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Agitation to Increase Minimum Wage Continues, But Will It All Become Moot?




by:
David P. Phippen
Constangy, Brooks & Smith, LLP - Fairfax Office

 
December 30, 2013

Previously published on December 2013

In an economic policy speech on December 4, President Obama gave support to an increase in the federal minimum wage, to $10.10 an hour. The speech dovetailed nicely with Black Friday protests at Walmart stores across the nation on the day after Thanksgiving and fast food worker actions in cities across the nation the first week in December. Both of the labor campaigns are in support of a wage of not less than $15 per hour.

The Walmart and fast food protesters face a fundamental obstacle - that $15, sometimes plus employee benefits, for unskilled labor, is probably more than the market will bear. Accordingly, the protests include some facets of strikes but also some facets of corporate campaigns. Apparently few workers are withholding services for any extended period of time, the hallmark of a strike. Stores are staying open. Instead, the labor actions appear to rely largely on non-employee protesters from labor unions, affiliated labor organizations, civil rights groups, and other liberal action groups. As we have reported previously, the protests seem designed to avoid the legal constraints associated with genuine strike activity by employees and unions under the NLRA.

Published reports indicate that labor unions, or community and worker center organizations, are paying some of the protesters for their time. One such report indicates that a group sponsored by the Service Employees International Union paid $75 to a Subway restaurant worker in Seattle. A recently released Advice Memorandum from the NLRB's Division of Advice indicates that the Board generally has no problem with this practice, determining that it was not unlawful interference with Section 7 activity for the United Food and Commercial Workers union to hand out $50 gift cards to the first 700 Walmart workers to strike during 2012 Black Friday protests.

President Obama claimed in his December 4 speech that there is "no solid evidence" that a minimum wage increase negatively affects jobs. However, the Washington Post - hardly a bastion of conservative economic thought - gave the President's claim "two Pinocchios" in a "Fact Checker" report about this claim. The report noted that even some liberal or liberal-leaning economists concede that in an efficient market, raising the price of labor will reduce demand. According to a December Wall Street Journal/NBC News poll, a solid majority of Americans favor an increase in the minimum wage to $10.10 an hour, as proposed by the President, but believe that $15 an hour is too much.

In somewhat-related news, in the last month Walmart reported that Walmart.com had 400 million page views on Thanksgiving Day, Applebee's reported it is instituting a computerized tablet-on-table system for ordering (although the restaurant chain says it has no plans to use the tablets to replace human waitstaff), and Amazon's CEO Jeff Bezos said his company is evaluating the use of drones to deliver packages in the future. So it may be only a matter of time before many minimum-wage jobs become obsolete.



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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