Ways to Regulate and Reform Unions in America Today

The role of unions in the United States has historically been to pool the collective power of workers to negotiate an end to exploitative work conditions and elevate rates of compensation. During the late 19th and early 20th century, unions fought courageously and successfully to raise the standard of living for workers and to push for systemic legislative reforms. While union spokespersons today may overstate their role in the creation of a middle class in America, their legacy is one of undeniable heroism and accomplishment.

In the aftermath of WWII, when the United States had an economy that was larger than the rest of the world combined, and a uniquely intact industrial base, unions flourished as never before. As America’s manufacturers enjoyed a near monopolistic position on world markets, and exported products to the recovering and developing nations, record profits amid minimal foreign competition enabled management to grant request after request to union negotiators, and a middle class was established that enjoyed an unprecedented level of broad prosperity.

Today the status of unions, and workers, is very different. The recovery of Europe and Japan, followed by the rise of great manufacturing nations throughout the world, has disrupted if not destroyed entire industries in the U.S. That process was accelerated by the failure of unions to adapt to an increasingly competitive global economy. The American consumer can purchase a dazzling array of products at incredibly low cost, but the price for this has been the decimation of private sector unions. And into this void, public sector unions have emerged as the new voice of labor in the United States.

With public sector union members now comprising more than half of all union membership in America, and probably more than two-thirds of all union revenue, organized labor is no longer a voice for exploited workers – that battle was fought, and won, nearly 100 years ago. Today organized labor is predominantly representing white collar professionals who work for the government. The agenda of these unions is to increase their membership, and increase the pay and benefits for their members. They negotiate not with managers representing the owners of capital – where there is a common interest in preserving the ability of the company to survive in the competitive free market – but with elected officials who rely on taxation for their funds. When a government program fails, rather than cancel it, the union agenda would more naturally favor extending and increasing it.

Here then are some principles and reform ideas that might inform any realistic program to redefine and revitalize unions in 21st century America:

(1) The greater the extent to which unions operate in a monopoly environment, the more restrictive the regulations should be governing their conduct and the scope of their permitted activities. Public sector unions operate in a total monopoly. Public utility worker unions operate in a near-monopoly. These unions should not have the same rights as unions operating in a totally competitive environment where there are natural checks on their agenda. For example:

(a) Public sector unions should not be able to negotiate for long term benefits such as retirement pensions or retirement health care. These benefits should be offered or withdrawn based on policy decisions made by elected officials who are accountable to taxpayers. To the extent public sector unions can collectively bargain for current pay and benefits, these contracts should not extend beyond the term of office of whatever elected officials may approve these packages.

(b) Public sector unions should not be able to require any employee to join their unions, nor to pay the “agency fee,” nor to be required to participate in the terms of the collective bargaining agreement. Public sector union participation by individuals, at all levels of participation, should be strictly opt-in.

(c) Public sector unions should not be permitted to use their funds for any political activity whatsoever. If public employees wish to form voluntary associations to lobby for political issues or support political candidates, they should do it entirely outside the union organization.

(d) No government agency should be used as a collection agent for union dues. Public sector unions should be required to bill their members using their own resources, not rely on the government payroll department to collect these dues for them.

(2) In general, the principle that should apply to the bargaining agenda of public sector unions, if not all unions, should be to push for benefit enhancements for ALL workers, not just the members of a particular union. Public sector pensions for state and local workers in California, for example, now offer newly retiring workers with 30+ years of service, on average, a pension that is literally four times bigger than the average social security benefit. We are on track to pay more in pensions to our retired population of government workers than we will be paying in social security to everyone else. This is totally unsustainable. When it comes to retirement security benefits that are paid for by taxpayers, unions, especially public sector unions, should be working with other activists to develop ONE financially sustainable formula of withholding, investment and disbursement that applies to ALL workers in the United States.

(3) Unions, especially public sector unions, need to acknowledge their partnership with America’s overbuilt financial sector, instead of pretending Wall Street is to blame for the economic challenges facing America. Whenever governments spend more than they receive in tax revenue – in order to pay for union negotiated, over-market wages and benefits, along with union supported programs that increase the numbers of unionized government workers – it is the bankers who loan the money and collect the fees and interest. And public sector pension funds are pouring more cash into Wall Street brokerages than any other source in the world. There are many thoughtful solutions to America’s challenges relating to government deficits, debt (all sources), and demographics (aging population). But they cannot be seriously addressed until public sector union members – and the taxpaying voters – connect the dots. The agenda of government unions is symbiotic – to put it mildly – with the agenda of global bankers.

(4) Unions need to prioritize infrastructure over compensation structure. Instead of elevating the wages of union workers to the point where the average government employee now enjoys total compensation that is literally twice that of the average American worker, unions should push for projects that rebuild our roads, railroads, bridges, aqueducts, water storage, power stations, energy grid, communications grid, and resource extraction. Here the axis of public sector unions and global bankers is particularly apparent, as is the looming schism between public and private sector unions. Because public sector unions benefit when infrastructure development is stopped in the name of environmental concerns. It frees more money up for their compensation packages. And when “carbon emission auctions” extract hundreds of billions of dollars from rate paying utility consumers, Wall Street brokers the deals, collecting commissions and fees, and for public sector workers who have assessed the “CO2 mitigation” value of their jobs (think bus drivers and code inspectors, to name just a few), those CO2 auction proceeds go straight to government payroll departments.

There is a win-win that it is important to emphasize when discussing how unions may be reformed and redefined in 21st century America. Because unions today operate under an economic model that exchanges social costs for private gain. That is, taxpayers pay a little more, and government workers make a lot more. How do you convince unionized government workers to accept making less?

The solution is to embrace a new economic model, that supports investment in infrastructure that LOWERS the cost of living for EVERYONE (ref. “Finding Common Ground With Private Sector Unions“). With cost-effective development of energy and water resources, investment in practical transportation improvements, and an end to restrictive land use regulations, the costs to ALL consumers will go down. This requires confronting the alliance of government unions, global bankers, and monopolistic corporations. Government workers need to make less, the financial sector needs to shrink, and corporations need to compete. If this can be accomplished, retirees can afford to live on a defined benefit that is barely better than what social security offers, because everything, from taxes to the cost of basic utilities to the cost of housing, energy and transportation, will go down more than wages.

This objective – that in exchange for lower wages and benefits, the cost of living will go down even more – is what should accompany any calls for union reform.