Union-Sponsored $18 Minimum Wage Initiative Targets Anaheim Resort Businesses

A coalition of unions is seeking to qualify a city-wide initiative forcing any Anaheim hospitality business that receives a “subsidy” to increase its minimum wage to $15 an hour on January 1, 2019, escalating a $1 per year until hitting $18 per hour by January 2022.  After that, targeted business must increase their minimum annually by either 2% or by the Consumer Price Index for the Los Angeles metropolitan area. The union coalition cited a study which it funded to bolster claims that Disney can afford to adopt a $20 wage floor.

The Coalition of Resort Labor Unions (CRLU) unveiled the initiative to a crowd of at least 700 members in a packed ballroom at the Sheraton Park Hotel, one of the few unionized hotels in the Anaheim Resort.  Anaheim’s progressive Left was there in force. Councilman Jose F. Moreno was there grinning like a Cheshire cat, as were union activists and school board members Al Jabbar, Ryan Ruelas and Jose Paolo Magcalas – his political wingmen. Magcalas brought students from the Ethnic Studies class he teaches as Loara High School.  Liberal Democrat mayoral candidates Ashleigh Aitken and Lorri Galloway sat front and center. The union candidate for 4th Supervisor District, Joe Kerr, prowled the perimeter of the room gathering signatures for his candidate papers.

Sometime progressive allies and council gadflies Cynthia Ward and Victoria Michaels were there. Both are registered Republicans and Ward has thrown her hat into the mayoral ring.

The event was emceed by Jennifer Beuthin, the six-figure salaried general manager of the Orange County Employees Association – which also represents Anaheim city employees. Beuthin was in full-proletarian mode, inveighing against corporate greed and denouncing Disney as “disgusting.” She introduced the authors of the study – paid for by CRLU – that calls for a $20 per hour wage floor for workers in the Anaheim Resort.

They were followed by two Disneyland employees who blamed Disney for their precarious financial situation. They were followed by series of union leaders who poured out heated anti-Disney, class-warfare rhetoric. One union speaker mocked the $1,000 bonuses the company had recently announced for its employees in the wake of the Republican tax cut: “Are any of you planning to go to Europe?”

This was all build-up to UNITE-HERE Local 11 co-president Ada Briceno announcing the aforementioned $18 minimum wage initiative.

She was joined at podium by Anaheim High School student Alexandra Retana. Retana is president of CROWN – a progressive student political club formed and moderated by Ruelas and used as campaign foot soldiers by him, Moreno, Jabbar and their union allies. She is also a Moreno appointee to the city’s Youth Commission, newly created at Moreno’s behest. Anaheim voters can count on seeing “Anaheim Youth Commissioner Vice Chair Alexandra Retana” on political mailers promoting the union initiative should it qualify for the ballot.

Renata claimed authority to speak on behalf of city student population: “I’m here today because Anaheim students support Disney workers all the way!”

Don’t be surprised to see discussion of the union initiative surface on an Anaheim Youth Commission agenda in the near future.

Magical Thinking About Government Dictating Wages
Briceno, Beuthin and others union leaders presented the initiative as a boon for their members, but the reality is it deeply flawed economic policy and poor politics.

Years of studies have established these politically-driven “living wage” laws kill jobs. The CRLU-funded report, however, claims this dramatic minimum wage increase from $10.50 to $18.00 will actually increase job creation and local tax revenue.  The authors of the study base their claim on discredited Keynesian thinking straight out of the 1930s. If that demand-side, prime-the-pump economics worked, the trillion dollar Obama “stimulus” spending package would have ignited an economic boom.

This is magical thinking. When government fiats artificially increase the cost of labor, what you get is fewer jobs. When Briceno, Beuthin and the others stand before their members and tell them otherwise, they are feeding them lies and false hope. If they had been honest with their members, they would have told them, “If this measure passes, some of you will make more money. Some of you will get fewer hours. And some of you will lose your jobs.”  Investors in workplace automation will certainly appreciate CRLU’s effort to increase the price of labor.

