Unions work to elect local government leaders

By Jan Teague, President/CEO

Washington Retail Association

My comments this week are more about what is happening with local governments than they are about unions, but my point is that unions are working hard to get people elected to local government who will either back their agenda or say things publicly to bring attention to their agenda.  It amazes me how these political changes happen over time and before you know it there is a groundswell of expensive rules coming out of local governments.

Let’s consider last week’s comments by Seattle Mayor Mike McGinn.  He publicly said that he won’t support Whole Foods coming into West Seattle unless the company raises the wages of its workers.  He opposed a mixed use development there based on this point saying, ” I’m setting a new standard here, that we are going to look at the wages they pay, and benefits, when a company wants to develop with land that involves public property.”  He wrote in a letter that “non-union” Whole Foods pays significantly lower wages and benefits than other grocery stores, so it violates the city’s social and economic justice goals.  McGinn said that Whole Foods will drag down the wages of other stores. 

Whole Foods pays non-management workers on average $16 an hour in Seattle, plus health benefits and has been picked as one of Fortune’s “100 Best Places to Work” for 16 years in a row. 

The growing movement to use local government politics to force wages higher is also happening in the city of SeaTac where there the City Council has voted to schedule a November special city election this year about whether to raise the minimum wage to $15 per hour for hospitality and transportation workers and concessionaires located at or near SeaTac Airport. Tacoma businesses also expect a similar proposal could surface in their city this year.

These actions are happening across the country in areas where unions have managed to gain local government elected seats or have done signature drives to create momentum for their agenda.  Just yesterday there were news reports that  Washington, D.C. is opposing a Walmart unless it meets wage demands while the Mayor of Chicago rejected a similar idea.

As people in business all know, this doesn’t even stop at the increase in minimum wage.  It means all other wages are tiered up from that lowest wage.  It means that the cost of living goes up in that area (Seattle), further increasing the CPI which in our state sets the minimum wage across the state.  Let’s not forget that it also means a stronger negotiating position for unions at union-run businesses that will now bargain starting with a higher standard. 

I heard this called a Ponzi scheme once and thought that it fit.  Not because it is one, but because Ponzi schemes eventually fall apart once there are so few at the bottom that they can no longer shore up the pay of those further up the ladder.  The idea that business can pay everyone these high wages is unrealistic particularly because price sensitivity is not even a local issue any more.  People shop online all the time to find better prices.  If they don’t buy in Seattle, what happens then? 

How a free market economy runs is part mystery because it is complex, proprietary and competitive. But one thing is for sure; city government can really muck it up when it starts to think that it can ask a company to open up its books and demand it pay a certain wage before the city decides to allow it to be in the city.  And when business left Detroit and the population dropped, what happened?  It’s a good example of any city’s future that doesn’t work to encourage and support a mix of different types of business growth.