Why Organized Labor Supports Government Health Care

[chefdennis]

It is all about barry bailing out his union buddies with TAXPAYER money...again....

The legislation includes a $10 billion bailout of union retiree health plans;

Yeap just follow the money....more for barrys buddies..even if he has to get it from China....

Why Organized Labor Supports Government Health Care

September 4, 2009
by James Sherk
Why Organized Labor Supports Government Health Care
WebMemo #2605

Unions strongly support President Obama's health care reform, which includes a plan for a government-run "public option" that would crowd out private health insurance. Labor publicly argues that the current health care system serves Americans poorly. However, unions also have self-interested motives for promoting government-run health care:

The legislation includes a $10 billion bailout of union retiree health plans;
Nationalized health care would lead to millions of new dues-paying union members as government employees unionize more frequently than private sector workers; and
National health care would also reduce unionized companies' competitive disadvantage.
However, unions do not support all health care reform plans. When Senators proposed taxing health benefits to pay for health care reform--a tax that would disproportionately fall on union members--the labor movement threatened to derail the legislation. Union support for health care reform is highly self-interested.

Unions Pushing for Government Health Care

Unions strongly support health care reform and have made supporting a "public plan" that would lead to a government-run single-payer system their top priority. In fact, after opponents protested at town hall meetings this summer, the AFL-CIO spent $15 million to stage counter-demonstrations with union members.[1]

Why has organized labor made government-dominated health care such a priority? The AFL-CIO publicly argues that the "real-world toll of soaring health care costs, lack of insurance and systemic flaws in our health care system must come to an end."[2] They further state that their goal "is to win secure, high-quality health care for all."[3] Many union leaders and activists do genuinely believe this. However, the labor movement has not spent such large sums of money campaigning for health care reform out of disinterested concern for the common good: Unions will benefit immensely if the government takes over the health care system.

Taxpayer Bailout

The most obvious benefit President Obama's health care plan provides to organized labor is a $10 billion taxpayer bailout for underfunded retiree health benefit plans. Many unions negotiate benefit packages that allow workers to retire early and collect health benefits until they qualify for Medicare. Many of these plans they are underfunded because unions mismanaged them.[4]

The healthcare legislation transfers $10 billion to these accounts, in the form of a reinsurance program that pays most of the cost of claims for workers in these plans.[5] Like the GM and Chrysler bailouts, the health care legislation requires all taxpayers--including low income workers without retirement plans--to pay for benefits for already well-compensated union workers.

Government Health Care Facilitates Unionization

Government-dominated health care would transform union organizing. Whether or not the government explicitly nationalizes the health care industry, government funding and government-dictated standards eliminate competition. Under health care reform, unionized hospitals would not face a competitive disadvantage because no competition would exist. All health care workers would become quasi-public employees. Whatever costs unions increased would be passed on to the taxpayer and not threaten union members' jobs. For instance, taxpayers would cover the costs of reduced productivity due to inflexible union work rules. Prospective union members would know this and, as a result, become more likely to unionize. Every step toward government-run health insurance vastly simplifies the process of organizing new union members and keeping existing union members employed.

This is precisely what happened in Canada, a nation culturally and economically similar to the United States, but with government-run single payer health care. While only 18 percent of nurses belong to unions in the United States, 78 percent do in Canada.[6] A full 61 percent of all Canadian health care workers belong to unions, well above the 11 percent in the United States.[7]

Given these figures, it is no wonder that the Service Employees International Union supports government-dominated health care so strongly. The SEIU represents health care workers. Under a government-run health care system, the SEIU could easily organize millions of new members who would then pay billions of dollars in mandatory dues. For example, if unions organized nurses at the same rate in America as they do under Canada's national health care system, they would bring in two million new members paying roughly $1.8 billion a year in dues.[8] Whatever its effects on the overall quality of health care, government health care would bring a financial windfall to the labor movement.

Reduce Unions Competitive Disadvantages

Unions who do not represent health care workers will also benefit from this law because it reduces competition. Unions negotiate gold-plated health benefits for their members that raise their employer's costs. Such expensive benefits, however, put unionized firms at a competitive disadvantage.

However, if the government provided health care coverage through insurance exchanges, then taxpayers--not consumers--would foot the bill for health costs. This would reduce unionized companies competitive disadvantage.

Unions Oppose Legislation They Must Pay For

Union support for health care reform does, however, have its limits. In particular, organized labor does not support health care reform for which it might have to help pay.

For example, Senate Democrats considered paying for the health care reform through taxing employer-provided health benefits. Such taxes would have fallen heavily on union members, since both private and public sector unions have negotiated expensive health benefit plans.

When news reports leaked that the Senate was considering such taxes the labor movement moved to quickly derail that idea. A coalition of 30 major unions sent letters to the Senate expressing their "strong opposition to any proposal that would pay for this reform by altering the tax treatment of employer provided health care."[9] Behind the scenes Organized Labor made it clear they opposed and would defeat any health reform that taxed employer health benefits.[10]

Organized labor supports health care reform only insofar as it benefits unions and their members. Despite their public arguments that the "real-world toll of soaring health care costs, lack of insurance and systemic flaws in our health care system must come to an end," the union movement will not sacrifice its own interests "to win secure, high-quality health care for all."[11]

A Financial Windfall for Unions

Unions claim that they support health care reform out of concern for workers' well-being. Many union leaders genuinely do, but the labor movement as a whole fights for government-run health care out of self interest. The health care reform legislation includes a $10 billion bailout of underfunded union health plans. More significantly, a government takeover of the health care sector would ease union organizing by eliminating competition and turning health care workers into quasi-public employees, as has happened in Canada. Unions would collect billions of dollars of new dues from millions of new workers. Government health care also reduces the competitive disadvantage unionized companies face in the marketplace.

