12.31.2009 0

Unions: Bringing Home the Bacon At Everyone Elses Expense

  • On: 01/22/2010 09:44:26
  • In: Big Labor
  • By Victor Morawski

    Proponents of comprehensive health care reform have for years expressed a wish to take the provision of health insurance out of the hands of private employers. They would either place it completely in the hands of government, via a single-payer system, or of individuals through a vehicle like Ezekiel Emanuel’s government subsidized and issued voucher system.

    As a result they, for years, have been saddled with the problem of selling their plans for such reforms to their major constituents— the union bosses —who often target increased health benefits as one of their main goals in contract negotiations.

    To bring them on board, Big Government advocates have for some time proposed what I call the “Transfer of Benefits Argument.” Simplified, it runs something like this: Not-to worry! In contract negotiations, employers will now be more willing to concede to higher wages for your members if they have been relieved of the burden of having to provide them with health benefits. So, again, not-to-worry!

    Having long intended to throw this bone to union bosses to placate them and bring them over to their side, it is no surprise that law makers seem to have used a similar argument last week to quiet union objections over their proposal to levy a 40% excise tax on so-called Cadillac Health Plans. Nor it is a surprise that it did not work. Fears by union officials that such an onerous tax might prompt some employers to drop such plans or scale them back, resulting in a loss of these union benefits, are not misplaced.

    Legislators found out as a consequence last week, that the devil is indeed in the details and that the sly old dogs of organized labor just weren’t going to be satisfied with the bone that they wanted to throw them. According to the Washington Post, they, “threatened to campaign against any health care bill that included the tax.”

    And why should they have been satisfied? As Maggie Mahar points out in TakingNote, “A survey of business executives by Mercer, a human resources consulting firm, found that only 16 percent of respondents said they would convert the savings from a reduction in health benefits into higher wages for employees. Yet proponents of the tax are holding steadfast to the belief that nearly all would do so.”

    And Mahar also makes the more obvious point that in the middle of the current recession, the prospects for negotiating for higher wages from employers seem bleak indeed—what seemed like a good argument to starry-eyed, overly optimistic academics just does not hold in practice.

    Now had union officials held their ground and maintained their threat to campaign against any compromise solution that included the tax that would hit not only their middle-class membership hard but potentially one fifth of middle class Americans in just a few short hears, I would have gained a renewed sense of respect for them.

    But, of course, this is not what they did. As is now general knowledge, they cut a back room deal exempting their own members from the tax—specifically it would exempt, “Health plans negotiated on behalf of state and local workers, or as part of collective-bargaining agreements” for five years, with the option for later renewal.

    They objected to the 40% levy because they knew that it was a bad deal for their members. But it was more important for them to have an advantage that they could use in the future as a union organizing and recruiting tool than it was to stand up for the interests of all Americans on principle—important enough to saddle the rest of us with the burden of this unfair tax in order to save their own sorry bacon. And all that is left to be said to them is, “Oink, oink!”

    Victor Morawski, professor at Coppin State University, is a Liberty Features Syndicated writer for Americans for Limited Government.


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