Court gives SeaTac workers a raise after $15 minimum wage exclusion

In SeaTac, Washington, home of the Seattle-Tacoma International Airport, citizens voted in 2013 to raise the minimum wage to $15 an hour. But airport businesses challenged the law in court, excluding 5,000 or so workers from receiving the increased benefits. Now the state Supreme Court has ruled in favor of the employees. Economics correspondent Paul Solman reports.

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    Now: how low-paid workers are winning some key battles.

    Today, the National Labor Relations Board ruled a large company could be held responsible for labor decisions held by a contractor it hires, even if it doesn't directly supervise the employee. That could mean unions may be able to negotiate directly with McDonald's Corporation, for example, instead of just its franchises.

    That win comes after another recent victory over a wage hike at Washington's Seattle-Tacoma International Airport. The state's Supreme Court ruled last week that employers must pay workers $15 an hour. Airport businesses had challenged a 2013 referendum.

    Our economics correspondent, Paul Solman, has updated his report.

    Here's a reprise of his Emmy-nominated story. It's part of our weekly story Making Sense, which airs every Thursday on the news hour.


    A lot was at stake last week in SeaTac, Washington, home of the Seattle-Tacoma International Airport, as local citizens decided the fate of a proposition to jack up the minimum wage there to $15 an hour, for thousands of workers, the promise of a huge pay hike, 63 percent if they were making the state minimum of $9.19 an hour, plus paid sick leave, which promised to be a benefit for the flying public as well.

  • WOMAN:

    Every employee that I work with comes to work sick because they have to put food on the table.

  • ABDIRAHMAN ABDULLAHI, Car Rental Employee:

    Imagine you're flying on an airplane. The worker who clean up the airplane before you fly, he was sick and he's cleaning the airplane, imagine you eating on that table, you know?


    But higher costs would boomerang against low-income workers, business spokesman Maxford Nelson insisted.

  • MAXFORD NELSON, The Freedom Foundation:

    The workers who retain their jobs might be better off, but an increased number of other workers lose their jobs entirely.


    A bitter, costly campaign ensued, a recount, and, in the end, the ayes had it by 77 votes.

    But, on decision day, Alaska Airlines, the main opponent of the $15 minimum wage proposition, filed a lawsuit in county court, arguing that a city can't set ordinances for an airport operating within its borders.

    HEATHER WEINER, Yes! for SeaTac: Unfortunately, a county judge agreed with Alaska Airlines and took away the benefits for about 4,700 workers at SeaTac Airport.


    Heather Weiner is spokesperson for the pro-$15 minimum wage side.


    I'm being a little cheeky when I say this, but it's like a mini-Bangladesh over there right now. You know, we have got high-end products and airfare, and people with high income flying in and out of SeaTac, 30 million people a year. And yet the people who are moving the bags, pushing the wheelchairs, serving the food, selling the magazines aren't able to support their families. It's really a tragedy.


    Just outside the airport, at SeaTac's larger hotels and parking lots, some 1,600 workers did get their raises. But for the 5,000 or so workers on airport property, the court decision, which was being appealed, was a body blow.

  • WOMAN:

    Hearing this, my heart just sunk. I feel that now I can never get ahead.


    Jenay Zimmerman, who manages taxis at the airport, still made just $11.90 an hour. Baggage handler Joshua Vina of Menzies Aviation, which services several airlines here, including Alaska, still earned a mere $9.50 an hour.

  • JOSHUA VINA, Menzies Aviation:

    It was actually going to help me pay a lot of things off. It was going to help me have a lot more things to give to my wife and my son. And I'm barely supporting them right now with this.


    A decade ago, Alaska Airlines' ramp workers had a union contract paying over $20 an hour, plus benefits, if you had worked there a few years. But when we visited, we saw some current workers on a free food line at church.

    Heather Weiner was eager to tell us why.


    In 2005, Alaska Airlines fired 500 people. They just laid them off without any kind of notice, and replaced those people with low-wage jobs at Menzies Aviation. Menzies Aviation is now the corporation that handles more than half of the bags and other services for Alaska and at SeaTac Airport.

    And, Meanwhile, Alaska Airlines' profits are way up. They reported half-a-billion dollars in profits in 2013, and the way they did that was in part by making sure that the people who work for them don't make any more than minimum wage.


    The connection between wages and profits is pretty obvious, says Seattle venture capitalist Nick Hanauer, an outspoken advocate for the $15 minimum wage.

  • NICK HANAUER, Second Avenue Partners:

    Clearly, the CEO and senior managers of Alaska Airlines, and their board of directors, and their shareholders would prefer that most of the value created by that enterprise goes to them, and almost none of the value created by that enterprise goes to their workers.


    Alaska Airlines declined our interview request, but sent a written statement — quote — "Alaska is profitable now, but the past decade has been the most challenging in the history of airlines. In order to survive, we turned to airport-based contractors that work for multiple airlines and provide economies of scale. While we can't dictate the labor relations practices of our business partners, we do strive to work closely with them on pay rates that reflect the job market" — unquote.

    We tried to reach Alaska's business partners, and other SeaTac airport contractors, 21 companies in all, none of which agreed to an interview.

  • MAN:

    I appreciate the call, but we're going to pass.


    Even the off-airport employers complying with the law took a pass, though some lamented it to local reporters.

  • DAVID ROLF, Union Leader:

    The Cedarbrook Lodge said that they were going to have to lay off employees, and instead they're doubling their room capacity and hiring.


    Union leader David Rolf was a prime mover behind Proposition 1.


    I think there was a lot of rhetoric designed to scare people leading up to that election, and so far all of the doom and gloom has not proven correct.


    Meanwhile, as both sides awaited the state Supreme Court's ruling on appeal, some SeaTac Airport workers weren't waiting around for judicial relief.

    Workers like Hani Osman, a driver at SeaTac Airport's Avis Budget Rent A Car, which the Teamsters recently succeeded in organizing with the help of this Somali refugee.

  • HANI OSMAN, Avis:

    We don't get vacation. We don't get sick call. We don't get nothing, and that's why we fought for the union.


    We met Osman at the SeaTac Teamsters hall, where she and others were voting on their first union contract, which would guarantee health care, retirement, vacation, sick leave, a grievance procedure, and $15 an hour if the lower court decision were overturned.

    Are you really excited about the fact that you have now gotten a union?


    We're so happy about it. Everybody's so happy about it. And now we're getting some results.


    What kind of results?


    For example, if we hit a car, we used to get suspended. You move like 100 cars a day, and if you scratch a little car, you get suspended for two weeks without pay.




    Yes. And now we don't have to see that again.


    Which brings us to one final note: The company that directly employs Hani Osman and colleagues isn't Avis Budget. It's the GCA Services Group.


    GCA is a contractor that has 30,000 employees around the country. They are owned by Blackstone, which is a major Wall Street investment group, which is worth hundreds of billions of dollars.


    That prompted a last question for multimillionaire investor Nick Hanauer about his fellow one-hundredth of the 1 percenters.

    How do you personally feel when you hear that a company like Blackstone has taken workers who used to work for Avis and Budget back to minimum wage, subcontracted?


    On the one hand, I feel like it's a moral abomination, but the truth is that they may have felt that they needed to do that because their competitor had already done it and they wouldn't be able to compete on price if they hadn't.


    The seemingly inexorable pressure of competition, in other words, which is why the workers of SeaTac had organized, they explained, to counter with pressure of their own.

    This is economics correspondent Paul Solman, reporting for the PBS NewsHour from SeaTac, Washington.

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