Report: Employee Free Choice Act Would Boost Union Political Spending

dollarsThe Employee Free Choice Act (EFCA) is a triumph of rhetoric over reality. In the name of expanding worker choice, this proposed federal legislation, stalled for the past couple years, effectively would eliminate secret-ballot elections for nonunion workers seeking to decide whether to join a union and would mandate government arbitration if collective bargaining following a successful “card check” fails to produce a settlement. EFCA is coercive to the benefit of organized labor, a fact that extends to finances. And unions, once having realized a dues windfall, will use a certain portion of that money to fund political activity of the sort that put the bill on the front burner in the first place. An ad hoc nonprofit group, the Workforce Fairness Institute, recently released a report estimating union-controlled political activism would exceed $1.75 billion, at minimum, in the initial decade.

The Workforce Fairness Institute (WFI) is a Washington, D.C.-based association organized under Section 501(c)(6) of the IRS tax code. Headed by former Mitt Romney presidential campaign aide Katie Packer, the organization’s explicit purpose is to mount public pressure to defeat the Employee Free Choice Act. Part of this campaign involves empirical research. The new study, performed by WFI staff, projects EFCA during its first 10 years of existence will generate an extra $1.75 billion (in 2009 dollars) for union political spending. This is money that will go to parties (almost invariably the Democrats), candidates, volunteers, consultants, and just about anyone else willing to promote the interests of organized labor. If anything, the figure might be on the low side. How so?

Currently, about 16 million U.S. employees, or 12.4 percent of the nation’s labor force, belong to a union. Andrew Stern, president of the Service Employees International Union (SEIU), itself with more than 2 million members, has projected total union membership will grow on average by an additional 1.5 million a year for at least a decade if EFCA becomes law. The WFI study, assuming his projection is valid, derived low- and high-end revenue and spending estimates. At the low end, annual per-worker dues payments would be $425, a figure the authors adjusted upward for inflation from the original $377 derived by a study published in 2004. With 15 million extra members over 10 years, the authors calculate, annual dues would rise $35 billion beyond the baseline (i.e., what would have been collected in absence of the law). The authors further assumed that unions would earmark 5 percent of this extra revenue for political activity. Thus, cumulative EFCA-driven political spending would be $1,753,125,000.

At the high end, the Workforce Fairness Institute estimated annual dues collections at $943 per worker, a figure it extrapolated from earlier research by the Employment Policy Foundation, George Mason University labor economist James Bennett, and other sources. The authors also assumed that unions would route 15 percent of this money toward political activity. This yields 10-year beyond-baseline figures of $77.8 billion in dues collections and $11.67 billion in political spending. And even these figures might be conservative. Remember, the landmark 1988 U.S. Supreme Court ruling in Communications Workers of America v. Beck was based on a case originating in Maryland, a non-Right-to-Work state, in which the CWA had spent fully 79 percent of collections on political advocacy in some form or another, and subsequently had to refund that portion to dissenting workers who were nonmembers forced to pay “agency fees” to the union if they wanted to keep their jobs.

So it isn’t that hard to see why unions are pulling out the stops to persuade Congress to pass the Employee Free Choice Act – and why supporters in Congress are doing likewise. A law that produces a bumper crop of new union members is almost by definition a law that produces extra revenues for unions and extra contributions for pro-union political candidates. The Workforce Fairness Institute report cites a study by the nonpartisan Center for Responsive Politics concluding members of Congress who voted for EFCA in 2007 took in 10 times more on average from union PACs during their career ($862,065) than those who didn’t ($86,538). The WFI concludes: “This cycle suggests that through EFCA, unions seek to create a self-perpetuating funding mechanism that generates greater revenue to be invested in political activity designed to yield changes in law that yield even greater flows of dollars to unions.” Put another way, if you think politicians can be bought by unions today, watch what happens if EFCA passes.