On Tuesday, the Service Employees International Union (SEIU), one of the largest private sector unions, endorsed Hillary Clinton in the 2016 Presidential race. This decision by the SEIU executive board came amidst objections from local SEIU chapters, some of whom say that the endorsement came too early in the election cycle. The controversy is heighted by Clinton’s failure to support SEIU’s keynote initiative, the ‘Fight for $15,’ aimed at raising the minimum wage to $15 per hour. Instead, Clinton has spoken out numerous times in support of a $12 per hour minimum wage. The endorsement reflects an alarming trend that a Clinton Administration would feature more pro-union policies, following the lead of the Obama Administration.
However, while the SEIU’s approach to solving income inequality is centered on disruptive protests and PR stunts against businesses, IFA’s President & CEO Robert Cresanti argued against harming America’s small business owners: “There is no question we should be looking at solutions to address the growing economic divide in America. However, staging street theatre and shutting down restaurants owned by local families who have invested their life savings and created jobs in communities cannot be the answer.”
The franchise industry is responsible for creating nearly 9 million direct jobs for Americans, outpacing job growth relative to the rest of the economy year after year. If drastic minimum wage increases take effect, many of these workers will be priced out of the labor market, thereby increasing unemployment and failing to provide millions of workers with the skills needed to excel in a competitive environment. Regulatory burdens such as the National Labor Relations Board and the Occupational Health and Safety Administration attempts to redefine the “joint employer” standard – which the SEIU has advocated for – have put the country’s more than 780,000 franchise establishments at risk. Despite franchising outpacing the gross domestic product of the rest of the economy, America’s small business owners face a perilous environment if these anti-growth policies persist.
In the future, the inequality debate should focus on creating opportunities to enter the middle class, rather than disruptive political theatre that targets America’s entrepreneurs.