Sunday, October 01, 2006

Big Unions…Big Money…Many Votes…


Have you noticed recently the big push for a minimum wage increase in Virginia, which is rated #1 for business, has a low unemployment rate of 3.3%, and a very good quality of life rating.

Many of the local members of the “Democratic” party have been pushing this issue and claiming it is the “right thing to do” for the people and is only fair.

This issue has been debated several times on RightsideVA and in the local media and has gotten heated at times. I am still waiting for somebody to show me a person working in Augusta County for the minimum wage of $5.15 and to present what job skills that person has and if those skills command more pay. The free market works and a person with increased\learned job skills will and have been paid more for they produce more and are more valuable to the job market. I have also asked how raising the minimum wage will increase\promote job skills and what will be the incentive for the worker to learn more and thus improve their skills and making themselves more valuable…

Recently I had the opportunity to hear Michael Reynold, the Executive Director of Free Enterprise Watch and he provided some very interesting information. The following information is from the website and it shows that VA Democratic Governor Tim Kaine received 10 times the amount of campaign contributions from “Big Labor” then the previous governor and how he has appointed many “Big Labor” members to his cabinet.

Check out the following information and this might just explain the big push for a minimum wage increase in Virginia and how it will benefit(?) the worker. Or will it benefit Big Labor and unions who require their workers to pay dues which are then given to candidates of the unions choice and not the workers choice.

Maybe this is why the local Democrats claim they want to talk to Senator Allen about supporting an increase in the minimum wage? For the benefit of the workers or the union? Maybe they should ask Democratic Governor Kaine why he took so much in “Big Labor” campaign contributions?

Labor Money
- Organized labor spent more than $1.95 million in last year’s three statewide races.
- Governor Kaine received more than 10 times the amount of campaign contributions from
big labor than the previous governor received.
- The Service Employees International Union gave Governor Kaine’s campaign three times
the total amount of all labor contributions that Governor Warner received.
- This year, a non-election year, big labor has contributed over $315,000 to anti-business
officials and organizations.

- The governor has placed union officials at the highest levels of state government. The
Administration’s policy and message are controlled by union operatives.
- The governor has appointed former AFL-CIO president Daniel LeBlanc to be his Senior
Workforce Advisor, a cabinet-level position. As recently as February 2006 LeBlanc has
called Virginia’s Right-to-Work law “right to work for less.”
- The governor has said LeBlanc is in a position to “make the biggest mark of anywhere in
state government.”
- Jean Bankos, former president of the VEA, is Senior Advisor to the Governor for
Educational Projects. The NEA has recently advocated for a federal minimum wage for
all teachers.
- Delacey Skinner, the communications director for the governor, worked for George
Soros’ 527 group, America Coming Together (ACT) - a partner with the Change to Win
and AFL-CIO coalition to raise the minimum wage.
- Maurice Henderson, the governor’s deputy press secretary, was an employee of the
United Steelworkers of America and ACT.

Labor Money in Virginia
In his 2005 campaign for governor, Tim Kaine received more than $1.4 million from organized
labor. Including contributions to his inaugural committee, Governor Kaine received more than $1.55 million in union money. This is far and away the largest amount of money ever spent by labor unions in a Virginia statewide election. To put this in perspective, Governor Kaine received more than 10 times the amount of money than the previous governor received.

Contrary to what some union officials contend, raising the minimum wage does not reduce
poverty rates. A recent study by Ohio University examined the correlation between a raise in
entry-level wages and poverty rates. The economists found that there was no reduction in
poverty even when broken down by gender, age, ethnicity and race. In fact, in some categories, “negative employment effects” actually increased poverty.xv Allowing the free market to work makes sense. Employers pay their employees what the markets will bear - giving them the flexibility and freedom to choose how to compensate their employees. With Virginia’s unemployment rate holding steady at 3.3%xvi, keeping the minimum wage at its current level is the right choice for keeping our economy vibrant and productive.

