James Sherk of Heritage on Members-Only Bargaining

James Sherk, senior policy analyst in labor economics at The Heritage Foundation, writes in response to my post on A Labor Reform Proposal Conservatives Should Support:

I support members-only bargaining which prevents non-members from receiving union services. I wrote in support of that idea in a Heritage Backgrounder two years ago. It is a labor reform conservatives should support, and most do. The only quibble I have is that it should apply everywhere, not just in Right-to-Work states. The conservative objection to current labor law comes from its coercive nature. It forces workers to accept a service that they do not want and often hurts them. Conservatives should not object to unions formed through free association. In my view if workers choose a union’s services they should pay dues—but if they do not should neither have to pay nor have to accept its contract.

Virtually the entire ideological/philosophical right would line up behind this. National Right to Work originally got started by pushing for an end to forced representation, but couldn’t get any traction with it. Advocating for right-to-work was (from their point of view) a compromise position: “alright the unions can force workers to accept the contract they negotiated, even if they hate its provisions, but they can’t make workers pay them for unwanted services.” The Chamber of Commerce and business groups might oppose members’ only unions – their members probably wouldn’t want to have to deal with micro-unions – but conservative policy wonks and activists would enthusiastically support such a compromise.

However, the union movement would never go for this. If they did it would pass. Unions function as labor cartels. If they cannot control the supply of labor at a company or an industry they can’t benefit their members at the expense of nonmembers and those with less influence in the union. Under such a proposal senior teachers couldn’t force new hires to accept a massively back-loaded compensation system with low starting salaries and huge pension benefits for those near retirement. New teachers could negotiate for higher starting pay and a 401(k) style pension. Similarly union insiders (senior workers) could not force new hires to walk the plank when layoffs come. New hires could negotiate for performance-based layoffs. Which would mean the members with 3-4 years seniority would then get laid off first. They would back out, then so would those next in line, etc., and the seniority system would break down. Unions cannot accrue benefits to senior “insiders” if they can’t force junior “outsiders” to accept the short end of the stick.

Michigan State Rep. Mike Shirkey proposed members-only bargaining after Michigan passed the Right-to-Work law he sponsored. The unions in Michigan had complained bitterly against free riding in the Right-to-Work debate, so it seemed like a natural compromise. But the union movement came out immediately against it. The President of the Michigan chapter of the American Federation of Teachers changed his tune entirelyWhen there are some who stop paying dues, we still care about them, and we want working people treated right.” Similarly, Kansas legislators considered analogous legislation for government employees in their state. Government employee unions came out vehemently against it and called it an assault on collective bargaining.

In my experience unions care about free-riding to the extent it justifies forced dues. They do not actually want to stop representing “free riders” in Right-to-Work states.

The developments in Chattanooga Benjamin highlights present an interesting counterpoint to this. The UAW says it will form a members’ only union and negotiate members-only contracts (even if it gains majority support). At one level the union has no choice – most workers oppose it and this seems the UAW’s only way forward. It looks more like a strategic organizing decision than a change of heart. Certainly the UAW appears in no hurry to let “free riders” in Michigan negotiate separately (even though it legally could).

However, if the UAW does embrace members-only contracts it could represent a pivotal moment in labor relations. Both conservatives and liberals could support a labor law premised on free association—both the freedom to join a union and the freedom to decline its services.

A Labor Reform Proposal Conservatives Should Support

The touchstone of conservative criticism of unions is worker “coercion” – the idea that individuals who don’t want to be in unions are required to join one if a majority of workers in the bargaining unit votes for one, or at least are required to pay agency fees for the non-political aspects of collective bargaining.  Conservatives have slowly been winning this argument for a while, in right-to-work-law states (where workers need not pay union fees) and, most recently, in Harris v. Quinn, which held that the imposition of an agency fee for certain public sector personal care providers violates the First Amendment.  As a result of this trend, in many instances it is now unions that are being “coerced” by exclusive representation laws that require them to represent all workers in the unit, even those who opt out and (in right to work states, or under Harris) don’t pay any fees.

This anomaly is the topic of Ben’s terrific op-ed with Catherine Fisk in the L.A. Times.  The nub of their argument:

Requiring unions to offer free representation to workers who do not want a union in the first place makes no sense. Nor does it make sense to have a system in which workers can benefit from union representation without paying their fair share. . . .

We can and should fix this. Where unions are unable to require objecting workers to pay fees — whether it’s in right-to-work states or in work situations that fall under Harris vs. Quinn — we should get rid of the rule of exclusive representation.

