Tipped Workers

Despite the fact that tipped workers work more than the other employees, they are not paid

sufficiently to reflect their hard work. Generally, the federal minimum wage rate

has been set at $7.25, but they are only paid $2.13 per hour (Base Wage). This discrimination has led

these people to live in anonymity compared to other highly paid workers. It has compelled them to

deal with immense poverty on a regular basis. So, let’s move on to the next phase to know how this

dire problem can be solved.

The Basics of tip credit

Before going to the main parts of the article, I would like to explain the basics of a tip credit. The

tipped workers are allowed to pay at least a wage of $2.13 per hour and if they don’t receive an

amount of $5.12 an hour, then more tips will be forwarded to them. So, the employers can pay up to

$5.12 an hour as ‘tip credit’ against the federal mandated rate. This is outlined in section (3) of the

FLSA (Fair Labor Standards


Keep in mind that the terms of ‘tip credit’ can be agreed upon either by mutual consent or by formal

papers. If any employer is unable to follow these, then they are subjected to pay the federal

minimum wage. Also, the must allow the tipped employees to keep all tips received.

The Burning Issue

The problem with the tipped workers is that most of them are not paid adequately, although, there

are some workers who can earn huge amount of money in tips. Nevertheless, this does not solve the

problem completely rather it gives fuel to it. Plus, these workers receive the lowest amount of wage

compared to other service industry employees, which creates dissatisfaction and discrimination

among them. For instance, a tipped worker who will fix the viair 0073 70p heavey duty air

compressors at home must be worthy of a minimum wage of $10 per hour. This example can

shed light on the problem as these tipped workers are inclined to fall below the poverty line more

than any other employees.

The uncertainty around Tipped Workers

Typically, tipped workers face an extreme level of uncertainty regarding their pay issues because tips

are volatile instead of constant. Also, this can vary season to season and from shift to shift. On top of

that, when the country is facing an economic turmoil, these workers suffer the most. At that time,

the consumers have less financial power and, as a result, they avoid spending on tips or they just

leave a smaller amount of tips to them. The effects of the economic turmoil can be understood from

the previous example of a handyman (Tipped Worker) for fixing a DWFP55130 compressor. If the minimum wage is increased, you can expect to

make the whole situation stable for the tipped workers. It will also secure them financially and

ultimately improving the overall productivity of these workers.

 How can the problem be solved?

Now, let’s come to the point of solving this problem. I have found that seven states in USA have

restructured their basic wage rate and it is equivalent to 100 percent of the full minimum wage. This

significant step has made certain that the rights of the tipped workers are secured and it has allowed

the employers to pay the full minimum wage straightly to them. To add to this glowing issue, a study

from the University of California-Berkeley has revealed that every increase in the minimum wage

boosts the earnings of the tipped workers by 0.45%. Additionally, it has considerably reduced the

poverty of tipped workers of these seven states as the percentage of falling under the federal

poverty line has drastically decreased (25%).

Final Thoughts

To conclude the writing, I would say that I am an advocate of raising the tipped minimum wage to

70% of the full income because it will guarantee the direct payment of the tipped workers by their

employees. It will also be an effective way to develop the economic security and workplace

environment of these lowly paid tipped workers. So, the respective authorities must pay attention to

them and solve the problem instantly.

Is nothing sacred? Labor strike in professional sports

This is an article by Kenneth A. Kovach.

Strikes aren’t just being made in the batter’s box these days. Where are players and owners headed?

“Maybe you don’t see a connection between those men and women who risked everything they had to ask for minimum wage, overtime, and safe working conditions, and football players, basketball players, and baseball players, especially given the rather substantial wages some of them receive. The connection is there, however, and it is as real as the Super Bowl, the NBA finals, and the World Series. And I’m telling you it’s every bit as important, because what is at stake when professional athletes strike is a principle, and a protection for every working man and woman, a protection once fought for in the streets of our nation, with fists and guns, and lynching and mass arrests.”

- Howard Cosell, What’s Wrong With Sports (1991)

Americans are fascinated, even obsessed, with sports. Our collective culture, our heroes and role models, our principles and ideals, and even our business dealings reveal the impact sports have on our country. No other culture in the world is quite as captivated by them as we are. Just look at the amount of time we Americans spend both participating in and watching sports, the billions of dollars we spend on sports merchandise and memorabilia, the myriad sports metaphors that punctuate our everyday speech, and the amount of media money, time, and attention focused on sporting events of all kinds. We are keenly aware of the glories and problems associated with our favorite athletes and teams.

To our chagrin, however, professional sports in recent years has experienced open labor warfare. Most of these disputes have even ended up in the courts. In the end, not only have the sports suffered, but so have the fans, who have become victims of this labor chaos and conflict.

Professional Sports and Collective Bargaining

Though built around the playing of games, professional sports itself is no game. It is a serious, multibillion-dollar business. And though not readily associated with each other, trade and industrial unions and the professional sports unions share the same collective bargaining process and enjoy the same rights, privileges, and protections under U.S. labor laws.

