Why Airbnb is in talks with one of America's largest unions

Start-up Airbnb and the SEIU, one of the nation's largest labor unions, are in talks for a potential alliance.

The San Francisco-based home rental company offers a platform and income stream for home renters. The Service Employees International Union, or SEIU, represents some 2 million workers. The union has also been a major force and financial supporter in the fight for a $15 minimum wage.

Now as the SEIU and activists work to expand support for higher pay in the absence of congressional action, the large union seems to be making friends in unlikely circles in pursuit of more $15 union jobs.

The SEIU has generally been willing to make even unlikely alliances if they think it will benefit workers and help them build their membership ranks.
Chris Tilly
University of California, Los Angeles professor
Airbnb co-founder and CEO Brian Chesky (l) and Mary Kay Henry, international president of the 2 million-member Service Employees International Union.
Getty Images

"We actively and regularly engage in conversations with companies who are committed to doing right by their workforce by paying better wages and giving them a voice at work through their union. Airbnb is one such company," said Sahar Wali, an SEIU spokeswoman. "However, there is no formal relationship or agreement between SEIU and Airbnb," she said.

Airbnb, meanwhile, is considering how it might leverage its vast online platform to help generate good paying union jobs.

"We have been engaged in conversations with organizations and community leaders about how to best help working families find solutions to economic inequality, including creating specific ways we could leverage the Airbnb platform to help create quality union jobs that pay a livable wage," according to Christopher Nulty, an Airbnb spokesman.

So what would Airbnb and the union get from a potential deal?

At the very least, some good will and publicity. And in the case of the SEIU, broader support, including union-paying members.

Co-founded and led by chief executive Brian Chesky, Airbnb has allowed many people to rent homes for income, especially during the recession. Out-of-work Americans are using the rental platform to help create a patchwork of income in a growing freelance economy, sometimes referred to as the gig economy.

But in cities like San Francisco, Airbnb has triggered controversy as critics charge it is displacing long-term tenants as some people convert scarce rental property into essentially motels and hotels for travelers — all without paying local hotel taxes, or meeting regulations as required for the hospitality industry.

Seeking 'unlikely alliances'

The other figure in this potential relationship is the SEIU, led by international president Mary Kay Henry.

The union, with the help of local activists, has been able to transform a broad, sometimes confusing message about economic haves and have-nots (dating back to the Occupy Wall Street movement) into a focused campaign for higher mandated pay.

In 2015, the SEIU spent at least $20 million on the "Fight for $15" movement, according to analysis by the Center for Union Facts, a nonprofit that seeks accountability in America's labor movement.

"The SEIU has generally been willing to make even unlikely alliances if they think it will benefit workers and help them build their membership ranks," says Chris Tilly, an urban planning and sociology professor at the University of California, Los Angeles.

Speaking with the Guardian in April 2015, SEIU international president Henry said the Fight for $15 campaign was worth the investment.

"There is not a price tag you can put on how this movement has changed the conversation in this country," she told the newspaper.

Members of the Service Employees International Union (SEIU) Local 1021 in San Francisco.
David Paul Morris | Bloomberg | Getty Images

Unions are seeking ways to boost members as participation has declined over the decades. Attitudes about unions have shifted among generations.

"I think unions are a standard piece of American democracy," said Tilly in a separate interview last summer. "But I think that's disappeared from the public discourse."

More recently, the Los Angeles city council on Tuesday approved expanding paid sick leave for workers. But the city council took action on the paid sick leave policy without a union-backed clause that would have exempted unionized workers from an hourly $15 minimum wage.

Union officials have argued the clause would have allowed them to negotiate better overall contracts, while some critics said the exemption would have created an uneven playing field for pay thresholds.

At first take, this sounds confusing. Unions broadly support workers' rights and higher pay. But a handful of cities including San Francisco have pursued strategies that include union waivers in minimum wage laws.

Protesters on the steps of Los Angeles City Hall, June 3, 2015, before the City Council voted on an ordinance that would raise the minimum wage in Los Angeles to $15 per hour by 2020.
LA union wants to be exempt from $15 minimum wage

Balancing wages against other compensation such as health care is actually not a new concept. Back in the 1990s and early 2000s, there was a push for "big box" retail stores like Wal-Mart and Home Depot to pay slightly lower mandated wages if they also offered health insurance.

But the U.S. Chamber of Commerce described such union-backed exemptions from minimum wage increases as "escape clauses."

What's at stake: New union members

While the union clause was eventually dropped in the push before the L.A. city council, unions and activists have already been influential in the "Fight for $15."

According to the Center for Union Facts, the $20 million the SEIU spent last year is likely much higher, as it excludes some staff salaries, expenses paid for legal services, as well as money paid to minimum wage advocacy groups such as the National Employment Law Project and the Economic Policy Institute.

SEIU's funding and support have helped yield results through a region-by-region, city-by-city push for higher wages in the absence of federal action. The federal minimum wage stands at $7.25 an hour.

Gov. Jerry Brown of California recently signed a bill that will raise the minimum wage to $15 by 2022. New York City will see $15 hourly wages by the end of 2018, with slower increases elsewhere in the state.

Dozens of states, and the District of Columbia, have moved to lift mandated pay above the federal threshold.

A woman boards a Bridj bus in Washington, D.C.
Look what start-ups already pay $15 minimum wage

As the higher wage experiment ripples throughout the economy, a big question is whether unions will be able to convert their wage support into new, dues-paying members.

"The part that matters for SEIU is at some point for this to work for them, in terms of how they work as union, they've got to start collecting dues," said Tilly. "If they succeed in raising minimum wages all over the country but don't end up having more dues-paying members, then that becomes unsustainable," he said.

But as with many organizations, the funding has to come from somewhere.

"The money for these campaigns, the staff for these campaigns, comes from somewhere," said Tilly on the "Fight for $15" campaign. "And it's coming from a portion of dues money."