The decision affects 5 million workers.
A landmark Supreme Court decision Wednesday could deal a financial blow to public-sector unions and public pensions, hobbling a last remaining bastion for the worker organizations in the U.S. But a counteroffensive by the groups could bolster them.
In a 5-4 decision, the high court ruled that unions can’t collect fees from nonmembers to defray the costs of collective bargaining.
Twenty-two states – including populous ones such as California, New York, New Jersey and Pennsylvania – have allowed unions to assess the fees on nonunion members, who benefit from collective-bargaining agreements anyway. About 5 million workers in those states could be affected.
The other 28 states are right-to-work states where the fees can’t be collected or they’re states that don’t permit collective bargaining anyway.
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Union officials will now lose the contributions of the nonunion members, though the vast majority of workers in government agencies that collectively bargain are union members, says Paul Clark, director of the school of labor and employment relations at Penn State University.
The bigger concern, he says, is that a significant portion of public sector union members could leave the worker organizations.
“This is just another step in a longtime effort to weaken the labor movement in the U.S.,” Clark says.
Union membership has fallen from 35 percent of the workforce in World War II to 20 percent in 1983 and 10.7 percent today, according to the Labor Department. While the ranks of private-sector union workers have steadily declined and make up just 6.5 percent of the labor force, public unions have grown and comprise 34.4 percent of all government employees. They’re now threatened.
Clark says unions already have mobilized in anticipation of the ruling and are likely to market themselves more aggressively at a time when support for unions is growing.
Lee Saunders, president of the American Federation of State, County and Municipal Employees, said recent teachers walkouts in multiple states suggest that unions are gaining steam.
“The Court’s decision … cannot stop this momentum,” Saunders said in an emailed statement in response to USA TODAY questions. “If anything, it will accelerate it, triggering a backlash that further emboldens union members to stick together.”
Gary Jones, the recently elected president of the United Auto Workers union, which represents some government employees, said in a statement that the ruling was “just another barrier and another attack on working men and women.”
“It cannot, however, take away the powerful voice that UAW members and other unions deliver when they sit across the table and collectively bargain for their families, their safety and their communities,” Jones said.
At the same time, Clark says proponents of corporate interests, including the Koch brothers, have also signaled they’ll mount a multimillion-dollar campaign to convince union workers to drop out and reap the same benefits without paying the fees. They’re likely to significantly outgun the unions.
“That could make the situation more dire than it otherwise would be,” Clark says.
Union members typically pay 1 to 2 percent of wages in collective-bargaining fees, or $500 to $1,000 for a worker with a $50,000 salary. The fees pay for lawyers, negotiators, research and communication for collective-bargaining and for routine activities such as filing grievances.
Clark figures that with unions mobilizing, they’re likely to lose just 10 to 15 percent of members and financing – losses they could offset by shifting responsibilities. But he said the corporate lobbying campaigns could result in a loss of 25 to 30 percent of members and financing. That would have a serious negative impact on resources and could spur existing union members to defect, creating a vicious cycle that decimates public unions.
Any sign of public unions getting politically weaker could energize state and local governments to take action to slash pension and health care benefits, which are a major source of their funding challenges.
Forced to pay for compensation pledges for past and future retirees, cities, counties, townships, school districts and states collectively had only 71.6 percent of the funding they needed to pay future pension obligations as of 2016, according to data compiled by a coalition of researchers, including the Center for Retirement Research at Boston College.
Pension deficits have fueled financial problems for many governments, including 2013’s municipal bankruptcy of Detroit and massive shortfalls in Illinois and New Jersey.
The ruling is “good for governments” in general, said Matt Fabian, managing director of Municipal Market Analytics, who tracks the financial health of state and local governmental units. “In general, weakening union revenues is generically a small positive for government managers and governments’ other creditors, like bondholders and taxpayers.”
Wisconsin offers a window into how the U.S. Supreme Court decision might play out. In 2011, GOP Gov. Scott Walker and Republican lawmakers all but eliminated collective bargaining for public employees and ended the requirement that they pay union fees. As a result, public workers left unions in droves.
In 2015, Walker signed what supporters call a right-to-work law that allowed private-sector workers to avoid paying union fees.
In 2010 – the year before Walker began making changes to union laws – 355,000 workers in Wisconsin belonged to a public- or private-sector union, according to the Bureau of Labor Statistics. By 2017, the number had dropped by 35%, to 230,000.
It’s unclear if the changes will be as dramatic across the country after Wednesday’s decision. Public-sector unions in Wisconsin lost most of their powers, leaving workers with few incentives to continue to pay to belong to them. Under the Supreme Court ruling, workers can get out of paying fees, but unions still have the ability to negotiate over a broad swath of issues in many states, which gives them a chance to make their case to workers that they’re worth investing in.
Lester Pines, an attorney who represents teachers unions in Wisconsin, said Wednesday’s decision would hurt unions across the country but would not destroy them.
“The idea that that will be a death knell for public employees unions is just not true,” he said.
Contributing: Patrick Marley of the (Milwaukee) Journal Sentinel
Supreme Court Associate Justice Anthony Kennedy, will step down at the end of July, which gives President Trump a opportunity to alter the nation’s top court for decades.
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