Unions' Disarming New Tactics

Megan McArdle is a Bloomberg View columnist. She wrote for the Daily Beast, Newsweek, the Atlantic and the Economist and founded the blog Asymmetrical Information. She is the author of "“The Up Side of Down: Why Failing Well Is the Key to Success.”
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I wrote last week that unions were having difficulty organizing employees at such places as Wal-Mart Stores Inc. in the face of a weak labor market, and they were therefore adopting tactics that you might call "alterna-organizing": turning to the firm's clientele or the government, rather than employees, to help them raise wages. That's why OUR Walmart is running an informational campaign against Wal-Mart rather than trying to establish a union -- it gives it more leeway to enlist customers and voters in its drive for higher wages at the company's stores.

Well, here's another exhibit in the trend: The Service Employees International Union is sponsoring ballot initiatives in California and Oregon that would cap executive pay at hospitals and limit how much customers can be charged. But what does this have to do with the workers? you will ask. The answer is nothing, directly. Instead, the ballot initiatives are bargaining chips. If the hospitals will "work with" the union, the SEIU will back off the ballot initiatives, which threaten hospital profits.

There are all sorts of reasons not to like unions, or any other group, that use the initiative process this way. There's no theoretical limit to the terrible initiatives one could come up with, and then drop, in exchange for firms "working with us." They don't even have to be initiatives with a high chance of passage, just things that you can force the other side to spend money opposing -- at which point, it might be less bother just to give you what you want.

But, of course, this strategy is not free for the SEIU, either; you can spend a lot of money on fake initiatives, have your bluff called, and end up with no money and no more members. It's probably a measure of how desperate their prospects are that they have chosen it.

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To contact the author on this story:
Megan McArdle at mmcardle3@bloomberg.net