Are Some Worker Rights Worth More Than Others?

This week, Apple store employees are busy getting ready to sell the company’s new line of iPhones, the colorful iPhone 5C and the improved iPhone 5S. Although these workers are paid an average of $11 an hour, there’s no sign of protests from the union-backed worker centers that organized nationwide fast food worker strikes in August.

No word from paid political activists at Fast Food Forward, Low Pay Is Not OK, Fight for 15, or Restaurant Opportunities Centers United. No word from New York Communities for Change, which took over ACORN when it closed after a scandal. No word from the Service Employees International Union, which has donated money to these groups.

Worker centers are organizations that advocate for worker rights through demonstrations, lobbying, and community organizing. Some are tax-exempt. They seek to persuade employers to change wages, hours, and terms and conditions of employment. Some offer education, training, employment services, and legal advice.

In a speech on Tuesday at the 2013 AFL-CIO convention, newly sworn in Labor Secretary Thomas Perez offered support for worker centers, saying “I also want to thank leaders of grassroots nonprofits who are here today and who have done remarkable work to give voice to the needs of low wage workers in the taxi industry, restaurants, domestic, home health and other industries with high concentrations of low wage workers.”

Worker centers have been complaining that fast-food chains make billions in profits, and that these companies can afford to pay more. They want fast-food workers to be paid $15 an hour, instead of a federal or state minimum wage that ranges from $7.25 to $9.19 an hour.

No matter that fewer than 3% of working Americans earn minimum wage, and that such increases will damage job prospects for teen and unskilled workers, who already face high unemployment rates. The Labor Department reported that the teen unemployment rate was 23% in August. The labor force participation rate fell to 1978 levels, as discouraged workers stopped looking. A higher minimum wage means fewer jobs, more discouraged workers.

The absurdity of worker center protests can be seen by the selective strikes. If activists were truly interested in $15 per hour wages, it would appear that Apple Inc. AAPL +1.88% would be as worthy a candidate for strikes as fast food restaurants. Its employees are service workers, just like fast food workers.

Apple owns its retail stores — unlike fast food companies, who rely on franchisees to run restaurants. Apple posted a $6.9 billion quarterly net profit in the latest quarter ending in June. Its executives were among the highest paid in the S&P 500 /quotes/zigman/3870025 SPX -0.03% . Senior vice president for technologies Bob Mansfield received $86 million in compensation in 2013, for example.

SEIU president Mary Kay Henry said that SEIU members “see the fast-food workers as standing up for all of us. Because the conditions are exactly the same.” Why aren’t Apple workers in the same boat?

Apple, and other organizations that pay workers entry level wages, such as Whole Foods WFM -1.52% and Urban Outfitters URBN +0.29%, have been spared the corporate shaming that the SEIU and worker centers are inflicting on fast food.

Union membership has been declining steadily over the past 30 years, and reached 6.6% of private sector workers in 2012. Even the government unionization rate dropped from 37% to 35.9%. Unions are looking for a new game plan to stem the tide. Hence the new focus on worker centers, and the public shaming applied selectively to corporations that, for whatever reason, anger those who support the union agenda.

At Tuesday’s AFL-CIO meetings in Los Angeles, the labor organization adopted a resolution in favor of worker centers.

The resolution states, “The labor movement must be open to these new forms of worker organization and advocacy and the AFL-CIO and affiliated unions will continue to work with worker centers and other advocates for workers’ rights, both to ensure that minimum standards are enforced and to prevent employers from using any workers to undercut the standards we have achieved through union representation and collective bargaining.”

It is to the labor federation’s advantage that worker centers are acting as unions, without any of the legal constraints placed on unions.

Labor organizations are regulated by a series of laws, including the National Labor Relations Act, passed in 1935, also known as the Wagner Act; the Labor Management Relations Act of 1947, also known as Taft-Hartley; and the Labor Management Reporting and Disclosure Act, passed in 1959, also known as the Landrum Griffin Act.

Under these laws, unions have to hold elections, so that workers can elect representatives. Unions represent workers because officials are elected in supervised elections. Worker centers are not official representatives of workers, including fast food workers, because they have not been elected.

Unions have to file financial disclosure forms with the Labor Department, specifying how they spend their money. Worker centers do not have to file these forms.

Unions are not tax-exempt organizations, and so they cannot receive tax-deductible contributions. But since most worker centers are organized as 501(c)(3) entities (charities), they are allowed to receive tax-deductible donations. A 501(c)(3) status increases the amounts donated by individuals and foundations, because many foundations are required to give only to charities.

The problem for the AFL-CIO, the SEIU, and other unions, is that when workers are given the choice of joining a union in a supervised election, they often vote not to join. Workers prefer not to pay union dues, and think that the costs are not worth the benefits. Plus, many union pension plans are underfunded, so workers’ contributions pay retirees’ benefits. There is no hope of similar benefits when the current workers retire.

Chairman John Kline of the House Committee on Education and the Workforce and Chairman David Roe of the Subcommittee on Health, Employment, Labor and Pensions wrote to Perez in July, “Today, many of these ‘worker centers’ are dealing with employers directly on behalf of employees. Given these activities, a case has been made that at least some ‘worker centers’ are labor organizations as defined by the Labor-Management Reporting and Disclosure Act (LMRDA), which would make them subject to annual filing requirements.”

Worker centers may be getting more power under Secretary Perez, but Congress cannot allow them to make an end-run around decades of labor law.

This piece originally appeared in WSJ's MarketWatch

This piece originally appeared in WSJ's MarketWatch