Mark Janus v. AFSCME: Supremes could doom public employee unions
WASHINGTON, February 25, 2018: Mark Janus, an employee of the Illinois Department of Healthcare and Family Services, has been paying thousands of dollars to the American Federation of State, County and Municipal Employees (AFSCME), the labor union representing his agencies’ workers.
The problem is that Janus never joined the union. Even so, his paychecks are still docked for union dues anyway. That is because all unionized Illinois public employees are subject to mandatory union dues deductions whether they like it or not.
Janus wants the Supreme Court to overturn its 1977 Abood v. Detroit Board of Education decision that effectively endorsed mandatory dues checkoffs for public employees.
Indications are that Janus may be successful in his suit, which is now before the U.S. Supreme Court. Abood was almost overturned by the court in 2015. But, in a stunning turn of events, the untimely death Justice Antonin Scalia led to a 4–4 split decision, which meant that the Abood decision was allowed to stand.
Mark Janus’ suit against AFSCME is now giving a full court the opportunity to revisit this explosive issue once again.
The industrial revolution, unions and “free riders.”
Prior to the industrial revolution in the mid-1800’s, virtually every worker was involved in agriculture or was employed in small shops. Those in agriculture generally produced enough to feed their families. If they were fortunate, they might have had something extra to sell to neighbors. Those workers involved with small shops provided some basic specialty services. For each sector, however, their productivity was relatively low and, as a result, their earned income was low.
During the rise of the industrial revolution, new machines were invented that could vastly increase worker output. Factories were soon built by those who could accumulate capital to purchase these new machines. The income of these early entrepreneurs was often substantial, eventually leading to increased capital formation. This new capital fueled further expansion.
Workers anxious to leave the farm to seek a job in the new factories, initially found relatively few opportunities since there were only a few operating factories at the time. This resulted in a large supply of willing workers in a time of low worker demand. Thus, with an oversupply of workers for scarce factory jobs, those that did gain employment were paid low wages. Yet factory wages were still high enough to attract many workers. They had no other option other than to return to the farm.
Eventually, as the economy became more industrialized, the demand for workers caught up to the supply and wages began to rise. Yet when compared to the wages of corporate ownership and management, the average worker’s pay rarely if ever kept up with the cost of living.
Workers subsequently found they were in a better bargaining position over wages when they bargained collectively. They formed labor unions, which often led to violent pitched battles when companies resisted this pressure. Nonetheless, as the union movement gradually took hold, one result was a regular increase in the salaries of union workers. Even better, employee benefits were built into new contracts along with provisions supporting significantly improved working conditions.
During the rise of the unions, and persisting to this day, was the issue of “free riders.” These were workers who did not directly join a union, but still received the same salary and benefits as dues-paying union members. This was always a vexatious problem for unions representing private sector unions.
But the issue became more complex with the rise of public employee unions, something even President Franklin Roosevelt opposed. Such opposition was due to the peculiar but very real conflict of interest that arises, at least in America, when taxpayers are effectively the employers of public workers at all levels of government. Are public employees subject to the same rules as workers in the private sector?
Abood v. Detroit Board of Education: The 1977 Supreme Court Decision.
Regarding the public sector, the Supreme Court ruled in the Abood v. Detroit Board of Education decision that public employees can be compelled by the State to pay full union dues. Even if an employee disagrees with the union’s use of funds, particularly for political purposes, union dues are still deducted from each paycheck.
In the years following this decision, numerous states have passed their own laws regarding this issue. There are currently 27 “right-to-work” states where employees cannot be forced to join a union, public or private. In the other 23, workers are forced to either join the union or pay an annual fee, which usually approaches the amount a worker would pay in annual union dues.
Mark Janus, an employee of the Illinois Department of Healthcare and Family Services, was stunned to discover this fact when he returned to employment with the state. Under protest, he has been paying thousands of dollars to the American Federation of State, County and Municipal Employees (AFSCME), the national public employee labor union representing his agencies’ workers.
But the problem remains, in that Mark Janus never joined the union and is still not a member. No matter. His paychecks are docked for union dues anyway. That is because all unionized Illinois public employees are subject to mandatory union dues deductions whether they like it or not.
Janus wants the Supreme Court to overturn the Abood decision that effectively caused his dilemma. Indications are that he may be successful. Indeed, Abood was almost overturned in a similar 2015 case that ended up before the nation’s highest court. But the death Justice Antonin Scalia led to a 4–4 split decision, which meant that the Abood decision was allowed to stand.
A win for Janus will be big trouble for unions.
If Janus is successful and if no public employee can be compelled to join a union and pay union dues, public employee union membership is likely to drop significantly, as it did in Wisconsin after Governor Walker signed a right-to-work measure in that state.
In the private sector, unions represent approximately 6.5% of employees. But in the public sector, that number is over 34%. Taken together, this totals just under 15 million people, about 11% of the total U.S. workforce.
Union membership, both public and private, will likely fall dramatically if Janus prevails in his suit. As was shown in a highly unionized state like Wisconsin, there are many people like Mark Janus. They don’t see any value in joining the union and would rather save the thousands of dollars.
While it is true that union workers tend to have higher wages than non-union workers, many workers today would rather negotiate with their employer individually rather than collectively.
Other union workers, while appreciating the higher wages they receive, see that one longer-term consequence of rapidly rising wages is the loss of jobs. Even as manufacturing is beginning to return to the U.S. today, the construction of new factories and facilities remains very capital intensive. Worse, the cost of new or renovated factories, combined with ever-higher wage demands, has increasingly led to the replacement of high priced labor with robots. Significantly, most of the new factories being built are locating in right-to-work states.
Starting this week, oral arguments will be heard by the Court. The outcome of this case will likely have a significant impact on the future of the labor movement in the U.S.
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. www.facebook.com/fundingdemocracy @mbusler
Originally published at www.commdiginews.com on February 25, 2018.