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Wall Street Journal

 

The Andy Stern Show

April 27, 2010

By Steven Malanga

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When Andy Stern announced his retirement earlier this month, virtually every news account noted that under his leadership the Service Employees International Union (SEIU) had become the fastest growing labor group in America. Whatever else Mr. Stern is remembered for—including his role as a key political ally of Barack Obama and an aggressive campaigner for the recently passed federal health legislation—his principal legacy will be having headed up a union that managed to add 1.2 million members during a time when overall unionization rates continued to plunge in the U.S.

But it’s important to understand how Mr. Stern pulled this off, because his union’s story is really the story of the transformation of the labor movement in America. The SEIU did not win its most significant victories on the picket lines, but rather in backroom political deals with legislative leaders, especially in states like California where the political class is already union-friendly.

Those deals helped the SEIU to organize workplaces that are nominally considered part of the private sector but actually are heavily controlled and influenced by government regulation, most especially in health care. By contrast, the SEIU’s success in areas where its political pressure isn’t decisive has been minimal at best.

The union’s long effort to organize home health-care workers in California (which actually began before Mr. Stern took over the SEIU in 1996), provides the best example of how it operates. Starting in the 1980s, California’s Medicaid system began making increasing use of these workers to tend to patients in an effort to cut down on expensive hospitalizations and nursing-home stays. The state considered the workers independent contractors, not least the many who were relatives of patients. California agreed to pay them the minimum wage in exchange for their caring for the sick at home.

Sensing an opportunity, the SEIU began a long campaign to have these workers declared employees of Medicaid. The union turned to lobbying in Sacramento where it successfully won a law allowing each of the state’s counties, which administered Medicaid, to set up authorities to hire the workers. Then the SEIU applied political pressure to county supervisors, who gradually put the workers on the payroll so that they could be organized—without employer opposition, of course.

What followed was a string of union “victories” culminating in more than 74,000 home-care workers in Los Angeles being absorbed into SEIU in 1999—the largest single drive since the United Auto Workers organized General Motors in 1937. All in all, the SEIU garnered some 130,000 new home-care members around California thanks to a campaign that magically converted tens of thousands of workers from private sector status to government employees.

The long effort, however, hardly represented a traditional union success story, even to those in the labor movement. As Class Struggle, a left-wing workers magazine, noted at the time, many of the home-care workers never even had an idea they had been recruited until they started seeing SEIU dues deducted from their paychecks. The home-care campaigns, the magazine noted, “were simply business deals cut with employers,” in this case local governments, which garnered the union more members and more dues.

The SEIU has also been successful at bringing employers in regulated industries into alliances that lobby government for bigger subsidies and better pay at taxpayer expense. In New York, for instance, SEIU Local 1199 made labor peace with hospitals in the late 1990s by proposing that together they begin pressuring the state for increased government aid. This powerful labor-management coalition won big gains in Albany, including some $3 billion in tobacco lawsuit settlement money that the state poured into health-care subsidies, and $2.7 billion that Albany gave the hospitals to provide raises for workers in a remarkable public subsidy for supposedly private employers and employees.

Such deals, however, have also been controversial. In 2003, the union made a pact with nursing-home operators in California in which the union said it would help lobby the state for higher government subsidies if the owners didn’t oppose the SEIU’s efforts to unionize the nursing homes. The deal helped raise state reimbursements to the homes by some $2 billion over two years and allowed the union to organize dozens of new institutions. But Sal Rosselli, a dissident SEIU leader, later called the pact “corporate unionism” at its worst. A 2008 study by University of California San Francisco researchers said the additional subsidies had no impact on patient care.

These deals have become more common among unions allied with the SEIU. The Hotel and Restaurant Employees Union (HERE), for instance, was successful in organizing Las Vegas casinos and other hotels around the nation by making agreements with management. The owners consented not to oppose unionization in exchange for workplace concessions and promises of lobbying aid from the union on issues dear to owners, like changes in federal tax laws that benefit travel. In 2005, HERE and its partner UNITE, a textile union, joined the SEIU in bolting from the AFL-CIO to form the Change to Win federation (although UNITE-HERE eventually rejoined the AFL-CIO).

Mr. Stern’s success in the genuine private sector, however, has been somewhat less spectacular. Five years ago he put the SEIU’s considerable resources and reputation behind a concerted effort to pressure Wal-Mart to give up its stiff opposition to unionization. To no avail. The best Mr. Stern achieved was an agreement in June 2009 to partner with Wal-Mart to support federal health legislation.

The SEIU’s mediocre organizing record outside of industries in which its political muscle matters helps explain why Mr. Stern was such a big supporter of President Obama’s federal health legislation. The bill that passed provides for hundreds of billions of dollars in new taxes to expand health-care services largely under government control, for instance, by vastly expanding Medicaid rolls. That perfectly describes the ideal Andy Stern environment for successful union organizing in today’s politicized economy.

Original Source: http://online.wsj.com/article/SB10001424052748704508904575192130504551918.html

 

 
 
 

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