Monthly Notes

Labor Notes: May, 2012

Liberal politicians breathed a sigh of relief in April when the Labor Department revealed that the nation’s unemployment rate dropped to 8.2 percent in March. A closer look at the numbers, however, reveals a disturbing trend in the job market: The labor participation rate, the percentage of working-age Americans either employed or actively seeking employment, continues to plummet as people drop out of the labor force altogether. It now stands at a dismal 63.8 percent – a thirty-year low. When people give up looking for work, the government doesn’t count them in the labor force, and voila! – unemployment drops. How’s that for creative accounting? Unfortunately, as Paul Vigna of The Wall Street Journal’s Market Beat notes, “That means fewer people to contribute to economic growth. Fewer people to pay taxes. Fewer people to help the U.S. earn its way out of a $15 trillion debt hole.”

It’s getting ugly in Wisconsin, as the state gets ready for the June 5th recall election of Gov. Scott Walker, whose anti-collective bargaining legislation infuriated unions and their supporters last year. In the Democratic primary to choose a candidate to challenge Walker, unions have supported former Dane County Executive Kathleen Falk against Milwaukee Mayor Tom Barrett. Unfortunately for Barrett, he is experiencing the kind of smear campaign that unions specialize in (though those are usually directed toward conservative candidates): A union- circulated video claims Barrett was a supporter of Walkers’ collective bargaining reforms. The American Federation of State, County, and Municipal Employees (AFSCME), Wisconsin’s largest public-sector union, was forced by the ensuing uproar to admit that the outrageously false ad was “over the top,” saying in statement: “While we used poor judgment in directing our members’ attention to an Internet video that went over the top to make its point, we believe it is essential to bring attention to Barrett’s record on collective bargaining.”

Speaking of Wisconsin’s collective bargaining reforms, a federal judge has upheld most of the controversial law, but struck down two of its key and most union-loathed provisions: one banned public union dues from being automatically withdrawn from members’ paychecks, the other forced unions to conduct annual recertification elections. On March 30, U.S. District Judge William Conley rejected arguments from seven large unions, who filed suit against the law last summer, that Walker’s reforms violated the U.S. Constitution’s equal protection clause because they exempted firefighters and law enforcement officers. Conley noted that Walker had legitimate reasons for exempting police and firefighters – if public-safety workers strike, the judge reminded litigants, the public safety is threatened.

In California, unions aren’t even trying to hide their ravenous appetite for taxes – four state worker unions have agreed to postpone their contact negations until after a vote on an initiative that would hike taxes. In Nevada, the AFL-CIO is pushing a ballot initiative to raise taxes that would be “assessed on net business profits in excess of $500,000 at a rate of 2 percent,” according to a report in the Lahontan Valley News. And in Massachusetts, unions are pushing to raise the state income tax to nearly 6 percent! Why would these unions be pushing for more taxes? James Sherk and David Weinberger of The Heritage Foundation have an answer: “Tax increases hurt the economy. They cost jobs. They take money out of taxpayers’ pockets. But they (usually) mean more money for the government—where most union members now work. Small wonder, then, that the union movement campaigns so heavily for them.”

The ink on Indiana’s new “right-to-work” is still wet, and already it’s being challenged in court by ever-aggrieved unions. “Attorneys for International Union of Operating Engineers Local 150 argue in a court brief that Indiana’s new law, which allows workers not to pay union dues even if a union bargains on their behalf, interferes with the union’s free-speech rights and ‘impinges on this fundamental right of union membership,’” reports the Associated Press. Imagine: Unions argue that not being allowed to forcibly collect dues from their members to spend on politicians that those members may not agree with is a violation of the union’s free speech rights! Now that’s chutzpah…