Union leaders claim a government-mandated wage hike is necessary due to the high cost of housing and other life necessities, while ignoring the reason for the high cost: counter-productive government policies they and their progressive allies in state government have been promulgating for years. Government mandates created this problem, and we’re supposed to believe another government mandate will fix it? If CRLU leaders are serious about addressing the issues faced by their members, they’ll push their allies to repeal policies that inihibit the private sector from creating sufficient housing, and misguided legislation like the recent increase in the gas tax and vehicle license fee that erode the purchasing power of poor and working families.

What Is The Union’s Real Target?
There was a surface disconnect between the union study and the union initiative. The study’s authors and the union leaders directed their rhetorical fire at Disneyland and its parent corporation, and the rank-and-file testimonials were from park employees. However, the initiative itself – at least outwardly – seems to target recently approved 4-Diamond hotel projects.

Why then did Beuthin, Briceno, Workers United Local 50 President Chris Duarte and others reserve their attacks for Disney? Why does the union-sponsored study mentions the hotel projects only in passing to focus almost entirely on Disney’s Anaheim theme parks – which do not receive subsidies – claiming the company can easily afford to adopt a wage floor of $20 per hour? For that matter, if – as the study claims – one must earn $23 an hour to afford life’s necessities in Orange County; and if Disney can afford a $20 wage floor, then why is the union only gunning for an $18 minimum wage? If the CRLU believes a $23 hourly wage is necessary for living here, then how can it say a $15 or $18 hour;y wage is a “living wage”?

Union Initiative Broadly Defines Who Qualifies As A Subsidy Recipient
As noted, the union initiative restricts – for now – the $18 minimum wage to Anaheim hospitality businesses that receive a “city subsidy.“ However, the initiative defines that category well beyond just the five 4-Diamond hotel projects that have signed economic assistance agreements with Anaheim.  According to the initiative language, the minimum wage hike applies to not only to the business entity that actually receives the city subsidy, but also to their contractors, subcontractors, lessees and sublessees, tenants and subtenants.  Every merchant in Downtown Disney or the troubled GardenWalk mall, for example, would be hit with a huge minimum wage increase.  One can make a strong case the $18 minimum wage mandate would apply to the heavily-subsidized Anaheim Packing House and its tenants.

The initiative’s definition of a “city subsidy” goes well beyond TOT tax rebates to include sales tax, entertainment tax, property tax or “other taxes, presently or in the future, matured or unmatured.” It also turns the City Manager into a labor relations cop charged with policing wage disputes that would arise from the initiative’s implementation.

The union initiative also raises legal questions. The economic assistance agreements between the city and developers of the participating 4-Diamond hotel projects are legal contracts. If the city acts to unilaterally change the terms, it would be in breach of contract; Councilman Moreno said as much on an online radio program earlier this week. Yet, that is what the union initiative would do. It’s immaterial if the change is made by the voters rather than the city council, because approval of this ballot measure would be the voters directly exercising the city council’s legislative powers. A breach is a breach, whether done by the council or the voters.

Whether or not one supported or opposed the Hotel Incentive Policy, targeting certain Anaheim businesses with an $18 minimum is bad economics and lousy public policy. But if one thinks government shouldn’t target certain types of businesses with tax rebates, one should also be opposed to government dictating wages. And anyone who thinks the unions plan on stopping at businesses that have economic assistance agreements with the city is living in dreamland. If passed, it will be the camel’s nose under the tent – part of a long-term strategy to turn the thousands of non-unionized Anaheim Resort area workers into dues-paying union members.

About 40-50 unionists gathered in front of Anaheim City Hall yesterday before marching to the City Clerk’s office to file their initiative. This battle will go a long way toward determining whether Anaheim will continue to be a freedom-friendly governed by an ethos of removing government obstacles to economic growth, or morph into progressive political outpost of Los Angeles.

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