Under such a proposal, workers who don’t want a union would have a right to be genuinely nonunion: They wouldn’t be subject to the terms of the collective bargaining agreement, they wouldn’t have to interact with their employer through a collective agent, and they wouldn’t be required to pay anything to a union they didn’t vote for. Unions, for their part, would be required to represent only those workers who actually want representation.

Ben and Catherine note that this proposal would have downsides and might be messy to implement.  But it would have important upsides, not just in eliminating free-riding by non-paying workers, but also in forcing unions “to prove that they provide valuable services.”  Ben and Catherine continue:

If the union could secure wage and benefit gains through collective bargaining, then workers would have every incentive to sign up and pay dues (assuming, of course, that the cost of dues was lower than the benefits the union provided). If the union couldn’t deliver the goods, then workers wouldn’t join and wouldn’t pay. In either case, the success of unions would depend on their ability to succeed for workers.

This strikes me as a reform proposal that conservatives can and should support.  Continue reading

Five Justices Probably Still Want to Kill Abood

Ben plausibly says of Harris:

The dicta in Harris about Abood is serious, and it shows that some number of Justices would like to overturn Abood.  But the holding in today’s decision shows that that number probably does not equal 5.  Most of the Harris dicta is just a repeat of what was already said Knox, and Harris was a completely viable vehicle for overruling Abood.  That the Court did not pursue this course may mean the votes aren’t there.

I am not sure “the votes aren’t there.”  Yes, the Court did not overrule Abood in Harris, but the question of whether five Justices want to overrule Abood is different from the question of when and under what circumstances they want to do so.  The five Justices in the majority were unwilling to pull the trigger now, but the anti-Abood dicta in Harris, following the anti-Abood dicta in Knox, is a clearly ominous sign.  In two cases over of two years, five Justices without qualification or separate concurrence have joined in extensive critiques of Abood.  Why would they do that when those critiques are unnecessary to the outcome of the case?  Why no narrower concurrences if one or a few of the Justices are disinclined to overrule Abood?  (Compare Justice Kennedy’s typically limiting concurrence in Hobby Lobby.)  Why do these critiques of Abood – including the arguments that it was wrong as originally decided, that it is inconsistent with other doctrines and precedent, and that it has proven unworkable in practice – track the criteria for overruling constitutional precedents?  Why is Justice Kagan so keen – despite the holding of Harris – to argue that overruling Abood would violate the Court’s stare decisis principles?  (More on this below.)  The answer to all of these questions, I believe, is that overruling Abood remains a distinctive goal of the five Justices in the majority in Harris.  But then why didn’t they overrule Abood in Harris itself?  Any number of reasons, including (a) avoiding the political heat of doing so now, (b) a desire to soften up Abood by building up majority-opinion attacks on it over several years, (c) a desire to enhance Abood’s unworkability/unmanageability in practice (a criterion for overruling a precedent) by narrowing and limiting it in ways that render it unworkable, and (d) a desire to better understand the consequences of overruling Abood (as outlined by Kagan in dissent) before actually killing it.  For these reasons, I would not draw much comfort from the fact that the Justices in the majority did not overrule Abood in Harris, and would not doubt that all five are prepared to do so in some future case.     

Indeed, it is plausible to think that the Justices in the majority were inclined to overrule Abood in Harris and then backed down. Continue reading

UNITE HERE’s Harshly Critical Report About Obamacare

Late yesterday, UNITE HERE confirmed to the On Labor staff that the union authored a report, The Irony of ObamaCare: Making Inequality Worse, that has been circulating on mainly conservative news sites recently. The report has gained attention because it is one of the broadest and harshest attacks yet on the Affordable Care Act by the labor movement.

The report argues that Obamacare will transfer billions in wealth to private health insurance companies, cause employers to cut hours for workers, raise health care costs for union members, and effectively cut the pay of low-wage workers. Specifically, UNITE HERE criticizes the Administration’s rejection of unions’ requests for waivers or flexibility in the face of some Affordable Care Act provisions:

For decades, unions and their employers have provided affordable comprehensive benefits to employees through “Taft-Hartley” plans. Named for the anti-union law passed in 1947, these benefit funds are governed by a separate regulatory scheme from commercial insurers, and have been a non-profit market counterweight to the for-profit companies. Their joint union-management governance structure gives patients a voice in plan governance.

