Moneybox

How Badly Did the Supreme Court Just Damage Public Sector Unions? Take a Look at Michigan.

SAN FRANCISCO, CA - FEBRUARY 26:  Union members hold signs during a rally outside of San Francisco City Hall on February 26, 2018 in San Francisco, California.  Hundreds of union members held a rally outside of San Francisco City Hall as the US Supreme Court begins to hear oral arguments in the Janus V. AFSCME case that union memebers and supporters claim would limit their right to union representation by allowing members to not pay dues but still receive representation.  (Photo by Justin Sullivan/Getty Images)
Maybe not. Justin Sullivan/Getty Images

In a decision likely to weaken organized labor for years—if not decades—to come, the Supreme Court ruled Wednesday that public sector unions could no longer collect fees from workers whom they represent at the bargaining table, but who choose not to sign up as members. The case, Janus v. AFSCME, essentially extends anti-union “right-to-work” laws to cover every single government employee in America, and will almost certainly lead to a decline in U.S. union membership.

It’s hard to predict exactly how damaging this result will be to the wider labor movement. But one quick, useful case study comes to us from the state of Michigan, which implemented its own right-to-work legislation in 2013.

By law, Americans cannot be forced to join or pay full dues to a labor union. But longstanding legal precedent held that, under a collective bargaining agreement, workers could be required to pay a reduced sum known as “agency” or “fair share” fees meant to cover the cost of the union’s basic services. Twenty-nine states have passed misleadingly labeled “right-to-work” legislation barring these arrangements outright. And in Janus, Justice Samuel Alito used his judicial perch to continue the assault by banning agency fees for all public sector workers, citing first amendment concerns.

Right-to work policies can discourage individuals from joining unions by letting them enjoy their benefits for free as non-members. Labor organizers are required to negotiate on behalf of every employee in a collective bargaining unit, even if they don’t pay dues, so any given worker will be better off financially if they decide to free-ride on the union’s efforts without signing up. This tends to hamper unions over the long-term by sapping their financial resources, making it harder to fund new organizing drives.

Estimates vary as to how drastically right-to-work policies ultimately reduce union membership, but the consensus at this point is that they’re a drag. Michigan offers a useful illustration, in part because it passed a right to work law in 2013, meaning enough time has passed to judge its initial effects, and because the state’s largest teachers union, the Michigan Education Association, files financial and membership information with the Department of Labor. (Many purely public sector unions don’t because they aren’t required to.) According to those documents, the union has lost 18 percent of its membership since the statute was passed. Dues and membership fees have declined, meanwhile, by 28 percent. The union hasn’t collapsed, but it is significantly reduced.

How right to work crippled Michigan's biggest teachers' union
Jordan Weissmann

David Crim, a spokesman for the Michigan Education Association, told me that many teachers decided to leave the union even though they supported it, because dropping their membership and not paying dues was the only way they felt they could increase their incomes at a time when educators’ wages in Michigan have been stagnant. If true, that points to how right-to-work policies can create a vicious cycle for unions: Weakening organized labor makes it harder for public sector unions to organize and bargain for better pay, encouraging more teachers to drop their memberships for the sake of their own finances.

The fate of the MEA isn’t necessarily a perfect preview of what’s to come for public sector unions. As University of Oregon Professor Gordon Lafer pointed out to me, Michigan’s right-to-work law banned unions from collecting any dues through a simple payroll deduction. Instead, they have to do it through a credit card, check, or bank draft, which is far more cumbersome and probably cuts into dues payments further. “The Supreme Court decision bans fair-share fees, but still lets voluntary dues be paid by payroll deduction, so its impact should be somewhat less than Michigan,” Lafer told me.

It’s also possible some unions could see a much more severe free-rider problem than what the Michigan Education Association has experienced. In one telling case, a public employees’ union in Iowa won recertification in 2017 with support from 83 percent of the bargaining unit’s workers. But only 29 percent are enrolled as union members; the rest are choosing to free-ride.

When I spoke with Crim, he tried to spin his union’s continued existence as a story of triumph over adversity. “When the Michigan Republicans in the legislature rammed through their attack on unions, many predicted that MEA would fold its tent,” he said. “We didn’t go away, nor did any other unions in this state go away when they rammed through this anti-union legislation.” That may be true. But it just underscores that today, the Supreme Court thrust some of America’s most important unions into survival mode.