Wednesday, May 22, 2019

The numbers are there, journalist just aren't or don't know how to report them.

This is an interesting example of how difficult it is to track and interpret news these days. The headline is Mass Exodus of Public Union Fee Payers After High Court Ruling by Robert Iafolla.

The reporting is on the consequences of the Janus v. AFSCME decision in June of 2018. From Wikipedia.
Janus v. American Federation of State, County, and Municipal Employees, Council 31, No. 16-1466, 585 U.S. ___ (2018), was a landmark US labor law United States Supreme Court case concerning the power of labor unions to collect fees from non-union members. Under the Taft–Hartley Act of 1947, which applies to the private sector, union security agreements can be allowed by state law. The Supreme Court ruled that such union fees in the public sector violate the First Amendment right to free speech, overturning the 1977 decision in Abood v. Detroit Board of Education that had previously allowed such fees.
I was aware of the case and had been following it for some time. It has long been a hypothesis of mine that part of the polarization we experience today is due to almost hidden, and usually unintended policy and regulatory issues. Janus is an example. Public sector unions have long been allowed to collect agency fees from government workers who were not members of the union but who the union claimed to represent. In some states, not only was the union allowed to collect, but the government agencies actually did the collection for them.

The result was that public sector unions negotiated with politicians who paid them off with taxpayer money in return for hefty union contributions to those self-same politicians. It was obviously corrupt. Insiders were conspiring against citizens. The question was whether it was consequential.

The government is besotted with such deals and subsidies. It is not just public sector unions. It is regulations covering big corporations, it is licensing arrangements, it is tax breaks, etc. All originally well intended, but all slowly strangling the system and breaking the critical connection between citizens and their representatives. We need to clear it all away.

Janus was one such effort. It only applies at the federal level. Iafolla is supposedly reporting on the consequences.
Two major public sector unions lost nearly 210,000 agency fee payers combined in 2018, according to recently filed reports showing the impact of a U.S. Supreme Court decision that prohibits forcing nonmembers to pay for collective bargaining and other nonpolitical expenses.

The American Federation of State, County and Municipal Employees saw a 98 percent drop from the prior year, leaving 2,200 agency fee payers. The Service Employees International Union lost 94 percent of their agency fee payers, reducing the number of agency fee payers to 5,800.

The disclosure reports filed with the Labor Department last week provide an early snapshot of ramifications of the high court’s June 2018 ruling in Janus v. AFSCME, which said mandatory agency fees in the public sector violate nonmembers’ First Amendment rights. Agency fees typically amount to 75 to 85 percent of full union dues.

The two main public teachers unions similarly lost their fee payers following the ruling, according to government reports and union representatives.

While the immediate and near total exodus of fee payers from public sector unions was expected, the long-term impact of the Janus decision will likely be measured in how many members quit. The ruling allows public employees in unionized workplaces to benefit from collective bargaining without paying anything.

“Most agency fee payers left,” said Patrick Wright, vice president for legal affairs at the Mackinac Center for Public Policy, a conservative advocacy group. “The big question going forward is how many full members are going to join them.”
I was aware of the decision but had seen little follow-up reporting.

And this doesn't really tell us all that much. As expected, all the agency fee payers, when no longed compelled to subsidize the union, immediately left. But that doesn't really answer the key question. How has the decline in agency fees affected the AFSCME as a political force and financial wing of the Democratic party? The numbers seem to be floating around the article but not revealing all that much.

Iafolla ends with:
The reports are less clear about the financial impact of Janus than its effect on agency fee payers.

The SEIU, for example, reported an $8.6 million gain in revenue from fees and dues despite losing members and fee payers, but accounting lags result in 2017 funds getting reported for 2018. AFSCME reported a $4.2 million drop in revenue from fees and dues.

Outside of funds taken in, public sector unions have had to dish money out to defend against a slew of Janus-related lawsuits seeking fee refunds, and challenging unions’ power to represent nonmembers and their ability to limit when former members stop paying dues.
So all we really know from this report is that, as expected, agency fee payers did, as expected, leave the unions.

But the AFSCME press release from March this year tells us a little more than Iafolla, though not with great clarity.
The American Federation of State, County and Municipal Employees (AFSCME) submitted its annual LM-2 filing with the Department of Labor, which requires all unions to report the number of members and agency fee payers they represent. AFSCME’s filing shows a gain of 9,097 dues-paying members and 18,638 dues-paying retirees over the union’s report last year, suggesting that efforts by the billionaires and corporations behind the Janus v. AFSCME case and the anti-worker majority of the United States Supreme Court to “defund and defang” public service unions have fallen flat.

The report is the first since Janus v. AFSCME, the 5-4 Supreme Court ruling which held that requiring fees from public service workers who receive union benefits but choose not to join the union is unconstitutional. In the wake of the decision, the report shows that, overall, the union retained 94 percent of workers it represents, including both dues-paying members and fee payers. According to the report, AFSCME represents 1,329,594 working members, agency fee payers in the private sector and retirees, compared to 1,411,877 reported last year. Though this represents a bottom-line decrease of 6 percent thanks to the Supreme Court’s decision, it crushed union analysts’ expectations, which anticipated a loss upwards of 30 percent.
Combining Iafolla and the AFSCME press release, we can get to an answer.
The ASCME suffered a 6% loss of members after the Janus decision, falling from 1,411,877 to 1,329,594 represented employees, a net loss of 82,283 members. All that loss was from agency fee payers, virtually all of whom have left the union in a single year.

The AFSCME gained only 9,097 dues paying workers, less than 1% of its representation. The US workforce of full-time workers increased by about 2% last year.

The AFSCME gained an additional 18,638 fee paying retirees. 65% of the total of new members to AFSCME are retirees.
So, post-Janus, ASCME total net membership is falling by 6%, and their new recruitment of members is at about half the rate (<1%) that the American workforce is expanding (>2%).

And this is just in year one. If their union revenues track with membership, then they have 6% less revenue with which to advance their member interests. If they are less successful at advancing member interests, they will lose further membership and possibly enter a declining cycle.

We'll see. The net of this is that at least for this single large union, Janus had pretty much the result expected, reducing one more buttress where insiders pay insiders and insulate politicians from the needs and interests of their constituents.

The facts are out there if only the mainstream media could or would report them. It shouldn't be so time consuming getting this basic level of analysis.

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