Health care reform means a financial windfall for unions. However, unions oppose health care reform for which they must pay. Congress should not pass any "public plan" that would lead to the government directly or indirectly controlling health insurance at the behest of self-interested union lobbying.

James Sherk is Bradley Fellow in Labor Policy in the Center for Data Analysis at The Heritage Foundation.

[greg334]

You know Chef I got into an argument with my dad and his neighbor the other day over this issue.

I want to know why is Medicare and social security good enough for everyone else but a union worker. They expect us to do what they think is right but when a UAW worker may lose his benefits because of his union, all of a sudden they are screaming that they don't want to deal with only Medicare and social security is too little for them.

I think we need to seriously think about getting the government out of the pension business and let the unions fail.

[aristotle]

The unions have failed. Look no further than the goods and/or services produced by a union. Sure, their membership has some sway with the Democrat Party, but they are abject failures. If Obama wasn't so busy bailing out the unions, he might have time to concentrate on really important problems. It's the tail wagging the dog, again. Unions are socialistic by definition, so they are natural allies for Obama.

[OntarioVanMan]

Wow the NY Times is really slanted on healthcare....

The Bush administration and a Republican-controlled Congress enacted a Medicare prescription drug benefit that will cost the government almost $1 trillion over the next decade without raising or saving a penny to pay for it.

They also passed tax cuts for wealthy Americans that will cost more than $1.7 trillion over 10 years, again without making provisions to offset the costs. Now they are complaining that $1 trillion for health care reform — fully paid for over the next 10 years — is too much to spend on a problem that has been festering for decades.

Rather than yield to Republican intransigence, the Democrats ought to resort to a parliamentary maneuver known as “budget reconciliation,” which would allow them to push through most reforms by majority vote.

http://www.nytimes.com/2009/09/06/op...sun1.html?_r=1

[chefdennis]

The dems are yelling about using “budget reconciliation", but they know it will cost them bigtime in 2010 if they do so i wouldn't look for that...

No one is saying that reform in healthcare isn't needed..but what they have shown so far is to wife spread and all in compassing....forced mandated coverage for those that chose not to get insurance is B/S, forcing small businesses into governement plans is B/S, saying they will reduce Medicare cost, but not cut coverage is B/S, and ignoring the CBO numbers that say it is going to cost more then ut saves....and the government run public option is way to much control for the government....oh yea and the "death panels".....

nope to much reform is worse then no reform...and why the rush?? Could it be that the more the people find out, the more they will reisist and pressure their elected reps to kill this??

barry is sinking like a rock, this is the "cornerstone" of his admin...he is going to push to get anything he can so he can say he did it, no matter what the cost to the people...he is FAILING!!!!

[greg334]

You know thinking about it, nothing is needed in the way of reform. There is nothing to reform, it is and should continue to be a free market system.

The so called uninsured, the uninsurable and others who can prove they are qualified to get assistance should be allowed to join the ranks of Medicaid and shift the Medicaid qualifications away from the ones who are getting medicaid while having the option of health care through their employers (Yes this happens, I know of one family where the mother works at Chrysler, but she gets all her medical through Medicaid because the father abandoned the family). Most of the ones who don't qualify for some types of insurance can get by on the basics while others need more care for conditions they have.

The other thing is to unify the states, forcing them to have one and only one level of care which is portable. This is not a reform, it is a change or departure from the standard practice of the state being the regulator. It can still allow them to regulate the insurance industry but with a minimal requirement for care and cost.

[layoutshooter]

Why do we have to "OFFSET" costs OVM? It is NOT the Governments money for one. Second, the did NOT get the so called "rich" tax breaks, just those who work hard and earn more. The REAL RICH, like the Kerry's, Bush's, Kennedy's etc were NOT taxed more or given breaks. Tax those guys if you want to "tax the rich". Just spend less, send less overseas and shut down the borders. Get RID of the income tax. Tax spending. Then you get taxes from the "underworld" like drug dealers and hookers etc. That tax income alone would be "HUGE"!! Then even those "illegals" would be paying at least a "part" of what it costs us to support them.

The "REAL" reason that the unions back health care reform is they believe that they are "OWED" health care. Just as many believe that they are "OWED" a job and don't have to "EARN" their way. In other words, socialism.

[OntarioVanMan]

Why do we have to "OFFSET" costs OVM? It is NOT the Governments money for one. Second, the did NOT get the so called "rich" tax breaks, just those who work hard and earn more. The REAL RICH, like the Kerry's, Bush's, Kennedy's etc were NOT taxed more or given breaks. Tax those guys if you want to "tax the rich". Just spend less, send less overseas and shut down the borders. Get RID of the income tax. Tax spending. Then you get taxes from the "underworld" like drug dealers and hookers etc. That tax income alone would be "HUGE"!! Then even those "illegals" would be paying at least a "part" of what it costs us to support them.

The "REAL" reason that the unions back health care reform is they believe that they are "OWED" health care. Just as many believe that they are "OWED" a job and don't have to "EARN" their way. In other words, socialism.

Those weren't my words Joe...I said it was a slanted article from the Times....

[layoutshooter]

Those weren't my words Joe...I said it was a slanted article from the Times....

"WHEW GOOD"!!! I thought you were "backsliding" LOL!!!

[OntarioVanMan]

"WHEW GOOD"!!! I thought you were "backsliding" LOL!!!

nope no slide...same ole post turtle here...*LOL*

[layoutshooter]

nope no slide...same ole post turtle here...*LOL*

GOOD!! You have come WAY to far to turn back to the "Dark Side" again!!