Union membership has been declining for decades as workers find better uses than union dues for their hard-earned dollars.
But union bosses and their supporters are trying to change the law to force hard-working Americans into unions. How? Through the Protecting the Right to Organize Act (PRO Act), a bill that would expand the power of union leaders at the expense of workers. After sailing through the House, the PRO Act now appears stalled in the Senate and Democrats are trying to slip some PRO Act provisions into a massive reconciliation bill.
American workers are wise to turn down union membership. Union pension plans are in trouble. In 2020, the Labor Department listed 121 union plans in critical status, defined as less than 65 percent funded, and 61 in endangered status, with less than 80 percent funded. Unions desperately need new workers to join, because they pay contributions for many years without withdrawing money.
Most recently, Amazon workers in Alabama resoundingly rejected efforts by the Retail, Wholesale and Department Store International Union to organize their plant, with more than 70 percent of workers voting against the union. The union’s plan was in critical status between 2015 and 2019, and the Labor Department informed the plan’s administrators that it had to be reorganized by reducing benefits and increasing contributions.
Union leaders and their allies on Capitol Hill believe the way to increase membership after decades of decline is to pass elements of the PRO Act through reconciliation.
Unlike the PRO Act, which needs 60 votes in the Senate to enable it to move to President Biden’s desk for signature, the reconciliation bill, which deals with taxes and spending, needs only a simple majority. So via a massive reconciliation bill, congressional Democrats are trying to move some labor union provisions of the PRO Act by arguing they are actually revenue raisers.
Proposed penalties from the PRO Act include fining employers that hold staff meetings at which union organizing is discussed, and creating new fines of $50,000 per firm for unfair labor practices. Such fines could put small firms out of business or discourage them from challenging union organizing.
Tax provisions are also in the reconciliation bill. One proposal is a deduction for union dues of up to $250 a year. Such a deduction shifts the burden of funding unions to the taxpayer. Another is a tax credit of $4,500 for purchasing a car made with union labor, such as a car by Ford, GM, or Stellantis (the new Chrysler). This disadvantages non-union auto manufacturers such as Tesla, Toyota, and Honda.
As if Congress picking winners and losers isn’t dangerous enough, the PRO Act would go even further than the damaging provisions in reconciliation. For instance, it seeks to deprive workers of the right to a secret ballot in elections for union representation, providing scope for intimidation and corruption by exposing workers’ votes to employers, colleagues, and union officials.
Equally harmful, the PRO Act would impose mandatory binding arbitration on contracts between workers and employers, if the union and the employer fail to reach an agreement on pay and benefits. These mandatory terms are unprecedented in American labor law and revoke the basic principle of collective bargaining—that employers and unions are free to disagree unless they voluntarily accept arbitration.
Another provision in the PRO Act would abolish right-to-work laws passed in 27 states. These laws protect workers by stating that employers cannot force employees to join a union as a condition of employment. Many right-to-work states have lower unemployment rates and higher rates of economic growth than other states.
In our highly competitive economy with 11 million unfilled jobs, labor unions look like a relic of the past. Today’s workers have many options and shouldn’t be forced by the PRO Act or reconciliation bill to pay union dues and fund failing union pension plans.
Diana Furchtgott-Roth, former acting assistant secretary for economic policy at the U.S. Department of the Treasury, is adjunct professor of economics at George Washington University.