How the New Wages Would Affect Unions in New York City

The level of enthusiasm for New York State’s minimum wage hike in the city’s economy can be gauged by unionized or non-unionized labor. Even though unions were the main advocates for the new minimum wage hike, it was generally assumed by politicians that only 16 percent of their members would reap the benefits.

 But the new wage will effect union workers at different rates in industries like Public Administration, Fire and Manufacturing from typically 12 to 26 percentage, but a whopping 40 percent of members in one industry that stood to gain the most: leisure and hospitality.

“This large percentage of workers in that industry is being affected because the industry already pays low wages,” said James Parrott of Fiscal Policy Institute.

 A New York State Comptroller’s report said sectors in these industries expect lower wages because they only require low-skill workers in need of short-term training.

 For example, New York State Department of Labor released long-term occupational employment projection indicating the city’s food preparation and serving related occupations for the entry-level positions hovering in the low $20,000s a year for the city.

 More specifically, Michael Saltsman's, Researcher Director at Employment Policies Institute, research suggests that the average food preparation workers earn less than $13 an hour, so they would get at least a 23 percent increase in base pay when the wage goes to $15. But if members in leisure and hospitality already make $15 an hour, unions argue they’ll go to the bargaining table and ask for upwards of $19.

But hospitality and leisure is a low-density unionized industry though it’s still accounts for six percent of union workers in the city. Two major industries in the sector are hotels and restaurants where the former tends to be more unionized.

“When there are heavily union industries like in construction where they paid $30 to $40 dollars an hour, it creates a ripple effect among other workers,” said Saltsman. “But with restaurants and grocery stores where people expect to have a lower skill set, unions have less bargaining power for raises.” 

Saltsman also suggests even though unions members won’t be directly effected by the higher wage, they still have bargaining power. So if members were making nowhere near the minimum wage, they would automatic benefit from it.

So even though leisure and hospitality see low union density, both Parrott and Saltsman agree that workers who have union representation will still help.

For example, Rafael, a manager at a Mexican restaurant on the Upper East Side, is not apart of a union and he doesn’t know anyone in one either. So if Rafael was apart of union, he says he would make up to $30 an hour for the same position and receive some type of health insurance as well. That would put him at ease while trying to support for his son too.

With that, restaurants and hotels are important to the city’s economy. According to New York State’s Department of Labor “Significant Industries” report for the city, both industries are expected to grow over twice as fast than the local economy between 2012 and 2022.

If leisure and hospitality workers in the city make U.S. Department of Labor’s report for median wages for the industry ($24,720 a year), they will expect a 15 percent raise when 2018 comes to a close. Even though union workers only make 15 cents over $15 nationally, members might see a 20 percent raise if they get what they bargain for.