The Numbers Don’t Lie
Right-to-Work laws attract new businesses to states, providing good-paying jobs and a high
quality of life. “Hundreds of site-searching companies and their consultants eliminate non-
Right-to-Work states from the beginning,” says southern business owner and author Joe
Hollingsworth. Specifically, Right-to-Work states expand a state’s manufacturing sector. From 1977-2001 Right-to-Work states gained more than 800,000 manufacturing jobs. On the other hand, compulsory union states lost nearly 2,000,000 jobs in this same time period.xxii Data from the U.S. Census Bureau reveals that 637,000 Americans between 21 and 30 years old have relocated from forced union states to Right-to-Work states since 2000.xxiii Between 1990 and 2001, Right-to-Work states have had a population growth of almost 8 percent higher than non-Right-to-Work states.xxiv

Why are Union bosses opposed to Right-to-Work?
For large labor organizations, worker dues are the sole sustaining force that keeps them
powerful. If workers are not compelled to contribute a portion of their paycheck to the union,
then the unions lose money and relevance. When states do not have Right-to-Work protection, a monopoly exists; leaving employees with no choice but to pay up. If unions are receiving compulsory income from workers who only join because they do not wish to be fired, the union’s power is inflated and, some argue, that the individual worker’s constitutional right to freely associate has been abridged. By forcing those who otherwise would not join the union to join, they collect additional revenue and exert inflated political power.


Anonymous said...

wow- this is some good stuff. More reasons to distrust Kaine.

SWAC Girl said...

Your research is right on! Keep telling it like it is ... maybe the nay-sayers will begin to listen.

Observer said...

According to the Bureau of Labor Statistics, there are a minimum of 60,000 Virginia workers paid at or below the minimum wage. I guess one or two might be in Augusta County.

Granted, many of those workers are in occupations where other income – such as tips – increases their wages. But not all. And the statistics don’t capture those making 10 cents or a quarter above minimum – hardly a decent salary.

The Fair Labor Standards Act of 1938 established the minimum wage. As it is the law of the land, I assume we are talking about what is an appropriate – fair – minimum wage.

The current Federal minimum wage of $5.15/hour is equivalent to just over $10,000 a year. That is just above the current Federal poverty guidelines for a single-person household. It is below the poverty level for a two-person household. It is half the poverty level for a four-person household.

And that is “poverty level” we are talking here, not a “comfortable” living. Even with the proposed increase (to $7.25 over the next three years), the minimum wage would still be below the poverty level for a family of three.

Let’s remember that the minimum wage has been at $5.15 an hour for the past nine years. Inflation has eroded its purchasing power to about $4. Rather than insisting that minimum wage workers show they have earned an increase by increased productivity, explain how they are now worth 20 percent less than they were a decade ago. What might have been an entry-level wage nine years ago isn’t one now. At that time, the minimum wage was half the average wage – it has now shrunk to one-third the average wage. Entry isn’t what it used to be.

A minimum wage that is at least poverty level is basic (if stingy) “social justice”.

Great country that this is, not all the folks here have been all that great. That’s why we have certain basic labor laws, most important of which at the federal level is the Fair Labor Standards Act which finally codified such radical notion as the 40-hour work week, overtime pay, restrictions on when, how long, and at what children could work, and the minimum wage – 25 cents at the time. (It only took a quarter century to get there from the 1912 Massachusetts minimum wage law, and only a century from when children struck for at eleven-hour, six-day week. And a little less from the Louisiana Militia shooting 35 black workers and lynching two leaders for striking for a dollar a day.) And that’s why we have the 1970 Occupational Health and Safety Act, to require a safe work place, free from unusual and avoidable hazards.

There is a subtext running under all this which is that these minimum wage workers are not worth a raise – they are not what some call the” worthy poor”. It is not lack of money at below the poverty level that is their problem, it is their lack of “understanding of economics, budgeting, and fiscal responsibility”. If they are not making enough money to get by, it must be their own fault.

Wake up to the facts. This may be a great country, but the rags to riches story is becoming ever more the exception. For most people, rich or poor, where you start out is where you end up (in terms of income quintiles – I have the date, if you want them). But I am not talking about making people rich – just giving them a shot at a better life.

And let’s get off this red herring about upping the minimum wage being an undeserved “big fat raise” for undeserving people. The poverty level has increased by 24 percent since the minimum wage was last raised. The first increment to the minimum wage proposed for 1 January 2007 was 14 percent.

