Andy Stern

Union vs. Union Fight

by Ivan Osorio on September 8, 2011

in Economy, Employment, Labor

A band I was in years ago had a song titled, “Sheet Rockers vs. Aluminum Siders,” about a fight our singer saw at work on a construction site.

I was reminded of it earlier today, when members of the International Longshore and Warehouse Union (ILWU) stormed the Port of Longview, Washington, where they held security guards hostage, blocked a train, and destroyed property, damaging railroad cars and dumping grain. They were protesting the hiring at a grain terminal by the employer, EGT, of a contractor employing workers belonging to a different union, the Operating Engineers.

Such union turf battles are not novel. What is unusual about this one is that it doesn’t involve the ubiquitous Service Employees International Union (SEIU), which in recent years has picked fights with UNITE-HERE, the California Nurses Association, and its former affiliate, National Union of Healthcare Workers. And now members of a health care workers local in Michigan are trying to disaffiliate from SEIU, which a local spokesman said, “seem to only be interested in collecting dues from us.”

While SEIU’s unusually large number of fights with other unions is largely due to the efforts of its recent former president, Andy Stern, to centralize his authority, inter-union fights are still nasty in a way rarely seen between market competitors. That’s probably because for unions, the stakes are higher. (Current SEIU head May Kay Henry has largely continued Stern’s policies.)

Under current labor law, unions enjoy the privilege of monopoly representation of all workers in a bargaining unit, which makes representation an all-or-nothing proposition — you can’t fight for market share when the market is indivisible.

For more on SEIU’s fights with other unions, see here.

Judge Rules against SEIU in Fight with another Union

by Ivan Osorio on July 25, 2011 · 1 comment

in Economy, Employment, Labor

A judge has ruled that the Service Employees International Union (SEIU) improperly benefited from an employer threatening workers with loss of raises in a 2010 election in California that pitted it against a breakaway SEIU local. The election was to determine whether 43,500 Kaiser Permanente workers were to be represented by SEIU, the former SEIU affiliate, or no union. The Washington Post‘s Alec MacGillis reports:

Administrative Law Judge Lana Parke ruled that Kaiser had improperly withheld pay raises from workers in Southern California who had switched to the new union and that SEIU had then improperly threatened the workers voting in the Northern California election that they, too, could have raises denied if they made the switch.

Leaders of the new union, the National Union of Healthcare Workers (NUHW), decided to split from SEIU in response to what they perceived as a power grab by the SEIU national headquarters, then under the leadership of Andy Stern.

Stern sought to consolidate several locals into a handful of giant mega-locals, a strategy that led to a series of embarrassing setbacks for the SEIU, including the split that created the breakaway NUHW and a corruption scandal in Los Angeles.

MacGillis further states:

Leaders of the breakaway union noted that the ruling came at the same time as SEIU and other unions are arguing in favor of new rules proposed by the labor relations board to reduce employer coercion against workers before union elections.

However, for NUHW to portray this incident as a case of employer intimidation is disingenuous. Kaiser’s conduct may hardly be exemplary, but its real fight was with SEIU, which has a history of making deals with employers without members’ input, and has tried to intimidate NUHW through strong-arm tactics ever since it became an independent union.

For more on the internecine SEIU fight and its related scandals, see here and here.

The Dead Weight Loss of Union Disputes

by Ivan Osorio on September 14, 2010

in Economy, Employment, Labor

At Reason Hit & Run, Tim Cavanaugh provides a good observation on the ongoing dispute between the powerful Service Employees International Union (SEIU) and its breakaway local, National Union of Healthcare Workers (NUHW), which entered a new phase yesterday, as voting began at Kaiser Permanente facilities in Northern California, for workers to decide whether to be represented by SEIU, NUHW, or no union at all.

NUHW president Sal Rosselli, who used to head SEIU’s affiliate in Oakland, has loudly complained of the SEIU national leadership’s efforts to forcibly merge his local with a scandal-ridden Los Angeles-based local. He’s got a good point. However, as Cavanaugh points out, in terms of the broader economy,  SEIU and NUHW are essentially fighting over the deck furniture on the Titanic.

