LaborPains.org

It’s no mystery that labor union leaders are paid well. But a closer look at the numbers are still astounding.

The Washington Times has the full report today, compiled from information available at UnionFacts.com. The article, which features our managing director, J. Justin Wilson, details how union leadership spends millions of member dues on themselves.

There can be riches in standing up for the working class: The Boilermakers union president earned $506,000, plus hundreds of thousands of dollars more for travel expenses, while the Laborers union president made $441,000. The Transportation Communications Union leader made $300,000, bumped up to $750,000 with business expenses.

Patrick W. Flynn makes $435,000 a year in his capacity as treasurer of a 13,600-member Teamsters union local, and the $30,000 in business expenses he collects on top of costs associated with carrying out his duties around Mokena, Ill., approach that of a typical worker’s entire salary.

Some of the salaries top half-a-million dollars per year. And in relation to the size of the unions (most of which are shrinking) the staff costs seem to keep growing. Union leaders want to maintain their luxurious lifestyle, and they do it on the backs of their fellow union members. How? By increasing the costs of dues:

Those salaries are financed largely, of course, by dues paid by members, and the average dues paid to a local by each member rose to $401 in 2011, up from $272 in 2000, or $355 in inflation-adjusted dollars. But some dues were far steeper than others. Boilermakers Local 154 raised its dues from 4 percent to 7 percent of wages over the past five years, for example.

This practice is problematic, according to Wilson:

J. Justin Wilson, managing director of the Center for Union Facts, a union-watchdog group, said spending of members’ dues on officers’ perks represented a conflict of interest because “the board of the union has the fiduciary responsibility.”
“There have been more than a few instances of labor leaders living high on the hog at the expense of their members,” he said. Those excesses occur in the corporate world, too, but as nonprofits, “technically they are beholden to the taxpayers. In exchange for not paying taxes, there’s a greater degree of responsibility.”

In the wake of Michigan becoming the 24th right-to-work state, numerous commentators have recognized that if employees aren’t forced to be members, unions may actually have to appeal to them. What a novel idea—free choice. It’s not something that most unions are used to dealing with. That’s reflected in the clear disconnect in political spending done by labor.

And even in employment and collective bargaining matters, unions don’t appear to have even the most basic employee interests in mind — like making sure theykeep their jobs. As was the case in the Hostess bankruptcy and eventual liquidation, the leadership of the Baker’s Union (BCTGM) was willing to push the entire enterprise over the cliff, putting thousands of people out of work. It continued to spin myths about the prospects of a buyout in order to encourage solidarity. The BCTGM’s failed campaign against American Crystal Sugar has left thousands of its union members out of work. Meanwhile, BCTGM President Frank Hurt and his family continue to collect thousands in compensation.

Michigan became the 24^th right-to-work state on Tuesday when Governor Rick Snyder signed two bills ensuring that employees will not be forced to pay a union just to keep their jobs. Police and fire unions were the only ones not included in the reforms.

While labor makes grand plans for a response after a long, loud, and violent day of protesting, little is mentioned on what this means for unions and their members.

The most popular misconception is that right-to-work laws eliminate all collective bargaining and do not allow employees to unionize. That’s wholly incorrect. Right-to-work laws change the status quo: rather than forcing employees to pay the union, either by member dues or non-member agency fees, those employees can opt out of this compulsory association.

At the heart of the right-to-work issue is something often ignored in reporting and in the debate: freedom. As President Obama said, politics have dominated the right-to-work conversation.  That should not be the case. The idea that someone must pay another just to be able to hold a job is a bizarre concept, but it’s one that has long been considered acceptable. An employee should have the freedom to work wherever he or she is hired and not be forced to pay a third party for the privilege.

Michigan is the second state this year to go right-to-work—Indiana did so in February. This is another step in the long history of labor reform. Instead of looking for ways to turn back progress, labor unions should consider the reasons why members want to be able to avoid them.

For the past week we’ve heard from breathless activists and politicians and biased journalists ranting about the Michigan legislature and governor moving to give the state’s citizens the freedom to work. Add the President of the United States to that list. According to the White House transcript, Barack Obama told a crowd in Michigan:

[W]hat we shouldn’t be doing is trying to take away your rights to bargain for better wages and working conditions.  We shouldn’t be doing that.  These so-called “right to work” laws, they don’t have to do with economics; they have everything to do with politics.  What they’re really talking about is giving you the right to work for less money.

