The Friedrichs Free Rider Fraud

The Supreme Court’s decision to hear the Friedrichs case has the unions in a tizzy.

On June 30th, the Supreme Court decided to hear Friedrichs v. California Teachers Association et al, a case that could seriously change the way the public employee unions (PEUs) do business. If the plaintiffs are victorious, teachers, nurses, sanitation workers, etc. would be able to work without the financial burden of paying union dues. The responses to the Court’s decision from the teachers unions and their friends have ranged from silly to contradictory to blatantly dishonest.

In a rare event, leaders of the NEA, AFT, CTA, AFSCME and SEIU released a joint statement explaining that worker freedom would be a catastrophe for the Republic. Clutching their hankies, they told us that, “big corporations and the wealthy few are rewriting the rules in their favor, knocking American families and our entire economy off-balance.” And then, with an obvious attempt at eliciting a gasp, “…the Supreme Court has chosen to take a case that threatens the fundamental promise of America.” (Perhaps the labor bosses misunderstood the wording of the preamble to the Constitution, “In order to form a more perfect union….” No, this was not an attempt to organize workers.) While the U.S. is not without its problems, removing forced unionism will hardly dent the “fundamental promise of America.”

The California Federation of Teachers, which typically is at the forefront of any class warfare sorties, didn’t disappoint. The union claims on its website that the activity of union foes “has resulted in a sharp decline in median wages for working people and the decline of the middle class alongside the increasing concentration of income and wealth in the hands of the one per cent.” But wait a minute – the unions are the most potent political force in the country today and have been for a while. According to Open Secrets, between 1989-2014, the much maligned one-percenter Koch Brothers ranked 59th in political donations behind 18 different unions. The National Education Association was #4 at $53,594,488 and the American Federation of Teachers was 12th at $36,713,325, while the Kochs spent a measly $18,083,948 during that time period. Also, as Mike Antonucci reports, the two national teachers unions, NEA and AFT, spend more on politics than AT&T, Goldman Sachs, Wal-Mart, Microsoft, General Electric, Chevron, Pfizer, Morgan Stanley, Lockheed Martin, FedEx, Boeing, Merrill Lynch, Exxon Mobil, Lehman Brothers, and the Walt Disney Corporation, combined.”

So the question to the unions becomes, “With your extraordinary political clout and assertion that working people’s wages and membership in the middle class are declining, just what good have you done?”

Apparently very little. In fact, the National Institute for Labor Relations Research reports that when disposable personal income – personal income minus taxes – is adjusted for differences in living costs, the seven states with the lowest incomes per capita (Alaska, California, Hawaii, Maine, Oregon, Vermont, and West Virginia) are forced-union states. “Of the nine states with the highest cost of living-adjusted disposable incomes in 2011, Iowa, Kansas, Nebraska, North Dakota, South Dakota, Texas, Virginia and Wyoming all have Right to Work laws.” Overall, the cost of living-adjusted disposable income per capita for Right to Work states in 2011 “was more than $36,800, or roughly $2200 higher than the average for forced-unionism states.”

But the most galling and downright fraudulent union allegations about Friedrichs concern the “free rider” issue. If the case is successful, public employees will have a choice whether or not they have to pay dues to a union as a condition of employment. (There are 25 states where workers now have this choice, but in the other 25 they are forced to pay to play.) The unions claim that since they are forced to represent all workers, that those who don’t pay their “fair share” are “freeloaders” or “free riders.” The unions would have a point if someone was sticking a gun to their collective heads and said, “Like it or not, you must represent all workers.” But as I wrote recently, the forced representation claim is a big fat lie. Heritage Foundation senior policy analyst James Sherk explains,

The National Labor Relations Act (NLRA) allows unions that demonstrate majority support to negotiate as exclusive representatives. If they do so they must negotiate fairly on behalf of all employees, including those who do not pay dues. However unions may disavow (or not obtain) exclusive representative status and negotiate only for their members. Nothing in the National Labor Relations Act forces exclusive representation on unwilling unions. (Emphasis added.)

Mike Antonucci adds,

The very first thing any new union wants is exclusivity. No other unions are allowed to negotiate on behalf of people in the bargaining unit. Unit members cannot hire their own agent, nor can they represent themselves. Making people pay for services they neither asked for nor want is a ‘privilege’ we reserve for government, not for private organizations. Unions are freeloading on those additional dues.

If there are still any doubters, George Meany, the first president of the AFL-CIO, whose rein began in 1955 and continued for 24 years, told Congress,

When a union has exclusive recognition with a federal activity or agency, that union is required to represent all workers in that unit, whether or not those workers are members of the union. We do not contest this requirement. We support it for federal service, just as we support it in private industry labor-management relations.

While the NLRA applies only to private employee unions, the same types of rules invariably govern PEUs. Passed in 1976, California’s Rodda Act allows for exclusive representation and it’s up to each school district and its local union whether or not they want to roll that way. However, it is clearly in the best interest of the union to be the only representative for teachers because it then gets to collect dues from every teacher in the district. It’s also easier on school boards as they only have to deal with one bargaining entity. So it is really a corrupt bargain; there is no law foisting exclusivity on any teachers union in the state.