[I]t’s not clear how having more choice in union leadership decisions would do much to end the exploitation of the proletariat. The more time you spend choosing between Rosselli and [SEIU President Mary Kay] Henry, the less time you have to, maybe, build some value for the people who pay you 100 percent of your income (not counting moonlighting), or even check out Craigslist to find a better job.

Even worse, your union dues may actually hurt your future job prospects, as they go to help elect and reelect politicians who support economically destructive policies intended to keep unions afloat.

For more on the SEIU-NUHW dispute, see here and here.

For more on SEIU, see here and here.

Two Health Care Unions Battle Each Other for Members

by Ivan Osorio on September 13, 2010 · 2 comments

in Economy, Employment, Labor

Voting began today in one of the most disputed union elections in recent years. The contest pits the powerful Service Employees International Union (SEIU) against the upstart National Union of Healthcare Workers (NUHW), which was created last year by former officials of a SEIU affiliate in Oakland, California. At stake are 44,000 at Kaiser Permanente health care facilities throughout Northern California.

SEIU’s national leadership placed its Oakland affiliate, United Healthcare Workers-West (UHW), in trusteeship in January 2009, alleging “financial wrongdoing” by then-UHW President Sal Rosselli. In response, Rosselli accused then-SEIU President Andrew Stern of using trusteeship to forcibly seize his local and merge it with a scandal-ridden Los Angeles-based local, whose president, Tyrone Freeman, had stepped down amid serious corruption allegations.

SEIU suffered a loss to NUHW in Southern California in January, so the current contest is major test for SEIU’s new national president, Mary Kay Henry, who took over from her notorious predecessor Andy Stern last May. Henry seems committed to this fight, and for good reason. She worked alongside Stern during his tenure as president, and helped to implement some of his more controversial policies, including his efforts to create a handful of giant mega-locals, through mergers such as the one imposed on SEIU’s California health care affiliates.

Union power struggles are nothing new, and, as in most, the dispute between SEIU and NUHW has its share of egos. But this fight also centers on the future of unionism in the private sector, where organized labor is a fading force. To revive unions’ sagging private sector numbers, SEIU, under Stern’s leadership, has pursued a strategy of increasing union “density,” which entails increasing the number of union members in the overall workforce to gain greater clout in negotiations. This often has meant compromising on contract terms to lessen employer resistance.

Rosselli, by contrast, has preferred to drive a hard bargain to gain the best contract terms for existing members, even while trying to organize new ones. Throughout this conflict, Henry worked alongside Stern to pursue the goal of greater “density,” which Rosselli has derided as “organizing workers for the sake of numbers.”

Whichever strategy wins out, it’s safe to say that the leaders of SEIU and NUHW can agree on at least one thing: support for the so-called Employee Free Choice Act (EFCA), which can help both their goals. EFCA’s card check provision would both allow unions to organize members more easily by effectively eliminating the secret ballot in organizing elections, while its binding arbitration provision would allow union negotiators to drive a harder bargain in the expectation that after 120 days a federally appointed arbitrator could step in to impose an agreement that is bound to be no worse for the union than management’s final offer.

Voting ends on October 4 and the vote count begins two days later. This is a contest well worth watching.

For more on SEIU, see here, here, here, and here.

The War of the SEIU Succession Is Over, or Is It?

by Ivan Osorio on April 26, 2010

in Economy, Labor

The battle over who would succeed outgoing Service Employees International Union (SEIU) President Andrew Stern (picture above, next to President Obama) appears to be over, as several key locals lined up to support challenger Mary Kay Henry against Stern’s handpicked successor, Anna Burger, who served as Secretary-Treasurer during Stern’s presidency. The story got largely buried because it broke at the start of a weekend, but Liberty Chick, at Biggovernment.com, has some useful background on Henry.

Mary Kay Henry’s history with SEIU began in 1979, as she rose through the ranks and became a leader and chief healthcare strategist, then was elected to the International Executive Board in 1996.  Today, Henry serves as International Executive Vice President of SEIU, a step beneath Anna Burger.  Henry’s efforts have been very focused in the health care sector and on building labor coalitions and partnerships with hospitals and health care facilities.  That said, we can probably expect to see SEIU’s stronghold on this sector continue to grow stronger.

