May 17, 2005
'Very, very bleak'By Thomas Lifson
Democrats, sustained by a mainstream media in friendly hands, can handle election losses, at least when facing the cameras. Deprived of a Senate majority, they are capable of unprecedented filibuster threats to block judicial appointments, while simultaneously blustering about supposed Republican abuse of Senate traditions. Even when in the minority, publicly at any rate, they seem to assume that they have a right to be running things.
But serious Democrats, the ones who love power more than the spotlight, and who look ahead and agonize about unfavorable trends, are worried about the slow—motion disintegration of their most important organizational and financial base: the labor movement.
"'If we can't reverse course, the future is very, very bleak,' said Harold Ickes, an influential Democrat and labor ally."
In the past presidential election, the unions doubled down their bet and busted out, committing unprecedented sums of money to campaign contributions, almost all of them to Democrats. Their huge political expenditures bought them virtually nothing at the polls. Now they are paying the price.
The AFL—CIO union federation is being challenged from within by its largest component, the Service Employees International Union. Industrial unions like the United Auto Workers and the United Steel Workers are caught in a death spiral. Their lucrative contracts have imposed enormous costs on employers which are making them uncompetitive in the market place. General Motors is struggling under the burden of providing lush health care benefits for retirees, while Toyota, Hyundai, and others not only import vehicles but also assemble them right here on their home turf, with nonunion employees in right—to—work states cranking out high quality, stylish, and well—made vehicles.
Fuelled by such short—sighted greed, the union movement is rushing toward oblivion. Union members now account for about 12% of the workforce, down almost two—thirds from its almost one third share a few decades ago.
The Service Employees International Union (SEIU) is different. It is growing by concentrating on America's fast—growing service sector. Half of its 1.8 million members are in the health care industry, whose hierarchical structures tend to build class consciousness among lower—paid occupations. Under its president Andrew Stern, a former social worker, the SEIU has also focused much attention on organizing Hispanic workers.
A na�ve observer would think that the rest of the union movement would celebrate the successes of the SEIU, and even learn from it. But instead, the SEIU is on the verge of causing a potentially disastrous split in the AFL—CIO, threatening to leave unless it gets its way.
In the language of business, Stern has identified a booming market, and has positioned his union in some of its fastest—growing niches. And he is reaping the union equivalent of profits: a growing stream of dues payments deducted from the paychecks of his membership.
Any chief executive who, by dint of insight and hard work, outperforms his peers, expects recognition and reward. That is simply human nature. Capitalism provides many such rewards to executives because businesses generate new resources which can be shared among management, workers and shareholders.
But union presidents, unlike their corporate counterparts, can't get rich from stock options, though they may, if so inclined and not obstructed by their membership, indulge in a few perks now and then. It is, however, a zero—sum exercise, with the boss's first class airline ticket or charter jet bill coming right out of the dues deducted from the Hispanic chambermaid's paycheck. So the big reward for labor bosses is always power and influence.
So Andrew Stern, the Bill Gates of American unionism, is taking on the labor establishment, and demanding that the AFL—CIO cut its budget by 50%, allowing member unions to apply the extra funds to more organizing activity. He is using the internet, putting his proposals on his own website, and is announced as one of the bloggers contributing to the much—hyped Huffington Post, though no blog posts of his are yet visible as of this writing.
The AFL—CIO has already downsized 167 employees out of their jobs this month, as heartlessly as any corporate executive. But it is resisting Stern's demands. Taking his union out of the federation is his nuclear option, and would save all of the money being sent there. He could spend all of the SEIU's dues to the federation as he wishes, exploiting the market opportunities he sees in the service industry.
Stern's union was one of very few which endorsed Howard Dean for president, making clear his aggressive in—your—face left wing approach to electoral politics. A leftward lurch does not likely spell success for the Democrats, though. Dean's record to date as head of the Democratic National Committee is encouraging Republicans more than Democrats. Fundraising for the DNC is going very poorly, and Dean has a habit of intemperate public expression, even earning a rare public rebuke from liberal—but—politically—adept Barney Frank last week.
If Stern has his way with the AFL—CIO, expect its political efforts to become more extremist in tone and less effective at the polls, pulling the Democrats with them toward permanent minority status. If Stern doesn't prevail, he will probably pull the SEIU out of the federation, thereby furthering its rapid descent into irrelevance.
Harold Ickes is right. The situation is very, very serious. The Democrats are losing an important source of strength, and there is nothing on the horizon to replace it.
Thomas Lifson is the editor and publisher of The American Thinker.