Introduction

The U.S. Supreme Court’s 2018 decision in Janus v. American Federation of State, County, and Municipal Employees (AFSCME) (referred to as Janus hereafter) prohibited state and local government worker unions from negotiating collective bargaining agreements with fair share fee arrangements. The court agreed with the plaintiff’s claim that the fair share fees (known also as “agency fees”) violate workers’ First Amendment rights of freedom of speech and association. This dramatic legal change makes it harder for public-sector unions to be effective.1 However, its full repercussions on membership, employment conditions, and other outcomes for public-sector workers remain to be investigated.

Because the Janus decision is relatively recent, it is too early to assess its comprehensive impacts. However, we can anticipate the direction that Janus is taking us by examining legislation that was passed by several U.S. states in the last decade that also substantially restricted public-sector bargaining rights. Though the laws in Idaho, Indiana, Michigan, Tennessee, and Wisconsin lack the scale of the Janus decision, and though they differ from one another and from the substance and the legal focus of Janus, all have—like Janus—been described as an attack on unions’ membership and strength.

In this report, we examine state collective bargaining restrictions on public-sector unions and how they impact spending on teacher compensation. Specifically, we develop a framework to estimate how spending on teacher compensation was affected by changes in the legal institutions (laws, court decisions, and other administrative mechanisms) governing public-sector unions in five states that experienced these changes early in the previous decade. There are two purposes of this study. First, our framework and the analysis, with the necessary adjustments to scale, contexts, and timelines, could be used in the near future to understand and estimate the impact on public-sector workers of the Janus decision (or of laws, court decisions, and other administrative mechanisms of a similar nature). Second, our results also set the stage for other important and broad questions regarding the affected education systems. These institutional changes that influence districts’ spending on teacher compensation may also shift the career decisions of individuals who otherwise may have chosen a teaching profession, and they may have implications for student outcomes. Thus, this study can help policymakers better grasp the role of teachers unions in the post-Janus era by exploring pre-Janus events that affected the educational sector.

We find that the pre-Janus legal changes weakening teachers unions in Idaho, Indiana, Michigan, Tennessee, and Wisconsin effectively reduced spending on total teacher compensation by about 6%, reduced teacher salaries by about 5%, and reduced teacher benefits by 9.7%. Even though it is not possible to use these results to exactly estimate the impact of Janus on union and nonunion teachers (nor to assess the impact of any other policy changes in states occurring within different contexts and under different timelines), the evidence from our study serves as an early warning of potentially negative repercussions of Janus on similar outcomes.

The legal environment for public-sector workers differs from that for private-sector workers

Legal environments and labor laws in each state play critical roles in the labor market for public-sector workers because they govern the breadth of worker rights and employment conditions. For private-sector workers, the exercise of collective bargaining rights is regulated by the country’s fundamental labor law, the 1935 National Labor Relations Act (NLRA) and the National Labor Relations Board (NLRB) established to administer and enforce the NLRA.2

For public-sector employees, there is no one national labor law or administrative body governing the entirety of collective bargaining rights. Instead, state laws and administrative bodies (1) govern whether collective bargaining (CB) among public-sector employees is mandated, legal, or prohibited, (2) govern whether public-sector employees are allowed to strike, and (3) shape the work environment and labor market outcomes. Prior to Janus, these institutions also governed whether unions were permitted to collect fair share fees from nonunion members (Winkler, Scull, and Zeehandelaar 2012; Hanushek 2020). After the Janus decision deemed public-sector agency fees unconstitutional, nonmembers were no longer required to pay fair share fees for union services, even though they are covered by the same bargaining contracts as union members.

Over half of union workers in the United States are in the public sector, and public school teachers make up the single largest group of public-sector unionized employees (Wolf and Schmitt 2018). According to a report by the National Center for Education Statistics (NCES), approximately seven in 10 (70%) of the close to 4 million public school teachers were members of a union or employee association in the 2015–2016 school year (NCES n.d.). Therefore, examining the role of legal institutions governing collective bargaining in the educational sector can also speak to the nature of public-sector unions in general and how they operate in various legal environments.

The existing research finds that the legal frameworks stipulating how teachers unions operate influence teacher well-being, teacher qualifications, and the educational landscape more broadly because the unions affect the level of revenue available to each district and how districts allocate their educational spending (Han 2019, 2020; Jones, Bettini, and Brownell 2016; Cowen and Strunk 2015; Moe 2011; Moore-Johnson et al. 2007).

