When minimizing wages is union policy

Steven Miller

It sounds far-fetched: Union bosses working to push wages below the legal minimum? But that is what’s allowed by Subsection B of the unions’ proposed minimum wage constitutional amendment that will be on your November ballot.

It explicitly authorizes unions to let businesses pay their employees sub-minimum wages: “All or any part of the provisions of this section [requiring payment of the specified minimum wage] may be waived in a bona fide collective bargaining agreement….”

Still — no union officials would really pursue lower wages as a union policy, right?


Herbert Hill, long-time labor secretary to the NAACP, revealed over 30 years ago, in the book Autocracy and Insurgency in Organized Labor, how garment-industry unions since the 1950s have explicitly embraced that very strategy.

Competition from overseas was shrinking the number of New York dues-paying union members — on whom the union officials depended for their own incomes. What was their solution?  Third-world wage-levels — in the U.S.!

Called a “membership retention strategy,” by 1998 it had led to a situation where most garments in New York were produced in hell-hole sweatshops controlled by Mob-run locals of the UNITE garment industry union, notes respected labor reporter Bob Fitch.

“The measures required to keep wages low destroyed the moral substance of the union,” he writes in a new history of American labor corruption, Solidarity for Sale. “Ever-poorer waves of unskilled immigrant workers had to be imported who would find life at the bottom acceptable.”

First imported were American blacks, then Puerto Ricans, then undocumented Chinese, then, “most recently, the poorest arrivals yet: Fujianese and Mexicans.” But it wasn’t market forces that did this, he says. It was the result of an explicit strategy chosen by garment-industry union bosses.

Fitch notes that those unions actually fought a New York City minimum wage proposal that would have been 50 cents above the federal minimum — going so far as to threaten depriving the New York Central Labor Council of per-capita contributions if the Council endorsed the proposal.

As a confidential Teamsters letter noted at the time, “the ILGWU has a vested interest in the perpetuation of exploitation, low wage packets and poverty in New York City.”

The ILGWU was the International Ladies Garment Workers Union. In 1995 it merged with the Amalgamated Clothing and Textile Workers of America, to form UNITE. Then in 2004 UNITE (Union of Needletrades, Industrial and Textile Employees) merged with HERE (Hotel Employees and Restaurant Employees).

How is this relevant for the Silver State? Today, bosses out of UNITE now run the parent international of Nevada’s own Culinary Local 226 — which is working hard to put Subsection B into the Nevada Constitution.

The anti-worker mindset in UNITE’s culture showed up not only in its fight to reduce wages, notes Fitch, but also in its fight against skill training for union members. When federal dollars were offered to raise garment-industry skill levels, research directors of the ILGWU and the Amalgamated collaborated in a 14-page document that insisted the government keep its money: ‘It is our considered judgment that the subsidized training of apparel workers is unnecessary … [and] sets in motion forces detrimental to the health and stability of our industry.”

Testifying in 1998 before Congress, Fitch — an advocate of worker-controlled unions — observed that, in choosing “their overall wage strategies, unions must choose between the low road and the high road.”

Seeking higher wages is the high road, he said, even though it encourages laborsaving capital equipment that displaces some union members — while “the low road minimizes wages but maximizes membership.” Choosing the low road, noted Fitch in his book, allowed New York union officials to “retain their power and retire on fat pensions.”

To enforce the “bottom-feeding wage levels,” he writes, the union bosses allied themselves with New York Mafia crime families, and by the early ’60s, the Mob had uncontested control over the New York garment unions.

Fitch’s book spells out in detail why organized crimes loves the sub-minimum wage approach that New York’s mob-dominated UNITE locals still use: It fosters a corruption-rich environment for many classic Lucchese, Gambino, Colombo and Genovese criminal schemes — kickbacks, shakedowns and other rackets.

Given the Mob-compromised histories of UNITE, HERE and Culinary, the odd presence of Subsection B in Nevada’s minimum wage ballot proposal is a legitimate and important issue.

Nevertheless, AFL-CIO Secretary-Treasurer Danny Thompson keeps refusing to address the actual questions raised by the provision.

Thompson’s constant recourse to spin mode, however, makes the real motivations behind Subsection B appear even more dubious.

Steven Miller is editor of BusinessNevada and policy director for the Nevada Policy Research Institute.

Steven Miller

Senior Vice President, Nevada Journal Managing Editor

Steven Miller is Nevada Journal Managing Editor, Emeritus, and has been with the Institute since 1997.

Steven graduated cum laude with a B.A. in Philosophy from Claremont Men’s College (now Claremont McKenna). Before joining NPRI, Steven worked as a news reporter in California and Nevada, and a political cartoonist in Nevada, Hawaii and North Carolina. For 10 years he ran a successful commercial illustration studio in New York City, then for five years worked at First Boston Credit Suisse in New York as a technical analyst. After returning to Nevada in 1991, Steven worked as an investigative reporter before joining NPRI.