So exclusive representation is good for the unions and simplifies life for the school boards, but very bad for teachers who want nothing to do with organized labor. It is also important to keep in mind that the Friedrichs case is not an attempt to “bust unions.” This silly mantra is a diversionary tactic; the case in no way suggests a desire to do away with unions. So when organized labor besieges us with histrionics about “the promise of America,” the dying middle class, free riders etc., please remind them (with a nod to President Obama), “If you like your union, you can keep your union.” In this case, it’s the truth.

Larry Sand, a former classroom teacher, is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers and the general public with reliable and balanced information about professional affiliations and positions on educational issues. The views presented here are strictly his own.

How to Opt Out of Public Sector Unions

This week is National Employee Freedom Week, a nationwide effort of 81 groups in 45 states to raise awareness among public union employees that they can opt out of membership in their unions. Groups also provide members with the necessary help and resources to do so.

Victor Joecks, executive vice president at the Nevada Policy Research Institute and an organizer of NEFW, told me why this week should be celebrated:

In almost every area of life, Americans understand that they have the right to join and leave associations. Every day some Americans go to a new church, switch political parties, or cancel magazine subscriptions without even considering the possibility that they wouldn’t be able to leave an organization they were unhappy with. We understand these rights in almost every area of life except for one—union membership.

The issue at stake is not that employees cannot leave a public sector union—it is that they cannot choose to stop funding the union. In forced unionization states, employees have the option to become agency fee payers, exempting them from paying for union activities that are directly political. By doing so, they lose many benefits of union representation, such as liability insurance. However, they are still forced to pay most of the dues.

Many people who support forced-unionization bring up the “free rider” problem. They say that people who leave the union will still receive benefits, such as bargaining for increased pay, fewer hours worked, and more generous retirement benefits, that they do not pay for. While this is a valid concern, the desire to opt out of public sector unions is not a case of a free rider problem. No sane person would force someone to get on a bus, then complain that they are “gaming the system” by resisting paying the fare. If union membership were voluntary the free rider problem may apply, but it is not.

Many union members see how collective bargaining is bankrupting state and local governments and harming educational achievement. They understand that by burdening their neighbors, children, and grandchildren with high levels of debt, collective bargaining works against their interests. States are $5.1 trillion in debt, of which $4.4 trillion is due to unfunded pension funds. To cover the total unfunded liabilities of state governments, each person in the United States would have to pay over $14,000.

Unions also oppose common-sense educational reforms such as charter schools and voucher programs. Implementing programs that inject choice into education is necessary right now. The latest results from the National Assessment of Educational Progress tests show no change in high school students’ reading or math skill levels from four years before. Stagnation is not acceptable when less than 40 percent of students are proficient in reading and only 26 percent are proficient in math.

With unions supporting so many harmful policies, is it any wonder that over 4 million Americans would leave public sector unions if they could?

While leaving a union is possible, it is not easy. Unions have a strong interest in keeping as many full-dues paying members as they can. Personal testimonies at this week’s Heritage Foundation event, Free at Last: How and Why Union Members Leave Their Unions, confirm that unions work to frustrate those who want to leave at every turn.

Voluntary association should not be a partisan issue. The vast majority of Americans (over 80 percent) agree that union employees should be able to opt out of having their hard-earned dues used for political spending.

These issues all stem from the flawed 1977 Supreme Court case, Abood v. Detroit Board of Education. In this case, collective bargaining was upheld, along with forced dues collection, even if members disagreed with the political ideology of the union leadership.

A group of California school teachers is seeking to have the Supreme Court reevaluate and overturn the Abood decision on First Amendment grounds. It is common knowledge that the First Amendment protects the rights of free speech and free association, yet forced unionization continues. Even worse, a substantial portion of the dues are used to promote political ends that many members disagree with on practical or moral grounds. The case, Friedrichs v. California Teachers Association, is working its way through the courts and offers hope that the injustice created by taking away choice is done away with for good.

Returning to Joecks’s example, imagine if magazine companies did what public sector unions do. They could force people to sign up for a subscription and refuse to allow them to stop paying for the magazine—even if they do not want it. Attorney General Eric Holder would be filing a lawsuit against them and the authorities would be involved.

Thankfully there are other solutions to public union representation. Private professional organizations, such as the Association for American Educators, offer perks such as $2 million in liability insurance and legal protection. These benefits are offered at a lower price than union protections, since AAE is focused on serving its members rather than protecting its special treatment in Washington, D.C. and state capitals.

Unions are supposed to provide a service. In any other part of the service industry, if customers began leaving, the company would need to rework its value proposition. Unions refuse to do so. Instead they do all they can to hold their “customers,” and American taxpayers, captive.

About the Author:  Jared Meyer is a policy analyst at the Manhattan Institute. He is a graduate of St. John’s University where he received a B.S. in finance and a minor in the philosophy of law. Jared’s research interests include microeconomic theory and the motivations for, along with the economic effects of, governmental regulations. He was previously a research assistant for the political philosopher Douglas Rasmussen. Jared also publishes and presents on the need for a moral foundation of free markets. This article originally appeared in Public Sector Inc. and appears here with permission.