Paycheck Protection: Cheap for Business, Good for Unions

Labor union leaders are having a difficult time organizing opposition in California to Proposition 226, the “Campaign Reform Initiative.” Unable to convince a majority of members that they should continue to allow unregulated union use of a portion of their paychecks for political purposes without member permission, they are now telling businessmen that giving workers the freedom of political choice simply costs too much.

Appearing on California’s June primary ballot, Proposition 226 would give labor union members the ability to decide if their mandatory dues can be spent on politics. If Proposition 226 is passed, members would sign a form authorizing the union to take money out of their paychecks to fund state and local campaign activity. If they do not, union members would still have the right to independently give to candidates and causes of their choice (possibly even the same as endorsed by their union) or to abstain from political involvement altogether.

Results of a Field Poll published in the March 24, 1998 San Francisco Chronicle found 61% of voting union households support Proposition 226. This is even higher than the general population, where support was found at 60%. While union leaders are waging an unanticipated internal campaign to turn their members against Proposition 226, they are also hoping to spread anti-226 sentiment among the business community with the contention that instituting and maintaining “paycheck protection” would create a costly new bureaucracy for employers.

This notion is false on several counts. Employers need not participate in dues collection in the first place. Securing member permission to take money for union political accounts is a matter between members and their union. Many employers do provide unions with the courtesy of subtracting these dues during the payroll process, but this is a point negotiated during collective bargaining. There is no requirement in Proposition 226 or existing state or federal law requiring employers to deduct membership dues — political or otherwise — for organized labor.

Workplace computerization would make a political dues check-off no big deal. Should employers agree to participate in union dues collection, all it would take is a click of the mouse on an employee database to determine whether a member wants his money sent to union political coffers. The hassle of creating a form allowing this would be minimal since the language of Proposition 226 already provides the wording for such a form right down to the type sizes.

Actual studies of the potential costs of paycheck protection also do not bear out the gloomy predictions made by union leaders. In California, the state and local governments employ more than one million people. Many of them are unionized. But the California Legislative Analyst’s Office (LAO), the state agency tasked with projecting the costs of proposed legislation, does not foresee Proposition 226 having a profound impact on how these governments operate. In its official report for voters on ballot initiatives, the LAO says instituting Proposition 226 will create “no net administrative costs to the state,” and “probably not major” costs to local governments.

Furthermore, a report by the Congressional Budget Office (CBO) in Washington found a federal paycheck protection bill would have only a limited effect on private business. An analysis of Congressman Bob Schaffer’s (R-CO) “Paycheck Protection Act” (H.R. 2608) by CBO staffers John Righter and Kathy Rarick determined the cost to private businesses would be below the threshold set by the Unfunded Mandates Reform Act. That is significant since the Act is meant to protect business and state and local governments from having to bear the potentially heavy costs of proposed federal regulation.

Another factor that blunts organized labor’s assertion that paycheck protection is bad for business is that most of the nation’s leading business associations have endorsed the concept and Proposition 226. This includes the U.S. Chamber of Commerce, the world’s largest business federation. When the National Federation of Independent Business (NFIB) asked its California membership “Should organizations be prohibited from using any portion of an individual’s dues for campaign purposes without annual, written authorization from the individual?,” NFIB Regional Political Director Tim Mooney said 94% agreed. “There is not much debate about paycheck protection among our members,” said Mooney. “It is a commonsense means of restoring fairness to the workplace and democracy to our political process.”

Karen Kerrigan, president of the 40,000-member Small Business Survival Committee, calls union leaders’ laments about Proposition 226 being a bureaucratic nightmare “disingenuous” and “overblown propaganda.” Pointing out the fact that unions often support greater workplace regulations that bury employers in paperwork, she said, “Now, when regulation of [the unions’] anti-democratic actions is at issue, they shed crocodile tears for the overburdened employer.”

Warnings from union leaders about the paperwork pitfalls and unanticipated costs of paycheck protection should be taken with a grain of salt. The group put at most risk by allowing workers to make their own political choices is the union leadership itself, which uses payroll deductions to amass their powerful political empire. Allowing union members to refuse to fund this campaign war chest would weaken the power of individual union leaders.

It is important to note that paycheck protection would not necessarily weaken the labor movement as a whole. In 1996, pollster Frank Luntz found respect for local union leaders among rank-and-file members was much stronger than for national ones. A split between local and national leaders over a political candidate, he found, left only 13% of surveyed union members siding with their national leadership. Political differences between union members and leaders have helped to erode the trust that once gave organized labor power and the respect of their membership. Paycheck protection provides a way to increase the average member’s trust in, and support for, their union’s workplace and political goals.

David W. Almasi is the editor of the Political Money Monitor newsletter, a publication of The National Center for Public Policy Research.

The National Center for Public Policy Research is a communications and research foundation supportive of a strong national defense and dedicated to providing free market solutions to today’s public policy problems. We believe that the principles of a free market, individual liberty and personal responsibility provide the greatest hope for meeting the challenges facing America in the 21st century.