06.30.2010 0

TimesCheck.com: SEIU’s New President Should Be Asked about Liabilities, Change to Win Coalition

  • On: 07/14/2010 21:45:39
  • In: Big Labor
  • SEIU’s New President Should Be Asked about Liabilities, Change to Win Coalition

    By Kevin Mooney

    “Visionary, but divisive.”

    That’s how The New York Times describes Andy Stern, the Service Employee International Union’s (SEIU) former president, in this profile piece about his successor Mary Kay Henry. She is ambitious to make her own mark in terms of organizing and politicking, according to the report. But Ms. Henry is also working to cut a distinct path and to reunite labor organizations that became split under Stern.

    “Ms. Henry seems more eager than Mr. Stern to reach a settlement to end a bruising war with Unite Here, the union representing hotel and restaurant workers,” the report says. “The two unions have often sought to sabotage each other’s organizing drives.”

    Although she has resisted the idea of rejoining the AFL-CIO, which the SEIU left in 2005, Ms. Henry has expressed interest in some form of reconciliation.

    “It really isn’t about structure,” she is quoted as saying. “Most workers have had it with the direction of the economy and having to make ends meet with shrinking incomes, rising health costs and no retirement security. That’s where I want to put our attention as a movement. Not to how the deck chairs are arranged.”

    But what about the union’s financial picture? Vinnie Vernuccio, an adjunct analyst with the Competitive Enterprise Institute (CEI) and former Bush Labor Department official, has carefully documented the SEIU’s deteriorating financial position. Ms. Henry should be asked how she will address the organization’s rising liabilities.

    “SEIU has seen its liabilities skyrocket during the past decade,” he wrote in a recent Washington Times piece. “The union’s liabilities totaled $7,625,832 in 2000. By 2009, they had increased almost by a factor of 16, to $120,893,259. Meanwhile, SEIU’s assets barely tripled, growing from $66,632,631 in 2000 to $187,664,763 in 2009. A significant portion of SEIU’s current assets are from IOUs from hard-up locals. SEIU is $85 million in debt, down from its 2008 high of $102 million, and has been forced to lay off employees.”

    Another missing piece concerns the SEIU’s relationship with Change to Win. When it formed in 2005, the multi-union coalition was heralded as a dynamic organizing force that would rejuvenate the labor movement and swell membership rolls for constituent unions. However, U.S. Department of Labor figures show that only SEIU has benefitted from its affiliation while the others have lost out.

    SEIU membership has risen from about 1.5 million to more than 1.8 million and its annual receipts are up to about $75 million since 2005, according to government records. SEIU has in turn contributed $5.7 million to support the coalition, which is far more than any other coalition member. By contrast, the other six unions that split off from the AFL-CIO to form Change to Win have either flat lined or declined.

    In 2006, the first year Change to Win filed Labor Department financial disclosure forms, the coalition claimed over 5.3 million members but its most recent filing in 2008 shows it had less than 4.8 million members; that’s a decline of almost 11 percent. In 2006, Change to Win listed $11.7 million in assets, a figure that dropped to $8.8 million in 2008. During that time, liabilities spike by more than 130 percent from about $550,000 in 2006 to more than just $1.25 million in 2008.

    Annual receipts have also plummeted, falling from $18.7 million in 2006 to just $6.5 million in 2008. In 2006, revenues far exceeded expenditures, but this ratio was turned upside down in 2008 with Change to Win’s spending outpacing its revenues.

    So how does this impact Ms. Henry’s efforts to reunite and reconcile with other labor groups?
    “Ms. Henry seems more eager than Mr. Stern to reach a settlement to end a bruising war with Unite Here, the union representing hotel and restaurant workers,” the report says. “The two unions have often sought to sabotage each other’s organizing drives.”

    That may well be true. But UNITE-HERE virtually collapsed during the time it was partnered with Change to Win, losing almost 90,000 members, according to disclosure records. This was particularly acute blow in that UNITE-HERE was viewed as a model for the new organizing methods championed by Change to Win. The merger between textile workers (UNITE) and hospitality workers (HERE) would produce a single strong union out of two weaker ones that would be in a better position to pressure employers, or so the thinking went.

    The very premise of this article is built around the idea that Ms. Henry is a consensus builder. But she will run into some very hard fiscal realities in short order that transcend personality. There’s an opening here for investigative work that could help answer why Stern unexpectedly resigned his post.

    Kevin Mooney is a contributing editor to ALG News Bureau and the Executive Editor of TimesCheck.com.


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