Decline of Unions Hurts All Workers’ Wages

One possible reason for South Dakota’s low wages and nationwide, wage stagnation over the past generation: declining union membership. Marketplace visits with Washington University professor Jake Rosenfeld, who says non-union workers are suffering right along with union workers from the loss of labor’s power to negotiate better pay:

Rosenfeld looked at non-union wage growth since 1979. He said union decline has had a staggering effect on non-union workers.

“We’re talking about over $100 billion a year in lost wages,” he said.

Adjusted for inflation, he found  the median pay for those men without a college degree is about 13 percent lower than in 1979 [Gigi Douban, “Decline in Unions Hurts Non-Union Workers’ Wages,” Marketplace, 2016.08.30].

The study Rosenfeld co-authored for the Economic Policy Institute says that private-sector unionization has declined since 1979 among male workers from 34% to 10% and among female workers from 16% to 6%. Rosenfeld et al. find that if union membership were at 1979 levels, non-union men in private sector jobs would be making $2,704 more each year (enough to cover union dues and then some), with even higher gains for less-educated workers.

But how do non-union workers benefit from union power?

Nonunion workers benefit from a strong union presence in their labor market in many ways. Strong unions set pay and benefits standards that nonunion employers follow. Those employers may raise pay for some workers to forestall an organizing drive, which leads to an upward adjustment in wages of workers above them, to maintain relative pay differentials (similar to the effects of minimum-wage increases).

Even absent organizing activities in their spheres, nonunion employers may also follow the standards that unions help establish through politicking for labor-friendly policies, instituting informal and formal rules governing labor conditions, and generally serving as a cultural force arguing for a “fairer share” for working men and women. (For example, highly unionized states helped lift minimum wages above the levels of states where labor was comparatively weak.) Higher pay in organized establishments increases competition for labor so that nonunion firms lift wages to prevent their employees from leaving for higher, union wages. And in setting wages, new market entrants often look to what industry leaders are doing; when organized labor was strong, many of these leaders were unionized [Jake Rosenfeld, Patrick Denice, and Jennifer Laird, “Union Decline Lowers Wages of Nonunion Workers,” Economic Policy Institute, 2016.08.30].

5.9% of South Dakota’s workers belong to unions, the 14th-lowest union membership rate in the U.S. As I noted earlier this morning, our average wage is the third-lowest in the nation. Of the ten states with the highest union membership rates (ranging from 14.8% in Oregon to 24.7% in New York), six are among the top ten for average wages. (The statistical correlation between union membership and average wage by state is 0.4633, with a strongly significant p-value <0.001.)

Strengthen unions, and you’ll strengthen wages for organized and non-organized workers alike. Strengthen wages, and you’ll strengthen the economy.


82 Responses to Decline of Unions Hurts All Workers’ Wages

  1. mike from iowa

    It was just another piece of the puzzle
    Just another part of the plan
    Wingnuts get rid of all unions
    Korporations make all the profit they can.

    Tip o’ the hat to Survivor for stealing their song.( Ever since the world began) On a more satisfying note- Mike Huckabeast was sued by Survivor for playing “Eye of the Tiger” at the rally when KIm Davis was released from jail He has to pay 25 grand is mad as hell and ain’t gonna take it no more.

  2. Had a union job now retired .Great pensions n and benefits.What gets me is republicans want those wages to ,no support the union , Then eventually they go away then they wonder why their making South Dakota wages .Rocket science IGuess.I am a fourth generation American buy C.H. Nothing but support for you.

  3. Roger Elgersma

    The bad trade deals we have in NAFTA and the coming TPP make it to easy to import products made by to cheap of labor which lowers both wages and the unions ability to ask for more wages since the company can to easily just leave. We need a situation where companies can not just leave. That will bring back the supply and demand in the labor market that makes for healthy wages and healthy companies. If you have a company that stays and your competition leaves, then you have very slim margins of profit since you still have to pay the semi reasonable wages here rather than dirt cheap wages elsewhere. China has built up a standard of living and enough wealth that they can make it on their own without such a huge influx of money from us. The same is true of Mexico. All economies would be in better balance and every country would be more independent if they all make their own products. The one percent are the only ones that make more because they own the foreign companies that undercut the prices on our own companies. They are the ones that can spend huge amounts of money on political campaigns to keep the situation skewed in their favor. Sanders fully understood this since many factories in his area closed.
    Henry Ford’s attitude that he would pay his workers more so they could afford the cars they built themselves is still true. If we can buy our own products would mean that our own workers would afford what they make themselves is balanced far better than if we can only survive and flourish if we get products from where the workers can not afford what they make.

  4. Donald Pay

    I was proud to be a union member as part of the first Teaching Assistant local formed in the United States. Graduate students who teach in colleges and universities are the lowest dogs in the academic barking order, so some students organized an AFT union local to increase pay and obtain better working conditions. Before our union formed, profs at UW-Madison thought they could work the TAs as much as they could get away with. Our union bargained some limits on what was academic slavery and got a hefty pay increase. That, of course, made other colleges and universities have to improve their conditions and pay in order not to lose grad students to UW.

    I participated in a month-long strike, when the University of Wisconsin administration tried to screw with our bargaining unit. The lack of support from the profs was one reason I decided against an academic career, and moved back to South Dakota to engage in environmental activism. My old union was very active against Walker’s anti-union efforts, leading the first march against Walker on Valentine’s Day in 2011.

    Unions are something that not only raise wages and make working conditions better for members, they also are advocates for better conditions for all workers. As Walker’s attack on unions has progressed over 6 years, household income in Wisconsin has declined markedly. Without unions, we are bound to become a welfare state, like South Dakota.

