Unions & Labor Policy
Paycheck protection ends the use of public resources to collect government unions’ political money.
Under current law, state and local governments (including school districts) take both union dues—a portion of which is used for politics—and campaign contributions out of workers’ paycheck and send the funds directly to union leaders.
Paycheck protection will benefit union members, protect taxpayers, and has bipartisan support.
One can't understate the scope of government unions' financial involvement in some of the key Pennsylvania races this fall. While final campaign finance numbers are still a few weeks away, total spending through the beginning of November shows government unions invested heavily in contentious races.
With the help of taxpayer funded-resources, government unions were able to direct $7.5 million to US senate candidate Katie McGinty and $253,465 to Attorney General-elect Josh Shapiro. In contrast, government unions spent zero dollars in favor of US Senator Toomey and $72,750 in favor of State Senator John Rafferty.
In fact, about $7,000 to support Katie McGinty came directly from union dues, not voluntary contributions from union members.
In the Attorney General race, government unions were responsible for $253,465 of the $6,401,746 spent in favor of Josh Shapiro. That's about three and half times the $72,750 government unions contributed to support John Rafferty. In total, $1,834,902 was raised to support Rafferty's bid.
Unlike any other private group in Harrisburg, government unions enjoy the special privilege of funneling PAC and election education spending through the taxpayer-funded payroll systems. In other words, they use taxpayer resources to collect purely political funds. That's a double standard that must end with the passage of paycheck protection.
Lagging job growth, rising taxes and coercive union tactics created an appetite for labor reform throughout Rust Belt states.
Transforming Labor, our latest policy report, ranks states on their progress towards reforms that can produce budget savings, shield taxpayers from overspending, and guarantee greater protections of individual workers’ freedom of association.
The report also recounts recent reforms. Nowhere did labor reform make a bigger impact than Wisconsin.
Wisconsin’s Act 10 of 2011 made sweeping changes by limiting collective bargaining for public sector workers to base wages and requiring employees to contribute more toward their health and pension benefits. According to the MacIver Institute, state retirement savings alone amounted to $3.36 billion from 2011 to 2016, and Milwaukee Public Schools alone saved $1.3 billion in long-term pension liabilities. That’s a big win for taxpayers.
In 2012, Michigan, the historical home of unionization, passed a right-to-work law.
The Michigan Education Association (MEA) quickly moved to enforce its “maintenance of membership” or opt-out clause for public school teachers who wanted to leave the union: The teachers could do so only in August. Many teachers were unaware of the obscure union resignation window and missed the opening. With the help of the Mackinac Center Legal Foundation, frustrated educators filed an unfair labor practice charge asserting that the MEA’s opt-out window violated the state’s right-to-work protections against forced union association.
In September 2015, the Michigan Employment Relations Commission ruled in favor of the teachers (a decision later upheld by the Michigan Court of Appeals), forcing the MEA to change its rules and bylaws. Michigan teachers may now leave the union whenever they please, a major victory for educator freedom across the state.
This week the Detroit Free Press wrote:
Workers must be willing — even in the face of intimidation and fear — to withdraw their union membership and stop funding their union’s political prejudices. It is the only tool they have to protect themselves from the political bias of the people who claim to have their best interest at heart
The same discontent is now creating momentum for labor reform in Pennsylvania. This session, Governor Wolf signed contract transparency legislation, Pennsylvania finally outlawed stalking and harassment during labor disputes and paycheck protection cleared the state Senate.
Pennsylvania still has a long way to go. Transforming Labor gives Pennsylvania’s public sector labor laws a D. In comparison, Wisconsin earned an A, and Michigan a B.
Labor reform isn't just critical for economic resurgence, it has election consequences too.
Michigan, Wisconsin, and Pennsylvania all turned out to be a critical factor in the presidential election. Politico noted organized labor’s historically low support for the Democrat nominee. The Fairness Center's Right on Labor blog documents the historic shift in voting patterns.
However, the gap between union leaders and their members shouldn't come as a surprise. Pennsylvania union households overwhelmingly favor reforms, like paycheck protection, that their leaders vehemently oppose.
The wave of union reform moving through the states shows taxpayers, union members and non-union members alike, understand worker freedom is a key ingredient to restoring prosperity.
From celebration to soul-searching, post-election analysis is everywhere.
While top-of-the-ballot results dominate headlines and your news feed, don’t miss the dramatic shift that occurred last night in Pennsylvania.
Republicans achieved historic majorities in both chambers. In the state House, Republicans will control 60 percent of the seats for the first time in 70 years. In the Senate, Republicans will field the largest majority of any party in 68 years. But that's only part of story.