The last decade brought major changes in legal institutions governing collective bargaining for public school teachers in some states

State and local governments began enacting labor laws to govern public-sector unions in the 1950s and 1960s. Some laws prohibited collective bargaining for their public-sector workers, some created a framework for a full set of collective bargaining rights (e.g., including a right to strike, a right to bargain over wages, etc.), and some created no framework but did not prohibit collective bargaining (Paglayan 2019; Keefe 2015).3

Most states established their own legal institutions for teachers unions in the 1960s, 1970s, and 1980s, and these laws changed little through the first decade of the new century.

The map in Figure A, reproduced from Han (2019), shows various legal environments in which teachers unions operated as of 2010. Based on the long-established state laws, the states are grouped into four categories according to two legal criteria: whether public school teacher collective bargaining is legal and/or mandatory for employers, and whether nonunion members can be required to pay fair share fees. (Notice that the fair share fee criterion is no longer applicable after Janus. See Han 2019 for more details).

Figure A

The “High-CB” group is composed of 23 states with “duty-to-bargain” laws (under which employers have a duty to bargain with the employee union) and allowed mandatory fair share fees for nonunion members. For example, New York and New Jersey were “High-CB” states. The second group, the “Mid-CB” group, is composed of states that also had duty-to-bargain laws but prohibited mandatory fair share fees. There were 11 states in this group. The third group, the “Low-CB” group, comprises states where local school districts are allowed to sign collective bargaining agreements but bargaining is not mandatory, and nine states, including Colorado, Louisiana, Utah, and Wyoming, are in this group. The last group, the “No-CB” group, includes states in which collective bargaining for teachers is banned, and there are seven states in this group: Arizona, Georgia, Mississippi, North Carolina, South Carolina, Texas, and Virginia.

In the last decade, however, several states have experienced significant alterations of their long-standing legislation governing the environment in which public-sector unions can operate. In 2011–2012, state legislators in Idaho, Indiana, Michigan, Tennessee, and Wisconsin launched unprecedented initiatives substantially restricting or entirely prohibiting the collective bargaining rights of public-sector employees, including public school teachers.

In 2011, Indiana enacted a law stating that collective bargaining is no longer mandatory, and only wages and wage-related items can be part of the collective bargaining process. In 2011, Tennessee passed the Professional Educators’ Collaborative Conferencing Act, making collective bargaining for teachers illegal. Wisconsin’s Act 10 enacted in 2011 eliminated fair share fees for public employee unions and restricted public-sector collective bargaining to only wage and wage-related items. It also capped the annual growth in affected public-sector workers’ base pay to the rate of inflation and required teachers unions to obtain annual recertification, a laborious process in which unions that already received enough employee votes to be created must ask their members to vote for the union again every year to retain its status. In Idaho, in 2012, teacher collective bargaining was no longer permitted unless the union could validate that at least half of a district’s teachers were union members. The new law also limited the scope of collective bargaining to teacher salaries and benefits. In 2012, the Michigan legislature passed the “Freedom to Work” law, a so-called right-to-work (RTW) law.4 Michigan’s RTW law reduced the financial strength of unions by making it illegal for a group of unionized workers to negotiate a collective bargaining contract that includes fair share fees for nonmembers covered by the contract. (Note that the Janus decision has been described as a decision that effectively made all states into RTW states for the public sector.)

These new laws became effective as early as 2012. After the laws curbing public-sector collective bargaining rights in these five states became effective, the changes were so significant that the states slid down the categorization used by Han (2019): Wisconsin moved from the High-CB group to the Mid-CB group; Michigan moved from the High-CB group to the Low-CB group; Idaho and Indiana moved from the Mid-CB group to the Low-CB group; and Tennessee moved from the Mid-CB group to the No-CB group.5

There are several ways laws curbing public-sector collective bargaining could have affected education spending in these five states

The stated motivation for these legal changes made in the states was the need to fix the holes in state budgets in the aftermath of the Great Recession.6 During the Great Recession, national public school per-pupil spending fell by roughly 7% overall—over 10% in seven states and more than 20% in two states (Jackson, Wigger, and Xiong 2018). The changes also derived from major changes in the political dominance of the states’ legislatures. For instance, for four out of five of these states (Indiana, Michigan, Tennessee, and Wisconsin), the legislative measures limiting teachers’ collective bargaining rights occurred right after a Republican governor replaced a Democratic governor. Idaho had elected Republican governors since 1994.

Surprisingly, despite the debate over the reasons, the consequences of these changes are still not well understood. In particular, research has not established how these changes impacted teachers unions and whether they impacted district spending on teacher compensation, the largest portion of school spending (NCES 2018).

