Mark Janus v. AFSCME: SCOTUS ruling stuns public employee unions

In the highly-followed case of Mark Janus v. AFSCME, the Supreme Court has just issued a momentous ruling. Voting 5–4 in favor of Mark Janus, SCOTUS states that public employee unions like AFSCME cannot force workers who freely choose not to join the union to pay union dues or fees. This is a victory for individual employees’ freedom. It could also prove to be a death blow to public employee unions.

Mark Janus, an employee of the Illinois Department of Healthcare and Family Services, has been paying thousands of dollars over the years to the American Federation of State, County and Municipal Employees (AFSCME), the labor union representing his agencies’ workers.

Janus’ problem was that he never joined the union. No matter. His paychecks still get docked for union dues anyway. The reason: All unionized Illinois public employees are subject to mandatory union dues deductions whether they like it or not.

Mark Janus v. AFSCME: Supremes declare mandatory public union dues deductions unconstitutional

Union members believe this SCOTUS decision in favor of Mark Janus is unfair. They say that in the 1977 Supreme Court decision in the Abood v. Detroit Board of Education, the Supreme Court effectively endorsed mandatory dues checkoffs for public employees. The logic behind that decision was that the Supremes wanted to avoid the so-called “free rider” problem.

More specifically, if an employee did not join the union, that employee would still receive the benefits that the union negotiated without paying dues or contributing to the expenses of the union. The employee would get a free ride. Hence, the term.

To avoid this problem, the court declared that the union could impose fees on employees who received the benefit without paying union dues. This fee was a percentage of the total union dues payable, and was often assessed at about 85 of the total.

Thus, if union dues were pegged $1,000 per year per employee, a non-union employee would have to pay $850. A portion of that fee would be used to contribute to the campaigns of candidates many employees do not support. The Supreme Court said that this violates the first amendment right to free speech and is therefore unconstitutional.

Is the free rider problem real?

The unions assume that without their collective bargaining representation, an employee would not receive the negotiated benefits. That, however, may not be a valid assumption.

When an individual is offered employment in a unionized government agency, the government makes a monetary salary offer along with a benefits offer. The new employee receives a wage consistent with the union contract and all of the benefits that the union has negotiated for every employee.

The union assumes that the employee would not be able to negotiate as high a salary without the union contract. The union also assumes the benefits offer is based on the contract the union negotiated. Following that line of reasoning, the union leadership assumes that the individual employee would not receive all of those benefits without the union. If the new employee does not pay the union at least a minimum fee, the employee gets a free ride.

A new employee may say that’s not true. The new employee may feel that the salary and benefits package could be better if the employee was free to negotiate with the employer. This is especially true if an employee, particularly in a white-collar profession, is considered more skilled than the average worker, and/or possesses an advanced degree in the relevant field.

Unions in academia: An example

In academia at public institutions, each professor is not considered to be the same. Some professors may be better teachers than others. Some professors may have a stronger research agenda with more publications that other professors.

A unionized university places our newly hired professor into an salary category previously negotiated under the union contract. The administration would say that’s the best they can do for the new hire because of the union contract. Similarly, the university offers the new employee a benefits package negotiated under the same union contract.

If the employee’s benefit needs differed from those written into the contract, some union-negotiated benefits might not be of interest. Other benefits the employee needs or desires, however, might not be part of the contract. Due to the existence of a valid of the union contract, however, the university administration could not change the benefit package offered to the new hire. That new employee might believe he or she could negotiate a better contract on his or her own. That employee may feel that he or she could negotiate a far more specific deal without union limitations.

The current state of American public and private sector unions

Today in the private sector, unions represent approximately 6.5 percent of U.S. employees. But in the public sector, that number is over 34 percent. Taken together, this totals just under 15 million people, about 11 percent of the total U.S. workforce.

As a result of the Supreme Court’s Mark Janus v. AFSCME decision, public unions may very well not survive. In order to prolong their survival into the future, public employee unions may finally have to change their usual game plan. Instead of pocketing mandatory dues checkoffs and using them for whatever purposes their leadership desires, unions will now have to convince employees they are better off with the union than without it.

In other words, the union must now show employees they are getting good value for the dues or fees that they pay.

Which gets down to a critical point. Perhaps unions operating on ever more limited budgets will finally have to stop supporting political candidates that many of their own members oppose.

MICHAEL BUSLER

Michael Busler, Ph.D. is a public policy analyst and a Professor of Finance at Stockton University where he teaches undergraduate and graduate courses in Finance and Economics. He has written Op-ed columns in major newspapers for more than 35 years. @mbusler www.facebook.com/fundingdemocracy

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