For years, we’ve talked about the Taxpayer Party vs. the Big Government Party in Harrisburg. Partisan labels aside, the real question is whether a lawmaker represents taxpayers’ interests or toes the government union leaders’ line.
While the Taxpayer Party has grown over the years, it couldn’t always overcome the strength of the Big Government Party. We saw this last month. Pension reform legislation fell three votes short in the House.
Last night in Pennsylvania and around the nation, the Taxpayer Party saw significant gains in state legislatures. Election results in states like Wisconsin, Pennsylvania, and Michigan showed the political benefit of taking on powerful government union interests to protect taxpayers from tax hikes and special political privileges.
It is no coincidence that over the past five years, Wisconsin and Michigan took bold steps to strengthen the Taxpayer Party, including limiting collective bargaining and passing right-to-reelect and right-to-work legislation.
Similarly, as the Taxpayer Party has grown in Pennsylvania, we’ve begun to see results. For example, Governor Wolf signed contract transparency legislation, and paycheck protection cleared the state Senate. These steps are critical to address rising government spending that's consistently driven by the Big Government party.
Yet, despite the gains of the Taxpayer Party in the General Assembly, divided government will continue in Harrisburg. That's an opportunity.
With an extremely tough budget on the horizon in 2017, the newly minted Legislature must work quickly to address the underlying problems that drive budget debates: surging pensions costs and a broken and expensive welfare system.
What’s more, the strengthened Taxpayer Party has an unprecedented chance to seize opportunities like expanding access to quality education choices and finally removing the state from the booze business.
This will require immense effort and continued vigilance. We’re excited to work towards implementing these ideas to build a stronger, more prosperous Pennsylvania.
Dwight K. Schrute is an employee at Dunder Mifflin—a fictional Scranton paper company featured in NBC’s The Office. And he just may be the key to overcoming the city’s very real economic decline.
But before offering a way forward for Scranton, it’s important to understand why the city is struggling. A new paper from the Mercatus Center does an excellent job detailing the source of Scranton’s troubles.
The authors—Adam Millsap and Eileen Norcross—identify Scranton’s inability to adapt to changing economic conditions as one of the main reasons for the city’s economic and fiscal problems.
They specifically cite economist Ed Glaeser who wrote, “In the coal towns of central Pennsylvania, exodus, not innovation, was a more common response.” Glaeser's rhetoric matches reality. In 1930, the city’s population was 143,433. In 2014, it was just 75,281.
Regrettably, government policies only made things worse. Spending and taxes rose—forcing fewer taxpayers to pay for bloated budgets driven by public sector benefits. Millsap and Norcross cite the inflexibility of Pennsylvania’s collective bargaining process as the main culprit:
Act 111 is intended to give police and firefighters’ unions binding arbitration in exchange for a prohibition against striking.  However, the law evolved to “give uniformed employees the upper hand when it comes to collective bargaining.”  When negotiations between the city and unions break down, an arbitration panel of three people is selected. Municipalities are required to pay the full cost of arbitration, regardless of ability to pay. Arbitration sessions are not open to the public. The municipality has limited ability to appeal the panel’s decisions.
The chart below illustrates spending growth for police and fire services—a product of the state’s broken collective bargaining process.
Officials have tried to improve Scranton’s finances with a combination of tax increases, cost cutting, and asset sales but costs, thanks to pensions, continue to soar. They’ve also utilized government-subsidized development projects to boost economic growth but to no avail. Government-centric solutions simply aren't working.
To truly turn Scranton around, dramatic changes to state and local policies are necessary. At the local level, Millsap and Norcross recommend improving the city’s business climate by reducing the overall tax burden. Controlling spending is critical too. Officials can do this by privatizing government functions—the city's parking authority is one possible option, according to the report.
At the state level, officials must reform the collective bargaining process to help distressed cities get control of their budgets. As it stands now, collective bargaining law imposes costs on cities without taking into account their ability to pay. By giving local officials more autonomy to negotiate with unions, they can better protect local taxpayers.
Back to Dwight Schrute. If you know the character, he has a reputation for being entrepreneurial and hardworking (also, a little quirky). If distressed places like Scranton and Uniontown are going to experience a revitalization, that's exactly the kind of people they'll need to attract.
Ultimately, government can only lay the foundation for an economic turnaround. But if that foundation is strong, innovative, educated, and hardworking people can and will build upon it.
Three critical bills stalled last week amidst a flurry of last minute legislative activity. Failure to reform pensions, repeal the e-cigarette tax, and prohibit ghost teaching were missed opportunities that will compound challenges facing lawmakers in 2017.
