Category Archives: Labor Unions

What Do Unions Do for the Middle Class?

Source: Richard Freeman, Eunice Han, Brendan Duke, David Madland, Center for American Progress, January 2016

From the introduction:
….This report examines the role that the decline of labor unions over the past 30 years has played in the hollowing out of the U.S. earnings distribution. We* expect that the decline of unions has reduced the share of middle-class workers because union workers are more likely to be middle class than nonunion workers. Unions represent workers in the middle of the income distribution, which raises the earnings of workers who would otherwise fall below the middle-class threshold. We call the higher share of union workers among middle-class workers the union equality effect.

In this report, we use a technique—known as a shift-share decomposition—that breaks down the falling share of middle-class workers into three factors associated with unionism:
– The first part is due to the decline in union coverage, namely the fact that when a smaller share of workers are in unions, fewer workers benefit from the union equality effect.
– The second part is due to a decline in the union equality effect. As earnings have polarized over the past 30 years, the middle-class share of union workers fell from 83 percent to 72 percent, which is more than the decrease in the share of nonunion workers in the middle class. This reduces the union equality effect.
– The third part is associated with the interaction between the decline in union coverage and the union equality effect.

The decomposition leaves a residual part with no direct connection to unionism that is instead due to the decline in the middle-class share of nonunion workers.

Our main findings are that the decline in union coverage accounts for 35 percent of the falling share of middle-class workers and that the combination of the shrinking share of union workers and the reduction in the union equality effect explains almost half of the decline in middle-class workers. To the extent that union-induced wage increases spill over from union to nonunion workers and that union advocacy produces economic and social policies that benefit the middle class, our results understate the impact of the weakening labor movement on the hollowing out of the U.S. middle class…..

Free Riders or Compelled Riders? Key Takeaways as Court Considers Major Union Dues Case

Source: Congressional Research Service, CRS Legal Sidebar, January 12, 2016

….Regardless of the ultimate outcome in Friedrichs, the case will likely be a major decision that revisits the Court’s compelled subsidization cases, which, in practical terms, could impact over seven million public employees throughout the nation and could possibly affect the current debate over how to address fiscal pressures mounting in states facing billions of dollars in obligations to their respective public employees. More broadly, Friedrichs could raise new constraints on Congress when compelling individuals to subsidize the speech of a private party, including outside of the context of labor law. The Court should resolve the fate of Abood by June 2016…..

Friedrichs Oral Argument Transcript

Source: Juhyung Harold Lee, OnLabor blog, January 11, 2016

The Supreme Court has released a transcript of this morning’s oral argument in Friedrichs v. California Teachers Association. As OnLabor contributors have previously noted, Justice Scalia has been identified as the potential swing vote in the case. However, this early exchange between petitioners’ counsel (Michael Carvin of Jones Day) and Justice Scalia does not seem to bode well for the Friedrichs respondents: …..

SCOTUS v. the American worker: The upcoming Supreme Court case that could explode inequality

Source: Liz Kennedy, Salon, January 8, 2016

The Roberts court will hear oral arguments on Monday in a case that could determine the future of organized labor. …. The case, Friedrichs v. CTA, is ostensibly about one teacher’s right to not join her teachers union, but that choice is already available to any worker everywhere in America. This case is really just another attack on workers’ ability to join together and make their voices heard…… The true force behind the case is the Center for Individual Rights, a group that has driven it on a frenzied course through the legal system since filing suit in the district court in April 2013. The group, funded by the Koch brothers and others determined to continue manipulating the rules of our economy — and our democracy — fast-tracked the case through the district and 9th circuit courts to bring it to Chief Justice Roberts’ Supreme Court, which will hear oral arguments on Monday. …..

Argument preview: New threat to public-employee unions

Source: Lyle Denniston, SCOTUSblog, January 4, 2016

Next Monday, January 11, when the Supreme Court returns from its holiday recess, it will devote an expanded argument to a case that has made unions which represent government workers deeply fearful for their financial future and their public stature. A significant blow to their treasuries could come if non-union workers are able to turn broad hints by the Supreme Court into final victory in Friedrichs v. California Teachers Association.

Since 1977, the Court has allowed public-sector unions to charge the non-members whom they represent fees to cover the cost of bargaining over working conditions that will benefit those non-members as well as the union’s own ranks on the payroll. They cannot charge a fee to cover union political activity, such as lobbying or campaign spending. But, applying a bit of elementary logic, a group of non-union teachers in California seeks to nullify even bargaining-related fees.