There are direct and indirect ways in which the restrictions on collective bargaining in Idaho, Indiana, Michigan, Tennessee, and Wisconsin could influence district spending on teacher compensation. Directly, spending on teacher compensation could decrease as a result of some of the restrictions on collective bargaining rights over teacher salaries and benefits, such as the cap on salary increase to the level of inflation (which is about 2%, see Bureau of Labor Statistics) and the ban on unions negotiating over benefits (Freeman and Han 2013; Han 2019; Workman 2011; Lafer 2013; Goldstein 2014).

Indirectly, districts’ spending on teacher compensation would decrease as the changes in legal institutions ultimately weaken the strength of public-sector unions (Han 2020; Freeman and Han 2013). As the bargaining power of teachers unions weakens, the demand for unions is more likely to fall, as more teachers expect lower benefits from unionization. This lowered demand and reduced union membership would put pressure on the financial capability of unions, decreasing their bargaining power even more. Finally, in states where unions could no longer collect mandatory fair share fees from nonunion members, the “free-rider” problem may arise (Freeman, Han, and Rogers 2015). The free-rider problem refers to the likelihood that some teachers in the bargaining unit—knowing that the union must represent them regardless of membership—may want to enjoy the advantages conferred by union contracts without paying for them, which is likely to further undermine unions’ financial capacity (Marianno and Strunk 2018). To the extent that lower membership and dwindling financial capacity will negatively affect the bargaining power of unions, these changes in legislation may further reduce districts’ spending on teacher compensation.

Past research indicates potential consequences of changing collective bargaining laws on teacher outcomes

Given these direct and indirect ways in which changing collective bargaining laws could affect spending on teacher compensation, we expect to observe substantial adverse impacts on teachers’ labor markets in the five states in our study. Before providing the estimates, we discuss additional potential consequences of reducing collective bargaining rights on other various teacher and student outcomes, according to the existing literature.

The existing research has long found a positive relationship between teachers unions and various teacher outcomes. For instance, teachers unions increase teacher salaries, raise nonwage benefits, improve working conditions, and reduce turnover (Freeman and Medoff 1984; Hoxby 1996; Ingersoll 2001; Podgursky 2003; Hirsch, Macpherson, and Winters 2011; West 2015; Han 2019; Han 2020).7 Further, the institutional changes that may have decreased spending on teacher compensation may also lead to undesirable consequences for students, through the following channels.

Numerous studies suggest that decreases in teacher pay and educational spending have adverse effects on educational outcomes of students. For example, according to the efficiency wages theory, higher salaries lead to higher-quality students entering the education field with greater interest in becoming a teacher (Figlio 1997; Hanushek, Piopiunik, and Wiederhold 2019; Leigh 2012; Manski 1987; Podolsky et al. 2019); higher quality teachers (Britton and Propper 2016; Hendricks 2014); and reduced teacher turnover (Ronfeldt, Loeb, and Wyckoff 2013; Sorensen and Ladd 2018; Loeb, Darling-Hammond, and Luczak 2005; Podolsky et al. 2019; Katz 2018; Gray and Taie 2015; Grissom, Viano, and Selin 2015; Stockard and Lehman 2004; Murnane and Olsen 1989).8

Moreover, growing evidence points to positive effects of higher spending on short- and long-term student outcomes (Jackson, Johnson, and Persico 2016; Gibbons, McNally, and Viarengo 2018; Hyman 2017; Lafortune, Rothstein, and Whitmore-Schanzenbach 2018; Jackson 2018; Baker 2018), and also to negative effects of spending cuts on student outcomes (Jackson, Wigger, and Xiong 2018).

These bodies of research suggest that ultimately, the changes in legal institutions toward teachers unions could pose serious threats to the educational system as a whole by deteriorating both teacher labor market conditions and student performance.

The empirical analysis: States with weakened collective bargaining rights have seen a relative decline in spending on teacher compensation

To estimate the effect of weakened collective bargaining rights on spending on teacher compensation, we used two national-level data sources: the Local Education Agency (School District) Finance Survey (F-33), administered by NCES, and the Stanford Education Data Archive (SEDA) from 2009 to 2016. (More detailed characteristics of the data and the analyses are included in the Appendix.) We employ a statistical method that allows us to estimate the causal impact of the change in legal institutions weakening teachers unions by comparing district spending on teacher compensation in the five states that enacted the legal changes in the study period (our treatment group) with spending in districts in all other states (our control group).

Before we offer these estimates, we first plot the trends in spending on teacher compensation and its two main components, salaries and benefits, in the districts in the treatment and control groups. Figures B and C show the time trend for public school district spending on teacher salaries and teacher benefits, respectively.

