"One Member, One Vote" and Finance Unionism

Is Labor starting to spend it's fortress of finance?

I recently published an article in Jacobin making the case for the direct election of union officers — aka “one member, one vote.” There is a bunch of new data in the article that I gleaned from digging through union constitutions, including the number of unions with direct elections of officers and the number of contested elections.

The funny thing is that when I was on staff (or a member) at various unions I never read the constitution of my union because it never occurred to me to run for office (and I would have lost!). But times have changed— reform is in the air — so read your union constitution. If your union doesn’t make it publicly available, you can get a copy at the Department of Labor’s Online Public Disclosure Room.

As a consolation to the subscribers of this newsletter for the poor productivity of the Radish Research staff (that would be me) in writing regularly, this edition will include some extra special data that did not make it into the Jacobin article. I’m also hoping to write more in 2024 pending successful therapeutic treatment for my painfully slow writing practice.

Union Elections Timeline

Below is a chart of the upcoming officer elections/conventions at the top 20 unions in the United States.¹

In 2024 there will be officer “elections” covering over 7 million union members at seven unions. All of the seven unions use a delegate/convention system rather than “one member, one vote” (1M1V) for officer elections. Here’s what I’ll be watching for:

• Will some of the longest-tenured top officers like Randi Weingarten at the AFT (16 years) or Mary Kay Henry at SEIU (14 years) stand for reelection, and/or will the election be contested? The longest-serving top officer at a large union is Douglas McCarron of the Carpenters who has served for 29 years (and membership has declined by nearly 100k since 2000).

• Will new reform caucuses emerge at large unions, and will 1M1V resolutions be introduced at some of the big upcoming conventions?

• Apart from political reporters writing stories about Biden waving to the convention crowd and accurately noting he is the most pro-union president in our lifetime, will there be any coverage of these conventions by the new burgeoning cadre of labor reporters? Will there be any reason to attend other than the swag?

Perhaps I was too harsh calling union conventions “a choreographed beauty pageant thrown by the ruling party in a one-party state” in the Jacobin article (but have you been to one?), so maybe the 2024 union election cycle will prove me wrong. I hope so.

“Finance Unionism” in 2022: New Data!

In the Jacobin article, I connect the lack of 1M1V at most unions to the rise of what I’ve called “finance unionism”: a practice in which union leadership focuses on the continual accumulation of financial assets rather than using those resources for mass organizing and militant strike activity. Finance unionism is a bit of play on the pejorative “business unionism” and Richard Yeselson’s influential article Fortress Unionism.

My financial analysis of organized labor is based on data from the Department of Labor (DOL), and I’ve finally got around to firing up my database machine to examine the 2022 filings. Please see my long report Labor’s Fortress of Finance for the methodology, the limitations of the data, and my equivocations. Most of the trends I outlined in the report — growing financial assets and budget surpluses while union membership declines — continued in 2022, but there are some silver linings.

Labor’s Net Assets

Below is the balance sheet (assets and liabilities) of organized labor from 2010 to 2022 (you may need to click on the table to get the full view as I’m experimenting with Datawrapper’s table design).

Labor’s net assets (assets minus liabilities) grew from $14.3 billion in 2010 to $32.7 billion in 2022, up 127% or about 11% annually. In comparison, union membership declined by 3%, or a loss of 435,000 members over the same period.² In 2022, labor’s net assets grew a bit more slowly, rising from $31.6 billion in 2021 to $32.7 billion in 2022, or a 3.5% increase. One thing to keep in mind is that assets are not marked-to-market but listed at cost, so the net asset figure likely understates the real value of labor’s assets. Also, a portion of public sector unions are not required to file financial reports, although many do so.

Unions are conservatively sitting on $13.5 billion in liquid assets (cash plus Treasuries) which could be used for strikes and organizing, as the pie chart below illustrates.

Labor’s wealth is distributed unequally (I’m looking at you building trades), and in 2024 I’ll be breaking out finances by union, industry, sector, and other fun categories.

Labor’s Spending

A key reason that labor’s net assets increased at a rate slower than the recent historical average is that spending was up by $1.7 billion (yay!), decreasing labor’s net budget surplus from $2.6 billion in 2021 to $1.7 billion in 2022.

[Click table to expand]

While union spending increased on average 2.5% a year from 2010 to 2022, in 2022 spending increased by 10.9%, primarily driven by large increases in general overhead, administration, and representational spending.³ One explanation (apart from inflation) for the rise in spending is that unions may be finally staffing up. Indeed, according to the U.S. Bureau of Labor Statistics, employment by unions increased by 3,200 employees in 2022. Average pay of staffers was also up by nearly 12%, increasing from $74,180 in 2021 to $ 82,860 in 2022.

Perhaps the rise in spending helps explain the increase in organizing (using NLRB elections as an imperfect proxy). According to the National Labor Relations Board, representation filings took a large jump in 2022.

On the other hand, comparing the amount unions spent on funding strikes versus political activities is example #1 of why unions need reform. Since 2010, organized labor has spent nearly $9 billion on political activities and less than $1 billion on strike benefits.⁴ This likely reflects the long-standing view of most union leaders that the primary path to growth and renewal for organized labor is through reform of the broken labor law regime (e.g. EFCA in 2007 and The PRO Act in 2019) rather than militant strike activity or mass organizing drives.

However, I would argue that the strikes in 2023 — especially the UAW’s highly public strike at the Big Three automakers — have far greater political salience than traditional political organizing. Strikes can mobilize and unite workers across political affiliations, help in the formation of class identity, and effectively identify common political enemies. For example, Trump held an event at a non-union plant during the strike but Biden walked the picket line. This will likely be remembered by voting auto workers and their families throughout the Midwest swing states.

Given the enormous assets available to labor it’s not an either/or question — you can engage in costly and powerful strikes and do political organizing. But with ominous political headwinds on the horizon, the time for labor to act is now before our limited freedoms under liberal democracy are rolled back (let alone the NLRB reforms). While the 2022 data is encouraging, one sign of labor’s resurgence will be when net assets decline rather than grow, and when billion-dollar surpluses turn to deficits — this will signal that unions are finally investing in organizing and aggressively engaging in strikes and other militant activities.

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Other wonderful labor newsletters…

• How Things Work: about labor, politics, and power by Hamilton Nolan, a journalist and author of the forthcoming The Hammer: Power, Inequality, and the Struggle for the Soul of Labor.

• Labor Politics: analyses of strikes, working-class politics, & union strategy by Eric Blanc, author of Revolutionary Social Democracy & Red State Revolt.

• Notes on Labor Data: reports on databases related to the US labor movement collected from government sources by Forest Gregg.

• Retail+Roundup is a newsletter about workers, power, and the contested evolution of the U.S. retail sector by research czar Jon Z.

1. Some unions have annual or biannual elections (e.g. NEA), but for simplicity sake the chart only shows the first upcoming election, not subsequent conventions/elections.

2. How is this possible you ask? One reason is that many unions set dues as a percentage of wages, so as wages rise, union dues also increase. This helps mitigate membership losses, in addition to the revenues from investments (rent, dividends, interest, etc).

3. “Representational” includes spending on collective-bargaining and organizing. The DOL proposed separately breaking out organizing and contract expenditures, but this was opposed by most unions and shelved by the Biden administration.

4. The DOL does not require unions to report PAC funds that are kept separate from the labor organization’s treasury if publicly available reports on the PAC funds are filed with a Federal or state agency. So the political $ amount is substantially higher.