  5. As a 27 year member of IAFF, Local 814, until I promoted out, I am a strong believer in the benefit of Union membership.
    A new study says union construction members in Minnesota get $5.59 back in income for every $1 they pay in union dues.

    http://www.ibew.org/media-center/Articles/16Daily/1608/160825_Does

  6. Joe Nelson

    It would be nice to see things improve in South Dakota, perhaps convincing people to join unions would help. I have an idea! Let’s pass a law that makes non-union workers pay a fee to the union, but not actually become union members! Then maybe they will think “Why not join? These guys seem like stand up people, making me pay a fee for not even being a part of their club, thereby subsidizing their lobbying of political candidates I don’t support. Guess I ‘ll join if I am losing the money anyway.”

  7. I grew up in a town where manufacturing essentially was the town. Without a legal entity negotiating fair pay based on company profits, in a way that workers wished they could have done for themselves independently, that city would have never prospered for one instant. With big employment comes the need for big labor to balance the leverage within the great give-and-take between employers and workers.

    Until we inspire waaay more big employers to set up shop here, it will be hard for South Dakota to experience the value of, and change its tune about, unions.

  8. Some union workers think they are better than the rest of us, and their hoity-toity attitude is what’s helping to kill unions. If you don’t like your job, get a different one. Don’t tell your boss what to do.

  9. happy camper

    We would be better off encouraging entrepreneurship with lower tax rates for small businesses instead of catering to big corporations and the necessary unions that both get too powerful and corrupt. All the manufacturing that moved overseas was a loss to traditional union membership but other areas like tech whine to allow cheap guest workers from overseas because they want to fire and replace anyone over 40 ie Hewlett Packard it’s common practice in the industry. Down with big anything.

  10. Troy Jones

    This is an conclusion which which requires extensive understanding of both macro-economics and micro-economics as many factors are significantly inter-related. The conclusion is essentially argued that correlation=causation. This is known as the logic fallacy “post hoc ergo propter hoc”.

    The authors:

    Jake Rosenfeld: Associate Professor of SOCIOLOGY (not economics) at Washington University in St. Louis.

    Jennifer Laird: Postdoctoral research scientist at the Center on Poverty and Social Policy (not economics) at Columbia University.

    Patrick Denice: Postdoctoral research associate at Washington University in St. Louis with a Ph.D. in SOCIOLOGY from the University of Washington.

    P.S. I won’t dismiss the entity which commissioned it like is often done to conservative groups who commission research. I think it is informative to read and understand research from a multitude of perspectives. But, I do expect the authors to have sufficient subject matter skills and knowledge.

  11. Troy, you questioning of the source of this study would cary weight IF you also had credible evidence to show the contrary is true. Does counter evidence deny the conclusion of this study? Also, really, does this study say anything not obvious economically?

    Let us not discount the non-wage effect of unions: the advocacy for safety in the workplace, requirements for proper certification/education for jobs, reasonable leave policies, and the use of collective bargaining to fight racial and gender discrimination.

  12. p.s. I also have been a union member for the past 30 years.

  13. Troy Jones

    O,

    I’m not arguing against the merits of unions. I’m saying simply these authors have backgrounds which doesn’t give them credibility/standing to assert conclusions outside their area of expertise. Sociologists study the organization, institutions, and development of societies, with a particular interest in identifying causes of the changing relationships among individuals and groups. This is an economic matter.

  14. It’s not always about the money. As we’ve seen recently with the penitentiary and SDDC, it can also be about personal safety issues as well as protection from rogue management. I think for the most part, South Dakotan’s just want to feel safe and secure. They all to often cannot count on their employer (including the state) to care beyond the bottom line.

  15. Joe, you mischaracterize IM 23. “Fair share” union dues laws don’t make non-members pay for unions’ political lobbying. That’s the point: the “fair share” is a calculation of the share of dues used for collective bargaining. It is less than the total union dues. And you’re not “losing money” any more than when you pay your electric bill; you are paying for services you receive. If you want to negotiate your own contract separately from all the other workers, and if you can get the NLRB to excuse the union from its duty to collectively bargain on behalf of all workers, go for it.

  16. Hap, I agree that any entity can become too big and corrupt. But we still need checks and balances.

    Hmm… so what would be worse: a situation in which corporations are big and corrupt and in which labor has no organization to defend itself against that bigness and corruption, or a situation in which labor organizes, becomes powerful enough to check the abuses of corporations, but also take onto themselves the corruption that seems to concomit with such power? (Is that a false dilemma?)

  17. Joe, if a union is legally obligated to represent all in a collective bargaining unit, and that representation costs money, doesn’t that mean that the law allowing this drain of union resources is a reduction of the union’s free speech (ability to lobby)? Money is freedom and speech – shouldn’t that apply to unions as well? As an individual union member, MY money is being used to provide benefits to non-union members; isn’t that an unconstitutional limit to my free speech expression?

    Ayn Raand would not be pleased with this mandatory use of one’s resources!

  18. Joe Nelson

    Cory, that is why I said subsidizing. And honestly, is it any extra work fro a union to negotiate for the non-union members? I doubt it. I imagine it is as simple as saying ‘We are negotiating for all the employees here.” as opposed to “We are negotiating for just the union employees here.” It is not any extra work for the unions to represent non-union members, so it is just extra padding in their bank accounts.

    o,
    It is not an undue drain, if a drain at all, on any of the union resources. I doubt very much they are at the bargaining table any longer than they would be anyways. If you feel the federal law is an unconstitutional limit on your free speech, take it to the courts, let them decide. But if you truly think it is an injustice, then why double down? Two wrongs do not make a right.

    I think I brought this up when IM 23 came about on this blog. IM 23 does not limit the unions to any specific service, such as just the federally mandated services. So if the union wanted to provide any service, and charge any fee, they would be authorized by IM 21. There is no check on this power given to the unions, and it is ripe for corruption.

    Section 1. Notwithstanding any other provisions of law, an organization, corporate or nonprofit, has the right to charge a fee for any service provided by the organization.