Figure B

In both cases, we can see that spending patterns diverge after the legal changes in 2011–2012. Spending on both teacher salaries and teacher benefits continuously increases in the control group but levels off (salaries) and falls (benefits) in the states with new restrictions on collective bargaining starting in 2012.

Figure C

Next we estimate the impact of the legal changes that weakened teachers unions on spending on teacher compensation by comparing the average changes in district spending on teacher compensation in the treatment group with the changes in the control group, controlling for various district and neighborhood characteristics that could also influence spending patterns. The results are shown in Figure D. Across all districts, we find that the collective bargaining restrictions that weakened teachers unions reduced average school district spending on total teacher compensation by about 6%, with teacher salary expenditures falling by about 5% and teacher benefit expenditures falling by 9.7%.

Figure D

Additionally, we conduct similar analyses measuring district spending on teacher compensation using other variables as outcomes, such as the ratio between teacher pay expenditure and total district expenditure (i.e., the share of total district expenditure devoted to teacher compensation) and average teacher compensation. The results based on these measures are similar to what we report here.

We also test whether the impacts on spending of the restrictions on teachers unions differ across low–, middle–, and high–socioeconomic status (SES) districts.9 We expect that the legal changes governing public-sector collective bargaining rights may have greater effects on spending on teacher compensation in the high-SES districts than in the low-SES districts, because the low-SES districts are more likely to operate with greater constraints, which leaves less room for a change in teacher compensation. For instance, studies find that teacher average salaries are lower in high-poverty schools than in low-poverty schools, and that it is difficult to attract high-quality young applicants to the teaching sector and retain them, especially in low-SES districts (García and Weiss 2019; Goldhaber, Lavery, and Theobald 2015; Ingersoll and Merrill 2017). This is all occurring in a profession that has been subject to a growing total compensation penalty over time, which reached 10.2% in 2019 (Allegretto and Mishel 2020).10 Thus, further reducing spending on teacher compensation in low-SES districts may not be well received by educators and policymakers.

Table 1 shows that school district spending on teacher salaries, benefits, and total compensation fell more sharply in the high-SES districts than in the low-SES districts (relative to how much such spending fell in similar districts in states with no change to the laws). The results for spending on teacher salaries are similar across districts with different SES status. This implies that teachers in the low-SES districts were not immune to the institutional changes, suggesting that their relative position in the salary distribution might have fallen further.11 However, as we expected, the cuts to spending on teacher benefits are much larger in the high-SES districts than the low-SES districts.

Table 1

Conclusions

This analysis shows that the legislative measures restricting public-sector collective bargaining rights enacted in five states in 2011 and 2012 significantly reduced average districts’ spending on teacher compensation, including both teacher salaries and teacher benefits. The cuts in spending were sizable: In the years following the changes, average district spending on teacher compensation decreased by about 6%, with spending on teacher salaries falling by about 5% and spending on teacher benefits declining by 9.7% in the five states relative to the rest of the states in the sample. Further research would be needed to determine whether the decrease in teacher compensation grew larger over time in the absence of measures to counter the early effects.

These findings are a matter of concern for at least four reasons.

First, education policymakers and society in general should worry about the broader impact on the educational sector of changes in legal institutions governing collective bargaining for public-sector workers, given evidence that reduced education spending and lowered teacher compensation are associated with not only impaired teachers’ labor markets but also worsened student outcomes. Broadly understood, such legal changes could deteriorate the overall quality of public education and the educational systems in the states that experienced the legal changes.

Second, all teachers in the states that enacted measures explicitly targeting public-sector unions’ bargaining rights should be concerned about reduced spending on teacher compensation because such impacts affect all teachers, whether they are or are not union members. Typically, union dues or agency fees for union members are about 1–2% of a teacher’s salary, a cost which nonunion members could avoid under the new laws. But that savings is offset by salary losses: According to our estimates, legal changes weakening teachers unions reduce spending on teacher salaries by about 5%, and, equating teacher salaries to spending on teacher compensation, roughly speaking, this finding suggests that nonunion members would face a net loss of 3–4% of their salaries. This is not unexpected because, in general, the consequence of free-riding is the underprovision of public goods and services, which leads to loss in well-being of all members in the society.

