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Public Unions and the Janus Reckoning

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Public Unions and the Janus Reckoning

February 21, 2018
Economy, finance, and budgets

Daniel DiSalvo joins Brian Anderson to discuss public-sector unions, freedom of speech, and the upcoming Supreme Court case, Janus v. AFSCME.

The Supreme Court will hear oral arguments in Janus next week. If the justices rule for the plaintiffs, employees of state and local governments across the country will be able to opt out of paying union fees. Public unions are often powerful political players, and a sharp drop in funding or membership could deal a heavy blow to their influence.

“The general result of public-sector unions’ outsize influence in politics over the last 30 years, especially at the state and local levels, is ever-larger and more expensive government,” writes DiSalvo in his City Journalarticle, “Judgment Day for Public Unions.”

Daniel DiSalvo is an associate professor of political science at the City College of New York, a senior fellow at the Manhattan Institute, and author of Government Against Itself: Public Union Power and Its Consequences (Oxford University Press, 2015).

Audio Transcript

Brian Anderson: Hello, I am City Journal editor Brian Anderson.  Thanks for joining us for the 10 Blocks Podcast, featuring urban policy and cultural commentary with City Journal editors, contributors, and special guests.  When the Supreme Court returns to session this week, the justices will hear what will likely be the most consequential case for government labor relations in U.S. history, Janus vs the American Federation of State, County and Municipal Employees.  Mark Janus is a child support specialist for the state of Illinois.  His suit charges that state law violated his rights by requiring him to pay fees to a union.  In this case, AFSCME, one of the nation’s largest labor organizations.  A ruling in favor of Mr. Janus would likely allow government workers across the country to opt out of union fees and the ramifications for many states and cities would be enormous.  Joining us on the show today is Dan DiSalvo.  Dan is a senior fellow at the Manhattan Institute, an associate professor of political science at the City College of New York and the author of Government against itself: Public Union Power and Its Consequences.  His latest essay for City Journal, Judgment Day for Public Unions, appears in our winter 2018 issue.  Dan, welcome to 10 Blocks.

Dan DiSalvo: My pleasure to be with you, Brian. 

Brian Anderson: We gave our listeners a brief overview of Mark Janus’s case against his local union in Illinois.  Can you tell us how this case came together and how it is different from similar lawsuits that have come before it?  At its heart is the question of free speech rights for government workers, right?

Dan DiSalvo: That’s right.  Free speech rights in a particular optic, which is the issue of compelled speech, whether by charging public employees agency fees they are then being forced to subsidize speech with which they disagree.  This case comes out of Illinois.  It was actually first brought by the governor, Bruce Rauner.  Rauner then was found not to have standing to sue in federal courts and Mark Janus stepped in and agreed to be the plaintiff to carry the case forward.  The case is similar to – very similar to a case heard by the Supreme Court just two years ago, Friedrichs v. California Teachers Association.  And the big issue about agency fees and free speech is the same.  The Friedrichs case also challenged the constitutionality of whether public employees could opt in or opt out of public spending, union spending on politics.  So, that is probably the biggest difference between the two cases.

Brian Anderson: And one of the most difficult things to understand for people who aren’t in the middle of this is how exactly union funding works.  Unionized government workers pay their dues – I think everybody understands that – but if, say, a teacher decides against joining the union, objecting perhaps to its politics or policies, in many states he is still required to pay what are called agency fees which you just mentioned.  Could you explain a little bit what an agency fee is and how are they used?

Dan DiSalvo: So, to form a union in public employment or private employment is basically the same.  Workers can get together and through a one-time vote decide to create a collective bargaining unit and designate a specific union as their exclusive representative.  The union then gets the rights to represent all employees in that bargaining unit and has the obligation legally to represent them all equally.  Coming along with that then the union says well, because all public – all workers in the bargaining unit are benefiting from union representation, all workers should therefore be charged or be forced to pay for that representation or that benefit.  Because the Supreme Court and U.S. federal laws prohibits unions from forcing all employees to be union members, because that would violate freedom of association, anyone who doesn’t want to be a union member is then not charged union dues but charged an agency fee.  Again, the agency word is describing the fee, it is paying for the union acting as its agent in collective bargaining and contract administration.

Brian Anderson: And how does the fee get used?  What is at the heart of this case again is objections to the political use of these fees, right?  Union dues go toward politics generally.  Isn’t the same thing going to be true of these agency fees?  And how does the amount compare between dues and fees?

Dan DiSalvo: The unions themselves have the authority to set the agency fee amount.  That is, the amount they are going to charge anyone who doesn’t want to join the union.  So, many set it at nearly identical to union dues.  In the case we mentioned previously, Friedrichs v. California, the California Teachers Association sets the agency fee at 99% of dues.  Other unions sometimes set it as less, 85 or even as low as 65% of dues.  But, generally, they are set very close.  And that provides a very strong incentive for most employees to just join the union.

Brian Anderson: Join the union, right.

Dan DiSalvo: As a result, in states where agency fees are legal, union representation is much higher.  So, again, using the California example, 90% of California teachers belong to the CTA.

Brian Anderson: Right, because there is just not going to be any financial difference between the two paths.

Dan DiSalvo: That’s right.  And, of course, once you are a member and you’re paying dues, the union has the unilateral authority to spend whatever they see fit on politics versus whatever they want to on collective bargaining.  For that smaller percentage of workers who decide they don’t want to join the union, if they’re paying agency fees many think well, I’m not a member of the union, therefore I’m not paying for politics.  Wrong.  They would actually have to take a further step and write, in most cases, say, an annual letter to register themselves as an objector to political spending, at which point the union then calculates their pro-rata share, meaning how much the union says it spent on politics versus how much it says it spent on collective bargaining and reimburses them that amount.  So, that’s a little bit abstract.  Let’s make a concrete example.  Let’s say you are a 20-year teacher in California, and you are being charged agency fees of about, let’s say $1,000 a year.  The union and you object to the political spending, the union will then come back and say oh, we only spent 10% of your agency fees on politics, and 90% of your agency was spent on collective bargaining or contract administration, here is a $100 check back.  That is the current remedy that is supposed to protect the free speech rights of accepting…

Brian Anderson: That’s a lot of hassle for $100, in other words, or that equivalent of 10%.