This is not a “raise” – this is catch-up. However inadequate the minimum wage was in 1997, it was about the poverty level for two persons. Remember we are talking poverty level, not a decent living.

Put very simply: What was $5.15 in 1997 is $4.00 now. That is a real world pay cut. It is time for catch-up, even for entry-level positions.

We all love the free market system just to death. But we also have wages and hours legislation, safety legislation, child labor laws, the family leave act, and other protections just to make sure that the free market system doesn’t screw the workers – and if you don’t think it has, try reading a little labor history about 11 hour days six days a week – for children. The free market system did not change that – the free citizens through their representatives did.

The minimum wage was an essential part of labor reform and economic growth, and it still should be. Instead, right now it’s a disgrace. Even George Allen must think so – he voted to raise it.

SWAC Girl said...

Observer, you are chanting the same old liberal rant. Perhaps you need to read Rightside's post again and get your head out of the sand.

We've discussed this issue before on this site but you missed it so I doubt any of us want to rehash all the facts for you.

Minimum wage was meant for those just starting out in the labor market. To make more money we better ourselves by education or experience. It is difficult to find anyone making minimum wage in the Shenandoah Valley; they make way over that amount.

A strong work ethic is sadly lacking in many in this country. Spare me your "concern" because, in reality, all you do is hinder those people and hold them back. You are enabling them to stay poor and uneducated. You're giving them a "hand-out" not a "hand up."

Observer said...

SWAC Girl says, "Minimum wage was meant for those just starting out in the labor market."

I have asked before that bloggers who make this claim support it with evidence from an historian, economist, or economic historian. No response. Tell me where you got this idea, or is it just your opinion? The facts are out there if you care to look....

While you are at it, maybe you could explain why if no one around here works for anything like the minimum wage (which, once again, is an unsubstantiated claim) you are so opposed to raising it? If no one gets that amount, then no one would be living The Good Life if you raised it. (The notion that the present minimum wage or the proposed increase provides an easy living is ridiculous -- and the numbers back that up.)

Could it be that raising the minimum wage would also bump up the wages of those who make slightly more, costing your business friends a bit more in wages? As I have pointed out, the minimum wage is no longer worth $5.15 -- it is worth $4.00. Why not deal with that issue? This is not a "raise" -- it is catch-up. If you are happily living on what you made in 1998, it must be more than $5.15 an hour. A lot more.

You claim that I am on a liberal rant, but your response is just more tired rightist rhetoric that is long on words and short on facts. How about something to back up your claims?

RightsideVA said...

Thank you both for some good posts. Observer provided some good information and I have seen it several times posted by others responding to my main question, that still has not been answered.

How will increasing the minimum wage increase incentive for people to learn\improve their skills?

Observer said:"Could it be that raising the minimum wage would also bump up the wages of those who make slightly more, costing your business friends a bit more in wages?"

I do not have a problem of moving the minimum wage up at all for it will not change labor budgets that much for most start at over $7+ an hour already. The problem I have is giving people more money for no increased productivity or skills learned. To give them a "Feel Good" raise will not provide any incentive at all to improve themselves... Can you see that?

Observer said...

Rightside VA asks "How will increasing the minimum wage increase incentive for people to learn\improve their skills?...The problem I have is giving people more money for no increased productivity or skills learned. To give them a "Feel Good" raise will not provide any incentive at all to improve themselves... Can you see that?"

Where we disagree, RightsideVA, is over what an increase in the minimum wage really is. You see it as a "raise" or a "reward" people have done nothing to earn.

I don't see it that way. I see it as basically a cost-of-lving increase. I don't know if your employment provides that, but many businesses and government entities do. It is an integral part of Social Security, too. As inflation eats away at the pay envelope, adjustments are necessary JUST TO STAY EVEN.

The minimum wage of $5.15 established in 1998 is worth only $4.00 now. People earning the minimum wage or whose wages are tied to it have had a whopping big pay cut -- and that is plain not right.

That's where I am coming from. Can you see that?

RightsideVA said...

