Raising Wages From the Bottom Up

Three ways city and state governments can make the difference.

Harold Meyerson

This article appears in the Spring 2015 issue of The American Prospect magazine. I

In 1999, while he was working at a local immigrant service center in Los Angeles, Victor Narro began encountering a particularly aggrieved group of workers. They were the men who worked at carwashes, and their complaint was that they were paid solely in tips—the carwashes themselves paid them nothing at all.

At first, the workers came by in a trickle, but soon enough, in a flood. Narro, whose soft voice and shy manner belie a keen strategic sensibility, consulted with legal services attorneys and discovered that while every now and then a carwash was penalized for cheating its workers, such instances were few and far between. “There were no regulations overseeing the industry,” Narro says. The state’s labor department conducted no sweeps of the carwashes to investigate what looked to be an industry-wide pattern of violations of basic wage and hour laws. When Narro took a new job at UCLA’s Labor Center, he had researchers survey L.A. carwashes. They reported that roughly one-fourth of the industry’s 10,000 workers were paid only in tips.

“She wouldn’t pay us on time, but she demanded the rent on time,” Sanchez says.

The workers who did get a paycheck weren’t raking it in, either. Wage theft was the norm in the industry, and the carwasheros (as the workers, almost entirely Mexican and Central American immigrants, have come to be called) had little recourse—especially since so many were undocumented. Oscar Sanchez, a tall, sober-faced carwashero who came to Los Angeles from Guatemala in 2000, recalls working a 10-hour day and routinely getting paid for five hours. Workers at his carwash, in South Central L.A., got no lunch breaks; the owner would “bring us burgers and we’d have to wash cars and eat at the same time.” The owner also had a mini-mart on the property, and rented the two rooms upstairs as living quarters for four of the workers—one of them Sanchez. “She wouldn’t pay us on time, but she demanded the rent on time,” Sanchez says. “When we fell behind, she said she couldn’t pay us because we owed her rent.”

Under California law, employers in a few industries in which wage theft was endemic—farm labor contracting, garment work, and construction—were required to register with the state and post surety bonds every year to cover any back-pay settlements and penalties that authorities assessed on them. Armed with data from his researchers, Narro asked legislators to get carwash owners added to the list. The bill, signed into law by Governor Gray Davis, required owners to register with the state and to post a $15,000 bond to cover labor-code violations.

But the new law changed nothing. Davis’s successor, Arnold Schwarzenegger, had no interest in strengthening it when it came up for renewal at two-year intervals. “We’d win cases, but we were still swamped with violations,” says Narro.

In 2006, the national AFL-CIO had established a partnership with a union of day laborers, and Narro reasoned that the Federation might be interested in trying to foster a union of carwasheros, too. He approached the AFL-CIO, which responded enthusiastically and sought out an established union willing to undertake the campaign. The United Steelworkers—which had expanded into other sectors as the U.S. steelmaking industry continued to shrink—took up the cause. Steelworkers Local 675, an L.A.-based union that chiefly represented oil refinery workers, agreed to undertake the campaign and welcome the carwasheros into the local. “If you can’t make steel,” says Dave Campbell, the local’s secretary-treasurer, “you might as well wash it.”

In 2008, the AFL-CIO and the Steelworkers commenced their campaign. The Federation staffed the carwasheros’ worker center, named CLEAN, with organizers under the direction of Justin McBride, a veteran of multiple union campaigns. The Steelworkers loaned organizers to the effort and announced it would negotiate contracts and service the new members.

By 2013, however, the campaign had stalled. Of the estimated 500 carwashes in Los Angeles County, just four had gone union. Part of the problem was that the industry itself was fragmented. CLEAN’s research determined that the 500 carwashes had 450 different owners; no one owned more than five. Worse still, a number of carwashes seemed to be operating like Walter White’s carwash in Breaking Bad—less as a business than as a money-laundering operation. Finally, no individual carwash employed more than a handful of workers, which made organizing both costly and labor-intensive.

To succeed, a completely new strategy was needed. In 2013, with the carwash law set for renewal, McBride proposed to greatly increase the bond carwash owners had to post—unless they established a formal grievance procedure, the kind that, by law, can only exist under a union contract.