Before the twentieth century, worker activities in the United States, including striking, picketing, and refusing to deal, were categorized as common law conspiracy. By the mid-1800s the treatment of these activities was shifted from criminal to civil because they were viewed as a direct threat to free market competition – a restraint of trade. Unions were still not recognized as legitimate organizations.

With the passage of the Wagner Act (aka the National Labor Relations Act) in 1935, labor attained the right to unionize and bargain collectively with management. The National Labor Relations Board (NLRB) was created to interpret and enforce the Act. With this clout behind them, unions found their membership and economic power dramatically increased. Subsequent labor laws were passed to provide civil and criminal relief for union problems and abuses.

Today, unionization goes to the center of the employer-employee relationship and seeks to control it on the most equitable ground possible. For employees, unions represent strength in numbers; for employers, unions represent the relinquishment of their control and economic power.

Although “peanuts and Cracker Jacks” sentimentality would lead us to hope otherwise, the world of professional sports is not immune from the difficulties and challenges of labor negotiations. Professional athletes and team owners have contributed to some of the most publicized and cutthroat labor negotiations of our time, including work stoppages, precarious 11th-hour settlements, strikes, stubborn impasses, and replacement workers (or threats of same) – all conducted in the most high-profile manner possible. Yet although the legal process remains the same for all unions, very few similarities exist between union negotiations in professional sports and those in other industries. Collective bargaining in professional sports has been described less as negotiating over working conditions than as “two mega-corporations talking to each other about mergers or splits or sales” (Chass 1994a).

Collective bargaining in professional sports is also different from that in most industrial or trade settings because professional team owners are dealing with such a closed, sheltered labor market. A very small number of athletes – roughly 3,500 total in the United States - are talented enough to be considered for major league professional sports. Moreover, says Chass, there is little or no international competition for the talents of American professional athletes, whose clout is a function not only of their unique skills but also of the unique relationship consumers have with the service they deliver.

Sports fans have a loyalty to their teams – often a “fanatical loyalty” – that is unmatched in the world of more mundane goods and services. This team loyalty runs to the players, not the owners. So for many fans, a field full of replacements playing under the team’s banner just won’t do the trick. Imagine Coca-Cola drinkers or Ford drivers being fiercely loyal to the workers in bottling plants or auto factories, and the difference becomes clear. To consumers, Coke is Coke and Fords are Fords, no matter who puts the liquid in the bottle or the wheels on the chassis.

On the other hand, team owners have certain advantages that don’t pertain widely outside of sports. For example, compared with other workers, athletes have little job security and their peak years are brief, which limits the unions’ “institutional memory.” In addition, athletes’ skills are not very portable, which, along with their short careers, yields a labor force that, says Corcoran (1994), is “vulnerable to management pressure.”

Unlike contracts in many other settings, professional sports union contracts are negotiated through multi-employer collective bargaining. The four major professional sports leagues – Major League Baseball, the National Football League, the National Basketball Association, and the National Hockey League – negotiate their collective bargaining contracts with their respective players’ unions on behalf of all the teams in their league. Individual teams are not welcome to negotiate with the players’ union apart from the league negotiations. Each owner and player has input into the negotiating process. However, once ratified, every owner and player is bound by these contract provisions.

Yet another difference between professional sports unions and trade unions is the unique sense of long-term responsibility to the profession. Traditionally, there has been tremendous solidarity among professional athletes, even across sports. Moreover, unlike their trade union cousins, professional athletes often tend to be concerned about how they leave their sport and their teams for the next generation. We no longer see this sense of responsibility to the next generation in many of the unions that comprise the AFL/CIO.

Collective bargaining in professional sports nonetheless shares one essential truth with collective bargaining everywhere: The bottom line for sports unions and sports team owners remains control and money.

A Grab for the Money

Baseball and basketball revenues have escalated dramatically since the early 1980s. Hockey revenues have also been booming in recent years. But many observers argue that there must be an end in sight for these increases as networks cut back their fees, stadiums and arenas reach capacity attendance, and markets become saturated with merchandise. When there is more and more money at stake, it stands to reason that both players and owners, regardless of the sport, want to get themselves as large a piece of the revenue pie as possible. And as revenues have soared, players have taken more of an interest in getting their share of that pie, while owners have attempted to protect their hefty investments and their profits, if any.

The largest and hardest-fought issues for all four professional sports leagues involve a combination of revenues and controls: salary caps, free agency, salary arbitration, reallocation of revenues from more prosperous to less prosperous teams, and other ways to control cost inflation. After brushes with labor problems in each sport, both sides seem more at odds over the revenue issues now than ever before. Owners look to Congress to “stop the salary madness.” They argue that the only way to protect the future of professional sports is, as McCarthy (1996) says, through “wage and price controls, small-team subsidies, antitrust exemptions, and other anti-market mechanisms generally discredited in the conventional business world.”

The most hotly debated revenue issue is the matter of salary caps, which set a limit on the total amount of money a team can spend on player salaries. The professional basketball and football leagues have salary caps in place, and baseball and hockey team owners want them too. Understandably, salary caps in one sport exert a powerful influence on labor negotiations in other sports. Owners maintain that they provide stability, predictability, and capital to their leagues, whereas players believe they hinder their ability to shop their talents around in a free market. Ironically, the salary cap issue creates an interesting dichotomy: union members arguing for free markets and owners arguing for collectivism, which is a step away from traditional union-management dogma.

