A crisis moment for the U.S. labor movement
Are unions losing their political juice? In this Friday, March 11, 2011 image, union supporters in Madison, Wis. rally on behalf of state senators who went to the state of Illinois, to postpone a vote on a bill that would limit the strength of unions. (AP Photo/The Country Today, Paul M. Walsh) / Paul M. Walsh
One of the most widely circulated photographs during the Wisconsin union battle was of a protester in Madison holding up a sign that read: "Dear Barack, Please put on your comfortable shoes. Love, America."
While that sign may not have meant anything to the rest of the country, those in the labor movement were all too aware that the president hadn't lived up to one of his most explicit promises. "And understand this," he told a union audience on the campaign trail in 2007. "If American workers are being denied their right to organize and collectively bargain, when I'm in the White House I'll put on a comfortable pair of shoes myself?--?I'll walk on that picket line with you as president of the United States of America."
Unions understandably feel they're owed. Obama, in turn, feels indebted. In his book The Audacity of Hope he wrote, "So I owe these unions. When their leaders call, I do my best to call them back right away. I don't consider this corrupting in any way." And that was before Obama was handsomely rewarded for being perhaps the most openly pro-union presidential candidate since JFK.
Unions spent in excess of $400 million in the 2008 election cycle, and nearly all of that went to Democrats, especially Obama. The Service Employees International Union (SEIU) alone spent over $80 million. (In January 2008, Obama told the union that he would "paint the nation purple with SEIU" as president, referring to the union's signature color.)
But if Obama doesn't consider his cozy relationship with unions corrupting, taxpayers may feel differently. Since Obama took office, his administration has rewarded unions on three major fronts.
To begin with, unions have been substantially enriched. One of Obama's first official acts as president was a February 6, 2009, executive order that in effect mandates union labor on large federal contracts through "project labor agreements" (PLAs). According to a study by the Beacon Hill Institute, PLAs make construction projects cost an average of 12 percent to 18 percent more.
Just after the executive order on PLAs, the stimulus bill was passed, which contained $188 billion in federally overseen construction projects as well as a provision applying Davis-Bacon "prevailing wage" laws to stimulus projects. This further slanted the awarding of federal contracts to the 17 percent of the construction industry that is still unionized. Heritage Foundation labor expert James Sherk estimates that the Davis-Bacon requirement alone could inflate the cost of the stimulus by as much as $17 billion.
The auto bailout also was of primary benefit to the endangered United Auto Workers. The Obama administration infused General Motors with upwards of $50 billion, even as the UAW boasted the deal meant no reduction in "base hourly pay, no reduction in . . . health care, and no reduction in your pension"?--?though exorbitant worker costs are one of GM's biggest operating handicaps.
Second, the Obama administration has rolled back union transparency requirements. The Bush administration was arguably the first to require unions to make meaningful financial disclosure, and their leaders to report conflicts of interest. The change had tangible effects. An unassuming Safeway bakery clerk was elected head of a powerful Denver grocers' union in 2009 after she revealed that the union's influential leader had put two relatives on salary for six figures and was using union dues to support a lavish lifestyle that included hefty bar tabs and NFL tickets. The corrupt union boss's ouster was made possible because the Bush Labor Department for the first time had mandated itemized expenses and staff salaries on the LM-2 union financial disclosure form.
That might be the first and last union election, however, where financial transparency plays a decisive role. Since then, Obama's labor secretary Hilda Solis has rolled back Bush administration LM-2 transparency requirements and stopped enforcing the requirement that union bosses disclose on form LM-30 whether they're being paid on the side by companies doing business with the union. (In 2004, unions filed 96 LM-30 forms. In 2005, that number was 13,326, thanks to the Bush administration's enforcement efforts.) The Obama administration has also stopped requiring financial disclosure for oft-abused union trusts or strike funds.
Third, it is readily apparent that unions influence the White House's legislative and political strategies. Many journalists noted that the most frequent visitor to the White House in the first six months of the Obama administration was then-SEIU head Andy Stern. Fewer noted that by the end of the year, according to White House logs, he had been surpassed by Anna Burger, aka "the Queen of Labor," who was then the SEIU's secretary treasurer. Almost no one noticed that Obama's political affairs director?--?the same position once held by Karl Rove?--?was Patrick Gaspard, formerly a top lobbyist for the SEIU. (Had Karl Rove been the former top lobbyist for a group that had spent $80 million electing Bush, it's hard to imagine this fact being all but ignored.) Early this year, Gaspard moved on from the White House to run the Democratic National Committee.
Both Stern and Burger have been appointed t o the White House fiscal commission. No doubt, having the SEIU set up shop in the West Wing helped unions garner a signifi-cant concession in the Patient Protection and Affordable Care Act that protects unions' generous "Cadillac" health insurance plans from being taxed until 2018. The union carve-out added about $120 billion to the bill's cost over ten years. It's also recently come to light that the $1.7 billion already spent for the health care law's Early Retiree Reinsurance Program has been a stealth bailout, with 6 of the top 10 recipients being union pension funds. In all, the administration granted 1,168 waivers covering 2,934,927 individuals, of whom 48 percent are in union health care plans.
The most direct attempt to influence the labor landscape quickly, however, might be Craig Becker's appointment to the National Labor Relations Board (NLRB). A former top lawyer for the AFL-CIO and SEIU, Becker was opposed vigorously by the business community, and his nomination was rejected in the Senate with bipartisan opposition. Obama placed Becker on the NLRB with a recess appointment. Within three months, the National Right to Work Foundation had filed 13 motions noting Becker's conflicts of interest in decisions before the NLRB. Oblivious, Becker has participated in handing down rulings in at least 17 cases involving unions he represented as a lawyer. In each of those cases save one, Becker ruled in favor of the unions.
By any measure, this is a staggering display of political favoritism. Rather than causing its beneficiaries to thrive, however, all this largesse has been necessary just to keep organized labor on life support.
Unions themselves are deeply pessimistic about the future. Until last fall, when he left the SEIU, Stephen Lerner was director of the union's high-profile campaign for reform of the banking and finance industries. He's not just any other union official?--?according to Washington Post wunderkind Ezra Klein, Lerner is "considered one of the smartest organizers, if not the smartest organizer, working in the labor movement right now. . . . At a time when a lot of people in labor have become, if not resigned to their fate as a marginal force in American life, increasingly confused as to how to reverse it, Lerner has a lot of fight left in him."
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