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Look for the Union Liable

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Unions are now more empowered and more desperate.

They feel empowered because a radically pro-union president has been elected for a second term. An Investor’s Business Daily headline (Nov. 21) proclaimed, “With Obama Win, Big Labor Feels Its Oats.” The article explained,

Unions are feeling their oats after the re-election of President Obama. It’s comparable to the perception of powerful political patronage after Congress’s passage of the National Industrial Recovery Act of 1933, which triggered a wave of strikes prolonging the Depression.

Unions also feel desperate because there is an active backlash against their cushy benefits and perks, especially the privileges of the public-sector unions, which are financed by taxation. The list of cash-strapped cities looking for ways to dump pension obligations is increasing by the week. If the recession deepens, as it almost certainly will, then the backlash will grow. The next few years may be a wild ride in terms of where and how unions will try to drive America.

The empowered and desperate unions.

Unions are expressing this new sense of empowerment through strategies in which they flex big muscles. For example, the United Food and Commercial Workers Union (UFCW) — spearheaded a nationwide Walmart strike on Black Friday, November 23. The UFCW has over a million members, but given that it is not the official union of Walmart, the move is remarkably bold. (Of course, Walmart has assiduously discouraged an official union in North America.)

Nevertheless, on the biggest sales day of the year, one of America’s most powerful unions pitted itself against the world’s largest private employer.

It is unclear whether the strike or other work disruptions will eventually lead to collective bargaining or any other concessions. But some messages are clear: an emboldened UFCW is playing hardball. And Walmart is standing firm. The retailer filed a complaint with the National Labor Relations Board (NLRB) in which it accuses the union of organizing illegal work disruptions. The complaint was a public statement of Walmart’s intention to resist union demands.

Unions’ recent aggressive strategies also indicate their desperation. On November 6, the residents of Costa Mesa, California, voted on ballot measure V. The measure would have changed Costa Mesa from a “general law” city into a charter one; this means it would have been governed by its own constitution rather than by state law. Thus, it would have more scope to privatize city services, such as policing, animal control, and fire fighting. The measure’s goal was to reduce the ruinously expensive pensions and benefits for public-service employees. The charter would also have ended the requirement to pay city workers the prevailing union wage.

Big labor reacted with a ferocity that bespoke panic. Under the headline “Forget Prop 32, Costa Mesa’s Measure V Is the Real Union Fight,” Southern California Public Radio KPCC (Nov. 5) explained,

Labor unions are spending upwards of $70 million to defeat California’s Proposition 32. [A statewide anti-union measure.] But they’re spending more per voter to stop another anti-union measure in Orange County.

Organized labor and its supporters are spending nearly $500,000 to defeat Measure V in Costa Mesa. That’s about $8.50 per registered voter, compared to $3.80 against Prop 32.

Jennifer Muir of the Orange County Employees Association expressed a major motivation for this enormous effort, saying, “One of our biggest concerns is that it would spread to other cities.”

Measure V was defeated.

New strategies?

From sought-out confrontations at Walmart to aggressive defensiveness in Costa Mesa, unions are breaking new political ground.

Some unions are facing off against local governments on the brink of bankruptcy. Others are appealing to big government to extend their reach into areas that are traditionally union-free.

An example of the latter is the American Federation of Teachers, one of America’s largest unions. The Washington, DC, branch (WTU) wants charter school teachers to be legally required to join its ranks. Charters receive public funds, but they are exempt from various rules and regulations that govern traditional public schools. In exchange for the exemption, charter schools must deliver specified results, including an acceptable curriculum and good test scores from students. There are currently 57 charter schools in DC.

Nathan Saunders, president of the WTU, revealed why he wants to push the union into charter schools. According to the Washington Examiner (Nov. 14), “his members are concerned they will lose their union-negotiated contracts” when 20 traditional public schools are closed next fall “and teachers look to charter schools for jobs.”

The government watchdog Union Watch commented on how the move would harm charter-school students whose test scores are regularly much higher than public-school students. For one thing, the charter schools have the educational advantage of being able to fire incompetent teachers; it is often difficult or impossible to fire a union teacher. The 20 schools scheduled to close, Union Watch commented, are doing so “because they are bad enough for parents to want to send their kids elsewhere … like to charter schools.”

As for any alleged harm inflicted on the teachers of the WTU, Union Watch further observed,

fewer unionized teachers mean less money and power for the American Federation of Teachers local. Clearly, Saunders needs the legislation to force charter school teachers to join his union because he knows that most of them don’t want to. (Nationally, only about 12 percent of charter school teachers belong to a union.)

The WTU gambit smells of desperation because it constitutes a long shot. A change in union status for DC charter schools would require the assent of Congress, and the Republican-dominated House is not in an agreeable mood. But the proposal is a bellwether of union plans to come. The strategies will aim at increasing the power of the unions, which comes from membership numbers and from money.

Increasing membership and money is what drove California’s Bill 1234, recently signed into law. The bill creates America’s first state-sponsored and state-managed retirement program for private-sector workers. For employees of every private company with 5 or more workers who do not already have an employer-sponsored pension plan, 3 percent of their income will automatically be deposited into a government-run retirement plan.

To avoid this fate, the employee must go through the process and paperwork of opting out. And then he must repeat the process every 2 years. The scheme is projected to put $6.6 billion under state management in the first year. The presumed manager is the California Public Employees’ Retirement System (CalPERS) — the biggest U.S. pension fund, with 1.6 million public-sector employees.

Conclusion

Over Obama’s second term, big labor will assert its demands in forceful and innovative ways. The most effective weapon against big labor’s clout is precisely what makes it defensive: public opinion. And opinion seems to be slowly turning against the unions.

Consider the bankruptcy of Hostess Brands, which produced Twinkies and Wonder Bread. The continuing media coverage is surprisingly critical of the role played by unions — specifically the Teamsters and the bakers’ union of the AFL-CIO. The bakery union’s unwillingness to grant concessions was the proximate cause of Hostess’s closure. But the story is more complex than that.

The Wall Street Journal (Nov. 20) explained that Hostess had been in bankruptcy proceedings for 8 of the last 11 years. The regulations imposed by the Teamsters in distributing goods were instrumental in preventing the company from being profitable. The WSJ commented on merely a few of those work rules,

Under the latest turnaround plan, the sticking point was Hostess’s distribution operations, source of the Hostess horror stories filling the media. Union-imposed work rules stopped drivers from helping to load their trucks. A separate worker, arriving at the store in a separate vehicle, had to be employed to shift goods from a storage area to a retailer’s shelf. Wonder Bread and Twinkies couldn’t ride on the same truck.

The bakers union was unwilling to make additional concessions as long as the Teamsters continued to operate in a business-destroying manner. The WSJ stated, “As the bakers rightly saw it, they were being asked once more to prop up Teamster jobs that would likely guarantee that any Hostess resurrection would be short-lived.”

Investor’s Business Daily was correct in its opinion of recent union activity:

If this is the future of America, it doesn’t work.

With unions leveraging political power instead of their own merit as labor, both accountability and the checks or balances of the marketplace are being thrown out.

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    Wendy McElroy is an author for The Future of Freedom Foundation, a fellow of the Independent Institute, and the author of The Reasonable Woman: A Guide to Intellectual Survival (Prometheus Books, 1998).