Public-employee unions face a mortal threat from a pending Supreme Court case — Janus v. AFSCME — that is expected to be decided this summer. The fundamental question is whether public-sector unions may extract collective-bargaining fees from members via payroll deductions.
The plaintiff in the case contends that collective bargaining inevitably entails political activity, which some members may not agree with. Employees, the reasoning goes, should not be forced to participate in political activity that runs contrary to their convictions. Union critics say his amounts to forced speech.
In oral arguments Monday, Justice Sonia Sotomayor laid out the stakes. As she put it to William Messenger, lawyer for the advocacy group representing the plaintiff: “You’re basically arguing to do away with unions.”
Justice Anthony Kennedy, from what appeared to be an opposing perspective, laid out what collective bargaining often entails in terms of political activity: “for a greater size workforce, against privatization, against merit promotion, for teacher tenure, for higher wages, for massive government, for increasing bonded indebtedness, for increasing taxes.” That’s a lot of political activity at the bargaining table. Most experts believe the unions will lose this one.
They should. These unions have amassed too much power in recent decades, and they have used that power to aggrandize a privileged few — government employees — at the expense of many of the ordinary folks who toil in the private sector and who pay the taxes that support those government employees. Consider: Between 1946 and 2012, state and local government employment grew from 3.3 million to 19.8 million — a 492 percent increase in a country whose population expanded by 115 percent over the same period. In 1947, national income was divided along these lines: 78 percent to private sector workers, 16 percent to federal workers, and 6 percent to state and local government workers. Now those percentages are 54 percent private, 28 percent federal, and 18 percent state and local.
With growing governments and more public employees hauling down a greater share of the economy, a major shift in the nation’s distribution of political power has occurred.
And in using this power to enhance their economic standing, these forces have helped push the country into a debt spiral that threatens financial disaster. Author Michael Lewis, writing in Vanity Fair, has noted that, during the boom years from 2002 to 2008, states increased their spending by two-thirds while their level of indebtedness almost doubled.
With government pension plans getting bigger and bigger, states allowed their pension programs to get increasingly underfunded — even as they piled up other future liabilities. The result is unfunded liabilities heading toward $3 trillion. To compensate, states began investing their pension funds in riskier assets in hopes of getting better returns. In 1980 some 23 percent of state pension money was invested in the stock market, with the rest in safer fixed-income accounts; by 2008 that number had increased to 60 percent.
Many state pension managers also sought to wish away the problem by blithely assuming they could earn 8 percent on their investments at a time when interest rates were being held to near zero. The result: more and more inadequately funded pension programs.
How did this happen? Too much power held by too few with access to government cash. Some public employee unions have cadged from government officials flows of employee benefits so huge that some states simply can’t afford them.
And public-employee unions enjoy a leverage of power that private-sector unions have never had and could never get. They can fire their bosses. Dues money represents political clout that can be used to campaign against politicians deemed insufficiently solicitous of public employees’ interests. At contract time, this translates into bargaining leverage that can yield big benefit packages.
Dues money is not at issue in the current Supreme Court case, which centers specifically on fees extracted from union members to support collective bargaining and other similar efforts considered separate from union dues and other fees collected to maintain the unions and sustain their political activity.
The Court itself upheld the distinction in a 1977 decision, Abood v. Detroit Board of Education, which allowed unions to impose agency fees to support, among other things, collective bargaining as long as political activity was kept separate. Now that distinction is threatened by an ascendant view that collective bargaining is intrinsically political activity. Justice Kennedy, often a swing vote on the Court, accentuated the point with his catalog of politically charged matters that arise when officials of public-employee unions sit down to bargain with their counterparts in government.
Franklin Roosevelt cemented the working class to his Democratic Party with the 1935 Wagner Act, giving workers collective bargaining rights. But he opposed such rights for public-sector workers because he feared governmental disruption. George Meany, the greatest labor leader of his time, agreed. But soon state and local governmental leaders saw the prospect of a new political force, and throughout the 1950s more and more public-sector collective bargaining rights were bestowed. President John Kennedy extended bargaining right in federal workers in 1962.
Public-sector unions have been ascendant throughout much of the interceding decades. Now some state politicians, most notably Gov. Scott Walker in Wisconsin, have sought to curtail this powerful force. The Janus case could go even further in restoring an equilibrium in the distribution of power between these unions and the governments they bargain with.
• Robert W. Merry, longtime Washington, D.C. journalist and publishing executive, is editor of The American Conservative. His latest book is “President McKinley: Architect of the American Century” (Simon & Schuster).