Organized Labor

Proposition 75 is just one prong of a fork Arnold Schwarzenegger and his allies are trying to thrust into the tongue of labor.

Proposition 75’s proponents seek these restrictions, not worker choice. Public employees already have the legal right to opt out of contributing dues toward politics. They participate democratically in the political activities of their unions, through the election or rejection of officers with whom they entrust political decisions or through member or delegate meetings.

Corporations already outspend unions in politics at a rate some put at twenty-four to one. Far from asking them to seek permission from shareholders for this political activity — a restriction roughly comparable to what Proposition 75 would place on unions — Schwarzenegger and his allies want to give corporations greater freedom. This is the point of another prong of their fork, the change of public employee pension funds from defined-benefit to defined-contribution.

Most of us in the Building Trades look forward to the support of defined benefit plans in retirement, to regular payouts based on set rates per years of service. Meanwhile it makes simple sense to us that our money should not be used against our interests, by supporting companies or CEOs who work against unions. It makes simple sense that our money should be used for us, by investing in companies with good union relations and in all-union construction projects. We understand that while short-term return on investment is important to our retirements, so is the long-term health of the union sector of the economy. We know that companies that deal fairly with unions can be very good investments. It makes simple sense to us that our representatives in administering these funds use them to advance our interests in a variety of ways.

But the United States Chamber of Commerce criticized the California Public Employees Retirement System (CalPERS), a system serving predominantly union members, for doing what made simple sense. It accused the “union-dominated board” of CalPERS of “using its clout to improve the position of labor and union leaders at the negotiating table, an alarming trend that has spread to other funds.” (Press release, December 1, 2004)

Sean Harrigan, president of the CalPERS board and an official of the United Food and Commercial Workers, had led the board in adopting a “policy of voting against corporate directors who allow excessive executive pay” and in backing “a group seeking to oust Safeway chairman Steven Burd and two directors in the wake of the grocery chain’s labor dispute with the United Food and Commercial Workers.” (San Diego Union-Tribune, December 1, 2004) Under him, the CalPERS board had “fought for changes in Securities & Exchange Commission rules that would make corporate board seats more accessible to outsiders, a move many companies resisted.” (Business Week online, February 15, 2005)

Harrigan had signed a letter asking the United States Securities and Exchange Commission “to adopt a rule requiring publicly traded companies to disclose annually to shareholders all political contributions they have made.” (News release, California State Treasurer Phil Angelides, August 25, 2004)

Under Arnold Schwarzenegger, Harrigan was forced out of office.

Then Schwarzenegger put forth a ballot measure seeking to change all public employee retirement plans in California to defined contribution plans, in which there would be no board as at CalPERS to advocate for worker rights and corporate accountability and no promised payout at set rates per years of service. For these the defined contribution plans would substitute the risks and fees of private brokerages. Political activism — much of it supported by dues — led by teachers, nurses, and firefighters but involving many unions obliged him to shelve the measure for the moment. He promised then that he would bring it back later.

He will bring it back if Proposition 75 is passed and dues money in support of political causes becomes far less available. He and business will not stop at public employee pensions. Only the smallest fraction of the potential of union pension funds in working for union causes has been realized. This is why the U.S. Chamber of Commerce found the spread of CalPERS’s advocacy to other pension funds “an alarming trend.” This is no doubt why the Bush administration has been content to watch some union pension funds wither and why it has declined to allow requested relief to multi-employer pension funds, on which most Building Trades workers depend. An end to defined benefit plans will likely be placed on the table by management committees in every negotiation with a Building Trades union if Proposition 75 succeeds.

And so Proposition 75 must not succeed.