The Hidden Costs of Collective Bargaining

From Americans for Prosperity, Illinois:

The hidden costs of collective bargaining

by Joe Calomino

From day one of his administration back in 2003, Illinois Governor Rod Blagojevich told the people of Illinois it wouldn’t be business as usual. He was right. It’s been business worse than usual. Calling himself a reformer and promising to shake things up, Blagojevich has found new and creative ways to benefit his own campaign chest while doing nothing to eliminate the perception of Illinois as the Wild West of politics.

Under the guise of extending union protection to individuals who work as home health care personal assistants and home daycare providers, Blagojevich created a whole new pool of people from which the Service Employees International Union (SEIU) could collect dues, a portion of which is used for campaign contributions – a union which at the time of his taking office had already given Blagojevich more than $800,000 in campaign contributions.

Less than two months into his first term, Blagojevich signed Executive Order 2003-8 to give collective bargaining rights to home health care personal assistants, which in turn chose the SEIU to represent them. Since that time, contracts negotiated for these workers have increased wages by more than one-third in five years. In Fiscal Year 2008 alone, the wage increase was 60 percent of the total increase in the home services line of the Department of Human Services (DHS) budget.

Then less than two years later, Blagojevich gave home daycare providers the same right to collective bargaining (Executive Order 2005-1). Again, the workers chose the SEIU, which has represented them well. In Fiscal Year 2008, home daycare providers saw $31.6 million more in wages and $7 million more for health benefits. And again, this increase is almost 60 percent of the entire child care line item increase in DHS’ budget.

It is not our argument that unions don’t play a role in the American workplace. Nor is it our argument that these workers, who previously were not considered employees under state law but rather contractors, did not merit a change in status. However, when a union which has so heavily contributed to the Governor’s campaign in turn negotiates such generous contracts for its employees – all at a time when state government can’t pay its bills – we believe taxpayers should be demanding answers. Why are hard-earned tax dollars, in the form of union dues pulled from state employees’ wages, underwriting the political war chest of the very same elected official with whom the contracts are negotiated? At the very least, these maneuvers put a new face on pay-to-play politics.

While the link between generous contract negotiations and generous campaign contributions seems obvious, the injury to taxpayers doesn’t stop there. According to an editorial in the Wall Street Journal (July 28, 2008), the SEIU is requiring every local give an amount equal to $6 per member per year to the union’s national political action committee on top of regular dues. Unions that fail to meet the requirement must contribute an amount in “local union funds” equal to the “deficiency,” plus a 50 percent penalty. According to the union, this formalizes policy that has always been in place, yet some believe the policy violates federal law. Contributions are supposed to be voluntary, and it is illegal for unions and corporate PACs to use money secured by the “threat” of “financial reprisal.” The Wall Street Journal states: It’s hard to see that an SEIU mandate enforced by financial penalties of 50 percent isn’t a “threat” or would qualify under any definition of “voluntary.”

Again, what does this mean for Illinois taxpayers? Will members of the SEIU in Illinois see their dues increased to cover the mandate from the national union? Will taxpayer dollars be used for campaigns across the country – campaigns which don’t affect the lives of the nearly 13 million people in Illinois?

In a similar vein, the SEIU is part of a coalition lobbying federal lawmakers to overhaul America’s health care system, moving it away from a free market enterprise. Health Care for America Now announced a $40 million national public awareness campaign this past summer. Again, we have to ask ourselves, are Illinois taxpayer dollars laundered as union dues being used to push this agenda? Americans for Prosperity strongly believes the nation’s health care system needs to be reformed, but feels changes can be made to the existing system to improve health care delivery and rein in costs without creating another government bureaucracy – or by using taxpayer money to promote a political agenda.

Americans for Prosperity isn’t anti-union nor are we anti-reform. In fact, we believe reform is exactly what Illinois needs: wide-sweeping reform of a system that allows a Governor to negotiate generous contracts with a union that pays him back just as generously; wide-sweeping reform that calls for transparency and accountability; and wide-sweeping reform that puts Illinois’ Wild West reputation for anything-goes- government squarely behind us and puts people before politics.

Joe Calomino is State Director of Americans for Prosperity-Illinois. Americans for Prosperity is a nationwide organization of citizen leaders committed to advancing every individual’s right to economic freedom and opportunity. For more information visit www.afpil.org.