These plans face extinction because the Obama Administration’s regulators have saddled them with the regulatory burdens but none of the benefits of health reform.

UNITE HERE has argued that the Administration’s unwillingness to provide flexibility to non-profit, Taft-Hartley plans is a double standard when compared to the delays the Administration has granted large employers from complying with Obamacare requirements. Donald “D” Taylor, President of UNITE HERE, recently highlighted the legal reasoning the Department of the Treasury provided to the New York Times regarding the Administration’s authority to delay employer mandates:

J. Mark Iwry, deputy assistant Treasury secretary for health policy, said the administration had broad “authority to grant transition relief” under a section of the Internal Revenue Code that directs the Treasury secretary to “prescribe all needful rules and regulations for the enforcement” of tax obligations. This authority has often been used to postpone the application of new laws that would cause “unreasonable administrative burdens or costs” to taxpayers, Mr. Iwry said.

Taylor argued that this reasoning seems broad enough to include the union plans, and unions are being unfairly excluded from administrative fixes.

In additional to the complaints about non-profit, Taft-Hartley plans, the UNITE HERE report includes three other major criticisms of fundamental elements or effects of Obamacare that are particularly striking in light of the labor movement’s strong support for the bill as it moved through Congress: Continue reading

Robots and Labor (Continued)

The Financial Times (behind paywall) reports on a speech by Google’s Eric Schmidt on the effects of robot technology on labor, in which Schmidt says:

“There is quite a bit of research that middle class jobs that are relatively highly skilled are being automated out,” he said. The auto industry was an example of robots being able to produce higher quality products, he added.  New technologies were creating “lots of part-time work and growth in caring and creative industries . . . [but] the problem is that the middle class jobs are being replaced by service jobs,” the Google chairman said. . . . “It is pretty clear that work is changing and the classic nine to five job is going to have to be redefined,” he said. “Without significant encouragement, this will get worse and worse.”

This theme – how automated technologies affect labor prospects – is the subject of a new book by Brynjolfsson and McAfee, The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies.  (Another recent book on the topic worth reading is Tyler Cowen’s Average is Over.)

Ken Anderson has a nice post at Volokh on this topic:

[A] familiar debate has broken out – around the employment effects that are likely to come from these new technologies. (The Economist magazine summarizes the debate and comments in this week’s edition.)  On the one hand, innovative, disruptive technological change is nothing new.  The result has always been short-to-medium term creative destruction, sometimes including the destruction of whole occupational categories – followed by longer term job growth enabled by the new technologies or the increased wealth they create.

In any case, over the long run, increases in the standard of living can only come through innovation and technological advance that allows greater economic output to be extracted from the same or smaller labor input.  In a world of many elderly, retired Baby Boomers and historically smaller worker base bearing much of the cost of the elderly living and health care costs, that has to matter a great deal.  Ben Miller and Robert D. Atkinson make the positive case for automation and robotics along these lines in a September 2013 report from the Information Technology and Innovation Foundation, Are Robots Taking Our Jobs, or Making Them?  

On the other hand, maybe this time is different. Continue reading

Oral Argument in Harris v. Quinn: Justice Scalia Siding with the Union?

Here is the quickie transcript of the oral argument this morning in Harris v. Quinn.  Perhaps the most important takeaway from argument is that Justice Scalia appeared to believe that the First Amendment is not implicated when public employee unions bargain over employment conditions, and thus seemed disinclined to overrule Abood (even though he joined Knox, which stated in dicta that “a public-sector union takes many positions during collective bargaining that have powerful political and civic consequences”).  As Lyle Denniston says in his summary of the argument, Justice Scalia strongly questioned Petitioners’ “basic argument that public employee union activity is more about shaping public policy — with implications for the First Amendment — than about the traditional union role of seeking to improve the working conditions of those it represents.”  Here is the key exchange:

JUSTICE SCALIA:  Suppose you have a policeman who — who is dissatisfied with his wages. So he makes an appointment with the commissioner, police commissioner, and he goes in and grouses about his wages. He does this, you know, 10 or 11 times. And the commissioner finally is fed up and tells his secretary, don’t — I don’t want to see this man again. Has he violated the Constitution?

MR. MESSENGER: No.

JUSTICE SCALIA: He is prevented a petition for a redress of grievances?