In addition to her posts at SEIU, Mary Kay Henry has also been a labor adviser to and member of the Subcommittee on Catholic Health Care of the U.S. Catholic Conference of Bishops, an organization that in itself has become a major political force, having brokered deals with the likes of Nancy Pelosifor crucial votes in the eleventh hour of major bills, most notably on health care reform.  Additionally, she is a member of the executive board of Families USA, a left-leaning non-profit group that serves as a think-tank for most of SEIU’s and other progressive organizations’ research and reports to support universal health care.

In other words, we should expect a change in style — mainly in not antagonizing other labor leaders as much as the Stern-Burger duo did — rather than substance.

For more on Stern and SEIU, see here, here, and here.

UPDATE: Outgoing SEIU boss Andy Stern isn’t giving up the fight for Anna Burger to replace him; he said today that the selection of his successor is not over. However, the Huffington Post reports that, “Aides at SEIU didn’t dispute that Henry, owing to support of local affiliates in New York, Los Angeles, Oregon, and Washington State finds herself in a strong position to take over for Stern.”

Public Employee Unions’ Suffocating Grip on California

by Ivan Osorio on April 22, 2010

in Deregulate to Stimulate, Economy, Employment, Labor, Regulation

The current issue of the Manhattan Institute’s City Journal features a must-read account of how government employee unions have turned California into “The Beholden State,” by Steven Malanga. The piece covers a wide range of issues and trends relevant to public sector unionism, so I will focus here on one particularly interesting section, in which Malanga ties together organized labor’s support for greater government intervention in the (already heavily regulated) health care market with the growing crisis of underfunded union and public employee pension funds. As in so many stories of recent union power grabs, the Service Employees International Union (SEIU) is a major player.

The SEIU’s rise in California illustrates again how modern labor’s biggest victories take place in back rooms, not on picket lines. In the late 1980s, the SEIU began eyeing a big jackpot: tens of thousands of home health-care workers being paid by California’s county-run Medicaid programs. The SEIU initiated a long legal effort to have those workers, who were independent contractors, declared government employees. When the courts finally agreed, the union went about organizing them—an easy task because governments rarely contest organizing campaigns, not wanting to seem anti-worker. The SEIU’s biggest victory was winning representation for 74,000 home health-care workers in Los Angeles County, the largest single organizing drive since the United Auto Workers unionized General Motors in 1937. Taxpayers paid a steep price: home health-care costs became the fastest-growing part of the Los Angeles County budget after the SEIU bargained for higher wages and benefits for these new recruits. The SEIU also organized home health-care workers in several other counties, reaching a whopping statewide total of 130,000 new members.

The SEIU’s California numbers have given it extraordinary resources to pour into political campaigns. The union’s major locals contributed a hefty $20 million in 2005 to defeat a series of initiatives to cap government growth and rein in union power. The SEIU has also spent millions over the years on initiatives to increase taxes, sometimes failing but on other occasions succeeding, as with a 2004 measure to impose a millionaires’ tax to finance more mental-health spending. With an overflowing war chest and hundreds of thousands of foot soldiers, the SEIU has been instrumental in getting local governments to pass living-wage laws in several California cities, including Los Angeles and San Francisco. And the union has also used its muscle in campaigns largely out of the public eye, as in 2003, when it pressured the board of CalPERS, the giant California public-employee pension fund, to stop investing in companies that outsourced government jobs to private contractors.

In other words, SEIU pushed CalPERS to make an investment decision based not on what the returns from it would be, but on how it would advantage SEIU’s organizing — in this case, by maintaining a larger government workforce. This should constitute a clear violation of fiduciary duty under any sensible definition of the term. This kind of politicization of union pension investments has been going on for some time, so some pension funds have years of lost gains behind them today.

Further, to unionize “health-care workers paid by government medical programs like Medicaid,” unions are now trying to redefine the definition of “public” to any social service provider who receives state subsidies, even while not being directly employed by the state. By extending new subsidies to more people, the recently enacted health care “reform” bill has created even more opportunities for such a dubious expansion of the definition of “public.”