    We are already acknowledging that this will be used to charge a fee for salary negotiation. Is this a charge by the hour? Doesn’t matter, the union can bill whatever they want. Union sends out flyers for recruitment, well unions benefit all workers, so they can charge a fee for that service too. There is no end to what a union can charge, there is no negotiation mentioned of service fees between the unions and non-union members. What is to stop the service fees from creeping higher and higher? Seriously, what is to stop the unions from charging non-union members more? No law on the books that I am aware of. What’s to stop a union from charging non-union members more than union members? Nothing! In fact it is pretty common in many organizations to charge non-members a higher rate than members.

    And that is just the surface! The law could not even limit the charging of fees to members (union or other wise) in the organization. If I am a part of any organization, and we provide a service to someone (whether they want the service or not), we are now legally allowed to charge a fee. Scrapped off your windshield, that will be $20. I advocated on your behalf to the city council that you be given a tax break. They said no, but I will be charging you a $50 fee for my services.

    Does nobody else see the implications of this poorly written proposed law? Am I living in a madhouse!?!?

    Rewrite it! Add provisions that limit abuse. Do something, but do not vote for this. Or do! That way I can charge you a fee for this public service announcement.

  19. Unions can behave good and bad, just like corporations. Society needs both, with checks and balances, to complete the system. That’s America, and it’s a good model for the world.

    As Troy would say, “This is an conclusion which which requires extensive understanding…”

  20. Joe, I am looking closer at the wording of this thing too. I am not yet quite sure about the wording either.

  21. I just don’t see a good argument that unions (or lack thereof) are the reason for low wages in South Dakota.

    We have more union representation than 13 other states, yet our wages are only higher than two other states? Given the gap, it’s pretty clear union membership doesn’t have a strong impact on wages when we’re talking states writ large.

    There are much more compelling socio-economic factors to work on: like primary, secondary, and post secondary degree completion; tribal poverty; incubating businesses which can compete in a global economy etc.

  22. Darin Larson

    Wayne B., the lack of unions in SD is not the only reason for low wages in SD, but the lack of unions are a contributing factor to our low wage state. We should be making reasonable efforts to strengthen unions instead of allowing the legislature to weaken unions.

    IM 23 is necessary and it is worded appropriately.

  23. Darin, I’m not sure the measure is worded appropriately. It’s pretty broad. I’d much rather it be tailored to say specifically unions can charge non-union members reasonable fees for services rendered.

    Joe Nelson has the right of it. There’s nothing stopping a union for charging exorbitant fees to non-members for the “service” they provide to non members. And the person who had no choice in whether the service was rendered or not, due to federal law, has no recourse.

    I don’t like free riders. But the solution is to make it so non union members don’t get to benefit from the work of unions.

    IM 23 will essentially allow unions to force people to join through financial levers, which contravenes our right to work statutes.

  24. Martin Wolf pretty much describes in detail what is happening with the wealth gap between workers and their wealthy bosses. http://www.ft.com/cms/s/0/e46e8c00-6b72-11e6-ae5b-a7cc5dd5a28c.html#axzz4J10PR9GX It is clear that without the unions to make higher wages and protection of worker rights a must, we stand to loose our democracy.

    Crazy you may think? In publicly traded company that gives bonuses to management, here is what I am speaking of http://www.bizjournals.com/sanfrancisco/news/2016/08/11/exclusive-losses-blue-shield-california.html The bosses put workers out on furlough, at the workers expense, to save that money they will then get as a bonus. We need unions to save democracy, it is that simple.

  25. W R Old Guy

    My experience with unions covers over 40 years in the federal service. I was both a union member and a manager sitting on the company side of the table during my career.

    I firmly believe non-members should be required to pay for service provided by the union. The collective bargaining is not the only thing done by the union. The union is required to represent non-members contesting adverse actions by the management. This includes things such as being forced to “work off the clock”, failure to provide safety equipment etc.

    Why should the union represent a non-member without compensation for the service? It’s like being represented by a lawyer but refusing to pay because you do not believe in lawyers.

  26. If a worker wants a Union benefit but doesn’t want to join the union, then a big part of me sort of thinks that worker should be entirely SOL.

    I can’t really see how when a worker doesn’t believe in the union, the union should still believe in that worker.

    When a worker doesn’t think he needs the union, but there he is asking for union services rendered on his behalf, it just seems like a weird hypocracy to me.

  27. W R Old Guy,

    You said this: “Why should the union represent a non-member without compensation for the service?”

    My point is this: Why should the union represent a non-member at all? I think the federal laws requiring unions to represent non-members is a load of hogwash.

  28. W R Old Guy

    Wayne, I somewhat agree but you cannot represent some and allow others to be excluded from a practical standpoint. Management could have different wages and working conditions for identical jobs if the negotiated contract only applied to union members. I would also guess most companies would prefer to have everyone represented by one voice or have no union at all.

    There are a lot of things the unions fought to have enacted into law over the last century and the average employee does not have the knowledge or the money to hire a lawyer to fight a violation of law.

    I’m not saying non-union worker should pay the full dues but they should pay a prorated basis for actions that benefit them as well as union members.

  29. I’m not saying non-union worker should pay the full dues but they should pay a prorated basis for actions that benefit them as well as union members.

    Well, then don’t vote for IM 23, because IM 23 allows any company to charge any rate for whatever service they provide. There’s no language preventing unions (or any other company) from charging exorbitant rates for services. There’s no protection for non-union members. In a very real and practical sense, unions could force non-members to join through financial pressure.

  30. Darin Larson

    Wayne B., since IM 23 doesn’t specify the basis for the charge, the law would undoubtedly hold that it be a reasonable charge–not an exorbitant rate that has no basis in fact.

  31. Why would it undoubtedly hold that the charge be reasonable? We’re a state that allows money lenders to charge 500% interest.

    Can you show me the law which limits how much lawyers can charge for legal representation?
    Or the law which limits how much mediators or negotiators can charge for their services?