How Defunding Public Sector Unions Will Diminish Our Democracy: The High Stakes of Friedrichs v. California Teachers Association

Source: Richard D. Kahlenberg, The Century Foundation, Issue Brief, January 7, 2016

From the summary:
On January 11, the U.S. Supreme Court will hear oral arguments in Friedrichs v. California Teachers Association. The case pits the right of public employees to band together and form effective unions to pursue the common interests of workers against the free speech rights of dissenting public employees to abstain from funding collective bargaining efforts with which they disagree.1 A decision by the Court against the teachers association could not only significantly weaken public sector unions, but also endanger the nation’s core democratic values. …. The report proceeds in four parts. Part I analyzes the claims in Friedrichs under the current framework of balancing envisioned by the Supreme Court, and concludes that fair share fees are justified. Part II broadens the discussion to consider the state’s powerful interest in promoting institutions that strengthen American democracy. Part III considers an objection raised by supporters of Friedrichs: that public sector unions will do just fine if they lose the Friedrichs case. Part IV concludes…..

What Drives Financial Reform? Economics and Politics of the State-Level Adoption of Municipal Bankruptcy Laws

Source: Stefano Rossi, Hayong Yun, Centre for Economic Policy Research (CEPR), CEPR Discussion Paper No. DP10984, December 2015
(subscription required)

From the abstract:
We investigate economic and political theories of financial reform to analyze state-level adoption of municipal bankruptcy laws (Chapter 9). Using a dynamic Cox hazard model, we find that interest group factors related to the relative strength of potential losers (labor unions) and winners (bond investors), courts efficiency, and trust in non-opportunistic behavior by local government explain the timing of Chapter 9 adoptions between 1980 and 2012. Similar factors also explain congressional voting on municipal bankruptcy law. After Chapter 9 adoption, municipal bond spreads decrease and firms experience higher revenues, profits, and investments, particularly in states in which more bond proceeds are used by the private sector. Our findings support political and economic theories of financial reform, and highlight a novel spillover channel from the public to the private sector.

The Labor Prospect: What to Watch in 2016

Source: Justin Miller, American Prospect, January 5, 2016

After a banner year of labor victories, 2016 may have an even bigger impact on workers. ….

The year 2015 was widely regarded as a reinvigorating one for the labor movement, with federal administrative rulings and local minimum wage ordinances breaking workers’ way. Last year, however, merely set the stage for a much more consequential 2016. This year could either go very badly or very well, depending on a whole host of labor prospects.

The year 2016 could be the one that a majority of the United States becomes right-to-work. It will be the year that the Supreme Court decides one of the most consequential union cases in decades. While the Obama administration’s labor legacy was polished in 2015 with new Department of Labor rules and a blockbuster NLRB decision, 2016 could see even more such rulings. The elephant in the room—the Trans-Pacific Partnership—could tarnish Obama’s labor record, though the trade deal’s passage is more uncertain than ever. And finally, what will happen with the Fight for 15 this year? Will it maintain its surging momentum, or will it wither?….

Election Speed and the NLRB: How Unions Fare in the Representation Process

Source: Bureau of National Affairs, 2016

From the blog post:
Since the National Labor Relations Board’s controversial amendments to its representation election rules took effect last April, supporters and opponents alike have asked two questions: Have the new rules served to speed up the election process? And, if so, has this pickup in tempo favored unions more than employers?

Bloomberg BNA has released a report, Election Speed and the NLRB: How Unions Fare in the Representation Process, which suggests that the answer to both questions is yes. …

….So, to summarize our findings, in the four months following the rule change:
– the NLRB resolved more elections than in the same period the previous year;
– these elections were resolved more quickly;
– unions prevailed more frequently; and
– the overwhelming majority of the quickest elections went labor’s way…..

Economic consequences of workplace injuries in the United States: Findings from the National Longitudinal Survey of Youth (NLSY79)

Source: Xiuwen Sue Dong, Xuanwen Wang, Julie A. Largay and Rosemary Sokas, American Journal of Industrial Medicine, Early View, Article first published online: January 4, 2016
(subscription required)

From the abstract:
Background: This study explored economic consequences of work-related injuries using a longitudinal data source.

Methods: Data were from the National Longitudinal Survey of Youth, 1979 cohort. Short-term consequences were measured when the injury was reported. “Difference-in-differences” approach was applied to estimate income and wealth disparities between injured and non-injured workers before and after injury. Fixed effects models were used to identify variations over time.

Results: The annual earnings growth was $3,715 (in 2000 dollars) less for workers with DAFW injury and $1,152 less for workers with NDAFW injury compared to non-injured workers during a 10-year follow-up. Lost wages and disability following injury contributed to income loss for injured workers, but the loss was moderated by union membership. After controlling for confounders, income disparities persisted, but family wealth differences did not.

Conclusions: Occupational injuries exacerbate income inequality. Efforts to reduce such disparities should include workplace safety and health enforcement.