First, it’s clear that Obama took notes on labor talking points after his meeting with union leaders last month.  “Right to work for less” is a tired old labor slogan, dragged out of the rhetorical trash every time a state legislature tries to reform labor laws.

Second, and more importantly, Obama is half right—if not for politics, it’s doubtful that either party, including Democrats, would be in favor of compulsory association and payment. But Democrats have benefited from labor unions, using member rolls to get out the vote and to collect dues that go towards political activity. This year was no different, as labor came out strong for Obama. The President’s continued support of forced unionism is part of the payback to labor that he failed to accomplish with EFCA in his first term.

If these dues did not go towards supporting politicians, which one would stand up and advocate for union dues and agency fees? Obama has put politics, and political money, ahead of what should be a basic right.

Right to work is also about economics and jobs. Michiganders need look no further than their neighbors to the south, Indiana. The Mackinac Center found that in the few months since Indiana passed its own right-to-work bill, the state has gained 43,000 jobs while Michigan has lost 7,300. And as Rich Lowry notes in the New York Post:

One study, by a University of Minnesota economist, looked at states bordering one another with and without right-to-work laws. It found “an abrupt change” when crossing the border into a right-to-work state, and “that manufacturing’s share of total employment increases about one-third.”

The benefits for the citizens of the soon-to-be 24 states that enjoy the right to work are advantages of freedom and economics.

Unions like to play up the fantasy that they stand for “the little guy.”  But that illusion quickly fades when labor leaders have to deal with those little people, and especially if those people are members of the union.

The latest exhibit is Mariam Noujaim, an Egyptian immigrant and member of the 95,000-member SEIU Local 1000, which represents the state employees of California. Since 2010, Noujaim has been on a quest to take a look at the local’s books in order to determine if the union has been wasting member dues. Jon Ortiz of the Sacramento Bee, who covers labor in California, reports:

State employee Mariam Noujaim said the tussle with her union started with a question: Why does the state pay for crossing guards to work on a lightly traveled street between two DMV buildings connected by a tunnel?

“I really believe we can help solve our crisis by spending our money on monitoring the waste rather than bribing political and special interest (groups),” Noujaim wrote in an indelicate April 2010 email to her Service Employees International Union Local 1000 representative.

Under the Labor-Management Reporting and Disclosure Act (LMRDA) any private sector union member has the right to see his or her union’s required federal financial filings as well as the “supporting records” if there is “just cause.” But that’s no help to Noujaim—since she is in a public sector union, such disclosure is not required. Under federal law, public unions must provide an IRS Form 990 and a more detailed Hudson notice—an independently audited report showing how the union dues are calculated. Under California Corporations Code Section 8333, Noujaim has the right as a member of the union to inspect the books “for a purpose reasonably related to such person’s interests as a member.”

After spending $18,000 of her own money and months and months in court, Noujaim was finally able to view Local 1000’s records—with limitations, of course:

After two years of legal battles to force SEIU to open its books, Noujaim and fellow activist Lisa Garcia had half a day to riffle through credit card records and expenditure statements from 2009 and 2010. They were not allowed to take photos, make copies or take anyone else to view the documents.

What was it that helped Noujaim to earn the “suspicion” of the local?

“She supported Meg Whitman,” [union spokesman Jim] Zamora said, referring to the 2010 Republican gubernatorial candidate whose name became a virtual epithet among state workers for her promise to cut 40,000 state jobs and tear down public pensions.[emphasis added]

This would be serious cause for concern for a private union. As far as we can tell, federal law doesn’t distinguish the rights of union members based on their political affiliation—despite what union political spending records may suggest.

Noujaim’s website www.helpsaveourstate.com, alternatively known as “OCCUPY SEIU,” has chronicled her journey to make the union responsible to its members. Noujaim said that what she was able to see on Tuesday showed large expenses for hotels, restaurants, and travel, which she viewed as potentially unnecessary, excessive spending. Noujaim believes that the union could and should work as a watchdog to fight waste throughout the California government, as its employees are on the front lines.

On its website, Local 1000 encourages members to blow the whistle on “wasteful private vendor contracts” in order to help the state save money (and to give the jobs to government union employees). But the union doesn’t want to be open to the same critique. You’d be hard pressed to find any detailed financial information on the union, and what you can find is only readily available through another website.

