John Fund on United States of Big Labor

From the February 17 edition of the Wall Street Journal's Political Diary (available for a fee):

Remember that three-day mass transit strike that paralyzed New York City over the Christmas holidays? Apparently the drama isn't over. Since then, transit workers have narrowly rejected the contract their leadership accepted to end the strike. The union is now hoping to start new talks in a desperate effort to avoid binding arbitration that would probably result in a less generous contract being imposed on them.

But an even more important fight for the union leadership now concerns the threatened loss of its ability to automatically collect dues from members. Unions that violate New York state law barring public-employee unions from striking face losing the right to require these automatic paycheck deductions. "Dues checkoff is absolutely indispensable," labor law professor David Gregory told the New York Times. "If dues are suspended, frozen or sequestered, that's a radical move. It would fundamentally cripple the union." He noted that dues account for 87% of the union's $23 million in annual revenue.

A very similar issue explains why California public-employee unions spent over $120 million last year to defeat Governor Arnold Schwarzenegger's set of voter initiatives to reform California politics. A centerpiece of the governor's effort was a proposal to require the unions to seek written permission from their members before spending a portion of their dues on politics. "At the heart of the union's ability to extract concessions from government employers is their unlimited ability to spend union dues money on political retribution against elected officials," notes former teacher union official Myron Lieberman. "That issue is at the heart of most failures to improve the performance of government."

New York's transit union was once before denied the right to automatically collect dues money from its members after a bitter 1980 transit strike. But the courts restored its privileges after it presented evidence that it would be bankrupt without the cash infusions that automatic payroll deductions brought in. Given the chaos and costs last December's strike caused New York, here's hoping the courts view any such appeal for sympathy this time with a more jaundiced eye.