The Center for Public Integrity
written by John C. Henry
March 3, 2011
On the surface, the fight between the governor of Wisconsin and organized labor is about balancing state budgets and collective bargaining rights. Behind the scenes, hundreds of millions of dollars in compensation to top labor leaders as well as campaign contributions to Democrats could be in jeopardy if workers lose.
The trickle-up effect of the standoff in Wisconsin and other states could irreparably damage the corporate-like compensation structures that the Top 10 labor unions have built over decades.
Union treasuries—filled by dues paid by union members—not only fund programs benefiting union members and their families. The money also pays six-figure salaries and benefits for labor leaders and their top staffs, and provides tens of millions of dollars for Democratic causes and candidates.
The Center for Public Integrity found compensation for leaders of the 10 largest unions ranged from $173,000 at the United Auto Workers to $618,000 at the Laborers’ International Union of North America and almost $480,000 for the president of the American Federation of State, County & Municipal Employees. The latter is the target of GOP governors in Wisconsin, Indiana, Ohio, Tennessee and Kansas.
“What’s very clear to union leaders is the huge threat this poses for the organizations they have built,” said John C. McAdams, political science professor at Marquette University in Wisconsin.
The standoff began when Wisconsin Gov. Scott Walker, elected as a Republican reformer, proposed deep cuts in state workers’ benefits to help close a projected $3.6 billion deficit in the state budget. Although unions have agreed to cuts in health insurance and retirement plans, Walker wants more.
Bolstered by business allies, Walker is pushing to deny state employees most of their bargaining rights. He also is aiming directly at the unions with proposals to make it harder to organize workers and collect dues.
Fueling this drive are reform minded Republican governors armed with studies—roundly disputed by Democrats and their union allies—that say government employees receive higher pay and better benefits than workers in non-government jobs.
“If the governor of Wisconsin wins this fight, for workers the state will begin to look like Oklahoma or Wyoming—unfriendly to unions and reliably Republican,” said Nelson Lichtenstein, a history professor who runs the Center for the Study of Work, Labor and Democracy at the University of California, Santa Barbara.
To counter daily protests by labor supporters, a pro-Walker demonstration was organized by Americans for Prosperity, a group funded by Charles and David Koch. The brothers from Kansas made their billions in energy and consumer products and were the fourth highest donor to Walker’s 2010 campaign.
In a Tuesday op-ed column in The Wall Street Journal, Charles Koch defended his family’s politics in the name of deficit reduction. “Because of our activism, we’ve been vilified by various groups. Despite this criticism, we’re determined to keep contributing and standing up for those politicians, like Wisconsin Gov. Scott Walker, who are taking these challenges seriously.”
Among those rallying support for the beleaguered state workers and the AWOL Democratic senators: AFL-CIO President Richard Trumka, Teamsters President James P. Hoffa, civil rights activist Jesse Jackson, and Gerald McEntee, president of the American Federation of State, County and Municipal Employees, whose local members have been targeted by Walker.
McEntee said Walker was retaliating for organized labor’s support of Democrats, in particular for the money given to his opponent in the 2010 election. “This is political payback, which does nothing to promote job growth or help the middle class,” McEntee said on The Huffington Post. “This is nothing less than union busting at its most transparent, designed to deny workers a voice in the workplace.”
The membership of AFSCME, which evolved from a state employees’ union organized in Wisconsin in 1932, has grown by 25 percent over the last decade. McEntee, who has been president since 1981, says more than 145,000 government employees have joined AFSCME since 2006.
AFSCME stands in stark contrast to the decline in traditional, private-sector unions. The Bureau of Labor Statistics recently reported that while less than 7 percent of private sector workers belong to a union, more than 36 percent of government employees—such as state and municipal workers, teachers, police and firefighters—are union members.
As membership in AFSCME has grown, so has its political activism and political spending. AFSCME spent $90 million in the 2010 elections, and most of that went to Democratic candidates and affiliated organizations.
McEntee’s pay and benefits have grown along with his membership stats. Reports by the union indicate that his salary has increased by about 4 percent a year, even as many workers have faced pay freezes and unpaid furloughs. In 2009, his compensation totaled almost $480,000. By comparison, the AFL-CIO’s Trumka was paid $283,340 in salary and benefits.
The union reports, filed with the Department of Labor, show that assets of the various labor unions run into the hundreds of millions of dollars and payrolls rival midsized companies. Among the Top 10 unions, dozens of top officials have salaries and benefits that rank them among the top percentage of income-earners in the country.
Although well-paid by most standards, McAdams acknowledged that a pay disparity exists between most union leaders and their members. He added that their income pales in comparison to corporate executives.
“Union leaders today are not really from the working class, and their incomes are not so high that they’re making out like bandits,” he said.
International Brotherhood of Electrical Workers was the only union that returned the Center’s phone calls and emails requesting comment on this story. Jim Spellane, director of media communications, said, “Our union president makes about what some of the highest paid workers in the union make. We’re proud that our leadership comes out of rank and file, people who worked in the trade.”
Union compensation is still a fraction of that paid to heads of Washington’s big trade associations. John Castellani of the Business Roundtable had a compensation package of $1.4 million in 2009 and Thomas J. Donohue of the U.S. Chamber of Commerce made $3.7 million. Castellani has since departed.
These are the 10 largest unions, noting the number of employees who earn more than $200,000, leadership salaries, and campaign contributions to federal candidates in 2009-2010.
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