Yes it is a "cost of living increase" but where are the people working for $5.15 an hour now and what are their job skills? I have asked that question several times and what I get are 60,000 people are out there working at minimum wage but yet nobody can give me a name, location, or what they are doing. Are they retired and working at the local park in a part time job taking tickets at the train ride? Are they working a job just to keep busy and instead of volunteering they are paid $5.15 to help cover gas, etc? Or are they the head of household, have 4 children at home, have a house mortgage, car payment, etc. and are working for just $5.15 an hour? And if they are what are their job skills and why are they "Stuck" at that pay scale? Show me a person working at $5.15 an hour, as of yet nobody has done that...

The local Augusta County Democratic Party has picked up on this topic and do NOT have an answer to my question. They only claim that I am part of the evil Republican party and that we care more about business then the people. Tell that to the 5 men that work for me at my job and ask them why do I push them hard on job training and in fact take extra time to train my next in line to take my position in my area or another. I take that effort to train them to improve them and to show them that with training and effort they can\will move on and improve but you should have to earn that...

Now what about Big Labor coming into the picture and "In Bed" with Kaine? Why did he take so much more contribustions then even Warner? How about all of the Big Labor people he has appointed into his administration?

See my point?

Observer said...

If you want to know the demographics of minimum wage workers, go to and you will find both the data tables and the BLS summary comments.

And, hey, let's not pretend to be naive. Democrats get support from labor unions and often appoint labor advocates to their administrations. Republicans get support from business PACs and businessmen and often appoint business supporters to their administrations. This is news?

Anyhow, I think we have beaten this to death as a discussion between you and me. I don't think either of us had any expectation of converting the other, but I have enjoyed our exchange. Maybe somebody reading this -- unless they are all right-leaning ideologues, will have seen something to make them think a bit.

RightsideVA said...


Have been to that site for info and has been quoted several times on Rightside by several people posting.

Still looking for the info on those who are making $5.15 an hour and what job skills they have. If they are trying to support the family of four as many have said let me know and I can get that person a Job at WalMart starting $7.00 an hour just standing at the front door and greeting people...

So who and how many in Augusta at $5.15 an hour? What are their job skills?

Stan from Fishersville said...

There are many jobs out there starting at over $7.00 an hour with little or no skills required. They train you once you are there and that is what the market bears. That is why the free market is by far the best system and that has been proven.The people crying for the minimum wage increase are Democrats and looking to get the votes of those who think they will get something for free and all they have to do is vote for democrat party. Anybody can see that.They just wont admit it......

Observer said...

If, as several posters insist over and over again, nobody works for minimum wage (which is untrue)and there are plenty of jobs starting higher with no real skills required, why object to raising the minimum wage?

If no one is making the minimum wage, then raising it really wouldn't benefit the Democrats, would it? No one would be grateful....

If you object to their even being minimum wage legislation, step up and stand up and say so. You are in good company in the nineteenth century, where they lynched folks for asking for a dollar a day.

Now, I really gotta get off this subject. There are so many other interesting things to talk about.

RightsideVA said...

But yet you have still avoided the issue of how raising the wage will increase incentive to learn better skills and improve the worker.

I have admitted that to raise the minwage for cost of living would be good for little make minwage starting now. You still have not shown me that person working for $5.15 and what skills they have...

Observer said...

Hi, RSVA. You say: "But yet you have still avoided the issue of how raising the wage will increase incentive to learn better skills and improve the worker."

I think I have said before that raising the minimum wage to compensate for the impact of inflation over the last eight years is a cost-of-living raise, not a reward or an incentive.

There is no necessary connection between adjusting the minimum wage and any greater incentive to the worker to learn new skills or improve him- or herself. That is not the point or purpose. It is just catch-up to what the worker should be getting for his or her present skill set.

And remember, the proposed raise in the minimum wage does not provide a very comfortable living -- I don't think either of us would want to try living on it.

Programs such as those you describe in your company -- pushing the workers to improve their skills and rewarding them for it -- always have to be a part of personal advancement. Your workers are fortunate in that regard.

The other part, of course, is the individual initiative of the worker to improve and learn more skills and thus earn more.

But the issue of a fair minimum wage and improving job skills are totally separate.

BTW, we had talked a bit on another blog about productivity and wages, but I don't know if you saw the last thing I put up before the thread went to archives. Basically, it said that American working men and women are not sharing in the fruits of increased productivity as they traditionally have.

Catch me on the other side on immigration, if you want.