The American Interest
Analysis by Walter Russell Mead & Staff
Union Civil War Reveals Blue Dilemma

In California, a massive fight between two of the country’s largest and most active labor unions offers a look into the dynamics of the deepening crisis of the American labor movement.

Globalization and automation first began to challenge the American labor movement in the 1970s and since then labor’s record has been one of almost uninterrupted failure. Years of denial and posturing were succeeded by strategic missteps as labor clung to the past. Yet labor could point to two success stories. First, as states allowed the unionization of government workers, government unions did much better than unions focused on the private sector.  Second, quasi-governmental employers like large health care providers (hospitals, eldercare facilities, home nursing organizations and so on) also proved fertile ground for labor.

Essentially, as the private economy transformed away from the blue model of a handful of stable oligopolistic (or in the case of the telephone industry, monopolitistic) companies dominating key sectors in a domestic market untouched by international rivals, the labor movement lost ground there. But because government, directly in the case of the civil service and indirectly in health care and the postal service, still offered something like a blue model environment in parts of the economy, the traditional labor movement continued to thrive there.

What’s happening now is that one of those two success stories for labor is in trouble — government employment has been hit by the crisis and states are beginning to roll back the unionization of their employees — but health care looks set, thanks in part to Obamacare, to enjoy a few more years of old fashioned blue model growth, and the opportunities for unionization there are strong.  That profound change in the labor environment has led to a major battle between the SEIU, a successful union with strong roots in the public sector, which wants to expand its presence in the health care field, and more traditionally health care focused unions that want to defend their increasingly precious turf.

The California Nurses Union—the largest nurses’ union in the country—and the National Union of Healthcare Workers announced plans to affiliate with each other, making the combined union the healthcare industry’s predominant labor entity. The result? More sharply drawn battle lines in an intra-union war:

The combined unions are also expected to aggressively campaign against the SEIU in organizing union drives, including one of the biggest of the year at health-care giant Kaiser Permanente, with 43,000 workers at stake. The workers, represented by the SEIU, will vote on whether to remain with that union or join the strengthened NUHW.

The NUHW claims that the SEIU is a “faux-union” that does “everything but climb into bed with the employers,” and it is committed to poaching as many members as possible from its rival. The SEIU sees it differently:

Steve Trossman, a spokesman for the SEIU, denied those charges and said unions shouldn’t be fighting with each other over workers at a time when all of organized labor is under siege nationally. ‘We’re going to spend millions, and they’re going to spend millions.…In the meantime, we’re losing members all across the country,’ Mr. Trossman said.

We’re willing to bet that the NUHW doesn’t care what Mr. Trossman thinks. Unions are facing some of the greatest challenges they’ve seen in generations, with their power diminished by right to work laws in Michigan and collective bargaining restrictions in Wisconsin, as well as pension crises all across the country. Labor’s environmental niche is shrinking almost everywhere, and NUHW and the SEIU are competing for the last patch of favorable ground.

Employers are probably hoping that the SEIU is able to push the NUHW aside. SEIU is a militant union in terms of national politics, where its large membership and public sector orientation make it an effective player with a strong focus on big government. But health care specific unions like the NUHW tend to be much tougher in dealing with employers over issues like wages and working rules. That’s largely because they can: hospitals and other health care organizations are extremely vulnerable to strikes, but haven’t faced all that much market pressure from competition. It’s often easier for management to yield to labor demands than to fight them, and the costs can be passed on to insurance companies and the government. Patients — consumers — scarcely notice.

That’s going to change. Health care costs cannot keep rising faster than the overall rate of inflation forever. Either we find ways to produce health care more cheaply and efficiently or we start rationing health care — not by choice, but by necessity. It’s more efficient hospitals or more aggressive death panels; there is no other choice.

Unfortunately the labor movement so far is proving to be as shortsighted in health care as it has been, say, in public education, where over and over again it has pushed for the short term interests of its members against the public demand for better educational outcomes. It is organizing hundreds of thousands of producers of public goods against the interests of the hundreds of millions who need those goods produced cheaply.

Whether SEIU or NUHW wins the battle at Kaiser Permanente, everyone in America will lose until and unless the American labor movement reflects more deeply on a generation of failure and decline and begins to re-invent itself to play a constructive role in a post-blue world.

Published on January 5, 2013 10:15 am