    Those are the services unions will be providing, as I understand it. And last I checked, lawyers are allowed to charge whatever they want. It’s all a question of whether or not I, the customer, choose to hire the really expensive lawyer or the really cheap lawyer to render services.

    In this instance, I’d get no choice in who to hire to represent me. I’d be beholden to whatever rate they determine.

    But please, show me which codified law in existence will prevent unions from price gouging and I’ll cede the point.

  32. Darin Larson

    I guess exorbitant is in the eye of the beholder. When I say reasonable, it means reasonable to a court of law. You might not think it is reasonable, personally.

    A lawyer is bound by ethical requirements to charge a reasonable fee given the circumstances, including things like the expertise and experience of the lawyer in question. It is reasonable for a preeminent lawyer in the field to charge more than a new law school graduate. You may not think it is reasonable, but it is not based on a personal subjective viewpoint.

    In the case of IM 23, there is an inherent check on what would be considered reasonable charges because it would be limited by what the union is charging its own members and what it has charged its own members in the past. They would also have to back out the charges for lobbying etc. from what would be reasonable. A union overplaying its hand could be sued for unreasonable charges and the court would make the determination what is reasonable.

  33. Darin, can you show me the statute in SDCL or the jurisprudence (e.g. the case law) which supports your claim?

    I’m afraid I won’t take your word for it. If you can’t point to a statute or legal precedent which is applicable, then I must assume there isn’t a protection.

  34. bearcreekbat

    Wayne B, here you go:

    SD Rule of Professional Conduct 1.5(a) states “A lawyer shall not make an agreement for, charge, or collect an unreasonable fee or an unreasonable amount for expenses.”

    http://www.sdlegislature.gov/Statutes/Codified_Laws/DisplayStatute.aspx?Type=Statute&Statute=16-18-A

  35. Joe Nelson

    But is it the lawyer charging the non-union member a fee? I thought the proposed law says “organization, corporate or nonprofit”. So lawyer X charges the union a fee, and than the union charges the non-union members a fee for researching law firms, for utilizing the lawyer, a fee for having to acquire a lawyer for non-union members, an additional fee for various administrative costs associated with dealing with the law firm, et cetera.

    Why not just concede the point that this law is written poorly? Why is it so broad and open? If this is a union issue, why doesn’t the proposed law just say “unions” instead of “organization, corporate or nonprofit”. Why does it not limit charging fees to “those fees mandated by federal law”?

    How about this?

    Section 1. Notwithstanding any other provisions of law, a union has the right to charge a fee to non-union individuals for any service provided by the organization, if that service is mandated by state or federal law.
    Section 2. Fees collected in this way must not be used for lobbying or political purposes, and proper internal controls must be implemented by the organization to show that moneys received by this fee collection are used only for expenses related to the service provided.
    Section 3. Fees charged in this way must be reasonable, and the total amount of fees charged to an individual non-union member in an calendar year may not exceed fees or dues charged to a regular union member for the same time period.
    Section 4. The effective date of this Act is July 1,2017

    It is not perfect, and I have never written a law before, but it looks a heck of lot better than what is currently floating to the ballots this Fall.

  36. Without strong unions, we send jobs overseas. The result, http://www.bbc.com/news/business-37241727

  37. Extra work, Joe? I suppose it’s like my writing the blog: I exert myself the same whether ten people or a thousand people read and comment on an article, and whether one person or ten ring the tip jar. Or perhaps it’s like mowing the city park: it costs maybe $1,000 to maintain the mower and pay the guy to cut the grass, regardless of how much tax money each park user pays.

    But consider this: if a hundred people are paying taxes to the city, they each need to pay $10 to run the mower. If the city can expand its tax base to 200 people, then each taxpayer will only pay $5 to cut the grass.

    If a local teacher union needs $5,000 to conduct negotiations and they have 50 members, each member pays $100 to support negotiations. If the union is negotiating the contract for 100 teachers, and if it can charge every beneficiary teacher for that service, it may need only charge each teacher $50 for negotiations.

    I don’t know if negotiations really work that way, or if “fair share” dues would lower dues for members. But if Joe’s cost point is applicable, fair-share dues would help all parties concerned.

  38. Wayne, IM 23 does not allow “any company to charge any rate” for services. IM 23 says “Notwithstanding any other provisions of law, an organization, corporate or nonprofit, has the right to charge a fee for any service provided by the organization.” A fee, not any fee. IM 23 would not trump the statute BCB cites limiting lawyer fees. It would not trump IM 21, which would cap the interest rates payday lenders can charge at 36%.

    Joe, if IM 23 fails, I would be happy to offer something like the statute you propose that explicitly and narrowly focuses on fair-share union dues for services the union is mandated by law to provide to non-members.

  39. Thank you bearcreekbat for doing the work Darin should’ve.

    I really don’t mean to move the goalposts, but Joe has a point; the statute you found and cited filled my criteria, but Joe may well be right that the statutory protection needs to be on corporations not being allowed to charge unreasonable fees, rather than individual lawyers or negotiators.

    Is there such a statute preventing corporations from charging whatever they want for services?

    Cory, you miss my point. My point is we all should acknowledge South Dakota is very “business friendly” and isn’t likely to have the statutory protections to prevent abuse. The case in point is we currently allow payday lenders to charge whatever they want. That example wasn’t meant to comment on this law’s impact on IM21 or vice versa; it was meant to illustrate how we already allow corporations to charge what they please, at least when it comes to financing.

    I’m not sure there’d be much controls elsewhere; generally speaking, the “free market” will prevent price gouging. The problem with this IM is we’re talking more a monopolistic organization… not unlike a utility.

  40. Darin Larson

    Wayne B., you are funny saying I should’ve done the work. I saw BCB’s entry, so I didn’t think I needed to cover it any further.

    What you are still missing is that in the particular circumstances of unions and IM23 the unions can’t charge more to nonmembers than the dues they charge to union members. The law implies reasonableness to the amount charged. It is not reasonable to charge nonmembers more than members. Union members will not support exorbitant dues on themselves and so there is a natural check on the fee that the union can charge nonmembers.

