Despite having its best friend forever in the White House, the American labor movement is in mortal crisis
Apr 25, 2011, Vol. 16, No. 31 • By MARK HEMINGWAY
One of the most widely circulated photographs during the Wisconsin union battle was of a protester in Madison holding up a sign that read: “Dear Barack, Please put on your comfortable shoes. Love, America.”
Andy Manis / AP
While that sign may not have meant anything to the rest of the country, those in the labor movement were all too aware that the president hadn’t lived up to one of his most explicit promises. “And understand this,” he told a union audience on the campaign trail in 2007. “If American workers are being denied their right to organize and collectively bargain, when I’m in the White House I’ll put on a comfortable pair of shoes myself—I’ll walk on that picket line with you as president of the United States of America.”
Unions understandably feel they’re owed. Obama, in turn, feels indebted. In his book The Audacity of Hope he wrote, “So I owe these unions. When their leaders call, I do my best to call them back right away. I don’t consider this corrupting in any way.” And that was before Obama was handsomely rewarded for being perhaps the most openly pro-union presidential candidate since JFK.
Unions spent in excess of $400 million in the 2008 election cycle, and nearly all of that went to Democrats, especially Obama. The Service Employees International Union (SEIU) alone spent over $80 million. (In January 2008, Obama told the union that he would “paint the nation purple with SEIU” as president, referring to the union’s signature color.)
But if Obama doesn’t consider his cozy relationship with unions corrupting, taxpayers may feel differently. Since Obama took office, his administration has rewarded unions on three major fronts.
To begin with, unions have been substantially enriched. One of Obama’s first official acts as president was a February 6, 2009, executive order that in effect mandates union labor on large federal contracts through “project labor agreements” (PLAs). According to a study by the Beacon Hill Institute, PLAs make construction projects cost an average of 12 percent to 18 percent more.
Just after the executive order on PLAs, the stimulus bill was passed, which contained $188 billion in federally overseen construction projects as well as a provision applying Davis-Bacon “prevailing wage” laws to stimulus projects. This further slanted the awarding of federal contracts to the 17 percent of the construction industry that is still unionized. Heritage Foundation labor expert James Sherk estimates that the Davis-Bacon requirement alone could inflate the cost of the stimulus by as much as $17 billion.
The auto bailout also was of primary benefit to the endangered United Auto Workers. The Obama administration infused General Motors with upwards of $50 billion, even as the UAW boasted the deal meant no reduction in “base hourly pay, no reduction in . . . health care, and no reduction in your pension”—though exorbitant worker costs are one of GM’s biggest operating handicaps.
Second, the Obama administration has rolled back union transparency requirements. The Bush administration was arguably the first to require unions to make meaningful financial disclosure, and their leaders to report conflicts of interest. The change had tangible effects. An unassuming Safeway bakery clerk was elected head of a powerful Denver grocers’ union in 2009 after she revealed that the union’s influential leader had put two relatives on salary for six figures and was using union dues to support a lavish lifestyle that included hefty bar tabs and NFL tickets. The corrupt union boss’s ouster was made possible because the Bush Labor Department for the first time had mandated itemized expenses and staff salaries on the LM-2 union financial disclosure form.
That might be the first and last union election, however, where financial transparency plays a decisive role. Since then, Obama’s labor secretary Hilda Solis has rolled back Bush administration LM-2 transparency requirements and stopped enforcing the requirement that union bosses disclose on form LM-30 whether they’re being paid on the side by companies doing business with the union. (In 2004, unions filed 96 LM-30 forms. In 2005, that number was 13,326, thanks to the Bush administration’s enforcement efforts.) The Obama administration has also stopped requiring financial disclosure for oft-abused union trusts or strike funds.