Last Thursday, in remarkably blunt language, the heads of three major labor unions – James Hoffa of the Teamsters, Joseph Hansen of UFCW, and Donald “D.” Taylor of UNITE-HERE — wrote a letter to Nancy Pelosi and Harry Reid denouncing Obamacare’s impact on employer-sponsored health insurance. Some of the highlights:
‐ “The ACA will shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class.”
‐ “This vision [of universal health care] has come back to haunt us.”
‐ “Our persuasive arguments have been disregarded and met with a stone wall by the White House and the pertinent agencies. This is especially stinging because other stakeholders have repeatedly received successful interpretation for their respective grievances,” such as the employer mandate delay.
‐ “We have a problem, you need to fix it. The unintended consequences of the ACA are severe.”
‐ “Perverse incentives are already creating nightmare scenarios.”
‐ “The law creates an incentive for employers to keep employees’ work hours below 30 hours a week . . . many of them are doing so openly . . . fewer hours means less pay while also losing our current health benefits.”
‐ “We can no longer stand silent in the face of elements of the Affordable Care Act that will destroy the very health and wellbeing of our members along with millions of other hardworking Americans.”
‐ “The law as it stands will hurt millions of Americans including the members of our respective unions.”
The irony, as I note in Forbes, is that historically, unions opposed government-run health care because a big part of the value that unions provided their members was health benefits. Members have less incentive to pay union dues if they can get health benefits elsewhere:
What a lot of people may not realize is that for much of our history, labor unions opposed universal coverage. “Unions…derive some advantage of good will, power, or profit from serving as a financial intermediary in health care,” writes Paul Starr in his Pulitzer Prize-winning history of the American health-care system, The Social Transformation of American Medicine.
If unions’ role in negotiating health coverage is taken over by the government, unions lose a big chunk of their utility. “Employers and unions had both tried to use medical care to strengthen their hand in the battle for workers’ allegiances,” Starr continues.
Labor unions opposed FDR’s half-hearted attempt at universal coverage, and split on Truman’s related proposal. Unions were fine with Medicare and Medicaid, because health benefits for retirees and poor people weren’t as relevant to their interests. It wasn’t until the 1970s that the goals of progressives and labor unions became closely aligned on national health care.
Now, my primary concern isn’t the power and influence of labor unions—rather, it’s the ability of Americans to have access to good jobs and affordable health insurance. And those latter goals are best achieved in a system where people buy health coverage for themselves, instead of getting it through their employers or the government.
That Obamacare encourages more people to buy insurance on their own, in part by incentivizing employers to drop health coverage, is one of the law’s few salutary qualities. It’s unsurprising that this outcome makes labor unions unhappy. But they had every opportunity to take the bill in a different direction in 2009. That they didn’t is no one’s fault but their own.