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Manhattan Institute

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Dues and Deep Pockets: Public-Sector Unions' Money Machine


Dues and Deep Pockets: Public-Sector Unions' Money Machine

March 21, 2012

At first glance, public-sector labor unions are just one of many types of organizations that participate in the political process. However, these unions differ significantly from other interest groups made up of individual citizens (such as the NRA or the Sierra Club) or non-labor organizations (such as the Chamber of Commerce or the Motion Picture Association of America). Because their members’ interests are tied to government policy, these unions are more focused and vigilant in their drive to influence policy than other groups are. And they have immense financial resources to deploy: in 25 U.S. states, laws guarantee unions both members and revenue.

The unions are assured of members by “agency shop” laws, which require workers covered by collective-bargaining agreements, even if they decline to join the union involved, to pay an “agency fee” for its representation. The effect of agency-shop laws is to push workers to join unions. Only a small minority of workers, who oppose joining on principle, are left outside the union fold.

Public-sector unions are assured of funds by “dues checkoff” rules, which require governments to withhold union dues from their employees and pay the money directly to their unions. This guarantees an abundant and reliable source of money, sparing unions the need to spend resources on recruitment, retention, and fund-raising.

As a result, public-sector unions bring vast resources to their political activities at the federal, state, and local levels. They make direct donations to candidates and parties, fund issue ads in parallel campaigns, provide get-out-the-vote ground operations, run campaigns for and against ballot measures, and engage in extensive lobbying efforts.

Public-sector unions also differ from most interest groups in their allegiance to a single party and a single agenda in debates about the role of government. They are focused on a few key issues relating to the government jobs of their members: more government employment and thus higher taxes and more government services. They consistently favor referenda that increase taxation and government spending. And public-sector unions give money, volunteers, and other support almost exclusively to candidates of the Democratic party.

A number of states are currently struggling with controversies over public-sector unions’ impact at the bargaining table on matters such as health-care costs, pensions, performance pay, and worker flexibility. But unions may have more impact on public policy—and the costs of government—through their uniquely powerful tools for electioneering and lobbying. Today’s debates should expand their focus from collective-bargaining issues to take into account these facts about public-sector unions as political actors.