    No court is going to allow a union to charge exorbitant fees to non-union workers under IM23.

    Could the law have been written to be more narrowly tailored? Yes. Could the legislature try to undermine the law again if it was not written broad enough? Yes.

  41. Unions are almost dead and are completely meaningless in South Dakota. However, if this law passes then grudznick can incorporate and force all of you to pay for my services whether you want them or not.

  42. Darin Larson

    Grudznick, you are now giving away your services for free by your own choice. Now imagine if others on this site were profiting from your efforts, but you could not charge them a fee because state law prohibits it. Your only recourse under the law is to quit this site or continue to work here for free. Should others suckle at the teat of knowledge that you provide without paying anything themselves?

  43. bearcreekbat

    There is in law an additional check on someone’s ability to charge an unreasonable fee for a service in situations where there is no express (normally in writing) agreement to pay the unreasonable fee. This is the “quantum meruit” doctrine.

    http://dictionary.law.com/Default.aspx?selected=1692

    This legal doctrine would provide a legal defense that would protect any non-union member from being required to pay an unreasonable fee for union services or benefits.

  44. What you are still missing is that in the particular circumstances of unions and IM23 the unions can’t charge more to nonmembers than the dues they charge to union members. The law implies reasonableness to the amount charged. It is not reasonable to charge nonmembers more than members. Union members will not support exorbitant dues on themselves and so there is a natural check on the fee that the union can charge nonmembers.

    The law doesn’t work that way, Darin. If it isn’t explicit, it’s not there. There is no “reasonable” clause implicit in this law. There is only what is explicitly written.

  45. Darin Larson

    Wayne B., you are incorrect. The law always implies reasonableness. It also avoids manifestly unjust results or absurdities.

    From Wikipedia citing: Einer Elhauge. Statutory Default Rules: How to Interpret Unclear Legislation. Harvard University Press (2008), p. 148. ISBN 978-0-674-02460-1.

    It would be absurd for a union to be able to charge more to nonmembers than that which it charges members. This law will not be interpreted to be a license to steal.

    Since another basis for determining the “fee” is not specified in the law, it will be interpreted to be a reasonable fee by the courts.

  46. Darin Larson

    The citation above is from the Wikipedia entry for “statutory interpretation”. I didn’t have time to look up case law right now, Wayne.

  47. Joe Nelson

    There are plenty of organizations that charge more for non-members. I know of gun ranges, where if you are a member, you do not pay as much of a range fee. Same holds true for other organizations (just do a google search, and you can find places that do this). A Great example, the Great Plains Zoo: http://www.greatzoo.org/hoyoucanhelp/membership/
    So many benefits to being a member rather than being a non-member. Shucks, there are even different levels of membership!

    So if businesses (including the best zoo in South Dakota!) can charge non-members more for their services, why couldn’t a union? Maybe it will be cloaked in a union members get special discounts on services, but dollars and cents would mean non-members paying more.

    If you all think that a union will not charge more for non-members, I got swamp land to sell you.

  48. Darin Larson

    Joe, we are talking about what the law is and means, not what unions would charge nonmembers if they had their druthers.

    No court is going to allow unions to charge more to nonmembers than members.

    Funny, you guys are so worried about what nonmembers are going to be charged after this law passes, but you apparently are not worried that union members are currently paying for the representation of nonmembers.

  49. Joe Nelson

    Darin,

    The law is a free pass for any organization to charge whatever they want. If I have a yard mowing business, and come and mow your yard, this law allows me to charge you for it. Doesn’t matter if you wanted you lawn mowed, I did it, I am due monies for services rendered.

    “No court is going to allow unions to charge more to nonmembers than members.”
    Just so I get your the logic of this all, unions were formed, in part, to protect workers from a business/organization taking advantage of them, because no single person could really compete with all the lawyers and money the business/organization has to litigate with.

    So now we have the potential for another organization to take advantage of individuals, and your response is for that individual to take the unions to court, and that will sort it all out? Sounds like we need to form another union, just to protect non-union members from the first union.

    I have provided clear examples of current organizations currently charging non-members more. I think this clearly establishes that unions can also charge non-members more. Why would they not? Because they are altruistic? Because they don’t want more money? Nope! I am pretty sure they want more money, and this law allows them to charge whatever they want, for any service they want to provide. Rewrite the law, and then put it back up for a vote.

    I gave evidence supporting my position that an organization can and has charged non-members more, where is your evidence that a court would not allow an organization to charge non-members more?

  50. Darin Larson

    Joe says “I have provided clear examples of current organizations currently charging non-members more. I think this clearly establishes that unions can also charge non-members more.”

    You have given examples of where if you pay to be a member, you get a reduced price for one thing or another, but you still have to pay much more to be a member. If I go to the zoo one time, it is a lot cheaper to not be a member and pay for a single higher priced ticket than to become a member, pay for my membership and pay for a reduced price ticket. They do not have these benefits for members because they want to take in less money; they are trying to encourage membership and make more money so they give you a break on one part of the membership benefits. Your examples do not prove your point.

    What you must understand is that IM23 only supplies a small but crucial part of the law, the right to charge the fee. The rest of the law not covered by IM23 will not be disturbed and is still in place.

  51. Darin Larson

    Joe says “The law is a free pass for any organization to charge whatever they want. If I have a yard mowing business, and come and mow your yard, this law allows me to charge you for it. Doesn’t matter if you wanted you lawn mowed, I did it, I am due monies for services rendered.”

    Joe, the law doesn’t change the rest of statutory and caselaw which require my assent to your lawn mowing service before I have to pay for it. Now, assent can be implied, like the nonunion member who works under a contract negotiated by the union; it would be implied that they have assented to be charged the fee for the negotiations on their behalf by the union. If this law passes and if the job is a union job, then you are consenting to have the union negotiate and charge you a fee if you are a nonmember.

