05/27/2015
Those who think the minimum wage doesn't cost jobs might want to have a chat with unions in Los Angeles.
After pushing for a big hike in that city's minimum wage — which will climb to $15 an hour by 2020 — labor leaders now want an exemption for companies that have unionized workers.
Why? Because, according to Rusty Hicks, head of the Los Angeles County Federation of Labor, "with a collective bargaining agreement, a business owner and the employees negotiate an agreement that works for them both. The agreement allows each party to prioritize what is important to them."
The union exemption would, Hicks said, give "the parties the option, the freedom, to negotiate that agreement. And that is a good thing."
Wait just a minute.
Isn't this precisely what happens when anyone applies for a job, whether it's through collective bargaining or one-on-one?
An employer and a prospective employee negotiate the terms of employment that suit them both, including the mix of wages, benefits and perks. If either side doesn't like the offer, the deal's off.
It's called the free market. And it works just as well when it comes to pricing labor as it does cars, homes, food, stocks, vacation packages and countless other things bought and sold every day.
What's more, when the government intervenes in this pricing process — by mandating artificially higher or lower prices — it inevitably creates shortages or surpluses.
In the case of a higher minimum wage, it does both: It creates a shortage of entry-level jobs and a surplus of unemployed workers.
When restaurants and other businesses in Los Angles tried to explain this to the city council and ask for the "freedom to negotiate" wages with their own workers, labor activists shot them down.
Apparently, only union bosses can be trusted with the free market.
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