Chicago’s “Labor Harmony” Arm-Twisting | U.S. Chamber of Commerce

Chicago’s “Labor Harmony” Arm-Twisting

The Chicago City Council on September 6 passed an ordinance that exemplifies cynical efforts by some local governments to favor organized labor. 

In this case, the ordinance applies to contractors performing services at Chicago’s airports (O’Hare and Midway), including the following: ramp services, such as baggage handling, plane fueling and deicing, and interior aircraft cleaning; passenger services, such as wheelchair services and baggage sorting;  security; food and beverage preparation, inspection, and; aircraft maintenance; and terminal services, such as passenger check-in and ticketing, Skycap services, and queue management.

The ordinance inflates the minimum wage for nearly 8,000 of these service workers to $13.45 (with yearly adjustments for inflation), which perhaps is not surprising seeing as the city passed a $13 minimum wage for workers in Chicago in 2014.  More interesting, however, is that the new airport ordinance also includes a waiver from the minimum wage for covered airport employers who choose to unionize.  It also contains a “labor harmony” section requiring companies licensed to work there to negotiate a labor peace agreement with any union that requests one. 

Local 1 of the Service Employees International Union (SEIU) had targeted the workers covered by the ordinance in an organizing drive that it launched in 2015. It carried on its campaign for the last two years with various instances of strikes and raucous protests, as well as the familiar tactic of making spurious allegations of “rampant wage theft,” health and safety violations, and unfair labor practices.

The campaign, however, hasn’t seemed to reach its goal.  Hence the new ordinance, which Mayor Rahm Emanuel introduced  in July 2017.

As mentioned, the ordinance, like the city’s own minimum wage law, allows an employer to avoid paying the new, higher wage rate if they negotiate a lower rate in a collective bargaining agreement.  In other words, if a business embraces a union, it can actually bargain to pay its workers lower wages than would otherwise be required.  This may convince some employers that rolling out the welcome mat for the SEIU isn’t so bad after all.  Such an outcome may seem far-fetched, after all, why would a union want workers to earn lower wages?  But, as revealed in a report published in 2016 by the Workforce Freedom Initiative, unions see this as a means to speed up organizing and dues collection.  And, there have been specific examples of workers earning less as a result.

Another pernicious component of the ordinance is the labor peace provision, which radically tilts the table in favor of unions.  As a condition of obtaining or maintaining a contract at either of the airports, employers will be required to negotiate a labor peace agreement with any union that requests one (such as the SEIU for example). The ordinance ostensibly does not require employers to recognize a union, and because it forbids strikes it would seem weighted against labor.  The reality, however, is that labor peace agreements are always stacked against employers because if they can’t get a union to sign on, they are effectively prohibited from doing business. And that signature doesn’t come cheap.  

As the Workforce Freedom Initiative (WFI) also highlighted in another report on this type of government advocacy for organized labor, labor peace agreements invariably lead to employers giving valuable organizing concessions to unions such as card check (recognizing a union based on signed cards rather than the results of a secret ballot election), neutrality (refraining from expressing negative opinions about a union or intervening in an organizing campaign), and workplace access (an allowing union organizers into the workplace).  With these concessions in hand, a union is almost guaranteed to win representation.

The Chicago ordinance adds one more kicker—if an employer is unable to agree on the terms of a labor peace agreement with a union, the city is empowered to station police around the business, allegedly to prevent any labor-related violence.  The cost for this deployment would be borne solely by the employer.

Chicago’s ordinance is certainly not the first of its kind—WFI’s report points out that unions have already secured labor peace ordinances in cities across the country (including at a number of airports such as Los Angeles and San Francisco)—but it is just as cynical as the rest. Labor unions desperate to reverse their sixty year membership freefall continue to seek help from their political allies, and unfortunately that’s just what they got in the Windy City.