Professional Sports and Player Restraint Systems

To understand better the ongoing labor-management conflicts in modern professional sports, we have to look at the long-standing tension between athletes and team owners over what are referred to as “player restraint systems.” Traditionally, these have been used in all professional sports to restrict player mobility among teams and to protect a team owner’s most valuable asset, the pool of unique player talent. Player restraint systems in professional sports include a draft (a system by which incoming athletes are allocated among teams in a particular league), the uniform player contract that every athlete in a sports league is required to sign, and the trade and free agency programs that leagues allow to move players between teams.

The argument in favor of restraint systems is that, in an unfettered free market system, the best players – incoming athletes as well as veteran players – would flock to the most desirable locations, the most successful clubs, or the teams paying the highest salaries, effectively destroying any competitive balance among teams. As a result, competition would decrease, game outcomes would become predictable, and fan interest would wane. Conversely, the players argue that restraint systems unfairly limit them from capitalizing on their talents, shackling them while employees in other industries are free to “vote with their feet.”

It could be that this argument has been the force driving professional sports unions in the first place. In the last few decades, changes to player restraint systems brought on by unionism have given professional athletes a much greater degree of contractual freedom. In football, basketball, and hockey, professional athletes have broken loose with help from U.S. antitrust laws. In baseball, because of that sport’s unique, historic exemption from the antitrust laws, players have sought relief only through collective bargaining.

Baseball’s exemption from antitrust laws dates back to the 1922 case of Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs, in which the player reserve clause was challenged as an unlawful restraint of trade under the Sherman Act of 1890. The clause restricted a player’s ability to move between teams and gave him no control over his salary or other contract provisions. Upon signing an initial contract with a baseball team, he became the property of that club. The challenge reached the Supreme Court, which determined that baseball owners were exempt from the antitrust laws because baseball games were not “trade or commerce” (a condition for applying the Sherman Act). This was a curious decision, given that baseball teams routinely cross state lines to play – for money.

Despite numerous challenges, basebali’s exemption has remained in force, with the courts concluding that Congress, through inaction, has implicitly approved of this outcome. Efforts to get Congress to speak up are periodically revived. And in late July 1997, the Senate Judiciary Committee voted to repeal a portion of basebali’s antitrust exemption. Armed with an agreement from both owners and players, some legislators are seeking to bring professional baseball labor relations in line with other professional sports in the hope of achieving fewer baseball strikes and lockouts.

In basketball, football, and hockey, players have sought relief from player restraint systems through the judicial process, arguing that these systems, including the draft and free agent indemnity, constitute unreasonable restraints on trade in violation of the Sherman Act. The ensuing litigation has brought into sharp relief the delicate balance between collective bargaining and the judicial process. Congress clearly supports collective bargaining as a means to settle issues between union and management involving terms and conditions of employment. The courts have attempted – with mixed success – to keep their involvement in these issues to a minimum.

First of all, the courts have shielded a broad range of union activities by finding a labor exemption from the antitrust laws in various provisions of the 1914 Clayton Act and the 1932 Norris-LaGuardia Act. Moreover, beginning in 1965, the courts have articulated the so-called “non-statutory labor exemption,” under which restraints that are agreed upon through collective bargaining under the labor laws are not subject to antitrust challenge.

Nevertheless, the courts have still made it clear that, except in baseball, the antitrust laws do apply outside the collective bargaining umbrella. Certain elements of player restraint systems have been held to be unreasonable restraints on trade in violation of the Sherman Act. The 1976 case of Mackey v. NFL, for example, deemed the “Rozelle Rule” to be an antitrust violation. Under the Rozelle Rule, a player whose contract expired could sign with another team, but in return the league commissioner could shuffle one or more players from the acquiring team over to the player’s former team. based on Supreme Court precedent, the Mackey court held that the non-statutory labor exemption could only apply if the restraint primarily affected only parties to the collective bargaining relationship, concerned a mandatory subject of collective bargaining according to the labor laws, and was a product of bona fide arm’s-length bargaining. In the court’s view, the Rozelle Rule flunked the last test, having been forced unilaterally on a weak union.

Importantly, the court in Mackey emphasized that only serious good-faith bargaining on an issue could activate the antitrust exemption. It stated, “The parties are far better situated to agreeably resolve what rules governing player transfer are best suited for their mutual interests than are the courts.”

The U.S. courts’ position on the non-statutory labor exemption keeps the federal courthouse door open to challenges of player restraints and greatly affects the dynamics of bargaining. For one thing, a question might arise as to whether a restraint has been the subject of serious, good-faith bargaining or has been thrust on a union that, practically speaking, had no choice, as in Mackey. Moreover, it remains unclear, and thus open to litigation, how long an admittedly exempt restraint might continue to be exempt after the collective bargaining agreement has expired.

Player restraint systems have always been at the center of union-management problems in professional sports. There appears to be no end in sight to these problems, and there probably will not be an end as long as power and money rule the sports machines.