Now that Andy Stern has announced his retirement, is he is riding off into the sunset triumphantly after leading SEIU during its successful campaign to pass Obamacare, or is he jumping off a sinking ship as he leaves SEIU a financial mess? Maybe a bit of both.

For more on SEIU, see here, here, and here.

For more on public sector unions, see here and here.

SEIU Recruits College Students as Muscle

by Ivan Osorio on April 19, 2010 · 2 comments

in Labor, Politics as Usual

At Biggovernment.com, the writer known as Liberty Chick offers a good, concise summary of the corporate campaign being waged by the Service Employees International Union (SEIU) against the catering company Sodexo, which it has targeted for unionization. As with any corporate campaign, the union is engaged not only in a frontal assault; it is also pursuing other lines of attack through allies, in order to obscure its self-interested economic motive in signing up more dues-paying members.

If you haven’t been following SEIU’s all-out war against Sodexo for the last 18 months, let me give you the crash course.  Sodexo is a food service and facilities management company that provides cafeteria and cleaning services at many of the nation’s companies, schools, event facilities and athletic stadiums.  The company’s 110,000 employees in the US (plus even more in international locations) have long been a been a prime target for SEIU’s organizing attempts.  In the “old days”, colleges and universities hired food and cleaning service workers as direct employees.  But as that need has declined over the years with all the food establishment choices available today, more and more  schools now outsource their food and cleaning services in an effort to leverage those cost savings to avoid making cuts to students’ educational programs. Organized labor has of course pushed back.  SEIU’s been pummeling Sodexo with their corporate campaign tactics through the usual outlets – the smear website, the manufactured “studies” from affiliates and allies,  the strategically times press releases, the coordinated protests, sit-ins and international delegations, and all the drummed-up issues…

Along with UNITE-HERE (which recently split, with one part it joining SEIU), SEIU has helped pioneer the use of the corporate campaign as a prime organizing tactic. Adapted from a strategy first articulated by the 1960s New Left, corporate campaigns target a specific employer or group of employers through the threat of destroying a company’s reputation. Tactics include feeding allegations of company wrongdoing to the news media, contacting stockholders to deride management and the company’s financial health, filing complaints with regulatory agencies, and plain vanilla picketing.

As George Washington University Professor Jarol Manheim noted in a 2002 Labor Watch article, “For unions, corporate campaigns are a powerful organizing tool because they focus not on prospective union members, but on their employers. The typical campaign does not depend on striking a massive blow against an employer. Rather, the idea is to generate a rising crescendo of psychological pressure to which management is eventually forced to respond.” One way to apply that kind of pressure is to enlist allies, such as environmental and other left-leaning activist groups. In the case of Sodexo, SEIU’s allies include student groups.

Manheim quotes Stern’s predecessor, John Sweeney, who recently stepped down as president of the AFL-CIO. In his 1995 AFL-CIO inaugural address, Sweeney said, “We will use old-fashioned mass demonstrations, as well as sophisticated corporate campaigns, to make workers’ rights the civil rights issue of the 1990s.”

Manheim’s Labor Watch article provides a very good overview of the evolution of the corporate campaign as a union organizing tactic. (Full disclosure: I was editor of Labor Watch when it was published.) And for a more in-depth history and analysis of corporate campaigns, I recommend Manheim’s book, The Death of a Thousand Cuts: Corporate Campaigns and the Attack on the Corporation. The title of the book is illustrative. Manheim also quotes current AFL-CIO President Richard Trumka, who, when he was secretary-treasurer of the federation, candidly stated: “Corporate campaigns swarm the target employer from every angle, great and small, with an eye toward inflicting upon the employer the death of a thousand cuts rather than a single blow.”

For more on SEIU, see here, here, and here.

Big Labor Pension Strategy: United States of Argentina?

by Ivan Osorio on April 19, 2010

in Bailout Watch, Economy, Labor, Regulation

Service Employees International Union (SEIU) President Andrew Stern made a big splash last week, when he announced his retirement from leading what is arguably America’s most powerful union. As I noted then, Stern leaves SEIU with the union’s pensions for rank-and-file members seriously underfunded.

