By Carl Schramm -Via Forbes-
In 1975, Leonard Woodcock, then president of the UAW, tied the labor movement to making universal health insurance a matter of federal law. It is no stretch to say that Obamacare would never have become a reality without the active support of labor for nearly five decades. But labor’s commitment to what finally took shape in the Affordable Care Act may become the textbook case of a political backfire. Obamacare is killing unionism.
The recent rejection of the UAW at Volkswagen’s Chattanooga plant presents only the latest chapter in the erosion of labor’s appeal. This election wasn’t about wages — VW pays well. Rather it was about work rules and benefits. With so much of the work place already regulated, the election was really about the only thing unions can promise any more, namely, lavish health plans.
But many VW workers recalled that last summer unions begged the President for an exemption from Obamacare’s tax penalty on “Cadillac-style” union benefits. Union members everywhere worry that their plans cannot remain immune from higher co-insurance costs and unwelcome disruptions of provider relationships. The vote in Tennessee was as much about “no-thanking” the UAW for Obamacare as it was about saying “we don’t want Chattanooga to look like Detroit.”
It is of a piece with Wisconsin’s pushback on public unionism. Sympathy for collective bargaining for civil servants gradually attenuated as legislation ensured more generous benefits with each passing year. When public union demands were reduced to more money, no accountability to the taxpayers for what members do (e.g., failing schools), and continuation of the closed shop, Wisconsin taxpayers signaled enough. Having lost the battle for compulsory membership, some public employee unions have lost eighty percent of their membership! State politics, long controlled by wealthy unions, are beginning to change in other states as well.
The value in union membership in a consumer-centric economy is increasingly judged like any other service. Fewer members appear motivated by being part of a larger movement intent on remaking society. For the most part society has been remade in the image unions long fought for. After all, Obama delivered government healthcare, the missing apex of the progressive movement’s one hundred year project!
But, unexpectedly Obamacare hurts many people unions thought it would help, including their members. And, it appears unions can’t reverse this reality. Without dues unions are a declining political force. The president’s post-healthcare pivot to protecting the world’s climate at the cost of union jobs; a newly invented goal for progressives, is a non-starter with the rank and file. Who cares? Obama’s new progressives don’t really need union help any more. They’ve got hedge-fund billionaires ready to fund pursuit of the new utopian frontier – ending the use of carbon fuels!
Long ago Selig Perlman saw the danger to unions by looking to expand government as a means to balance class grievances through public benefits. In his 1928 book Theory of the Labor Movement he argued that our nation of immigrant workers knew and rejected the European social democrats’ model that vested enormous power in the state.
America’s immigrants were attracted by the very freedom that limited government provided. Class grievance was not part of American political vocabulary. A non-hierarchical meritocracy meant that one’s children, through hard work and with luck, could become owners of capital – bosses! This vision shaped the pragmatism of American labor. Once asked what unions wanted, Samuel Gompers who founded the American Federation of Labor replied “more.” What he meant was higher wages and better conditions.
Gompers rejected “international” comity with European labor. He saw risk in its focus on class struggle rooted in Marxism. Gompers kept his unions out of partisan politics believing that alignment would be dangerous to the best interests of workers. The relationship between owners and unionized workers was a matter of private contract. Perlman called this “business unionism,” also known as “bread and butter unionism.”
Indeed, Gompers would not ally the AFL with early efforts to enact federal compulsory health insurance. He believed that a social welfare state was detrimental to economic growth. Every union leader up to George Meany believed this too.
Commenting on Woodcock’s decision to champion national health insurance Milton Friedman writing in Newsweek at the time said that committing the union to a government insurance scheme “was against the interests of members of his own union, and even the officials of the union.” Friedman saw unions as businesses. Their customers paid dues in return for effective bargaining over wages and benefits. By going political, seeing to the expansion of government into every nook and cranny of the workplace and the economy, unions eventually devalued their role. Now, having midwifed Obamacare, organized labor cannot escape the suicidal path it chose long ago.