Take Me Out to the Ball Game?

The labor movement in Major League Baseball (MLB) was organized in the mid-1950s in response to player unhappiness and bitterness toward restraint systems. Despite MLB’s exemption from antitrust laws, its players’ union is arguably the most successful union, sports or otherwise, in history. One of the shrewdest moves by the Major League Baseball Players Association (MLBPA) was to snag economist Marvin Miller as its full-time executive director and soon-to-be president in 1966. During Miller’s tenure, the MLBPA developed into an influential, powerful, and commanding organization supporting player salary increases and gaining arbitration rights.

By 1967, Miller was proving his labor acumen by negotiating major concessions from team owners. Included in his first basic accord was an agreement by the owners to submit $4.5 million annually to the player pension fund and raise the minimumsalary from $7,000 to $10,000. When this agreement expired, Miller again negotiated an increase in the minimum wage to $13,500. In addition, the owners consented to the use of players’ agents in contract negotiations and agreed to outside arbitration in settling salary disputes. Eventually the arbitration process would be responsible for netting the highest player salary increase ever. When Miller retired in 1982, the average baseball player’s salary was $245,000, up from $19,000 in 1966. In the early 1990s that figure was closer to $1 million. Miller’s legacy continues today.

MLB has experienced eight work stoppages since 1972. Player strikes or owner lockouts have caused games to be canceled or postponed in 1972, 1981, 1985, and 1994. Spring training had to be canceled in 1990. To date, the players’ union has won all labor disputes. Collective bargaining agreements since 1976 between the union and the league have won players the right to submit their salary disputes with clubs to binding arbitration (during which the arbitrator is not permitted to negotiate a compromise between the two parties; it’s either one offer or the other, a process known as final-offer arbitration). In addition, players have won the right to become free agents after their contracts expire, which allows them to offer their services to any team willing to pay the price. As a result of free agency and binding, final-offer arbitration, ball player salaries have grown at a compound rate of 13.5 percent per year since 1976. Meanwhile, despite billion-dollar, multi-year television contracts with several networks, owners have continued to complain of unprofitable business.

There is no denying that the baseball owners have valid financial complaints. They cannot easily predict their player costs from year to year because of MLB’s final-offer salary arbitration system. When an owner pays a player more than he might be “worth,” it sets a precedent for other players to demand the same deal or better. From the players’ perspective, MLB owners, acting as a cartel, are fighting for their long-standing player restraint systems to restrict the athletes’ movement, limit new entrants, maintain territorial exclusivity, pool their national television and radio revenues, limit roster sizes, partially share their gate receipts, and conduct a common player draft – all while enjoying exemption from the antitrust laws that regulate all other professional sports. Players struggle for more control over their sport and careers; owners struggle to keep what control they have.

The most recent work stoppage, the 1994 player strike, was the worst in MLB history, canceling the playoffs and the World Series for the first time in 90 years. It was also the first time we saw a fairly equal distribution of power between the owners and players. The crux of the 1994 strike was, again, money – more specifically, a salary cap and revenue sharing. In the wake of player gains scored over the course of almost three decades, owners were looking hard for bargaining concessions from players once the four-year collective bargaining agreement expired on December 31, 1993.

Following preliminary discussions between the players and owners in 1994, it became obvious that a quick settlement was not imminent. Fearing an impasse in negotiations and a unilateral decision to impose contract terms, the players decided to strike on August 12, early enough in the season to maintain leverage. By striking in August (with a hefty $200 million strike fund in place), the players earned two-thirds of their salaries, but the most profitable period for owners was on the horizon – the playoffs and World Series. Owners stood to lose buckets of money if the season did not continue.

With no end to the strike in sight, and with the antitrust exemption looming over the players’ union, the MLB labor dispute landed, oddly enough, in the U.S. House of Representatives, where congressional hearings were scheduled to discuss the more than 70-year-old MLB antitrust exemption. Congress wanted to consider how the exemption may have contributed to MLB’s many work stoppages and bad-faith collective bargaining problems over the years. Delays, strong lobbying by the owners, and perhaps constituent anger over the strike resulted in the issue remaining undecided by the House. Many experts maintain that the players’ voices will probably be heard sooner or later in Congress, and if the antitrust exemption is ever overturned, we will see yet another era in professional baseball – in the federal courtrooms.

The 1994 baseball season was over in August, and discussions began to revolve around the use of replacement players to start the 1995 season, which had been done in professional football during the 1987 strike and which has been a tactic of management for many years during labor strikes. In late 1994, a bargaining impasse was declared by the owners because the sides were no closer to a settlement. This declaration gave owners the flexibility to impose a salary cap unilaterally. The MLBPA challenged the declaration of impasse, claiming league owners did not bargain in good faith. A federal judge issued an injunction against the owners, restoring the previous terms of employment.

With the injunction in place, the players returned to work. Because of potential economic, legal, and public relations damage, the owners chose to forgo a lockout. The 1995 training camp was delayed, thereby shortening the season from 162 to 144 games. As a result, the players lost $230 million in salaries while the owners missed out on over $700 million in revenue. Moreover, the replacement players were sent back to the minor leagues. Players and owners formally met in late 1995 to begin negotiations on a new contract. In late 1996, owners and players agreed to several key provisions, including a unique revenue sharing plan, creation of interleague play beginning with the 1997 season, and increases in starting salaries for players.