Yet he may have a plan to bail out those pensions — at taxpayer expense. Worse, Stern and his labor allies are working with the Obama administration to facilitate a direct government takeover of pensions. (It’s worth noting that the Obama administration includes a lot of organized labor appointees, especially from SEIU, as well as Vice President Joe Biden’s chief economic adviser, Jared Bernstein, who was previously chief economist at the labor-backed Economic Policy Institute.)

As The Washington Examiner‘s Mark Hemingway explains, one vehicle being used to push this agenda is the  White House’s Middle Class Task Force.

The section of the [Task Force's] report devoted to “Protecting Workers and Creating Middle-Class Jobs” reads like organized labor’s policy wish list. It pushes expensive “high road” federal contracting, plans for project labor agreements, enforcing labor standards, a “National Equal Pay Enforcement Task Force” and, most perniciously, “retirement security.”

Social Security is bankrupt and the average union pension plan only covers 62 percent of its liabilities, well below the 65 percent threshold at which the government considers the plan “endangered.” Given these facts, the Economic Policy Institute has teamed up with two of the most powerful unions in the country — the AFL-CIO and Service Employees International Union — to push something called “Retirement USA” (visit Retirement-USA.org).

Retirement USA looks like a scheme to prop up trillions of dollars worth of failing pension plans by seizing your personal savings. It would create a universal retirement plan for all Americans that centralizes all existing retirement plans — including your personal 401(k) savings and private pension plans — into the same retirement system.

Free-market advocates often accuse those on the Left of trying to turn America into France, but would follow a model even more bureaucratic and dysfunctional: Argentina, where the government of President Cristina Fernandez (pictured above) has seized pensions to pay for its profligacy. Kirchner seems to have learned little from her country’s epic economic decline during the 20th century, which was due largely to abysmal policies. For America to consider something even slightly similar today is terrifying.

For more on pensions, see here, here, and here.

Stern Jumps off Sinking Pension Ship

by Ivan Osorio on April 13, 2010 · 1 comment

in Economy, Employment, Labor

Service Employees International Union (SEIU) President Andrew Stern plans to retire as head of the union that he helped to transform into the most powerful in America. Considering the access he enjoys to the Obama administration — he was the most frequent visitor to the White House last year — the timing of his departure seems odd.

While it could be seen as a case of knowing when to quit so as to go out on top, or of riding into the sunset following SEIU’s huge victory in helping ram Obamacare through Congress, there may be another, much less triumphant reason for Stern to quit now.

He may be getting off the Titanic that is SEIU before it runs headlong into the proverbial iceberg in the form of severely underfunded pensions. As Diana Furchtgott-Roth of the Hudson Institute notes in a 2009 study that compares union-sponsored vs. private pension funds:

On July 11, 2008, in response to an article published in the July 9 edition of the New York Sun by Diana Furchtgott-Roth on the state of union pensions, the Service Employees International Union (SEIU) issued a blistering press release. The article stated “Yet in 2006, the SEIU National Industry Pension Plan, a plan for the rank-and-file members, covering 100,787 workers, was 75% funded. That is, it had three-fourths of the money it needed to pay benefit obligations of workers and retirees. In contrast, a separate fund for the union’s own employees, numbering 1,305, participants was 91% funded. Even better, the pension fund for SEIU officers and employees, which had 6,595 members, was 103% funded.”

The SEIU lambasted the article and claimed that the SEIU National Industry Pension Fund had achieved high funding levels, 92 percent in 2006, and 96 percent in 2008. Now, perhaps the union’s internal calculations showed the SEIU pension plan was in good shape, but in 2009, the SEIU National Pension Fund reported to the DOL that it was in critical status—a sign of serious funding deficiencies that suggests the SEIU’s arguments were ignorant at best, and disingenuous or worse if they were aware of these problems22.

In addition, three of SEIU’s pension funds were in endangered status as of 2008, and this year the 1199 Pension Fund declared critical status.

