Club for Growth's Chocola: Unions Would Benefit From Wage Hike

Friday, 28 Feb 2014 04:58 PM

By Lisa Barron

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Union members are likely to stand behind Senate Majority Leader Harry Reid's proposed minimum wage increase because they stand to benefit as well, says businessman Chris Chocola, president of Club for Growth, on Newsmax TV.

"They make significantly more than minimum wage. So the question is why that is such a big deal to them, and the answer, in at least part, is because this isn't really about the minimum wage.

"This is about union contracts that are based on a formula that is based on the minimum wage. So if you raise the minimum wage, they automatically get increases in their wages," he told J.D. Hayworth on "America's Forum" Friday.

Story continues below video.

"It's always interesting to ask why somebody would support something that they don't actually have a direct benefit from, but if you look, maybe they do get a direct benefit....  So it's unfortunate that the economics of this aren't really driving the discussion. It's the politics of it and part of the politics of it is a benefit to the unions," Chocola said.

Chocola, an Indiana Republican and former member of the House, argued that raising the minimum wage would have negative implications economically.

"The worst part about it is that you're going to drive unemployment up when you increase the minimum wage. Every economist that looks at this objectively agrees with that, but I don't think the Democrats supporting this are all that interested in the facts, just the message that they're trying to deliver," he said.

The Congressional Budget Office said in a report earlier this month that increasing the minimum wage could cost the country about 500,000 jobs.

"The mainstream media's not going to cover the fact that raising the minimum wage would actually mean less jobs, and if they can't avoid covering it, they'll say, 'yeah, the people that have jobs will make more.' I guess we don't care about those half million people that would lose their jobs."

It's the inevitable cost of doing business, said Chocola.

"We can't hire people to do things because the cost of hiring them has gone up. So instead of making a starting wage — that's one way of looking at minimum wage — they make nothing, and I don't think making nothing is better than making something," he said.

"The fact is, the people that are minimum-wage don't stay on minimum wage. It's a starting wage that gets them into the work force and helps them learn very valuable skills and values, to show up at work, show up on time, learn things that are valuable and marketable.... If you shut that door and never let them get started, that's one of the cruelest things you can do."

"So raising the minimum wage isn't a compassionate thing to do. In many cases it's the worst thing you can do for people trying to improve their position in life," Chocola said.

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