The 1994 baseball strike was successful because the union was well led, it enjoyed solid support from its players, and the uniqueness of the players’ skills and talents could not be easily replaced. The owners bickered among themselves, presenting a fragmented facade of self-interest and greed punctuated with fights over revenue sharing. There were certainly disagreements among the players as well, but they were brought forth and resolved behind closed doors, out of the public view. The owners, on the other hand, often were not communicating directly with each other and were engaging in internal public debate through the newspapers. Moreover, although greed abounded on both sides, the reluctance of most owners to adopt a revenue-sharing plan among themselves impressed most knowledgeable observers as the ultimate example of self-interest run amuck.

baseball strike

On the 50-Yard Line

During the strike, NFL owners hired replacement players to continue the season. These were possibly the darkest days of labor relations in professional football. Unwilling to support a weak union leadership and with no player strike fund in place, some NFL players crossed picket lines to play. Despite tremendous inconsistency between the quality of the replacement teams, networks nonetheless carried these “scab games.” To worsen the situation, viewers appeared to accept the football they were watching. The 1987 strike was indeed a low point in professional football. The use of replacements pitted players against players, coaches against players, and coaches against owners.

The NFLPA lost its strike battle, returning to work without a collective bargaining agreement and having been dealt a serious blow. In the resulting win-lose situation, the owners saved up to $800,000 in salaries every week the strike continued, whereas the players lost more than $80 million in salaries for the games they did not play. (An interesting side question is whether the owners simply allowed the strike to continue unabated to save a little money.)

In retrospect, the players’ union faced an uphill battle from the start. The owners, complained Cosell, “with their illegal, unrestricted monopoly practices, and the lack of competition in the business of football, have created a power base so enormous and corrupt that it is almost untouchable. Operating in collusion with the networks, the owners are virtually unbeatable.”

Following the 1987 strike, which showed that traditional labor pressure tactics would not work in their efforts to obtain a contract with the owners, the NFLPA turned to the courts as a last resort. For five years after the strike, the players worked with no contract in place, and both sides spent more time in the courtroom than at the collective bargaining table. In late 1992, a serious attempt to iron out a collective bargaining agreement began with formal discussion between the players’ union and the owners. Issues included contract length, free agency, salary caps, and player exemptions. The resulting contract, especially with its salary cap, has exerted a great deal of pressure on other sports to follow suit.

The player strike of 1987 is a memory now, but the NFL Players Association has never been the same. To this day, it remains the weakest of the professional sports unions.

Through the Hoop

Since its inception in the 1950s, the National Basketball Association Players Union (NBAPU) has been successful in its efforts on behalf of professional basketball players and has never participated in a labor strike against the NBA team owners. Instead, the union has made its greatest strides through federal antitrust laws.

In 1987, following the expiration of its contract, the Players Union filed a broad antitrust lawsuit against the NBA, arguing that labor exemptions granted to the association under the previous contract had expired, opening up the possibility of antitrust claims. Finding little relief in initial court rulings, and in a daring and ingenious move, the union threatened to decertify itself – meaning that no collective bargaining process would be in place and the owners would be wide open to antitrust suits. The plan worked; the NBA capitulated, not wanting anything to do with negotiating individual contracts with players in a free market, subject to antitrust laws. The result, says Cosell, was the best collective bargaining agreement ever given any sports union.

As a result of this successful 1987 agreement, basketball player salaries have continued to escalate, and owners are scrambling to find an end to their skyrocketing operating costs. After unsuccessful initial contract negotiations in 1995, owners ordered the first player lockout in the history of the NBA. In response, the players’ union considered decertification once again. Indeed, the NLRB authorized a decertification election – which, in an interesting twist, was held on the same day as the deadline for the contract vote. Players could vote either for union decertification (leaving them open to file an antitrust suit against the NBA) or for the proposed contract with the league.

In the end, 88 percent of the eligible players participated in the “decertification versus contract” decision. By a great margin, the players ratified the new contract, continuing what is considered the most player-friendly agreement in professional sports. NBA players are now the most highly compensated and have the most liberal free-agency rules.

The accomplishments of the NBAPU represent a real success story. Not too many years ago, the NBA was a troubled league; attendance was down, television ratings were poor, league sponsors were few, some clubs were in serious financial trouble, and the league was fraught with drug problems. Because of the hard work of both the NBA and its players’ union, as well as the support of the fans and the popular media, professional basketball now enjoys a newfound popularity and economic strength.


On the Ice

Until recently, the professional hockey players’ union, the NHL Players’ Association, was not considered a strong advocate for its membership in collective bargaining with league owners. Long criticized for being a patsy to the owners, it never waged a strike against the league until 1992.

