Andy Stern's America

Heritage Foundation

Last night, Politico reported that Service Employees International Union President Andrew Stern is expected to resign and, according to The New York Times, the resignation is about to happen very soon. If Stern does resign, he will be doing so while at the top of his game. Stern told The Las Vegas Sun last year: "We spent a fortune to elect Barack Obama - $60.7 million to be exact - and we're proud of it." President Obama is well aware of his huge debt to the SEIU. That is why he admits in his autobiography, "I owe those unions." And it also explains why Stern is the most frequent Obama White House visitor, according to official visitor logs. Stern's access to President Obama has already paid huge dividends including: an $862 billion stimulus that prevented states from having to cut-back government union jobs or wages; $2.5 trillion in new government health care spending, much of which will go to unionized health care providers; and the appointment of SEIU associate general counsel Craig Becker to the National Labor Relations Board. The NYT describes the SEIU under Stern's tenure as "the nation's most politically active union, with 1.9 million members." The marriage of politics to union organizing has been great for SEIU membership, making it the fastest-growing union in America.

But what has been great for SEIU's membership rolls has not been good for the SEIU's bottom line. Growing union membership through politics is expensive. The Wall Street Journal reports that as recently as 2002, total SEIU liabilities were about $8 million. But by 2008, the union owed more than $156 million, a 30% increase over the $120 million it owed in 2007. And make no mistake, lobbying government is where Stern believes the future of SEIU is. After President Obama's election, SEIU fired 75 national field staff and organizers so that the SEIU could "reallocate resources ... to lobbying and communications in Washington."

In fact, taking a more critical look at SEIU's recent growth, The Washington Post reports: "some of its biggest gains in recent years were less the result of shoe-leather organizing and more the result of deals with major employers or politicians -- including former Illinois Gov. Rod Blagojevich." Specifically, Blagojevich signed a state law handing over 49,000 state child care workers to SEIU local 880, which is run by the notorious community organizing group ACORN. The deal nearly tripled SEIU 880's income from $7 million in 2005 to $21 million in 2007. This came after SEIU's Illinois Political Action Committee gave Gov. Blagojevich $908,000, making it the single largest campaign contributor for his re-election campaign.

It is no coincidence that under Stern's tenure the number of government union members surpassed the number of private sector union members for the first time in our nation's history. There are two reasons for this: 1) Unions kill private sector jobs, and unionized companies earn profits 15% lower than those of comparable non-union firms. This makes unionized firms less competitive, which is why unionized manufacturing jobs fell 75% between 1977 and 2008, while non-union manufacturing INCREASED 6% over that same time. 2) Government union jobs face no competition. Public sector unionization has exploded in the past decade as leaders like Stern realized politics paid much better than the free market. Under Stern's leadership, SEIU has become the nation's second largest government union with over half of its membership drawing a paycheck on the taxpayers dime.

Explaining how organized labor really works, US Court of Appeals judge for the 7th Circuit Richard Posner recently wrote:

The goal of unions is to redistribute wealth from the owners and managers of firms, and from workers willing to work for very low wages, to the unionized workers and the union's officers. "Unions, in other words, are worker cartels." There is also a long history of union corruption. And some union activity is extortionate: the union and the employer tacitly agree that as long as the employer gives the workers a wage increase slightly above the union dues, the union will leave the employer alone.


Except that in Stern's America, union management no longer redistribute wealth from firms to union members. With the majority of union members now working for the government, Andy Stern and his cohorts are extorting money from you, the taxpayer. And where is that money going? Not into shoring up union member pensions. Those are woefully underfunded. No, the Andy Sterns of the world turn around and use their taxpayer-funded government union dues to lobby for an even larger government that can pay for even more government union jobs. Andy Stern's America is a perpetual government dependency machine.

And don't think for a second that Stern's retirement means he is gone for good. Stern is still a proud member of President Obama's deficit commission. Complete reliance on government growth, crippling debt, and Blagojevich-style corruption. That is what Andy Stern did to the SEIU, and it is what Stern and President Obama will do to this country.