The number is staggering and sure to increase.
Over the last three years the Service Employees International Union (SEIU) has poured $30 million to $50 million or more into its “Fight for 15” campaign to increase the national minimum wage to $15 per hour - more than double the current federal minimum wage and well above the minimum wage in every state.
Both the Washington Examiner and The Atlantic have cited the $30 million figure while the Employment Policies Institute estimates SEIU spending has already surpassed $50 million. Both figures are already above the $28 million the SEIU spent on President Barack Obama’s 2008 campaign – and still growing.
A second set of numbers is equally staggering although headed in the opposite direction.
Since reaching an all-time high in 1954, union membership in America has fallen from 35 percent to around 11 percent, which many believe to be the impetus for the “Raise the Wage” campaign and the SEIU’s recent spending spree.
Much of this decline is due to the changing nature of modern work. The bedrock industries of union membership (manufacturing, steelwork and others) have all experienced job losses due to a globalized economy and technological innovations.
Meanwhile, the restaurant industry has experienced strong post-Recession growth, chefs are the new rock stars; and, increasingly fluid and time-sensitive lifestyles mean more dollars flow toward dining out.
This combination of factors has placed a target on the back of the restaurant industry as the labor movement looks for its next big membership source, and even existential purpose.
The SEIU’s push towards a $15 minimum wage has received added encouragement from a national narrative in the media increasingly focused on inequality.
Nick Hanauer, a billionaire entrepreneur based in Seattle, has made waves with his vocal support for a living wage and provocative opinion pieces featuring titles like, “The pitchforks are coming for us plutocrats.”
Seattle last year, in part because of Hanauer’s efforts, became the first major city to support a $15 per hour minimum wage.
“If workers have more money, businesses have more customers. Which makes middle-class consumers, not rich businesspeople like us, the true job creators,” he wrote in an article for Politico last year. “Which means a thriving middle class is the source of American prosperity, not a consequence of it. The middle class creates us rich people, not the other way around.”
A few weeks after Bloomberg published Hanauer’s “The Capitalist’s Case for a $15 Minimum Wage” article in 2013, his friend and SEIU organizer David Rolf encouraged fast-food workers nationwide to go on strike for a $15 living wage. Less than a year later, the city of Seattle approved a $15 minimum wage.
“It happened because we reminded the masses that they are the source of growth and prosperity, not us rich guys,” he wrote in the Politico article. “We reminded them that when workers have more money, businesses have more customers – and need more employees. We reminded them that if businesses paid workers a living wage rather than poverty wages, taxpayers wouldn’t have to make up the difference.”
It’s a familiar line of logic deployed by super minimum wage advocates: higher wages lead to more spending money, which finds its way back into businesses. Nevermind the potential for higher prices for middle class customers, reduced work hours, devastating effects on entry level and teenage workers, and loss of job creation overall.
The focus on inequality has also gained momentum from academic work crossing over from policy wonks to the collective consciousness of the American public. Thomas Piketty is a French economist whose Capital in the Twenty-First Century became a bestseller and an unlikely beach read.
After 10 years of research by the economist and some of his colleagues examining the history of wealth in aggregate, Piketty, according to The Economist, sought to explain the “historical changes in the concentration of income and wealth.” This pile of data allowed Piketty to sketch out the evolution of inequality since the beginning of the industrial revolution and to theorize “wealth grows faster than economic output.”
The popularity of Piketty’s book has added to the national discussion of the economy and has been used as justification by the unions for super minimum wage increases.
Yet, labor’s use of his research is also a distortion of the economist’s work since Piketty actually argues, “…raising the minimum wage cannot continue indefinitely: as the minimum wage increases, the negative effects on the level of employment eventually win out.”
It’s the type of distortion Big Labor has been all too willing to make in order to justify its grand membership drive and to leverage the American public’s real economic concerns. And the skewing of economic realities hasn’t stopped with Piketty.
Therein lies the convergence for labor and policy groups. Big Labor sees the restaurant industry as an untapped source for new members and as an answer to its declining ranks. At the same time, concerned policy wonks believe a professionalized service industry could be leveraged to build a more robust middle class – all as the cultural zeitgeist zeroes in on inequality.
And although the inequality discussion has focused on the disparity between two polar opposites, the restaurant industry and many other small businesses who survive off of thin margins and are essentially middle class businesses, have been pulled into the national narrative and the union’s political gambit.
Electeds are responding to an issue which polls well. Los Angeles and San Francisco both recently approved phased increases to a $15 per hour minimum wage, with many other cities exploring super minimum wage increases.
It’s one thing to use data to periodically raise the minimum wage. It’s another thing to hike the minimum wage for no fact-based reason, in such a short amount of time, and to proportions never before experienced.
“We’re looking at it from that vantage point,” California Restaurant Association President and CEO Jot Condie said. “It may be too much too fast for businesses to absorb.”
This is the first in a series of articles on a potential $15 per hour minimum wage in California.