The primary issues surrounding this labor dispute involved, of course, money. The players wanted changes to the free agent procedures; owners, citing financial losses exceeding $9 million from increasing player salaries, wanted limits on salaries and a piece of the $10 million in trading card revenues the players were receiving annually. The strike proved to be very short, and the resulting labor agreement was for only one season. Both players and owners won concessions in the 1992 negotiations; the basic agreement, however, remained intact.

As expected, when the 1992 contract expired, the labor dispute picked up where it had left off. Owners wanted to tie player salaries to club revenues; players wanted more liberal free agency. Other issues involved salary arbitration, rookie player salary controls, and the entry draft system. Players were without a contract during the 199394 season when owners, claiming an impasse in negotiations, imposed unilateral contract terms that included 19 “take-aways” from the union. The players were willing to play the ’94-95 season without a contract as well, but league owners insisted on negotiations and threatened to postpone the season if no contract was established.

Following unsuccessful last-minute negotiations, the owners postponed the season in October 1994, effectively imposing a lockout, and vowed to cancel the season instead of encountering a mid-season stoppage like the baseball strike. The hockey union wanted a no-strike/no-lockout agreement, which the NHL rejected. Desperate not to cancel the season, which would damage the teams, the league, and the sport overall, owners and players negotiated a contract early in 1995, with no salary cap.

Much like professional basketball in recent years, hockey has enjoyed a surge in popularity and prosperity. The fan base is growing, merchandising revenues rise exponentially, television revenues increase, and teams move to new luxury arenas across the country. As this newfound popularity causes revenues to increase, professional hockey players will also continue to expect a larger piece of the growing pie.

With players’ unions becoming more powerful in the collective bargaining process and league owners continuing to fight to retain their profits, where is professional sports going? Perhaps, says Rhoden (1994), team owners will be willing to take greater risks to gain more control over their businesses, hold down their costs, and maximize their profits. As a result, we may see more labor strife, strikes, lockouts, and bargaining impasses as owners fight harder to keep what they believe is rightfully theirs – profits and control.

In response to management, perhaps we will see union efforts to combine collective bargaining forces across sports. The issues facing all professional athletes and team owners in collective bargaining are essentially the same: salary caps, revenue sharing, and free agency. The day may come when we see one union representing all professional athletes in team sports.

The opposite of the one-union prospect would be a completely free market in sports, with no unions, no collective bargaining, and no owner collusion. If all professional sports clubs were subjected to strict interpretation of the antitrust laws, we would see movement in this direction. Players would be free agents; there would be no salary cap, no minimumguaranteed salaries, no salary arbitration, and no player draft. Teams could move freely from city to city. Owners could compete for player talent on the open market. And players would have to market their services like never before. Perhaps such a prospect seems revolutionary. But the free market approach continues to be the most efficient way to run an economy – so why not sports as well?

Meanwhile, the fans grumble more and more each year and wish that players and owners would put the game first and just play ball. But the basic factors that drive labor economics – money and control – are far more powerful than sentimental associations with and among baseball, Mom, and apple pie. In other words, if a strike can cancel the World Series, then nothing is sacred, and in all likelihood, the recent atmosphere of labor-management conflict will continue to lie heavy over America’s parks, stadiums, arenas, and rinks. Enjoy the game!


M. Chass, “As Trade Unions Struggle, Sports Unions Thrive,” New York Times, September 5, 1994(a), p. C1.

M. Chass, “NBA Players Back Union in Landslide,” New York Times, September 13, 1995, p. B9.

M. Chass, “NBA Players to Vote on Future of Union,” New York Times, July 24, 1995, p. B7.

M. Chass, “Players’ Next Step is a Legal Challenge,” New York Times, December 24, 1994(b), p. C1.

M. Chass, “Union Seeks Approval First, Negotiations Later,” New York Times, September 26, 1996, p. B33.

M.H. Cimini and C.J. Muhl, “Labor-Management Bargaining in 1994,” Monthly Labor Review, 118, 4 (1995): 23-38.

K. Corcoran, “When Does the Buzzer Sound? The Nonstatutory Labor Exemption in Professional Sports,” Columbia Law Review, April 1, 1994, pp. 1,045-1,075.

H. Cosell, with S. Whitfield, What’s Wrong With Sports (New York: Simon & Schuster, 1991).

Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs, 259 U.S. 200 (1922).

T. George, “Owners and Players to Meet Today on Labor Agreement for NFL,” New York Times, December 15, 1992, p. B9.

J. Helyar, “Why Can’t Athletes and Owners Learn to Play Nice Together?” Wall Street Journal, September 6, 1994, p. B1.

W. Highberger, “The Impact of Brown v. Profession Football on the Future of Multi-Employer Bargaining Patterns,” Employee Relations Law Journal, 22, 3 (1996): 125-136.

J. LaPointe, “Pleas Amid a Vote by NHL Players as New Strike Deadline Approaches,” New York Times, April 1, 1992, p. B9.

J. LaPointe, “Play Hockey! Settlement Ends a 10-Day Strike,” New York Times, April 11, 1992, p. B35.

D.L. Leslie, Labor Law in a Nutshell (St. Paul, MN: West Publishing, 1992).

Mackey v. NFL, 543 F. 2d 606 (1976).