Dan DiSalvo: That’s right.  Any public employee who doesn’t know their rights already is neglectful, like many of us forgets to return clothes that don’t fit, they will end up subsidizing speech with which they disagree.

Brian Anderson: Now, how plausible is that contention that only 10% is used toward political activities?  The unions are major political donors and maybe say a bit about that, how they pattern that spending.

Dan DiSalvo: One of the biggest contentions here is so much that political spending of the unions is unidirectional, largely in favor of the Democratic Party and Democratic candidates.  Take AFSCME, the union that is the defendant in this upcoming case, spends about 97% of its political monies, either in terms of campaign contributions to candidates or parties, on the Left side or to the Democratic side of the spectrum.

Brian Anderson: Right.

Dan DiSalvo: So, one issue is whether this is really a mechanism for financing one side of the political spectrum.

Brian Anderson: And that breakdown certainly isn’t mirrored by the political views of the workers in these government offices, right?  Not to that degree.  And they may have, you know, they may lean to the Democratic Party, but not 97%.

Dan DiSalvo: No.  The internal representational structure of unions is obviously complicated, partly because let’s say that the 10% who are nonunion members can’t vote in union elections as a result and whatever their political views, they are not going to be represented by the union leadership.

Brian Anderson: Right.

Dan DiSalvo: Second, many workers who are union members are not at all active in union activity or politics.  They don’t vote in union elections, they are very low-turnout affairs.  So, the union leadership often ends up representing the most activists tend to be older workers and hence the strong skew in a particular political direction.

Brian Anderson: Oral arguments in the Janus case, I believe, begin next week.  What do you expect and what do other observers expect is going to happen?  And what’s the union view?  How are they preparing for the ruling?

Dan DiSalvo: Many people are looking at this case and sort of have a strong sense that it’s going to be decided against the unions and in favor of the plaintiff, Mark Janus.

Brian Anderson: In part because of these past decisions all seem to be heading in this direction.

Dan DiSalvo: That’s right.  This is the fourth case in five years touching on the constitutionality of agency fees in the public sector.  So in some ways the unions have gotten a big heads-up about what is coming or the direction of First Amendment jurisprudence that this court, or at least the conservative majority on the court has been tending, and in particular, if we look back at the Friedrichs case, which deadlocked 5-4 after – or excuse me – 4 to 4 after Justice Scalia’s untimely death, that indicates that at least four justices were ready to overturn agency fees and declare them unconstitutional.  So, that leaves really the only undecided vote here is Neil Gorsuch.

Brian Anderson: Right.  How might a ruling in favor of Janus affect the politics of some of these big states like California, New York and New Jersey where municipal unions have enormous weight?

Dan DiSalvo: Because the unions are very – expect a ruling against them, they have been in something of a panic, but they have also been taking active steps to reduce any negative impact that the case would have on them.  So, they have been on a major organizing drive over the last three or four years to get union members to resign membership cards, to do all the things to recommunicate the message of why union membership is valuable.  In many places, union leadership could rest on its laurels because everyone had to pay into the union regardless.  Now they have to make an active case to why workers should be a member of a union and reconnect with them.  So, that’s been a real big organizing effort on the part of labor.  Nonetheless, the decision, if it goes against public employee unions, will probably over time reduce membership and therefore money being paid to public employee unions anywhere from 10% on the low end to 30% on the high end, which, in turn, would lead to probably perhaps some reduced political power in state and local governments and finally giving that – in that giving politicians maybe some more fiscal flexibility to deal with…

Brian Anderson: Long-term…

Dan DiSalvo: …tough questions that they have been struggling with, yeah.

Brian Anderson: Sure.  Now, it’s the case that public union membership has surpassed private union membership, right?  When did that happen and what do you think about that shift as reflecting on the future of the labor movement?

Dan DiSalvo: Well, in 2009 for the first time, the total number of union members for the first time was a majority of public employees rather than private sector workers and that is, in a way, remarkable since four-fifths of workers are in the private sector and only about 20% of workers are in the public sector.  So, that shift obviously indicates that there is something fundamentally different about public-sector unions as compared to their private-sector cousins.  They have been able to maintain steady unionization rates across the vast changes in the economy over the last thirty years, whereas those changes have had huge impacts on the private sector.  And that is what is at issue in part in this case, is how different is unions in government from unions in the private sector?

Brian Anderson: Thanks very much, Dan.  Don’t forget to check out Dan DiSalvo’s essay, Judgment Day for Public Unions.  It is on our website, www.city-journal.org.  Dan, again, is a senior fellow at the Manhattan Institute, an associate professor of political science at the City College of New York.  He writes for City Journal frequently and you can follow him on Twitter, @DiSalvoCCNY.  We would also love to hear your comments about today’s episode on Twitter, @CityJournal.  Lastly, if you like our show and want to hear more, please leave ratings and reviews on iTunes.  Thanks for listening and thanks, Dan, for joining us.  You can subscribe to this and other Manhattan Institute podcasts in the iTunes store.  The audio edition and transcription is available on our website, http://www.city-journal.org.  This is City Journal editor, Brian Anderson.  Thanks again for listening to the 10 Blocks Podcast.

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