Missouri is the latest front in the attack on organized labor with so-called "paycheck protection" bills moving through the legislature, with backing from the usual array of corporate interests. But according to the Washington D.C.-based Economic Policy Institute, the bills primarily disadvantage workers while preserving privileges for corporations.
The "paycheck protection" supporters -- the U.S. Chamber of Commerce, the American Legislative Exchange Council (ALEC), the National Federation of Independent Business, David Koch's Americans for Prosperity -- frame the bills in terms of "freedom" from union political activity. EPI's study debunks claims that these bills are beneficial to workers and the economy and explains how they are a form of limiting the political voice of organized workers while protecting corporate political spending. The study also details the history of the idea, which was originally introduced in California to punish educational unions for defeating efforts to privatize the California school system.
Below we excerpt from two parts of the study which can be read in full here:
The Paycheck Protection Racket
In the spring of 2013, Missouri lawmakers are debating two bills that seek to limit the ability of state employees and Missouri workers in general to pay union dues that help fund political advocacy. These bills -- dubbed "paycheck protection" by their supporters -- are part of a national effort to restrict the role of unions in politics. Proponents of Missouri's Senate Bill 29 and House Bill 64 claim that these bills will save taxpayers money, will remove the government from the role of collecting money used for political purposes, and will increase workers' control over how their wages are spent.
On close examination, it is clear that these bills will not create new rights for Missouri employees, and will significantly tilt the political playing field by enabling unlimited corporate political spending while restricting political spending of organized workers.
- In voicing its support for HB64, the Missouri Chamber of Commerce claims that, under current law, "employees who pay union dues have no say whether campaign contributions are taken out of their dues, or where those contributions are directed" (Missouri Chamber of Commerce 2013). This is false: All union members have a voice in how dues contributions are used, and any employee who doesn't want his or her dues used for politics is free to either withhold that portion of dues (in the private sector) or withhold the entire dues payment (in the public sector).
- Even in the treatment of payroll deductions themselves, SB29 and HB64 establish a stark double standard for labor organizations versus business. ALEC promotes "paycheck protection" on the grounds that "taking political contributions from workers without their fully informed consent violates these workers' rights" (American Legislative Exchange Council 1998). The Missouri Chamber of Commerce declared that it supports HB64 because "people have a right to designate which candidate gets support with their money" (Missouri Chamber of Commerce 2013). Americans for Prosperity similarly promotes SB29 as guaranteeing workers' "freedom to decide whether or not their earnings are put toward political activity to which they may object" (Americans for Prosperity–Missouri 2013). But these principles apply only to unions, not to corporations. Missouri currently allows 405 possible payroll deductions for public employees, and many of the payments go to corporations that spend heavily on politics. These include:
- Health insurance payments to UnitedHealth Group, which spent $3.4 million on lobbying activities in 2012.
- Prescription drug benefit payments to Express Scripts, which spent nearly $1.9 million to lobby Congress and $340,000 to lobby Missouri lawmakers in 2012.
- Life insurance deductions to Allstate, which spent over $17 million on lobbying in the past five years.
- Supplemental insurance payments to Aflac, which made campaign contributions totaling $2.5 million in 2012 and has spent $21 million on lobbying over the past five years.
Corporations can be expected to pursue a political agenda that furthers their economic interests. But there is no conceivable justification for lawmakers to confer political rights on corporations while diminishing or violating the rights of working people.
What is 'paycheck protection,' and where does it come from?
SB29 and HR64, which Missouri lawmakers are debating in the spring of 2013, seek to limit employees' ability to pay union dues that help fund political advocacy. Dubbed "paycheck protection" by their supporters, these bills are part of a national effort to restrict the role of unions in politics. Proponents of the legislation claim that these bills will save taxpayers money, will remove the government from the role of collecting money used for political purposes, and will increase workers' control over how their wages are spent. Before evaluating each of these claims in detail, it is important to understand the larger historical and political context of "paycheck protection" in order to assess the likely impact of the bills and to make sense of their political purpose.
"Paycheck protection" proposals did not originate just in the past year or just in Missouri. The nation's largest corporate lobbies -- including the U.S. Chamber of Commerce, the National Association of Manufacturers, and the National Federation of Independent Business -- have been promoting such measures for at least the past 15 years in various states (Norquist 1998; Broder 1998).
The first "paycheck protection" bid -- California's Proposition 226 in 1998 -- followed upon the loss at the polls of a school voucher proposal that would have allowed funds to be diverted to religious schools. The defeated backers of the voucher law concluded that their failure was due to the opposition of the teachers' union; they launched "paycheck protection" not in order to safeguard the rights of teachers but rather to remove the teachers' collective voice from state politics (Sabato 1998; Orange Net News 2006).
Despite its defeat by California voters, Proposition 226 was trumpeted by corporate lobbies as a model for other states. At the center of this campaign to promote "paycheck protection" laws is the American Legislative Exchange Council (ALEC), a national network that brings state legislators together with the country's largest corporations, including Wal-Mart, Coca-Cola, Koch Industries, ExxonMobil, and leading tobacco and pharmaceutical firms. Among other activities, ALEC sponsors conferences where corporate lobbyists sit with sympathetic lawmakers to draft model legislation. The resulting model bills must be approved by ALEC's corporate donors before they are circulated. These corporations pay ALEC's expenses, contribute to legislators' campaigns, and fund the think tanks that promote legislation; in return, legislators carry the corporate agenda into their statehouses (Wilce 2013). Over the past decade, ALEC's leading corporate backers have contributed more than $370 million to state elections, and over one hundred laws a year are adopted based on ALEC's model bills (Common Cause 2011).
In many cases, ALEC pursues initiatives that directly benefit the bottom line of its corporate partners. For instance, ALEC receives money from energy companies and lobbies against environmental controls; it receives money from drug companies and advocates prohibiting cities from importing discounted drugs from Canada; it received money from Coca-Cola and lobbied against taxes on sugary soft drinks; it even receives money from "payday loan" companies and opposed a law prohibiting such firms from charging more than 36 percent interest. But ALEC also promotes a broader economic and deregulatory agenda that is not directly tied to the profitability of specific donors. It advocates cuts to Social Security, farm subsidies, unemployment insurance, and food stamps (all of which ALEC describes as "welfare"); it supports trade treaties along the lines of the North American Free Trade Agreement (NAFTA); it favors cutting public funding for schools; and it supports efforts to block union organizing and restrict unions' participation in political debates (Laffer, Moore, and Williams 2011).
The influence of ALEC on the Missouri legislation is clear. In the same year that Proposition 226 was put on the ballot in California, ALEC adopted a model "Paycheck Protection Act," to be distributed to legislators in all the states, that prohibited employees in both the public and private sectors from contributing to union political activities through payroll deductions -- even if the employees voluntarily asked to do so (American Legislative Exchange Council 1998). The following year, in 1999, ALEC adopted the "Public Employee Freedom Act," and the "Public Employer Payroll Deduction Policy Act," both of which prohibit public employees from contributing union dues through the payroll system -- even if the contribution is voluntary and regardless of what the dues are used for (American Legislative Exchange Council 1999a, 1999b).
The bill, SB 29, passed the Senate in March and recently passed the House Rules Committee; it is expected to move to the House for a full vote in coming weeks.
Read the full study, Paycheck Protection Racket, by EPI's Gordon Lafer.