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August 01, 2008

Comments

"Yet, we make such generalizations all the time despite the fact that there are always exceptions, so I don't think your attack was justfied."

I'm pretty sure my three questions were no kind of "attack" of any sort. An "attack" would be some sort of personal comment, or disparaging remark, not three substantive questions about unions.

Seb:
Take 1,000,000 workers each earning $100.
Take N executives each earning $35,000.
Total original payroll = $100,000,000 + N*$35,000.
Give each worker a 2% raise by cutting each executive's pay to $4,000.
Total final payroll = $102,000,000 + N*$4,000.
We want total final payroll = total original payroll.
That means
$102,000,000 + N*$4,000 = $100,000,000 + N*$35,000
or
$2,000,000 = N*$31,000
or
N = 2000/31
or
N = about 65

Your point to Eric was that to give a million workers a measly 2% raise would require redistributing the 'excess' pay of 6,500 executives. You were off by a factor of 100. I can explain it to you. I can't understand it for you.

-- TP

I don't know about other behemoth companies, but mine determines just and reasonable executive compensation by looking at what other behemoth companies are doing, and adjusting accordingly. They also do employee compensation that way, so if things are getting worse, we're closely following the trend.

The top of the corporation are known as NEOs (Named Executive Officers, for what it's worth), and there are seven of them, pulling down a total of about $60 million a year in total compensation, depending on their performance. Last year it was rather less, but likely still in the high $40 mils. Spread that around the 140k employees, and it comes to $428. Dunno what the average wage is, but I suspect that'd come to something less than 1%.

FWIW, anyway. There's no telling what all of the management between Bob Stevens and I are pulling down, or how many of them there are. I'd guess the division-VP guys are making a few hundred thou, depending on how successful their division is.

I'm pretty sure my three questions were no kind of "attack" of any sort.

Oh please, there is such a thing as rhetoric and a sentence like:

Do you have any facts or cites to bring to bear on this question, or are you using anecdotes to smear and misjudge good unions along with bad ones?

is not a neutral question, but rather a loaded one. Implying that someone uses questionable data to "smear" someone is an insult by most standards.

Hogan: Unions aren't allowed to use dues money for political activity. Let me repeat that, because it's widely misunderstood: unions aren't allowed to use dues money for political activity. (If you are aware of a union doing that, contact your local Republican US attorney's office; I'm sure they'd love to hear from you.) My union maintains a PAC funded by contributions from members, and based on the rate of participation in my local, I can assure you that contributions are entirely voluntary.

Late on this, but it took me a couple days to get around to finding a cite:

The union adopted a new amendment to its constitution at last month's SEIU convention, requiring that every local contribute an amount equal to $6 per member per year to the union's national political action committee. This is in addition to regular union dues. Unions that fail to meet the requirement must contribute an amount in "local union funds" equal to the "deficiency," plus a 50% penalty. According to an SEIU union representative, this has always been policy, but has now simply been formalized.

Where does the $6 per member come from if not dues? Where do "local union funds" come from if not dues? (Honest question. Does a local have another source of revenue?)

So they can’t force the PAC contribution from the members directly, but they can force a contribution from the locals equivalent to $6/member plus a penalty if they don’t pony up. That doesn’t seem to be entirely voluntary to me. What’s that called when you demand money from someone and then impose a “penalty” if they don’t give it up?

OCSteve, this is a policy that was only implemented a month ago, and it is being contested, so your assertion that unions have been 'extorting fees, and spending that money on lobbying for Democrats to win local elections" is not strictly correct.

Openleft has this

If the local doesn't put enough money into the national PAC, they will have to pay a penalty of regular funds out of union dues to the international. PAC contributions are voluntary and only come when members feel empowered, whereas union dues are automatic, so this is a strong incentive for locals to organize and empower their members. It's a good policy move, and it was voted on and ratified at the SEIU Convention.

The problem is that this policy might be considered discriminatory against locals that don't raise enough PAC money 'voluntarily'. The requirement and penalty do somewhat cut against what it means to voluntarily give to political causes. A possible lawsuit might be viable.

So even OpenLeft sees your point, but if the local had enough people to donate, the problem never comes up. I've been trying to find the average donation of the SEIU union member. If the average is around $6, then it would be a wash.

LJ: this is a policy that was only implemented a month ago

“According to an SEIU union representative, this has always been policy, but has now simply been formalized.”

If the local doesn't put enough money into the national PAC, they will have to pay a penalty of regular funds out of union dues to the international.

I don’t see how that counters my point LJ. If a local doesn’t raise enough “voluntary” contributions for the PAC they make up the difference plus a penalty out of union dues. If there is one single union member who does not support the political goals of the PAC or simply does not want his/her dues funding political activity this is simply wrong. If it was me I’d think of a few other names for it than “empowered”. “Voluntarily” contribute to the PAC, or else face a penalty you’ll pay out of local dues…

It’s a coerced donation no matter how you frame it IMO.

