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The Unions’ Last Stand?

by John Fund
California’s Proposition 32 could be pivotal

Los Angeles — After the presidential election, the most consequential political contest in America this year is that over Proposition 32, a California ballot initiative that would curb union political power. If voters approve it in November, it could follow in the footsteps of 1978’s Proposition 13, a tax-cutting initiative that spread nationwide and remade the political landscape.

Proposition 32, in essence, would forbid unions — both public- and private-sector — to automatically deduct money from their members’ paychecks to finance political activities. They could still collect dues for administrative and collective-bargaining expenses, but if they wanted to spend money on political activities, they would have to solicit voluntary contributions.

Nationwide, unions collect some $14 billion a year in dues, more than half of which comes from government employees. “That’s more revenues than 65 percent of the Fortune 500 companies, giving unions huge money to spend on politics — almost all of which goes to Democrats,” writes Mallory Factor in his new book, Shadowbosses: Government Unions Control America and Rob Taxpayers Blind.

Many believe that America’s unions are losing clout, but that isn’t true when public-sector unions are taken into account. Yes, membership in private-sector unions has dropped from 35 percent of the private work force in the 1950s to just 7 percent today. But in the public sector, union membership exploded during the Sixties and Seventies as collective-bargaining laws swept through most state legislatures — giving unions monopoly power to represent all workers at a place of employment so long as a majority of workers vote to unionize — and has hit nearly 40 percent of the governmental work force. The percentages for many occupations — teachers, nurses, firefighters, police officers — are much higher. Schoolteachers, for example, are 80 percent unionized, a fact that explains many of the problems in our failing public schools.

No other interest group in America can match the public-employees’ unions in their potent combination of guaranteed dues money, mobilized manpower, and geographic dispersion. Ask former California governors Pete Wilson and Arnold Schwarzenegger. Each placed on the state’s ballot a measure to end the use of mandatory payroll deductions to collect union dues for political purposes, an idea they called “paycheck protection.”

In 1998, the unions spent a tsunami of cash opposing Wilson’s initiative, which lost, 53 percent to 47 percent. But then the unions overreached. That year, they helped elect Democrat Gray Davis, whom they pressured to adopt a raft of pro-union measures that hurt the state’s business climate. “I think that one of the reasons Gray Davis was recalled in 2003 was his cave-ins to unions,” Jon Coupal of the Sacramento-based Howard Jarvis Taxpayers Association told me back then. “He accepted a $500,000 contribution from the prison guards’ union immediately before he signed a bill massively increasing their benefits. The union leader actually made the quid pro quo public by essentially saying that ‘yes, he gave us the benefits because we paid him the money.’”

After his victory in the recall election, Governor Schwarzenegger resurrected Wilson’s ballot initiative to end automatic dues deduction, a move he said would “break the stranglehold unions have over the legislature and the budget.” But he too was outspent, and his measure went down by the same margin: 53 percent to 47 percent.

This year, the backers of Proposition 32 hope to ride a wave of anger over public-employee pensions. Until recently, police officers in San Francisco could retire in their 50s and receive a pension amounting to 90 percent of their last year’s salary, while most private-sector workers — who on average earn less than public employees — have no employer-provided retirement benefits but must pay taxes to support the public pensions. That helps explain why citizens of both San Diego and San Jose — cities that gave Barack Obama more than 60 percent of their ballots in 2008 — voted by more than two to one last June to curb public-employee pensions.

Unlike its two predecessor initiatives, Proposition 32 prohibits both unions and corporations from using paycheck deductions for politics or contributing directly or indirectly to candidates. It also limits the political contributions that government contractors may make to elected officials.

Why are the unions and their liberal allies so desperate to block such reforms? It’s all about the money. Unions can’t abide the loss of political clout that will result from ending the state’s practice of automatically deducting union dues. For most California public employees, union dues total between $800 and $1,200 a year, much of which is funneled into political spending to elect the officials who negotiate their contracts. In other words, the unions are often represented on both sides of the bargaining table.