A compromise proposal to place newly-hired state workers into a hybrid pension plan fell three votes short of passage in the House. The bill provided a 401(k) component paired with a smaller defined benefit component. Employees could also choose to opt-in to an entirely 401(k)-style plan, providing ultimate portability and retirement control. Although the legislation provided little in immediate cost savings, it shifted future financial risk away from taxpayers and provided a predictable system for measuring costs.
Union leaders and lobbyists campaigned hard against the bill, and it was narrowly defeated without seeing a vote.
Reducing the E-Cigarette Tax
Revising the punitive e-cigarette / vape tax from a 40% retroactive wholesale tax to a 5 cents per milliliter tax failed to advance in the House. Meanwhile, the Senate was reluctant to add any session days to send the bill to Gov. Wolf. This inaction will eliminate thousands of jobs and bring in far less revenue than the $13 million originally projected.
Vape businesses are already beginning to close.
Expelling Ghost Teachers
Lawmakers were unable to prohibit release time provisions that enable unions to pluck teachers from the classroom to perform union work on school time. These ghost teachers continue earn salaries, rack up pension benefits, and accrue seniority while working for the union. Worse, the union may not be formally required to reimburse school districts for these costs. In other words, resources are being diverted from the classroom to line the pockets of a private organization. Strictly limiting the practice of ghost teaching, as would HB 2125, would have saved taxpayers millions and corrected an obvious injustice.
HB 2125 will be reintroduced next session.
The gold standard for labor reform is right-to-work, according to the conventional wisdom. However, our latest policy report—Transforming Labor—shows why right-to-work laws aren't enough to protect public employees.
Of the 50 states we surveyed, 18 were right-to-work states that allow collective bargaining for public employees. That means government unions can negotiate limits on workers' choices, such as demanding exclusive representation of all employees, even if some would rather negotiate their own salary without the union's help.
Clear limits on collective bargaining can go a long way in protecting workers from a host of special privileges public sector unions negotiate to maintain power and reduce accountability to members.
In Pennsylvania, there are few restrictions on a government union's ability to collectively bargain. So it's no surprise that less than 1% of public school teachers in large cities have ever voted for their union. It also shouldn't come as a shock when union executives demand public resources and staff to run their private operations, resulting in ghost teachers haunting public schools.
This morning, APSCUF, the union representing 5,000 faculty at the State System of Higher Education schools, went on strike.
As we pointed out a few weeks ago, one of the sticking points in contact negotiations is APSCUF’s health care demands. Despite being offered a 12 percent pay increase, the union refuses to accept modest cost-sharing for health insurance. Nevermind that the proposed cost-sharing is far more generous than what most workers in the private sector receive from their employers.
To enforce discipline, APSCUF leadership has threatened faculty who don’t agree with the strike.
As reported by Fox43, here is an email sent from an APSCUF chapter president—using his university email address—to faculty, implying anyone choosing to work during the strike would be “forever” labeled a “scab” (emphasis added):
This is probably the last EMAIL you will receive from me using the SRU addresses. We begin using off-campus address today.
Dear Colleagues but especially to those who are unsure if they will work during the strike,
Personally I hate being told what to do by anyone – be they presidents of universities or unions. But at the risk of being too direct, I want to help you in your decision-making if you are thinking about working during the strike, also known as “crossing the picket lines.”
IF YOU CROSS THE PICKET LINE you will be effectively saying to your colleagues on the line that you disrespect the sacrifice they are making in terms of making a stand and going without pay and benefits. You would be effectively prolonging the strike by continuing to work so the administration can maintain a fig leaf of “business as usual.” By your actions you are saying that you choose to continue to enjoy pay and benefits hard-fought by colleagues over the decades, but will not do your part NOW to take a stand to defend those benefits. You are effectively saying to the SSHE that their proposals are OK with you to:
* Cut pay of our adjunct faculty (25% of our colleagues)
* Give up the concept of shared governance
* Be reassigned any time as needed by administration
* Have reduced say in tenure, sabbatical and promotion decisions
* Work for little or no net pay increase
If you decide to work during the strike, i.e., cross the picket line, you will be faced with:
* Colleagues who will try to convince you not to cross the line
* Peer rejection
* Being publicly identified as a “Scab” (strikebreaker) forever
What makes this university a great place to work is our colleagues. We look out for each other, we respect each other, we defer to each other, we support each other, and we value each other. This collegial atmosphere is a two-edged sword. If one betrays his or her colleagues, the reaction could be negative. Strikes are unpleasant – relationships can be harmed long-term. If we have a brief strike, do you want to be branded by your colleagues forever as one of the few who crossed the picket line? I don’t recommend it.
