Outrage After Big Labor Crafts Law Paying Their Members Less Than Non-union Workers

Under an obscure provision of the city's wage hike, unionized hotels were granted an exemption allowing them to pay their employees less. The result is that some members in the hotel workers union Unite Here, now make less than those doing the same job in non-union workplaces.
Peter Jamison
April 9, 2016
When Los Angeles City Council members voted two years ago to give hotel workers a raise, Bill Martinez was the type of worker they said they wanted to help.
 
Martinez, a 53-year-old bellhop, has hauled tourists' luggage across the flagstone plaza of the Sheraton Universal in Studio City for two decades. He said he was excited after the council's vote to raise the minimum hourly wage at large hotels to $15.37, which he expected to boost his paycheck by 71%.
 
He soon found out he wouldn't be getting a raise after all. Under an obscure provision of the city's wage hike, unionized hotels were granted an exemption allowing them to pay their employees less. The result is that Martinez, who pays $56.50 every month for membership in the hotel workers union Unite Here, now makes less than those doing the same job in non-union workplaces.
 
"That's what really makes me mad," Martinez said. "I just wanted to be treated equal. Don't exempt us, because we're the ones paying union dues."
 
Few progressive causes have enjoyed as much recent success as the campaign to raise pay for the working poor. Most large cities in California have raised their minimum wage over the last several years, culminating in Gov. Jerry Brown's signing the nation's first statewide $15 minimum wage last week. On the same day, New York enacted a less-comprehensive wage increase that activists also greeted as a victory.
 
Less celebrated, and often unnoticed, has been a series of loopholes that cut union workers out of the very pay increases their leaders have championed. Such clauses have emerged as one of the labor movement's most divisive issues, clouding an otherwise triumphant political moment for the unions that have backed new wage mandates.
 
Counterintuitive at first glance — organized labor's historic goal has been to obtain more for workers, not less — union exemptions are absent from state and federal pay standards. Yet they have been written into the fine print of wage ordinances in a dozen California cities at labor leaders' urging.
 
San Francisco, San Jose, Oakland and Santa Monica have all adopted union waivers in their most recent minimum wage laws. L.A. city officials are expected to indicate whether they will include such an exemption in their own $15 minimum wage at a hearing next week.
 
Critics see such provisions as a cynical collusion between politicians and big-city labor interests. By making unions the "low-cost option" for businesses seeking to avoid paying better wages, they assert, the exemptions are designed to drive up union membership — and revenue from dues — at the expense of workers.
 
The attacks don't come solely from unions' traditional antagonists in the business community.
 
"I just think unions should not be in the business of carving out lower wage standards for ourselves," said SEIU-United Healthcare Workers West President Dave Regan, whose union helped lead the charge for California's new $15 minimum wage. "We don't help ourselves with anybody — with our members or with the public — by defending the indefensible."
 
Proponents of the carve-outs acknowledge that they may make business owners more amenable to unionization. But they say their central purpose is to offer union members flexibility to negotiate a superior package of employee benefits in which lower hourly wages can be offset by other perks, such as health insurance.
 
"I wouldn't even say it's an incentive," Unite Here Local 11 President Tom Walsh said of the effect of the exemptions on hotel owners. "It just perhaps will cause them to be less resistant to unionization."
 
Absent from the debate have been some of those most affected: Exempted employees themselves.
 
In L.A. they can be found at large hotels, which employ tens of thousands of the region's low-wage workers and over the last decade have been subject to several industry-specific pay mandates that include loopholes for businesses with collective bargaining agreements. Unite Here officials were among the foremost advocates of those ordinances, which were enacted earlier and separately from the city's broader minimum wage for all workers.
 
Many union workers, including the housekeepers who make up the bulk of a hotel's workforce, were unaffected by the pay mandates since they already made more than $15.37 an hour. But a sizable minority, like Martinez, missed out on what they say would have been a life-altering boost to their take-home pay.
 
Their complaints offer a rare window on internal dissent at Unite Here, which is known for its commanding influence at L.A. City Hall and has been a driving force behind other California cities' minimum-wage laws. The union's support for loopholes in those laws has at times brought it into conflict with other labor groups.
 
Just north of the 101 Freeway, in the sun-scorched hills overlooking Universal Studios, the disparities bred by union minimum wage waivers are stark. At the Sheraton Universal Hotel, a longtime union property, bellhops, waiters and banquet servers make California's current minimum wage: $10 an hour. (When the hotel ordinance first went into effect, the state minimum was $9.)
 
Those doing the same jobs at a non-union Hilton less than 500 feet away make at least $15.37 under the city's hotel wage law. Neither amount includes tips.
 
Alicia Yale, 42, a waitress at the Sheraton Universal, said she's dumbfounded that Unite Here Local 11, which represents hotel employees in Los Angeles and Orange counties, fought for her to make less money than workers at non-union hotels.
 
"Why is it more of a benefit to be in a union? The union isn't really doing anything for us," she said. "It's completely upside-down. They want to pay us less than the minimum wage."
 
Yale, a mother of two young children, said she was unconvinced by labor leaders' arguments that the exemptions were designed to secure better benefits. She said many low-wage workers at the Sheraton lack health insurance because the union's contract requires them to work at least 100 hours a month for five consecutive months to qualify.
 