MR. MESSENGER: No, because in that – with an individual speaking, it’s, sir, a matter of private or internal proprietary matter that under this Court’s precedence don’t rise to a matter of public concern.  However, if you had an organization petitioning a — a police district for wages across the board for police officers, then that is a matter of public concern and would violate the First -­

JUSTICE SCALIA: I really don’t understand that. When — when you — so what if it’s policemen who do this? It’s still not a matter of public concern? Does it have to be the whole police force?

MR. MESSENGER: The line would be once you have the collective, it would be start to become a matter of public concern. It’d be the public concern test.

JUSTICE SCALIA: It seems to me it’s always a matter of public concern, whether you’re going to raise the salaries of policemen, whether it’s an individual policeman asking for that or — or a – a combination of policemen or a union. It’s a always a matter of public concern, isn’t it?

MR. MESSENGER: And if it is, then I submit that it’s unconstitutional for -­

JUSTICE SCALIA: Okay. To not — not give this guy an appointment for the 12th time.

MR. MESSENGER: No. The police chief can certainly shut his door, but it would be unconstitutional as to force -­

JUSTICE SCALIA: Well, how can he shut his door if he has a right to petition, a constitutional right to petition for the redress of grievances? His grievance is he’s not being paid enough

MR. MESSENGER: But in that case under our public concern test, which goes within the Pickering  line, that that individual grievance would not rise to a First Amendment petition.

JUSTICE SCALIA: But it’s the same grievance if the union had presented it. The — the grievance is the salaries for policemen are not high enough.

MR. MESSENGER: But the -­

JUSTICE SCALIA: He’s not asking for just his salary to be raised. He wants salaries of all -­ all the cops to be raised.

The point Justice Scalia is pressing here is very much like the one Ben made yesterday:

The upshot . . . is that public employees generally lack First Amendment protection for speech relating to the terms of their employment.  Those engaged in carrying out the administration of state programs generally lack protection for speech relating to the terms of the programs they administer.  This is true even though the public employee’s speech, directed to his employer, might be over a matter of “public concern” and might be plausibly be considered “petitioning” the government.  Recall, as one among many examples, Garcetti:  That case involved a deputy district attorney who thinks that his office has violated a defendant’s constitutional rights.  When the deputy protests, he is demoted.   Has he spoken on a matter of public concern?  Certainly.  Has he petitioned the government?  Probably.  Is his speech protected by the First Amendment?  No.

Whether the homecare workers in Illinois are public employees (as seems clear to me) or simply paid by the state to carry out an important government program, their speech about the homecare program is entitled to the kind of circumscribed First Amendment protection that the Court routinely affords public employees and public contractors.  And the state’s interests in carrying out these programs, in part through a collective bargaining regime (for the clear articulation of these interests, see the briefs here, here, and here), is entitled the same deference that the Court routinely affords states when they act as employers and proprietors.

Is Abood in Trouble?

That question is the title of Lyle Denniston’s preview of Harris v. Quinn at SCOTUSblog.  After reviewing the history of the case, Denniston explains how it “has mushroomed, since the Court granted it, into a major test of the continuing validity of the Abood precedent.”  (Abood held that agency shop arrangements in the public sector are consistent with the First Amendment as long as union service charges collected from nonmembers are not spent for political or ideological purposes.  Our explainer on the relationship between Harris and Abood is here.) Denniston then offers this analysis:

The Court has a number of quite obvious ways to decide this case without confronting the ultimate question of whether the time had come to overrule the Abood decision.  The most obvious alternative approach is a finding that these home-care providers work in an intimate, one-on-one environment, so there is no risk of social disruption over labor relations.

That could allow the Court simply to second-guess the state’s rationale for insisting that these workers need a representative to state government, to negotiate over the scope of Medicaid payments.  This approach could be taken on a theory that it was a way to avoid having to address the constitutional questions about freedom of association and freedom to petition the government.

The Court might be comfortable drawing some distinctions between situations where bargaining over benefits is likely to produce civic tension, and those that do not.  Here again, the isolated work of the home-care providers might provide a rationale for a finding that they are not proper subjects for collective bargaining relationships in any event.

A truly narrow decision could be to hold that these workers are really not employees of the state, but of the patients who hire them, so the state would have no authority to try to draw them into unions.

The Court could decide that the imposition of representation on these workers was, indeed, an interference with their rights under the First Amendment, and that would not necessarily require it to question the continuing validity of the Abood precedent for other kinds of public employees.

In the end, the key to the fate of the Abood precedent is whether there is a majority on the Court that has come to believe that the status of public employees is a poor fit for the doctrine of an “agency shop.” Continue reading