    I have not consented to you mowing my lawn and if you did mow my lawn you would have no legal basis to recover a fee for doing so. Right now, the law is that the union mows everybody’s lawn and can only recover the cost of mowing lawns from union members. Thus, union member dues are subsidizing nonmembers’. In other words, the nonmembers are getting their lawn mowed for free.

  52. Joe Nelson

    Oh Darin, I had such high hopes, you were providing clear and articulate argumentation. But then you went ahead and argued against me, without even reading the information on the zoo page to which I linked. Zoo members get into the zoo…..free. Disregarding that, you are comparing an entire year’s worth of membership to a single visit to the zoo.

    I provided a clear example of an organization that charges more for non-members than for members. The fact that this exists shows that unions could very legally get away with charging non-members more than members. The point I am making is that IM 23 makes no provisions to stop this overcharging, and that unions can and will charge more. I suppose until a union actually does charge more, my point will not be proven. Likewise, IM 23 does not limit in anyway what services the union can charge a fee for, to include political activity and lobbying.

    I can understand your reasoning for consent, and how consent can be implied. For example, if a union decides to represent their members in a negotiation, since the law says they have to represent everyone, it is implied that they have assented to representing everyone.

    I suppose if your hypothetical worker doesn’t like assenting to the fees, they could quit their job. And I suppose if a union doesn’t like representing everyone, they can quit being a union.

    I would love to see, and I have not been able o find it, how much more it actually costs a union to represent non-union members. Does anyone know where that information is found?

  53. Darin Larson

    Joe, I understand the situation with the zoo. Our family has a zoo membership. We pay $95 a year for our family. Taking your example, our family could go to the zoo once a year for $36 as nonmembers which would be cheaper than the yearly membership fee. Twice a year would be $72 which is still cheaper than being a member. Only if you are going to the zoo three or more times a year as a family is it cheaper to be a member. If you are an individual, the membership is $47 a year, so you would have to go to the zoo more than four times per year for it to be cheaper to be a member. The point is not to provide a cheaper fee to members; the point is to raise the most amount of money from memberships that are reasonably affordable. On the average year, our zoo membership does not save us any money, but we view it as being supportive of the zoo.

    If you think that organizations sell memberships because it reduces the amount of revenue to that organization over single event nonmember tickets, I have a bridge to sell you.

  54. Darin, I don’t have a J.D. (do you?), but the text written using Elhauge as the reference states this:

    If a statute is susceptible to more than one reasonable construction, courts should choose an interpretation that avoids raising constitutional problems. In the US, this canon has grown stronger in recent history. The traditional avoidance canon required the court to choose a different interpretation only when one interpretation was actually unconstitutional. The modern avoidance canon tells the court to choose a different interpretation when another interpretation merely raises constitutional doubts.[21][22]

    The simple and straightforward reading of IM23 is that corporations and nonprofits can charge a fee for any service provided.

    Is it reasonable to construe the measure differently by inserting words not included?

    Under the same wiki page, there are several canons which demand our attention:

    Plain meaning
    When writing statutes, the legislature intends to use ordinary English words in their ordinary senses. The United States Supreme Court discussed the plain meaning rule in Caminetti v. United States, 242 U.S. 470 (1917), reasoning “[i]t is elementary that the meaning of a statute must, in the first instance, be sought in the language in which the act is framed, and if that is plain… the sole function of the courts is to enforce it according to its terms.” And if a statute’s language is plain and clear, the Court further warned that “the duty of interpretation does not arise, and the rules which are to aid doubtful meanings need no discussion.”

    The language of IM 23 is plain and clear. Corporate and non-profit organizations can charge a fee. There’s nothing there about reasonableness of the fee, or that it must be less than the fee charged to union members.

    And there doesn’t seem to be any existing legislation limiting corporations in the amount they may charge for services, except in the case of natural disasters & emergencies (price gouging).

    I’ll still hold to my convictions that the federal mandate for unions to represent non-union members is wrong. The way to correct that injustice is not to force more injustice upon people.

  55. Darin Larson

    Joe says “I would love to see, and I have not been able o find it, how much more it actually costs a union to represent non-union members. Does anyone know where that information is found?”

    It is not that it costs the union any more per se to represent the nonmembers, although there would be some incidental costs, it is the fact that the costs are spread out over all the workers, not just the union members.

  56. Darin Larson

    Wayne, I do have a JD if that means anything to you. The reference that you made to courts preferring to interpret statutes so that the statutes pass constitutional muster applies here as well. It would probably be an equal protection violation for unions to be able to charge more to nonmembers than the dues that union members pay.

    You are reading words into the statute. It says they can charge a fee. It does not say they can charge any fee they want or an exorbitant fee or a fee that has no basis in fact or reason.

  57. I don’t think I’m reading words. There is no descriptor on the basis of the fee an organization can charge, thanks to this measure.

    But Darin, why would pharmaceutical companies be allowed to charge vastly inflated amounts for their drugs in South Dakota, but not unions for their services to non-members?

  58. Wayne, if such exorbitant fees are a possibility, and if the courts do not immediately enjoin enforcement of IM 23 on passage pending lawsuits by the Koch Brothers and other anti-labor groups, I will be happy to sponsor legislation regulating the newly established “fair-share” dues to require that they indeed be a “fair share”—i.e., less than some reasonable fraction of dues charged of full union members.

  59. Darin Larson

    Wayne, the Constitution is still in effect here–both state and federal. There are limits on IM23.

    You say: “I don’t think I’m reading words. There is no descriptor on the basis of the fee an organization can charge, thanks to this measure.”

    This measure also doesn’t say that you have to pay the fee in dollars. Does that mean that you could pay the fee in Swiss Francs or Russian Rubles? No, because our other laws prescribe that the US Dollar is the only legal tender in this country. Likewise, if you tried to pay the fee in chickens or with bushels of corn, a court would not consider this to be proper. This is an illustration of the many laws that would still have an effect on IM23 even though IM23 does not mention them.