At a seasonal business, she said, that can be harder than it sounds. Yale said she spent about a year and a half at the Sheraton before getting health benefits.
 
"Half the people I work with don't have benefits because they don't get enough hours," she said. "We should get the raise just like everybody else does."
 
Penny Moore, a bartender and former union shop steward at the Sheraton Universal, said she was perplexed in the weeks after the 2014 law passed when a Sheraton human-resources official told her that many employees would not be getting the promised pay raise. After phoning the union office, she said, she received a call from Unite Here Local 11 organizer Fred Pascual.
 
"He said I've got to look at the bigger picture," Moore said, that "this is going to make all the hotels go union." She said Pascual did not elaborate on his remark, but she interpreted it to mean hotels would embrace collective bargaining agreements in order to pay less.
 
"There is no other purpose for it," said Moore, who already makes more than $16 an hour and did not stand to benefit from the increase. "It doesn't make me happy to have to attack them like this. But the alternative is my co-workers" lose out. "And that's not OK."
 
Pascual confirmed he had discussed the exemption with Moore but did not recall specifically what was said, according to union spokeswoman Daria Ovide.
 
Assessing the broad effects of labor loopholes on unionization is difficult since employers are often loathe to comment on their dealings with unions. According to a Times analysis of information filed with the U.S. Department of Labor, Unite Here Local 11's membership has grown 73% since it began campaigning successfully for hotel minimum wage laws in 2006 — first for companies operating near Los Angeles International Airport, then for all big hotels in the cities of Long Beach and L.A.
 
Membership numbers alone are inconclusive. Ovide noted that over the last decade Unite Here has also made inroads in cities that have no hotel-specific minimum wage laws, such as Irvine and Glendale.
 
The union's booming growth, particularly when contrasted with the bleak national outlook for private-sector union membership, has nevertheless given fuel to critics. Ruben Gonzalez of the Los Angeles Area Chamber of Commerce said that under minimum wage laws that include labor waivers, businesses "have a regulatory gun to their heads" forcing them to unionize.
 
Walsh, the hotel union president, said exemptions don't make unionization a cheaper alternative to paying the minimum wage. But he said they narrow the difference between labor costs at union and non-union hotels, making collective bargaining less forbidding to companies worried about payroll expenses.
 
Walsh said Unite Here's total compensation package for employees making below minimum wage is still superior to that at non-union hotels. (Unite Here officials said they did not have figures for overall pay and benefits at non-union businesses, and thus could not provide a precise comparison.) He said that for workers like Martinez and Yale making $10 an hour, Sheraton Universal also contributes $7.54 per hour into the union's health-insurance fund.
 
Walsh acknowledged that union members don't have access to health benefits early in their employment. "Yes, of course, there's eligibility qualifications," he said. "It's by seniority, and you have to work there a certain amount of time before you get promoted or get full-time work … when you reach the threshold, you get an amazing medical package."
 
Ana Hernandez, a telephone system operator and union shop steward who has worked at the Sheraton Universal for 10 years, said that in her case the wait for high-quality healthcare was worth it. The 36-year-old mother of five said she pays just $50 a month for a policy that covers her whole family. Union members can also opt for a less-comprehensive plan with no premiums at all.
 
Hernandez, who earns $17.62 an hour, said she sometimes has to explain such benefits to confused co-workers who ask her why they make less than the minimum wage.
 
"Even though they don't see it on a paper check, the $15.37, I try to let them know why they may not see it," she said. "It's not that the $15 are not there, it's just that it's distributed … it's distributed to different areas that are also to our benefit."
 
City Councilman Curren Price, a chief supporter of the hotel living-wage ordinance, defended the law as written in a statement but declined to answer specific questions about the union waiver.
 
"The effect this ordinance continues to have is immeasurable, helping to spark the movement we're witnessing today from coast to coast as others join in on the fight for income equality," Price said. "That's something that the city of Los Angeles and I can and should be very proud of."
 
Mayor Eric Garcetti, who signed the law, declined to comment.
 
On Tuesday, a City Council committee is scheduled to hold a hearing on several potential add-on clauses to the citywide minimum wage, including paid sick leave and the union exemption. Last summer, after news reports that the L.A. County Federation of Labor was pressing for a waiver, a public backlash forced council members to table the issue while the rest of the law advanced.
 
Even union workers exempted by the ordinances of L.A. and other cities will see their pay gradually rise under the state minimum wage increase. However, because of the law's incremental rollout — the statewide minimum will not reach $15 until 2022 — they are still positioned to miss out on tens of thousands of dollars compared with their non-union counterparts.
 
Echoing other dissatisfied union members, Chito Zamayla, a 61-year-old Sheraton bellhop, said the city should repeal the labor carve-out from its hotel minimum-wage law. That would immediately put him and his co-workers on equal footing with employees of non-union businesses.
 
"It's not right. I've been with the union for 10 years, and I've paid my dues for 10 years," Zamayla said. "And in the meantime, I'm losing $12,000 a year."
 
 
Twitter: @petejamison
April 10, 2016