J.L. McCarthy, “The Soul of Sports,” Chief Executive, March 1996, pp. 50-51.

R.A. McCormick, “Labor Relations in Professional Sports: Lessons in Collective Bargaining,” Employee Relations Law Journal, 14, 4 (1989): 501-512.

D. Nemec and S. Wisnia, Baseball: More Than 150 Years (Lincolnwood, IL: Publications Intl., Ltd., 1997).

D.R. Oorlog, “Marginal Revenue and Labor Strife in Major League Baseball,” Journal of Labor Research, 16, 1 (1995): 25-53.

M. Ozanian and M. Taub, “Adam Smith Faces Off Against Karl Marx,” Financial World, February 14, 1995, pp. 32-35.

W.C. Rhoden, “Lockout, Push-Backs and Pull-Ups,” New York Times, October 1, 1994, p. 33.

W. Shapiro and R. Zoglin, “Bummer ’94,” Time, August 22, 1994, pp. 68-75.

C. Smith, “The Strike Is Going from Ugly to Uglier: When the Cap is Implemented, the Game Will Face its Greatest Test,” New York Times, November 30, 1994, p. B17.

L. Smith, “Beyond Peanuts and Cracker Jacks: The Implications of Lifting Baseball’s Antitrust Exemption,” University of Colorado Law Review, Winter 1996, pp. 113-141.

T. Smith, “Only the NFL Uniforms Looked Familiar,” New York Times, December 24, 1994, p. C4.

J. Starr and S. Taub, “Hypocrisy on Ice: Hockey’s Player-Cost Inflation is Slowing While Revenues Are About to Explode,” Financial World, February 14, 1995, pp. 38-46.

Kenneth A. Kovach is a consultant and a professor of industrial relations and human resource management at George Mason University in Fairfax, Virginia, Patrizia Ricci is a graduate student in HRM at the University of Maryland University College in College Park, Maryland, as well as an elementary school math teacher. Aladino Robles is also a graduate student in HRM at the University of Maryland University College, as well as chief of the Animal Husbandry Division at the Uniformed Services University of Health Sciences in Bethesda, Maryland.

Bound by Our Constitution: Women, Workers, and the Minimum Wage

What difference does a written constitution make? Vivien Hart poses this question with respect to minimum wages for women in the United States and Great Britain. Women’s labor legislation has been the subject of continual scholarly attention at least since the ruling, in Muller v. Oregon (1908), that laws invalid for men were acceptable for women. Feminists discovered the issue at about the same time constitutionalists exhausted its possibilities. Like Sally Kenney (For Whose Protection?, 1992), Hart has taken this issue into new territory by doing a comparative study. The result is an important contribution to constitutionalism, women’s studies, and comparative politics.

Women minimum Wages

Hart has taken on a formidable project. First, she must persuade the reader that the question is answerable. Other differences between the two systems (unitary vs. federal, parliamentary vs. separation of powers, etc.) – let alone differences in economic policy and political culture – militate against efforts to track the effects of any single factor. Second, the author must show that the answer matters. This books weaknesses stem from Hart’s failure even to perceive the first set of problems. The books value lies in its unexpected – and unexpectedly significant – resolution of the second set.

The books intellectual honesty does its author credit. Hart provides enough information to allow the reader to dispute her conclusions, and there is plenty. The American judiciary’s sustained, obdurate obstructionism on labor legislation, represented by Lochner v. New York (1905) and Adkins v. Children’s Hospital (1923), lends support to the convention view that “a potential for adaptability characterized Britain; a propensity to fixity the United States” (p. 4). So do the effects of the judicial rearguard action on Armerican labor law. Lochner led to Muller, with its emphasis on physical sex differences. Muller undermined both women’s protection and women’s equality, by providing an excuse to overturn a minimum wage in Adkins and by legitimizing any discrimination (however invidious) with a physical basis (however tenuous). By contrast, Britain’s first minimum wage was gender-neutral and antedated the Fair Labor Standards Act (FLSA) by almost 30 years.

On the other hand, the respective histories of the minimum wage might convince a cynic that the comparison is between six of one and a half-dozen of the other. Britain had a minimum wage only from 1909 to 1993; the FLSA, enacted in 1938, may not survive another Republican administration. In neither country has the minimum wage amounted to more than three-fourths of the estimated, living wage. In both countries women have comprised the majority of beneficiaries of the laws because women’s average wages lag far behind men’s. And Kenney’s study of women-only workplace restrictions in the same two countries demonstrates that physical differences have been so less common an excuse for restricting women in Britain than in the United States.

But Vivien Hart insists that the Constitution did make a difference – and a positive one. She reminds us that the Constitution’s effect on minimum wage law was not limited to hostile decisions. The Equal Rights Amendment, first introduced in Congress the same year Adkins was decided, generated valuable debate over – and reinforced the presumed dichotomy between – quality in law and equality in fact. American women “have been gainers” because “relative to Britain, their dual identity and double burden have been open issues” (p. 181). The constitutional tradition “enabled claims to be based on dignified grounds of right rather than demeaning terms of need” (p. 180). Hart gives this rights-based discourse a large share of the credit for the gradual expansion of the coverage to include 90% of workers, as opposed to 10% in Britain. The inclusion of farm and domestic workers effectively extended coverage to large numbers of black and Hispanic women.