Union officials know what can happen if dues payments become voluntary. Robert Chanin, who was general counsel of the National Education Association from 1968 to 2009, said in a U.S. District Court oral argument in 1978 that “it is well recognized that if you take away the mechanism of payroll deduction, you won’t collect a penny from these people, and it has nothing to do with voluntary or involuntary. I think it has to do with the nature of the beast, and the beasts who are our teachers . . . simply don’t come up with the money regardless of the purpose.” Without payroll deduction, unions would have to raise money the old-fashioned way — by asking for voluntary donations, as churches, the Red Cross, and the AARP do.

There is evidence to back up the fears of Chanin and other union big shots. In 2001, Utah made the collection of payments to union political funds optional, and nearly 95 percent of public-school teachers opted not to pay. In 2005, Indiana governor Mitch Daniels limited collective-bargaining rights for public employees, and today only 5 percent of state employees pay union dues. In Wisconsin, enrollment in the state’s second-largest union — the American Federation of State, County, and Municipal Employees — fell by over half within months of Governor Scott Walker’s termination of all automatic union-dues deductions (not just those for political purposes) in 2011.

Governor Walker told me that dues money and union power were “the real issue” in the effort to recall him that failed in June. “After it became clear we were serious about our union reforms last year, the union leaders couldn’t wait to throw their members under the bus by saying they could live with higher contributions for health and pension benefits,” he said. But they would not bend on collective bargaining or dues deductions.

In California, the unions are “muscling up” to prevent a loss like the one in Wisconsin. They have already pledged $45 million to kill Proposition 32 — with the California Teachers Association alone earmarking $19 million. The money has been poured into ads warning voters that the measure exempts some corporations and gives “shady” super PACs excessive influence in politics.

The ads have had an impact. Three new polls have Proposition 32 trailing by six to eight points. That’s a big drop from the 25-point lead the measure enjoyed a few months ago. But in all three surveys, about a fifth of voters said they were undecided, and Prop 32 backers privately insist they will have some $30 million available to get their message out before Election Day. The first pro-32 ads take a Joe Friday, just-the-facts approach that pushes back hard against opponents’ distortions.

“The unions are complaining that Prop 32 doesn’t do anything to restrain super-PAC spending,” says Jon Fleischman, who edits the influential conservative blog Flash Report. “The only way you could do that is to change the First Amendment, as the Supreme Court reminded us in the Citizens United case.”

Backers of Proposition 32 point out that unions will always be as free as anyone else to set up independent-expenditure committees to push their political views. Indeed, they have created several to spend their many millions fighting Prop 32.

But under current law, the unions have a guaranteed income stream that can threaten political leaders and bring them to heel. Proposition 32 would take that away. Gloria Romero, a Democrat who served as the state senate’s majority leader from 2001 to 2008, says Proposition 32 is a prerequisite to passing the school reforms needed to improve the state’s dismal rank of 49th in educational competitiveness. She told the Wall Street Journal that teachers’-union officials “walk around like they’re God” when dealing with the legislature. “If we don’t deal with how the beast is fed, and what maintains that, and what gives it status and opportunity to run roughshod over the educational lives and futures of 6 million kids in California, then shame on us,” she said. “It’s do or die.” She says many prominent Democrats privately agree with her but are “afraid” to speak out.

Passage of Proposition 32 would likely lead to similar efforts in states that allow ballot initiatives or have conservative legislatures. There is no reason that unions should have the right to extract money from members — who are also taxpayers — without their permission. Such a principle is as old as the Republic. Thomas Jefferson wrote that “to compel a man to furnish contributions of money for the propagation of opinions which he disbelieves and abhors is sinful and tyrannical.” This November, we’ll find out whether the public-employees’-union dragon — what both sides for different reasons call “the beast” — can be caged.

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