The defection of two major unions from the AFL-CIO has stirred questions about the possible impact on local, state, and national tax and budget policies.
The Teamsters and the Service Employees International Union dropped out of the AFL-CIO on July 25, during the organization’s convention in Chicago. Four other AFL-CIO unions boycotted the convention.
Most of the unions’ campaign cash and foot soldiers have gone toward candidates, mainly Democrats, who advocate increased government spending and higher taxes. With the apparent split, some political observers are suggesting Democrats will lose valuable support.
Unions Divide into Factions
“When you’re a minority party and your base divides in two with factional fighting and feuding, that can’t be a good thing,” said Doug Schoen, a Democratic strategist, to Chicago Tribune reporter Jill Zuckman for a July 26 article.
Sen. Dick Durbin (D-IL), assistant Democratic Senate leader, told Zuckman he believes the split will weaken labor’s ability to press issues with lawmakers, and he fears some unions might throw support to Republicans.
Some convention delegates complained about union leadership almost exclusively supporting Democrats.
“I just know they take our money and give it to the Democratic Party,” Barbara Woodson-Silas told the Chicago Tribune for a July 27 article.
Michael Reitz, director of labor policy at the Evergreen Freedom Foundation, said he thinks little will change, as far as campaign cash goes.
“The talk among union dissidents is that they can’t be tied to one party,” Reitz said. “But those individual unions are largely supporting Democrats. I don’t think we will see a huge decline in the flow of money to the Democrats.”
He added, though, the split might reduce the number of union campaign workers who hit the streets, because organizing efforts may become more fragmented.
Government Unions Raise Costs
While private-sector unions have seen big declines in membership, government employee unions, which have a vested interest in expanding government payrolls and budgets, have seen big increases. This has consequences for government reform efforts.
Public-sector unions strongly resist efforts to privatize the delivery of government services. Unionized government workers also are better paid on average than their private-sector counterparts. In 2004, the average hourly wage of a government employee was $19.25 compared to $16.04 on private payrolls. That’s a 20 percent premium for government employees.
The same is true of benefits. The Bureau of Labor Statistics reports the employer cost of providing health insurance to state and local government employees averages $3.26 per hour worked and is equal to 9.6 percent of total compensation, compared to $1.50 per hour and 6.5 percent of compensation in the private sector.
Union Membership Raises Taxes
As might be expected, there is a strong correlation between how heavily a government workforce is unionized and the level of taxation.
Nationally, union penetration in the public-sector workforce averages 36.4 percent. In the top 10 high-tax states, however, average unionization is 45.6 percent. In the 10 states with the lowest rates of state and local taxes, average unionization is 27.0 percent. These figures are based on a comparison of union penetration among government employees and an annual Tax Foundation report that shows the percent of income in each state that goes to state and local taxes.
In other words, the public sector workforce is 69 percent more unionized in the high-tax states than in the low-tax states.
David Denholm ([email protected]) is president of the Public Service Research Foundation, an independent, nonprofit organization that studies labor unions and union influence on public policy.
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