    You are trying to read IM23 in isolation and that is not how the law works.

  60. But Darin, your example about “pay” is pretty ludicrous since the common definition of “pay” is to give money for work done or services provided, or goods sold. And I suppose I could pay in Rubles, but it would be incumbent upon me to convert to legal US tender.

    So where in SDCL does it say corporations must charge reasonable fees for services again?

    Find that, and I’ll shut up. But it’s pretty clear there isn’t such a law, elsewise Mylan couldn’t be charging $600 for EpiPens!

  61. bearcreekbat

    This continued discussion about how much a union could charge a non-member suggests that you all overlooked my earlier link describing the legal concept of “quantum meruit.” Unless the parties agree to a contract providing otherwise, the right to collect payment for any service is limited to a reasonable value of any services provided. And SD Courts are required to apply the quantum meruit doctrine when applicable to resolve a dispute over the value of any such services.

    https://ujs.sd.gov/uploads/sc/opinions/26840.pdf

    Since nonmembers of a union have not entered into a contract with the union, the value of the union’s services that benefit the nonmember must be based on the quantum meruit doctrine, which limits any such claim to a “reasonable” amount based on whatever services have been provided.

  62. Darin Larson

    BCB, I agree with your take on the application of quantum meruit to this situation.

  63. Sorry BCB; I missed that comment. If that doctrine applies, I’ll acquiesce.

    I’m still incredibly leery of the overly broad language of the initiated measure. If we mean unions, say unions, less we clog up small claims courts with

    In right-to-work states, Unions must prove their value to their members. They must keep costs lower and maximize the gains for the union members. What’s their incentive if they’re guaranteed income?

    Bearcreek, is there anything preventing unions from negotiating “members only” contracts as upheld in SCOTUS 1938 CONSOLIDATED EDISON CO. v. NATIONAL LABOR RELATIONS BD.?

    If not, it seems that’s the appropriate answer to free riders – just don’t represent them. Let the unions negotiate contracts on behalf only for their members, and let non-members negotiate their own.

  64. Joe Nelson

    Here is my issue with this, and I could be wrong, so correct me if I am.

    Hypothetically, a union member pays one fee/dues for the entire year, for all services provided by the union. Let us say it is…$250 for the year. This includes contract negotiations, any dispute resolutiosn, et cetera.

    The non-union member also receives services. Let us say that they have the contract negotiated and 5 hours of lawyer services, for a total of 10 hours of services provided. In my mind, it is reasonable for a lawyer to charge…$100 an hour. Non-union member is now charged service fees amounting to $1000. These fees were all reasonable, but the non-member actually pays four times what the union member paid.

    Of course, I could be way off on my hypothetical numbers. I have no idea how much lawyers reasonable charge per hour, or what union dues are on an annual basis.

    But to me, this situation seem very plausible.

  65. Darin Larson

    Joe, in your hypothetical, the $1000 in services is spread across all workers–union and nonunion. If there were 100 workers, that would be $10 each, so the nonmember would pay $10. It would not be reasonable to charge each nonmember for the total charges of the entire representation.

  66. bearcreekbat

    Wayne, this source argues that a union is not required to represent non-union members, but points out that such a situation almost never happens.

    . . . nothing in the law prevents private sector workers and an employer from privately agreeing that a union will represent only its own members. But this almost never happens, for three reasons. First and foremost, a private-sector employer has no legal obligation to recognize or deal with a union that doesn’t represent a majority of its workers. 29 U.S.C. §§ 158(a)(5), (d), 159(a). Second, employers are rarely willing to voluntarily recognize such a “minority” union, and never accept multiple minority unions representing the same kinds of workers in the same workplace. Third, even if an employer is willing to deal with a minority union, this is an impractical arrangement that inevitably enables only weak representation for the union’s members.

    http://in.aflcio.org/statefed/?action=article&articleid=6beb1f5e-53a4-4928-bfbc-51685c44a97e

  67. Joe Nelson

    Darin,
    Where does it require the union to spread out fees among members and non-members? What if, and bear with me, membership fees stay the same or are reduced, and non-members are specifically charged fees per service they receive? Is there any law or statue preventing a union from doing this? IM 23 is written broadly enough, that the unions could legitimately charge a individual a fee for every service provided. If the origins of this IM are truly rooted in union members upset that they are paying for free loaders, would they not be upset if they had to continue to pay dues for a particular non-member who keeps racking up service fees, if those fees are then again doled out to the union members? If I were a union member, I imagine that I would want my dues going towards my fellow union members, and the non-members can pay for the services they receive.

    I honestly think that unions will charge non-members more, in an attempt to persuade them to join the union. That is how almost every other organization runs their business, so it is reasonable to assume that unions will do the same thing.

    And this still doesn’t address the fact that IM 23 does not limit the unions to only federally mandated services. So any extra services that the union provides, by virtue of the person working there, implicitly consents to said services and fees, right?

  68. If this one passes, then my new 501c3 “grudznick inc” will be able to charge all you fellows for my blogging services, like them or not.

  69. Darin Larson

    “Where does it require the union to spread out fees among members and non-members?” Quantum meruit requires fairness. It is an equitable doctrine that court’s may enforce rather than specific statutory authority. As the saying goes, “He who seeks equity, must do equity.” It would not be fair for the union to recover $1,000 from 25 nonunion members when the total cost is $1,000.

  70. Joe Nelson

    Darin,
    So maybe it would be fair to spread out the cost for contract negotiating, since it involves everyone. But if a non-member was utilizing the services outside of that, let us say for dispute resolution between the employee and management, IM 23 allows for charging a fee for this specific service, to that employee. How is it fair to make union members pay for this non-union members dispute resolution?

  71. Darin Larson

    Joe, to my knowledge, unions typically represent their employees in employment disputes without any additional charge. It is built in to their union dues. This cost would be shared by the nonunion members under IM23 just like the sharing of the contract negotiating cost.