Accountability and transparency are near the bottom of labor’s priorities. Instead, unions prefer to focus on political activity and personal attacks. Noujaim would like to see labor improve:

“They’re becoming a special interest group so we’re trying to go back to the original goal and purpose of the union to work for their members not to be a special interest group and work for politicians.”

This isn’t the first time that Local 1000 has been in the news this year. Another California state employee, Dianne Knox, opposed a special fee for politics assessed against her, a “fair share” member. The case, Knox v. SEIU Local 1000, was decided 7-2 in her favor in late June after several years of litigation.

Only days later, Local 1000 agreed to cut the compensation of union members in exchange for more time off. The union’s leader, Yvonne Walker, had a tough go of it explaining those cuts to members, though eventually, 65 percent of them did. The bad times that labor has endured in November seem to pale in comparison to SEIU Local 1000’s bad year.

But Noujaim should count herself lucky, considering the only tactic used against her was stalling. Members of SEIU Local 1000 were accused of attacking another state employee-critic in 2009. The victim, Ken Hamidi, dared to question where dues were going, especially after a 50-percent increase.

It's hard to tell anti-capitalist protesters from AFL-CIO leaders these days. (Photo credit: csuspect)

The AFL-CIO is demonizing millionaire CEOs that make their money the old-fashioned way—by working hard and earning it. According to the union, more than 100,000 median wage earning workers could be supported if the nation’s top earning CEOs were, presumably, eliminated or magically decided to work for free. The AFL-CIO’s “Executive PayWatch” website states:

In 2010, Standard & Poor’s 500 Index company CEOs received, on average, $11.4 million in total compensation— a 23 percent increase in one year. Based on 299 companies’ most recent pay data for 2010, their combined total CEO pay of $3.4 billion could support 102,325 median workers’ jobs.

Taking a page from the AFL-CIO’s book of wishful thinking, bloggers at The Union News reverse-engineered the union’s argument to see what would happen if billions in union dues hadn’t been collected in 2010 and blown on “salaries and benefits of union bosses, their staffs, and their golf courses, airplanes, and other costs.” The results, though speculative, seem to shatter the glass house in which the AFL-CIO enjoys throwing its rocks:

According to the Bureau of Labor Statistics, in 2010, there were 14.7 million union Americans belonging to unions. While that only represents 11.9 percent of all wage and salary earners, there is a substantial amount of dues money flowing to unions.

If we were to use a conservative figure of $50 per month for union dues, in 2010, unions collected $735,000,000 per month in union dues from America’s unionized workers. Multiply $735,000,000 by 12 months and you get a whopping $8,820,000,000 that was collected in union dues in 2010.

Divide $8,820,000,000 by $33,227 and you’ll find that if unions did not take union dues from workers in 2010, 265,447 workers’ jobs could have been supported.

We’re guessing AFL-CIO leader Richard Trumka probably won’t be testing out The Union News’ theory to see if it holds any merit, and for obvious reasons.

Labor unions will need to devise a new mechanism for collecting dues from unwilling government employees in the Sunshine State. Members of both houses in Florida’s legislature voted this week to ban state and local governments from deducting union dues from an employee’s paychecks.

“This is what I campaigned on last year, and that’s limited government,” said Republican Sen. Scott Thrasher who sponsored the bill. “Government should not be the tax collector for unions.”

The paycheck protection bill now goes to Gov. Rick Scott who is expected to sign it into law without hesitation, the Palm Beach Post reported.

Photo credit: David Greg Katechis

Since the governors of Wisconsin and Ohio put an end to doing business-as-usual with public-sector unions, nearly 750 bills have been introduced by fiscally responsible legislators (or at least those trying to be) in almost every state. Most reports suggest the obvious: that this is a bad thing for unions and their lockstep members, of course.

The Los Angeles Times is by no means a cheerleader for these predominantly Republican state legislators, but the Times did manage to mention a few noteworthy facts on their behalf (via information it gathered, in part, from the National Conference of State Legislatures):

• Nearly half of states are considering legislation to limit public employees’ collective bargaining rights.
• A number of states are considering bills that would limit unions’ ability to collect dues from public employees.
• Other bills would eliminate a requirement that workers covered by union contracts pay union dues or fees.
• [P]roposals to roll back pensions are gaining steam.

We wouldn’t say that the days of public officials and workers being bullied into submission by union leaders are coming to an end, but the tide may just turning in favor of the taxpayers who’ve been footing the bill.