Sorry for the negative tone of this message, but I want it to be clear to faculty who are considering working during the strike that they will potentially face negative judgement by colleagues. If we are solid and unified, a strike will be brief. Plan to honor the picket lines and stand with us.
Election season is in full swing, but so is the fall legislative session. This time of year elected officials walk a narrow line to avoid the illegal practice of using public resources for politics. Yet, public resources are used all-year round to funnel union dues and campaign contributions from workers' paychecks to union leaders.
Since 2010, PSEA, AFSCME 13, SEIU, UFCW and PFT unions have contributed $18 million from Political Action Committees (PAC). These same unions reported spending $40 million on "political activities and lobbying" using union dues. A significant chunk of PAC money is donated to state legislator's campaigns. The following Pennsylvania elected officials are the largest recipients of government union PAC contributions.
It's time to end this unfair use of public resources to collect political money by passing paycheck protection. Paycheck protection strengthens the rights of all government workers, giving them power over their own money and choice of political association.
New union contracts will make state government more expensive, according to two analyses released by the Independent Fiscal Office (IFO).
The IFO projects contracts negotiated by the Wolf Administration with the state’s two largest unions—AFSCME and SEIU—will cost taxpayers an additional $507 million over three years.
Prior to this law, neither lawmakers nor the public knew the true cost of these contracts.
In the near term, the contracts will add to the state’s challenging fiscal predicament. The current budget is “balanced” by borrowing money and counting on unreliable revenue from harmful tax increases and other changes to state law.
Add to this the additional costs of the new contracts, which will require an estimated $61.4 million more in General Fund spending (plus another $100 million in other funds) in 2017-18, and Pennsylvania’s budget picture now looks even bleaker.
Note, in addition to the cost estimates calculated by the IFO, the Office of Administration estimates the savings due to higher employee health care contributions would be $4.7 million for SEIU and $13.6 million for AFSCME. The IFO says each of these is “a reasonable estimate.”
Currently, the wage base (not including benefits) of affected workers is $1.835 billion. The IFO represents the increase in costs, both salary and benefits, above this baseline resulting from the new contracts.
The IFO did not consider savings from administrative changes to the PA Employees Benefit Trust Fund (PEBTF), as these savings are irrespective of the union contracts.
The lack of legislative oversight over the collective bargaining process is a glaring problem. This is why Rep. Garth Everett is sponsoring HB 2289. The legislation, which passed the House State Government committee just yesterday, would give the General Assembly the authority to rescind state labor contracts negotiated by the governor.
The proposal would provide a much needed check on the governor, who has the power to negotiate contracts with campaign contributors behind closed doors.
David Smith and Donald Lambrecht were up against a powerful foe: Gov. Wolf and an executive order that granted a sweetheart deal to a union at their expense. In a huge win, the Commonwealth Court today issued a ruling invalidating Wolf’s executive order unionizing home care workers.
Shortly after he took office, Wolf handed down an executive order that would have let the Service Employees International Union (SEIU) and the American Federation of State, County and Municipal Employees (AFSCME) unionize thousands of home health care workers in Pennsylvania—and take millions of dollars in union dues each year from their paychecks.
Most of these home health care workers are taking care of a family member or loved one. This order would have wreaked havoc on the relationships between recipients and providers—while padding union pockets.
We’ve shared the story before of Dave and his home care provider, Don. Homebound with muscular dystrophy, Dave has relied on Don for more than 25 years. Far beyond an employer-employee relationship, Dave and Don are like family. Wolf’s order would have forced Don to unionize against Dave, effectively stripping Dave of many of his rights as an employer.
With the help of the Fairness Center, Dave and Don challenged Wolf’s order in court. Today’s ruling, which is in a similar case challenging the same executive order, is a victory for Dave, Don, and thousands of other home care providers and recipients across the commonwealth.
Beyond the overreach of the order, the deal was particularly suspicious considering the cozy relationship between Wolf and the SEIU. As we noted in a previous blog:
Michael Brunelle, the former executive director of SEIU's PA State Council, is now special assistant to the governor and regularly collaborates with his former employer. Emails between Mr. Brunelle and union officials show the administration sharing news releases, talking points, and other documents before they are published.
…Most worrisome is the collusion over a controversial executive order.
SEIU officials helped draft an executive order that enabled SEIU and AFSCME (American Federation of State, County & Municipal Employees) to rapidly unionize tens of thousands of home health care workers—and deduct union dues from their paychecks. These dues can be spent on political activity and lobbying to push the governor's agenda.
What’s more, AFSME and SEIU were two of Governor Wolf’s largest campaign contributors during the 2014 election cycle.
Wolf’s executive order was a stealth attempt to help the unions collect millions of dollars. Now, we can add one more court-approved word to describe the order: illegal.
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