NCPA - Unions

Unions Support Living Wage Legislation

Congress is debating raising the federally mandated minimum wage from $4.25 an hour to $5.15 or $5.25. But the deceptively named living wage movement, which wants government to order wages raised even higher, is spreading -- backed by unions and coalitions of community groups and religious organizations.

The immediate target of living wage laws is private firms with government contracts.

Baltimore, Milwaukee and Santa Clara, Calif., have already enacted laws requiring contractors to pay workers more than the federal minimum wage.
More than 20 other cities -- including New York, Los Angeles and Chicago -- and several states are considering it.
Baltimore, for example, began requiring city contractors to pay their employees at least $6.10 per hour in 1994, and this will rise automatically to $6.60 on July 1, 1996 and to $7.70 in 1998.

Unions like the idea because it reduces the difference between union wages and nonunion (market) wages, increasing their ability to compete for city contracts. Others view it at as a costless anti-poverty effort. The city of Baltimore, for example, estimates it will only cost the city $3.5 million per year after 1998, less than 1 percent of the city's annual budget.

Some critics suggest the primary aim is to halt privatization efforts. For example, the New York City Council is considering a compromise that applies only to contracts for security, food service, cleaning and temporary work -- the areas where the city has been contracting out the most.

Sources: Ed Carson, "Contract Revisions," Reason, July 1996, Reason Foundation, 3415 Sepulveda Blvd., Suite 400, Los Angeles, CA 90034, (310) 391-2245; and Steve H. Hanke, "Looks Like Charity, Smells Like Pork," Forbes, May 6, 1996.

Unions V. "Right To Work" Laws

The Senate will debate and vote on a bill this summer that would remove a union's long-standing privilege in most states to force workers to choose either to pay union dues or lose their jobs. The right-to-work law would also preserve the rights of workers to join unions if they so wished. Twenty-one states now have such laws.

Private sector unions now raise $4.9 billion each year from workers through mandatory dues.
That compares with only $1.2 billion collected by unions through voluntary dues.
In 1993, the average post-tax income in right-to-work states was $36,540 -- compared to $33,688 in states without right-to-work laws.
In 1992, right-to-work states attracted 57 percent of all new or expanded company facilities.

The unionized share of the private sector workforce has been declining for four decades in the U.S.

In 1983, 18.5 percent of private sector payroll workers were covered by a union contract, and 16.5 percent formally belonged to a union.
By 1994, those figures had declined to 11.9 percent and 10.8 percent.

A survey last year indicated that 77 percent of respondents favored right-to-work laws, with only 17 percent favoring forcing new hires to join a union.

Source: Carl Horowitz, "Behind Big Labor's New Facade," Investor's Business Daily, March 27, 1996.

Reason For Union Decline

The decline in union membership in the nation's private sector could be traced to the fact that Americans do not like to be told what to do. They resent pressure brought to bear in the union elections process. They resent the mandatory nature of membership itself. And they resent forced union dues when the money goes to political activities and causes with which they do not agree. The result:

Twenty-one states have right-to-work laws.
The number of manufacturing jobs in right-to-work states has grown by more than 77% between 1960 and 1993.
Families in right-to-work states earn $2,852 more than those in non-right-to-work states.
A 1993 study showed almost 80% of Americans opposed forced union dues or fees.

Source: Sen. Orrin G. Hatch (R-Utah)"...But the Strong-Arm Tactics Continue," Wall Street Journal, September 1,1995.

Union Dues Used For Partisan Purposes

Although federal statutes forbid partisan lobbying by unions, the AFL-CIO will spend millions of dollars this year - more than in any previous year - to unseat Republicans.

It will dump $35 million into a crusade to defeat 75 GOP House members.
It also plans to dispatch 300 well-trained political operatives immediately to the targeted districts - and another 2,500 or so before election day.
It has been estimated that in-kind union aid could provide between $300 million and $500 million to Democrats.

Some two-thirds of the $35 million comes from a special tax imposed on union members last month - many of whom favor Republican candidates.

Some 40 percent of all people represented by a labor organization pulled the GOP lever in 1994.
Internal union polls show that members care primarily about three issues - gun ownership, welfare reform and lower taxes - all Republican issues.

Source: Tony Snow, "Union Buying Clout," USA Today, April 8, 1996

Halting Worker-Management Teams

If a company strives for greater cooperation by forming a team composed of representatives of employees and managers to discuss and solve problems, it might find itself hauled up before the National Labor Relations Board and be accused of unfair labor practices.

Congressional Republicans are trying to change this, however, with legislation entitled Team Act. Although President Clinton called for "companies and workers (to) work as a team" in his recent State of the Union message, he vowed to veto the bill.

The Team Act states simply that it is not an unfair labor practice for an employer "to establish, assist, maintain, or participate in any organization...in which employees participate to address matters of mutual interest and which does not...seek authority to negotiate or enter into collective bargaining agreements."
The problem dates back to 1935's National Labor Relations Act which contained a provision banning sham unions.
The Act made it an unfair labor practice for management to participate in any organization which discussed with workers "grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work."

Supporters say the Team Act is needed because it is virtually impossible for employers and employees to know what they can and can't do under the current law.

Labor lawyers say the effect has been to allow only two kinds of organizations in non-union shops.

One is "command and control," in which the employer makes the decisions and simply tells the work force exactly what to do.
The other involves turning the plant completely over to the workers and telling them to make all the decisions.
Any arrangement that is somewhere in between -- where there is give and take -- is probably illegal in most situations.

The law made few waves until companies started to break down the walls between management and labor in search of greater productivity. A recent survey found that some three-fourths of firms involve workers in company decisions.

But almost half said they worry about the legality of these arrangements. And one in five said they were uncertain about expanding programs or starting new ones.

The Team Act passed the House last fall, but not by a sufficient majority to override a presidential veto. Additional Senate hearings on the measure are scheduled for next week.

Source: John Merline, "Halting Worker-Manager Team," Investor's Business Daily, February 2, 1996.