Unions and employers can legally agree to collect such representation fees in private industry, at least in the 25 states that have not passed so-called “right to work” laws. But public sector unions are regulated differently.
The plaintiffs argue that collective bargaining with a government agency is fundamentally different from bargaining with a firm. They claim that any money—even representation fees—given to public sector unions is political (and therefore protected) “speech” under the First Amendment. In other words, union representation fees are equivalent to forcing someone to “say” something particular to the government and this is unconstitutional.
The state of U.S. labor unions
It’s no secret that labor unions in America have fallen on very hard times indeed. At their peak in the early 1950s, American unions represented just over a third of American workers, virtually all in the private sector. By 2014 (the last year for which we have data), unions represented less than 7 percent of private sector workers.
Unions have fared better in the public sector. For several decades, they’ve steadily represented well over a third of all public workers. Even though the vast majority of Americans today work for private businesses, about half of all American union members are in the public sector—teachers, firefighters, police, postal workers, prison guards, and employees of local, county, and state governments.
That stable national rate is deceptive, though, as the first map below shows. In fact, outside the federal bureaucracy, public unions’ membership varies dramatically by state. Some states (like Georgia) prohibit public sector collective bargaining entirely. Others (like California) have highly developed collective bargaining protections for state and local workers, including requirements for the “fair share” or “agency fees” now being contemplated by the Supreme Court.
Why such variation? There are many reasons, but in other (gated) research, I show preliminary evidence that states where public sector unionism took off in the 1960s and ‘70s were the states that already had relatively strong private sector unions. Private sector workers (and voters) were willing to support collective bargaining rights in the public sector because, at the time, many private sector workers already enjoyed these rights themselves.
But as private sector unions cratered, private sector workers, especially those without college degrees, have watched pay stagnate and work rights shrink while simultaneously bearing more of the risks of illness, unemployment, and retirement. As a result, as Kathy Cramer of the University of Wisconsin-Madison demonstrated (gated), resentment toward state workers can run deep. The belief that public sector unions are self-interested, politically influential, and exclusive supporters of Democrats compounds this resentment.
And so as private sector unions disappear, public sector unions are politically exposed, as we have seen in Wisconsin, Michigan, Ohio, and Illinois. This, in turn, puts organized labor overall in a politically and financially vulnerable position.
Which leads us to the current fight. There’s a longstanding tension in American labor law. Once a majority of workers choose a union that union is legally obliged to represent all the workers in their bargaining unit, even the ones who did not vote to join the union. But workers cannot be legally obligated to join the union and pay dues even they initially voted to choose a union. Unions have managed to solve this “free rider” problem by developing contracts in which those who don’t join the union still pay some fees to cover the cost of representing them. Money spent on political activities such as lobbying and get-out-the-vote campaigns along with other “non-chargeable” union expenditures are refunded to non-members. Non-members, however, by not paying full union dues, give up the right to vote on union contracts or run for union offices.
So what happens if those agency fees disappear? Some states have that ban on similar fee arrangements in the private sector. Research shows that those laws make it harder to organize new unions. (How introducing a right-to-work law affects existing unions isn’t as well understood.)
Something similar appears to be true for public sector unions. Comparing the map below with the one above we see that states allowing public union agency fees have more public sector unions. If SCOTUS rules for the plaintiff and gets rid of those fees, it would be establishing an immediate, national-level “right-to-work” regime for public sector unions.
That could have serious consequences for everything from state and municipal payroll systems to peaceful labor relations in the public sector.
What about the effect on unions and the labor movement? That’s less clear. In California, for example, fewer than 10 percent of teachers covered by union contracts pay agency fees—or to put it differently, more than 90 percent have joined their union. Terry Moe of Stanford, in work otherwise critical of teachers’ unions, shows that teachers generally want to join their unions; they tend to be satisfied with the unions’ contracts and other benefits. For example, about 94 percent of teachers surveyed said they would voluntarily join their local union. That’s roughly constant across states with different legal regimes for public sector workers. In fact, between 76 percent and 83 percent of teachers said they belonged because they “really want to,” instead of feeling coerced.
Even in Texas, a state that prohibits both agency fees and teachers’ collective bargaining, 65 percent of teachers were union members.
New research by Stanford Ph.D. student Agustina Paglayan appears to demonstrate a selection effect: States requiring collective bargaining with public school teachers spend more on education and hire more teachers–but these states were already doing so before collective bargaining for teachers. In other words, whatever social and political factors led states to spend more on public education also predisposed these same states to introduce teachers’ collective bargaining.
The plaintiffs in Fredrichs argue that little will happen if the Court knocks down agency fees. If these yet-to-be-identified other factors are still relevant today the way they were in the 1960s, then teacher pay, education spending and outcomes may not change all that much. And some unions may continue to exist in some form.
But continued existence is hardly all that matters. First, the data above is only for teachers’ unions. Teachers tend to be more educated than average and may be more likely to join or remain in unions than other public sector workers. The effects of an anti-union decision could be more serious than information on teachers would lead us to believe. Second, a sudden 5 to 10 percent hit to union budgets would be significant. Many smaller union locals have little in the way of financial reserves, funding themselves out of dues and fees pay period by pay period. Larger unions are not much better off financially.
The plaintiffs themselves have said that the unions will make up the shortfall by curtailing other activities, such as contributions to the AFL-CIO, political lobbying and electioneering. Public sector unions are now the financial and organizational bulwark of the entire union movement, so a financial hit to those unions seriously impedes all of the organized labor’s ability to mobilize and get its message across to members, voters, and politicians.
The effects on the Democratic “ground game” going in to the 2016 election season could be serious. That is exactly what many on the political right are hoping for.