Hart’s awareness of racial issues is a welcome corrective to the race blindness of much feminist scholarship on labor legislation. Her argument that a relationship exists between the written Constitution and the greater inclusiveness of American minimum wage law, if not compelling, is an ingenious and perceptive explanation of a counter intuitive result. Why should a nation which has verged on a welfare state and has no nasty judges to thwart the legislative will lag behind a government as reluctant as ours to interfere with market forces? But Hart too readily accepts the dichotomization embedded in relevant discourse and scholarship. Her distinction between rights and needs, for example, ignores the arguments of contemporary fiminist scholars that these need not be opposition (e.g., Rothman’s Recreating Motherhood, 1989). This weakness may be symptomatic of a tendency to rely on simple dichotomies as explanations of different outcomes. Yet even if Hart makes her subject simpler than it is, she has handled it in a provocative and insightful way.

Bare minimum: what constitutes a just wage?

In a final flurry of pre-holiday maneuvering, the last session of Congress failed to raise the federal minimum wage from its current rate of $5.15 an hour, at which it has languished for the past eight years. Recent efforts to raise the minimum wage have made strange political bedfellows, with the likes of Senators Ted Kennedy (D-Mass.) and Rick Santorum (R-Penn.)–otherwise on opposite ends of the spectrum–both championing the need to raise wages. Advocates argue that the last decade of inflation has made the current minimum wage less valuable than at any time since 1955. For those of us who are not economists but are concerned about the increasing disparities between haves and have-nots, it’s helpful to consider secular arguments on the minimum wage in light of Catholic social teaching.

bare minimum wages


Should the minimum wage be increased ?

During the past five years, Republican business interests have continued to prevail. According to their logic, the minimum wage is exactly what that is sounds like–an entry-level figure, attractive to teenagers, part-timers, or first-time job seekers gaining a foothold on the lowest rung of the pay ladder. Moreover, the thinking goes, if the minimum wage is raised, jobs will be lost because small-business owners will be required to reduce the number of employees to accommodate higher labor costs.

This is faulty thinking. First, if the federal wage floor is raised, labor costs for all employers will remain a uniform feature of doing business. Much recent research, especially analyses by David Card and Alan Krueger of Princeton, indicates that an across-the-board rate increase will not leave any particular owner at a competitive disadvantage, precisely because a regulated market helps keep the playing field level for everyone. Second, the claim that raising the minimum wage would lead to significant job losses is dubious. Suppose the minimum wage were lowered to, say, half its current level. Would a proportional increase in jobs immediately follow? Would lower labor costs lead to proportional reductions across the whole economy? Unlikely.

What has the church had to say about all this? Papal encyclicals since Leo XIII have spoken prophetically about the inadequacies of bottom-line thinking to meeting the moral requirements of individual and family dignity in capitalist economies. Since Aquinas, Catholic thought has emphasized the inseparable connections between property holding and the requirements of the common good. In the U.S. context, the landmark writings of Msgr. John A. Ryan on the right to a living wage adapted the tradition’s emphasis on common property to the circumstances of modern market economies. Ryan insisted that distributive justice is the necessary corrective to capitalism’s focus on generating, rather than distributing, wealth. One seldom hears justice language from those who decry raising the minimum wage.

But wait, such critics might protest. Don’t confuse our arguments about the minimum wage with Catholic musings about a living wage. The two are not the same. We are talking about the overall economy and the creation of jobs, not about the material needs of any particular person or family.

Really? Is that the argument? That everyone has to start somewhere, even at a wage rate that, in many places, would force workers to choose between basic shelter and one decent meal a day? What about those full-time workers–not teenagers or part-timers–who, for lack of skill, opportunity, or aptitude, are destined to stay on the lowest rung of the economic ladder? These people aren’t the product of an overactive liberal imagination. Barbara Ehrenreich’s powerful Nickel and Dimed (Henry Holt and Company) details the difficulties of the have-nots in today’s economy, and the sad tradeoffs required by the working poor in meeting their subsistence needs.

In the absence of federal action, campaigns to raise the minimum wage–many of them successful–have been conducted at local and state levels, as documented by Jon Gertner in the New York Times Magazine (“What Is a Living Wage?” January 15). Yet for all the grass-roots successes, efforts to raise the minimum wage still deserve federal action. If raising the minimum wage is not an important step toward improving the plight of the working poor, what other remedies do critics suggest? After all, the same Congress that begrudges a raise in the minimum wage for workers at the bottom readily finds reasons for continuing the gravy train of tax cuts for the most well-off, even as it slashes billions of dollars in spending for Medicaid. The same Congress that keeps a lid on the minimum wage seems unable or unwilling to reconsider the need for a system of national health care, which would dramatically improve the access of the working poor to timely medical services. The same Congress that preaches trickle-down charity rather than social justice seems intent on doing all it can to ensure that the working poor will stay that way, without the means, on their own or from the rest of us, to achieve the minimum security that Catholic social teaching holds is justly theirs.