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Unions fleecing day care providers

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By James Sherk
Thursday, May 30, 2013, 8:55 p.m.
 

Desperate times call for desperate measures, but the union movement has taken this saying to a new level. It has reacted to dwindling membership by unionizing recipients of public assistance. In more than a dozen states, unions now extract dues from government benefit checks.

The latest example is Minnesota. The Legislature just passed a law unionizing day care providers at the behest of the American Federation of State, County, and Municipal Employees (AFSCME). Employees of large day care centers could already unionize. This bill applies to self-employed day care providers, many of whom run day care centers out of their homes.

Self-employed workers don't normally unionize. What could a union do, demand that someone pay himself more? Have its members strike against themselves?

Minnesota funds a Child Care Assistance Program (CCAP) that subsidizes day care costs for low-income families. The Legislature just defined day care providers receiving CCAP payments as state employees — but only for the purpose of collective bargaining. This will let AFSCME form a statewide union of at-home day care center operators.

It's hard to see how this benefits the day care providers. The law lets AFSCME bargain over subsidy rates, but not the amount Minnesota spends on CCAP. Any increase in rates will come at the cost of fewer families using subsidized day care.

The law certainly benefits the union. The state will deduct mandatory union dues out of CCAP payments. Hundreds of dollars in annual dues from more than 10,000 day care providers works out to a lot of money. The net effect: AFSCME siphons millions of dollars from self-employed day care operators into its coffers, while providing few services in return.

More than a dozen other states also allow unions to collect dues from day care subsidies. Fortunately, other states have been less accommodating. The Service Employees International Union's (SEIU) attempt at a similar scheme in Michigan came crashing down.

In 2006 the SEIU persuaded then-Gov. Jennifer Granholm to let them organize Michigan home-care workers reimbursed by Medicaid. Most of these home-care workers are family members caring for disabled relatives. This saves the state money by avoiding expensive institutionalized care.

These home-care workers made strange candidates for unionization. Parents certainly weren't going to go on strike against their children. But Granholm allowed the SEIU to mail ballots for an organizing vote. Most parents ignored the mailers; fewer than one-fifth sent them back. However, the SEIU mobilized its supporters and won a majority among those who voted.

Perplexed parents soon began seeing union dues deducted from their Medicaid checks. The union charged families hundreds of dollars a year without providing any services.

The situation didn't last. Corruption charges forced the president of the Michigan SEIU local to resign. After Gov. Granholm left office, the Michigan Legislature terminated the program. Still, before the program ended the SEIU took $34 million from families with disabled children.

Unions need to modernize and adapt to the 21st-century economy. But forcing disadvantaged families to pay dues out of their government benefits is the wrong approach. Unions should reinvent themselves to provide services modern workers value, not tap into money meant for children and the disabled.

James Sherk is a senior policy analyst in labor economics at The Heritage Foundation.

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