  72. Joe Nelson

    Darin, we come to the crux of it. Union members enjoy all of these services and benefits just by paying their dues. There does not seem to be any itemization of services or charges, just whatever the union decides dues are (to a profit? I am not sure if unions are profitable or not. Thankfully, IM 23 allows both corporate and non-profits to issue fees).
    So how do they decide what to charge non-members? Can profit be a motivating factor? Or are you assuming that whatever the current union dues are, we add them all up and divide by the new grouping of members and non-members, and that is what is now charged to all involved (essentially making non-union members into union members, but I suppose they will not get a card or learn special handshakes or get to be involved in union meetings.

    I see IM 23 as a profit making tool, with no checks and balances built into it. Unions will be able to charge non-members for any service they perform, and I am not convinced that unions will behave as altruistically as you think they will.

  73. Darin Larson

    If a union does not behave fairly and altruistically, the aggrieved will have their day in court and I’m sure there will be no shortage of Koch Brothers to make sure the court challenges are well-funded. It is ironic that you opine so freely on what unions may do if fairness was allowed to them under IM23, but you seem to have no problem with the current circumstance where unions are treated unfairly by the law and made to represent nonmembers. Unions, to my knowledge, have taken the burden of representing nonmembers with grace and diligence and I would trust that they would not typically overplay their hand if given the right to fairly charge for their services.

  74. Joe Nelson

    Darin,
    I do not like injustice anywhere, which is why I am currently railing against IM 23. But I will gladly support getting rid of federal mandates that require unions to represent non-union members, as it does seem to be unfair. Or, just rewrite the law as I mention above. I honestly think that passing IM 23 would be trying to over correct for an injustice. Two wrongs do not make a right. Say no to IM 23, and put forward a law that specifically targets unions, limits fees to services provided, and does not give off the slightest whiff or perception of corruption or abuse. That, I will vote for.

  75. Darin Larson

    Joe, you are railing against the possibility of injustice when we are living the reality and certainty of injustice right now. It seems you have your theoretical sense of injustice set to a higher level of understanding than your actual sense of injustice.

  76. Joe Nelson

    Darin,
    I am leery of any law that gives so much power with no restrictions.

    The problem that this IM is supposed to be correcting (unions unfairly being force into representing non-members), is not actually correcting it.

    Unions are getting raped by the government (forced to do something they do not want to do), and all this IM is doing is giving them a reach-around (while the government is forcing them to do something they do not want to do, is allowing them to get a little compensation).

    At the end of the day, unions are still being unfairly forced to represent non-members, but now they get to crap on other people, so there seems to be more justice in the world? Nope, it is just another big guy beating up a little guy.

    This thread is about IM 23, and that is what I have been talking about and railing against. I even rewrote it and made it address the problem specifically. If and when Cory rights a blog post about how he is going to campaign against unions being forced to represent non-union members, I reckon I will be on your side.

    How about the unions, instead of trying to milk non-union members, fight the federal government over the mandates? I know, because it is a lot easier to push through a law that will allow them to charge fees for any service the want to provide to a non-union member.

  77. Joe, is there anything wrong with picking one’s battles and going after the easier political goal first? And could we interpret the unions’ action here as more noble than the “milking” you portray? They could go after the federal collective bargaining requirement and cut non-union members off completely. Instead, they are saying they are willing to serve even those workers who don’t support the union and simply ask that they be able to spread the cost of satisfying that legal requirement over all people who benefit from that requirement. The unions aren’t milking anyone; they are living up to their goal of protecting all workers.

  78. Joe Nelson

    Cory,
    I apologize for my above comment. No one needs that imagery.

    But I agree with you completely! However IM 23 is far too broad! Would you not agree? Why doesn’t it say unions specifically? Why does it allow for charging of fees for any service, not just those mandated? I would love if all the behaved altruistically with this, if it were to pass, but maybe it is just my mistrust of organizations abusing the law loop holes (payday lenders, banks, businesses that pay their employees less than they deserve, etc) that makes me want IM 23 re-written to better reflect the issues at hand.

  79. Overly broad?

    For what services should we not allow corporate and non-profit organizations to charge a fee?

  80. Joe Nelson

    We should not allow unions to charge fees to non-members for services that are not federally mandated.

    Let’s say that a union hires a lobbyist, and spreads that service expense among its members via dues. IM 23 allows the union to charge a fee for this service to non-members as well (either through direct fees, or as Darin suggested, spreading out the cost among members and non-members).

    Now apply this to any other service or fee not mandated. They want to hire extra legal support, they can pass the costs on to non-members. They want to host a motivational seminar and bring in a high priced speaker, they can charge non-members a fee for this service.

    IM 23 opens up an avenue of revenue with no limits built in. It goes beyond allowing unions to get their “fair share” from “free loaders”, it opens up a non-members wallet to an fee they want to charge. And as I have provided example earlier, there are clear example of organizations charging non-members more than members. Perhaps union members will get a 20% discount off of all service fees, just for being members, and that extra 20% is picked up by non-members. Perfectly legal, done by businesses all over the state.

    Don’t pass this. Rewrite the law to apply only to unions, limits fees to services federally mandated, and protects non-union members from being taken advantage of by a reasonable fee creep.

  81. Joe Nelson

    Should be “opens up a non-member’s wallet to any fee”, sorry for the typos and grammatical errors! And there are more too! I should have had some coffee first….

  82. I welcome your proper apostrophes. Use the Force, not coffee. :-)

    Joe, just as we have law and “quantum meruit” to prevent infinite fees, I suspect we have oodles of jurisprudence that will prevent IM 23 from allowing the overly broad application you fear, like an argument someone raised in an earlier thread (if I’m recalling correctly) that someone could mow my lawn unbidden, then show up at my door demanding payment.

    Of course, I would welcome examples to back up my suspicion.