The Local 32BJ District 36 Building Maintenance Pension and the Local 32BJ District 36 Building Operators Pensions cover together 7,000 people. And the SEIU 1199 Greater New York Pension covers another 29,000, or 36,000 in New York in all.

Whatever the reason for the disparity in funding between rank-and-file pensions and those of SEIU staff and officers, it doesn’t look good. With Stern gone, it’s somebody else’s problem now. That somebody else will most likely be SEIU Treasurer Anna Burger, who has long been considered Stern’s heir apparent, though, as Politico‘s Ben Smith reports, she may be challenged from within the union.

For more on union pensions, see here, here, and here.

For more on SEIU, see here, here, and here.

Washingtonian mag: Stern is “union boss number one”

by Ivan Osorio on March 31, 2010

in Economy, Employment, Healthcare, Labor, Regulation

The current issue of Washingtonian magazine features a long, fairly in-depth interview with Service Employees International Union (SEIU) President Andrew Stern, whom author Chris Lehmann describes as an unlikely “Washington insider,” who “is very much in the thick of power politics today.” Lehmann describes the controversies for which Stern has become notorious, including his access to the White House and conflicts with other labor leaders.

What makes this interview especially worth reading, however, is its account of Stern’s and SEIU’s role in the recent policy fight over health care, which the Obama administration — and its labor allies, including SEIU — won. As Lehmann notes, “Perhaps more than any other influence broker in Washington, he has thrown the fortunes of his constituency in with the effort to revamp the nation’s health-care system.” So committed was he to this goal, that he approached with in grand strategic fashion.

A 2007 press appearance touting health-care reform with then–Walmart CEO Lee Scott—complete with a phone-in appearance by Republican California governor Arnold Schwarzenegger—sent Stern detractors into fulminations that would bewilder the Glenn Becks of the world. “The single biggest obstacle to single-payer health care in this country is Andy Stern,” Michael Lighty, policy director for the California Nurses Association—a union locked into one of the state’s organizing disputes with SEIU—told the Nation’s Liza Featherstone at the time.

The Walmart event was one in a series of Stern-backed conciliatory moves toward management that have jangled the nerves of the rank and file. Stern’s union has endorsed contracts with provisions that many rival leaders view contemptuously as giveaways to employers—securing minimal cost-of-living wage hikes in exchange for management pledges of noninterference with organizing drives. And at times Stern has come out in favor of key business-backed proposals—such as tort reform and charter schools—whose benefits to most wage workers are far from clear.

Building off the arguments he advanced in his 2006 book on globalization and the workplace, A Country That Works, Stern contends that labor leaders can’t simply shun strategic alliances with management.

“There’s a certain level of a relationship we need with employers besides just demonizing them,” he says. He cites the health-care fight as a case in point: “All I would say is that if today the pharmaceutical industry, the hospital industry, Walmart, and every big business was against health care, you could all go home and call this thing dead. But the truth is that people built coalitions with AARP and the Business Roundtable and Walmart, then kept an issue alive because it wasn’t completely politicized right from the beginning.”

Stern’s allies in the business world appreciate his more ecumenical approach to accommodating their interests. John Castellani, who heads the Business Roundtable, joined forces with Stern’s union as well as AARP and the National Federation of Independent Businesses in 2007 to spearhead the Divided We Fail coalition to keep the health-care issue in play before Congress.

As we now know, Stern’s strategy paid off. And while he and others on the left who wanted to see a “public option” health insurer directly run by government didn’t get everything they wanted, they still got plenty in the way of government expansion. That should be seen as part of an even bigger strategy of creating more opportunities for SEIU (and organized labor in general) to recruit new members, because government is the one sector of the American economy where unions’ organizing prospects look brightest. And they could look even brighter, if public sector unions bosses succeed in their efforts to expand the definition of “public” to include any service provider (such as for child care and home elder care) who receives any government assistance.

Just as troubling to those who value economic freedom should be business leaders’ readiness to meet leftists like Stern halfway in their government-expanding efforts, in the mistaken belief that the likes of SEIU will leave them alone well into the future. They will just eat them last.

For more on SEIU, see here, here, and here.

For more on public sector unions, see here and here.

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