Trouble Ahead If Democrats Cannot Deliver to Labor
In a speech to the AFL-CIO convention on Sept. 15, President Obama reminded his labor allies that any public insurance option “would just be an option.” Two days later, the AFL-CIO unanimously endorsed single-payer Medicare for all. Clearly a mere option is not the union’s preference when it comes to health care reform. This disjunction in sentiment between the Democrats and one of their most important interest groups seems to be a trend. “When labor really wants something, can the Democratic Party deliver?” asked John Trumpbour, Research Director of the Labor and Worklife Program at Harvard Law School, in an interview with the HPR. If the answer is no, the Democrats could lose a vital base of support and the unions may be rendered obsolete.
Unions, Health Care, and Self-Interest
Though labor unions have been in the Democratic trenches for health care reform during recent political skirmishes, this has not always been the case. After World War II, when Harry Truman was the first Democratic president to push universal health care, labor unions generally opposed the reform out of self-interest. At the time, the health care coverage one could receive was one of the most significant attractions of joining a union.
In recent decades, labor unions have become scarcer and weaker; the private sector is only a little more than 7 percent unionized. Rising health care costs are among the causes of this de-unionization. According to Trumpbour, employers’ excuse for not wanting to unionize is often the cost of providing health insurance for their workers, a cost which has been often outpaced the growth of inflation. From 2001 to 2007, health insurance premiums increased by 78 percent, according to the Kaiser Family Foundation.
To accommodate these mandated costs, unionized employers often have to make cuts that harm their employees. Bill Jaeger, director of the Harvard Union Clerical and Technical Workers (HUCTW), told the HPR that these cuts come in the form of shifts in premium costs, introduction of large co-pays, lifetime maximums, and changes in eligibility. While Harvard’s endowment allows Harvard to be very generous with its health care plans and the HUCTW has not lost any health benefits in the recession, this is not the case for most businesses, and the cuts they make can be devastating for workers.
Lifetime maximums on health care coverage, such as a million-dollar limit, satisfy most workers, but not when a worker or a family member develops an expensive disease such as cancer or AIDS. This excludes one group of workers — those with diseases for which the only treatments are exceedingly costly — from the security that a health care plan theoretically provides. Furthermore, many part-time workers are excluded altogether from health insurance.
These facts have led unions to reconsider their self-interest. It is no longer typically the case that health care is an attraction of joining a union; instead, concerns over health care coverage often stand in the way of forming a union at all, because they constitute one further point of conflict between workers and employers. Assigning responsibility for health care to the government would offer unions more leverage to negotiate other benefits — such as wages, hours, working conditions, and pensions — with reluctant employers. Thus the AFL-CIO’s enthusiasm for a single-payer system is the result of its reconsidering the interests of unions in light of decades of health care cost inflation.
The Risks of the Middle Road
The Democratic Party has held the presidency and both houses of Congress for about nine months, and in that time — despite the stated preferences of one of its largest contingents — single-payer health care has been completely off the table. Notably, the Obama health care plan would do little or nothing to dismantle the employer-based insurance system that is, in the unions’ eyes, a major stumbling block to more favorable labor-employer negotiations. Obviously unions are not completely put off by the Democrats’ halfway-there proposal for a public option: Jaeger reports that even his relatively well-off union members personally attend reform rallies out of a “personal belief in universal coverage and affordable coverage for groups.”
The risk Obama and the Democrats have taken is that they will satisfy neither those who fear private insurance companies and want guaranteed government insurance, nor those who fear “government-run” health care. In the battle against the latter, the support of the former — that is, of unions — has been crucial. But it is worth considering how reliable and how enthusiastic that support really is. Gina Glantz, former senior advisor to the Service Employees International Union (SEIU), told the HPR that workers who are dissatisfied with the Obama health care proposal still just want something passed that will “change the system we have and will cover more people.” But Trumpbour believes many unions are asking why they have given so much to the Democratic Party and have little to show for it.
This same theme can be noticed in other areas, particularly in regards to the Employee Free Choice Act (EFCA). It now seems likely that EFCA will be stripped of its controversial “card check” provision, which would make it much easier for unions to organize by requiring only a majority of employees to signal their agreement. Steve Malanga, a senior fellow at the Manhattan Institute, told the HPR that card check would make some Democrats vulnerable in their home districts. “They feel that supporting the legislation as it is now constructed would hurt them in the next election.”
At a Crossroads
But alienating labor unions is not in the Democrats’ best interest, either. Though they are steadily disappearing from the private sector, unions still claim over 30 percent of the public sector work force. And, as Glantz noted, they are the ones making phone calls to Congress and rallying against the Tea Partiers at town hall meetings.
It seems that the Democrats have reached a crossroads in their relationship with labor. Union interests are strongly progressive at a time when the moderate Blue Dogs control the Democratic caucus in the House, and a handful of conservative Democrats from “right to work” states can join with Republicans to water down progressive legislation. Labor unions have long supported the Democratic Party, if only because they had no better option. But with the Democratic Party in control of both the executive and legislative branches, this coalition could be undermined if the party continues to ask labor unions to forgo their own preferences out of concern for political strategy. The Democrats should be afraid of labor unions answering the question “Can Democrats deliver?” with a resounding “No.”