2/1/2010 General Counsel's Corner

Nearly twenty years ago, Chicago labor lawyer Thomas Geoghegan lamented the sorry state of organized labor in his moving and heartbreaking memoir, Which Side Are You On? Geoghegan wrote, "A union movement in America will always be a scandal." By this he meant that even when labor was fortunate enough to secure a modicum of success in the often ruthless economy, such victories would invariably be used in service of the loathsome myth that unions per se have a debilitating effect on the American economy. As Geoghegan put it with unsparing sarcasm, "After all, this is America, and there should be no "working class" with people making $40,000 or $50,000 a year." (Remember what real wage levels were back in 1991 when Geoghegan wrote those words.)

It is no surprise that the myth of unions dragging the economy down gathers more force in tough economic times. It's natural to want to point the finger at someone, something, when people from so many different walks of life find it tougher to make ends meet. And given the crisis in the state budget with its ominous repercussions for local government, the finger is pointed squarely at public sector unions like ours. A new book put out by the director for journalism at the Pacific Research Center (a free market think tank based in San Francisco) carries the provocative title, Plunder! How Public Employee Unions Are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation.

While it might be understandable that a staunch free market advocate would make such a claim, even those whom we have traditionally assumed to be allies in our cause are not immune from the temptation to wag the finger at public sector labor for California's economic woes. Former Assembly Speaker and San Francisco Mayor Willie Brown wrote in his weekly SF Chronicle column early last month that "[W]e politicians, pushed by our friends in labor, gradually expanded pay and benefits to private-sector levels while keeping the job protections and layering on incredibly generous retirement packages that pay ex-workers almost as much as current workers."

This sounds suspiciously close to the myth that Geoghegan's memoir exposed, namely, that it's scandalous in America to suggest that a working man or working woman should ever receive any wage or benefit that might be thought of as "incredibly generous." Again, here is Geoghegan's devastating take on that myth, in his description of Chicago labor back in 1991:

The rank and file sit in front of the TV . . . like the rest of the country. Except they know that the rest of the country is gunning for them: for their cars, their RVs, their Chicago Bear tickets, their big, high-wage, high-pension jobs. After all, this is America, and there should be no "working class," with people making $40,000 or $50,000 a year. There should just be one big indeterminate middle class, like in Les Miserables. A union movement in America will always be a scandal.

It should not be "scandalous" that California's finest receive "generous" wages and retirement benefits for the dangerous and often thankless work they perform. The real scandal is - or ought to be - the fact that too many other workers receive inadequate wages and, more often than not, no pension benefits. Indeed, starting as early as the 1970's, most workers have seen a consistent, downward trend in their real wages. While some might point to overall declines in U.S. productivity as part of the explanation for such wage stagnation, the fact remains that various periods of renewed growth of productivity have not brought corresponding increases in real wages (for example, between 1973 and 1995, output per person of all non-farm workers in the private sector increased by 25 percent, while the real wages of non-supervisory workers fell by twelve percent). The only brake available to halt that slide has been the grit and determination of organized labor, despite the ever-decreasing percentage of the workforce that actually belongs to a labor union.

But it is a tactic as old as the hills to pit one group of more successful workers against their beleaguered counterparts in the contemptible effort to drive all down to a lower level. One can see this tactic at work in recent criticism over the Senate Bill's exemption of union-bargained health care plans from the new 40 percent tax on so-called "Cadillac" health care plans in the proposed health care reform bill. Some decry this as a union "sweetheart" deal, when the real villain is use of the misleading term "Cadillac" to describe health care plans that aren't necessarily more generous than other plans but simply happen to cost more based on any number of factors (e.g., Are the people covered old or sick vis-à-vis those in other, less costly plans? Is the "Cadillac" plan located in an area of the country with a high cost of living?, etc.). Indeed, as Washington Post business columnist Allan Sloan illustrates, take the 100 U.S. Senators out of their current federal plan where they benefit from being pooled with many other, younger federal employees, put them in their own health care plan, and you would have insurance premiums far above what the Senate characterizes as "Cadillac" plans!

To blame organized labor - public sector unions in particular - for the sufferings faced by their non-union counterparts in the current dismal economy is to get things precisely backwards. Would that all workers enjoyed the level of success we have managed to obtain.

"Roll the Union On . . ."