Having been in a few unions, I imagine the 'policy' is the requirement that a donation to the National PAC, not the penalty. The story is unclear on precisely what the policy is and what the formalization of a policy actually is (unions wouldn't survive very long if they just arbitrarily instituted penalties on locals)

OpenLeft and I agree that that it is problematic, but by your reasoning, it seems that any use of any money in a systematic manner from the locals would constitute a coerced donation. Since the purpose of a union is to create some notion of collective action, given your argumentation, the national organization couldn't really require anything of the locals ever. What union-y things would you allow a union to do?

LJ: … but by your reasoning, it seems that any use of any money in a systematic manner from the locals would constitute a coerced donation.

Well, I consider income taxes to be a “coerced donation”. ;) But really, I was responding to Hogan on this:

Unions aren't allowed to use dues money for political activity. Let me repeat that, because it's widely misunderstood: unions aren't allowed to use dues money for political activity. […] My union maintains a PAC funded by contributions from members, and based on the rate of participation in my local, I can assure you that contributions are entirely voluntary.

Getting to the bottom line, there is money in the form of union dues flowing from the locals to the national PAC. Note that this money includes nonmember employees' compulsory dues/fees. Sorry, but that is just wrong and likely illegal IMO. I’m actually glad that they put it in writing as now it can be challenged. The scary part to me is that “this has always been policy”…


What union-y things would you allow a union to do?

Take care of their members. Start by shoring up their pension funds. I’ll limit this to the scope of SEIU – but they don’t seem to be in very good shape:

Public records based on the SEIU's own filings show that the SEIU National Industry Pension plan – which covers some 101,000 workers – was only 75% funded in 2006. Put another way, the plan had only three-fourths of the money it needs to meet its retirement obligations. And the national chapter is only the start. Some 13 local SEIU pension plans in 2006 were less than 80% funded; several didn't reach 65%.

And as there was a lot about executive compensation in this thread:

On the other hand, SEIU leaders are highly attentive to their own pension funding. A separate fund run by the national union, this one covering the benefits of SEIU officers, was 103% funded in 2006. The top SEIU guns are set for their golden years.

What union-y things would you allow a union to do?

Take care of their members.

Does that include negotiating a contract with employers, and demanding whatever they think is in the interests of their members?

Do you believe that taking stands on what laws should be aren't the business of a union? Laws regarding employment, employer-union relations, working conditions, pensions, wages, and everything else that affects their members shouldn't be the business of a union? Or what?

"but they don’t seem to be in very good shape:"

I might believe a WSJ news article as credible; WSJ editorials lie like mad. Find a credible source?

OCSteve: I've been looking for more clarification on the SEIU policy and not finding it, so I'll just note for now that not even the WSJ article says that the penalties for insufficient PAC contributions go to the PAC. If they're paid to the international--and if they're adopted by the same international convention with the same elected delegates that sets the dues amounts--then it's not a political contribution and no more involuntary than the dues themselves. (Which may be bad enough, from your perspective.) I should note that if I were a delegate to the SEIU convention, knowing only what I know now, I wouldn't have voted for that policy (unless it was accompanied by significant rank-and-file participation in setting political priorities and making endorsements).

Reading farther down in that article about the SEIU pension funds, I see what the problem with the SEIU National Industry Fund is: "Some of this might be the result of poor investment performance, but the main problem is that the SEIU hasn't negotiated adequate employer contributions to the plans." In other words, that bad old union hasn't forced the employers to put enough money into the fund to meet the obigations that the employers themselves have apparently agreed to. Shame on you, union! Use your superpowers to magic that money directly from the employers' coffers (they still use coffers, don't they?) into the pension fund! Or else stop funding adequately the pension plan you are directly responsible for!

I also wonder how 75% compares to other pension funds, especially in whatever non-union firms still have pension funds. I suspect it's pretty good.

"I also wonder how 75% compares to other pension funds, especially in whatever non-union firms still have pension funds."

Note that even the cited WSJ editorial (and WSJ editorials lie worse than weasels) says: "The SEIU is now disputing some of these figures, claiming the information it publicly filed is wrong. It now claims its national plan was 92% funded in 2006, and as of January 1, 2008, was 96% funded."

OCSteve: Take care of their members.

You do sound like my doddery*, ageing great-aunt sometimes. She believed in unions. So long as they didn't do anything she didn't hold with unions doing. Like going on strike, or political campaigning.

*She'd kill me. Fortunately, she doesn't blog.

She'd kill me. Fortunately, she doesn't blog.

How would she know that her dear great-niece was one and the same as that blogger with the funny name?

;)

Well, also, she's been dead for seven years, and over the years I find my mourning for her has progressed from the pain of knowing she is no longer in the world to the richness of knowing she once was.

It's actually somewhat complimentary to OCSteve to say he reminds me of her. If we ever meet, I fully expect OCSteve to take one look at my hair and bark "I don't like it! I don't like it at all!"


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