Schwarzenegger had by then returned to Hollywood, and his successor, Jerry Brown, had long supported the cause of low-wage workers. Brown’s labor commissioner, Julie Su, had begun sweeps of carwashes that routinely turned up violations. Democrats, following the 2012 elections, had two-thirds majorities in both houses of the legislature. The stars were aligned for McBride’s proposal, though he had “to compile data showing that the $15,000 bond was inadequate” to protect workers, says Caitlin Vega, the state AFL-CIO’s lobbyist who was shepherding the bill that codified McBride’s proposal. Fortunately, she adds, “Justin is very good at math.”

In a rather elegant solution, the bill that passed the legislature and that Brown signed simply added a zero to the $15,000. (It also eliminated the original act’s two-year sunset provision.) Starting in January 2014, carwash owners would have to post a bond of $150,000—unless they agreed to let their workers go union.

As the new year dawned, Labor Commissioner Su and Los Angeles City Attorney Michael Feuer convened a raucous meeting of more than 100 L.A. carwash owners to explain the new statute. “We heard some complaints about the law,” Su says, but the purpose of the meeting was to make clear both the terms of the law and Su and Feuer’s intention to enforce it with ongoing and widespread inspections.

Several months later, 16 carwashes announced they were going union. Today, Local 675 represents workers at 25 carwashes in Southern California. The unionized carwasheros work under contracts that their union representative, Manuel Ramirez, acknowledges are “very basic.” They make roughly 2 percent above minimum wage, they have shaded places where they take their breaks, they have lunch breaks, fresh water, time clocks, regular paychecks— the merest basics of a work relationship, but ones routinely denied their nonunion brethren. The unionized carwashes are chiefly those that couldn’t afford the new surety bond, located disproportionately in the poorer sections of the city. Still, both the new law and the increased inspection regimen have improved conditions across the industry. “Now,” says Narro, “hardly any carwasheros are paid only in tips.”

 

Though the longest of long shots, the carwashero campaign has unionized two dozen Los Angeles–area carwashes—with the crucial assistance of state government.

THE VICTORIES OF THE CARWASHEROS, limited though they be, are a clear example of what Rutgers University sociology professor Janice Fine terms “regulatory unionism”—the enactment or enforcement of laws that not only better workers’ lot but also enhance their ability to organize in their workplace. The latter, of course, was the intent of the National Labor Relations Act, the federal law passed in 1935 that created a clear process through which workers could form unions. Over the past four decades, however, the NLRA has largely become a dead letter, as employers have found multiple ways to violate the terms of the act with impunity.

Though Obama labor officials have improved enforcement efforts, conservative pressure at the federal level has thwarted all efforts to strengthen the NLRA itself. But with the heightened profile of the economic-inequality issue, the burgeoning of low-paying jobs, and the demonstrations of low-wage workers for higher wages and greater justice, state and city governments have proved more responsive to the new proletariat’s plight. With the lion’s share of major American cities now firmly in liberal control (25 of the nation’s 30 largest cities currently have Democratic mayors), municipalities have raised the local minimum wage and required employers to provide their workers with paid sick days and, for part-time retail workers, an advance schedule of their hours. Only seven states, however, have Democratic governors and Democratic control of both houses of the legislature, so the number of such pro-worker statutes emerging from statehouses is smaller.

But the one thing that progressive states and cities have generally not been able to do is enact measures that help workers organize into unions.

But the one thing that progressive states and cities have generally not been able to do is enact measures that help workers organize into unions. The NLRA specifically preempts most such endeavors. That’s why the case of the carwasheros is so remarkable.

Nonetheless, the carwasheros’ victory illustrates one of the three ways in which cities and states can currently boost not just worker income but worker power. These paths, to be sure, are narrow—but not so narrow that they can’t accommodate more campaigns from creative strategists and dedicated workers. The three paths are:

  • Using a city or state’s purchasing, financial, regulatory, or wage-setting power to foster worker organization;
  • Giving worker organizations the authority to help enforce and monitor city or state labor ordinances; and
  • Cracking down on the misclassification of workers so that those mislabeled as “independent contractors” can become unionizable employees.

 

by Harold Meyerson.

This is the first of three posts on Raising Wages.

Harold Meyerson writes a weekly political column that appears on Wednesdays and contributes to the PostPartisan blog. Meyerson is also executive editor of The American Prospect, a liberal magazine based in Washington. He is an Honorary Vice Chair of DSA.

 

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