Third, constituents in other states that have subsequently undergone equally drastic movements limiting public-sector workers’ collective bargaining rights should also be concerned about these findings, as it is likely that the effects can be extrapolated to them. For example, Kentucky passed an RTW law in 2017. In 2017, Iowa passed a law to significantly restrict the bargaining rights of teachers and other public employees. Then, in 2018, the Janus decision substantially diminished the financial capacity of public-sector unions by banning their collection of agency fees from nonmembers who are covered by the same union contracts, shifting the course of public-sector workers’ rights onto a different path (McNicholas 2018; Rosales 2018). Although the effects of these similar institutional changes for union and nonunion teachers in the states will need to be properly estimated, these continued movements that reduce the strength of teachers unions could have negative impacts on teachers’ labor markets and on student outcomes both locally and nationally.

Fourth, those concerned with the strength of the private-sector workforce should also be aware of the implications of this study. The legal changes affecting public-sector employees also could affect pay and working conditions of private-sector employees. The private-sector and public-sector labor markets are not mutually exclusive, so the legal environments for public-sector workers can influence the labor market in the private sector. The lower wages may push public school teachers to search for private-sector occupations, reducing wages in the private sector (union spillover effects in the opposite direction), and the weakened strength of public-sector unions may discourage private-sector workers from unionizing (the inverse of union threat effects).12 The existing evidence shows that in the wake of legal changes affecting teachers unions, a greater than normal share of teachers leave public schools through transfers across districts and by taking early retirement (Han 2020; Biasi 2018; Baron 2018; Roth 2019). Thus, changes in public-sector labor laws could have consequences for employment conditions of all workers.

Changes in legal institutions may arise in the pursuit of fundamental goals such as individual freedom, efficiency, equity, or others, but they often occur because they are ideological and politicized in nature. However, it is important to consider their ultimate repercussions. Our evidence suggests that legal changes affecting collective bargaining for teachers are more likely to be a hindrance to enhancing the educational system and improving the well-being of teachers, and they may impose costs down the road when further efforts are needed to fix their negative consequences to labor market and educational outcomes.

About the authors

Emma García is an education economist at the Economic Policy Institute, where she specializes in the economics of education and education policy. García’s research focuses on the production of education (cognitive and noncognitive skills), evaluation of educational interventions (early childhood, K–12, and higher education), equity, returns to education, teacher labor markets, and cost-effectiveness and cost–benefit analysis in education. She has held research positions at the Center for Benefit-Cost Studies of Education, the Campaign for Educational Equity, the National Center for the Study of Privatization in Education, and the Community College Research Center; she has consulted for MDRC, the World Bank, the Inter-American Development Bank, and the National Institute for Early Education Research; and she has served as an adjunct faculty member at the McCourt School of Public Policy, Georgetown University. García received her Ph.D. in economics and education from Columbia University Teachers College.

Eunice Han is an assistant professor in the Economics Department at the University of Utah. Han’s research interests include labor unions, economic inequality, intergenerational mobility, and public education. She is also a research associate with the Economic Policy Institute and a senior research associate at the Labor and Worklife Program at Harvard Law School. Han received her Ph.D. in economics from Harvard University.

Acknowledgments

The authors are grateful to EPI Publications Director Lora Engdahl for her edits. We also appreciate EPI Vice President John Schmitt’s comments on this report and on the full paper this report is based on. We acknowledge EPI Research Assistant Daniel Perez for his assistance with the tables and figures in this report and EPI’s communications staff for their work disseminating the report and their assistance with the media.

Appendix

To estimate the causal effects of the changes in collective bargaining on teacher compensation expenditures, we construct our data set by combining two data sources: the Local Education Agency (School Districts) Finance Survey (F-33), administered by NCES, and the Stanford Education Data Archive (SEDA) from 2009 to 2016.

The F-33 data include annual fiscal data for every U.S. school district providing public education to prekindergarten to grade 12 students, approximately 16,000 districts for each survey year. From these data we draw three main variables of districts’ expenditures during the school year: teacher salaries, teacher benefits, and teacher total compensation (salaries plus benefits).

The SEDA provides district-level information on schools and students for all public school districts in the country, along with descriptive information on the characteristics of families with school-age children residing in each district, derived from the American Community Survey.

We merge these two data sources to construct a national- and district-level panel data set, containing a great deal of information on districts and their surrounding neighborhoods between the 2009–2010 and 2015–2016 school years.

We examine the impact of the change in legal institutions weakening teachers unions by comparing average district spending on teacher compensation in the five states that experienced the legal changes (our treatment group) to district spending on teacher compensation in all other states (our control group). The method used, a difference-in-difference (DID) estimation, provides us with a causal estimate, computed by the difference between the average change in teacher compensation spending before and after the legal changes in 2011–2012 for districts in the treatment group and the average change in teacher compensation spending before and after 2011–2012 for districts in the control group.

To obtain more precise estimates, we control for various district and community characteristics. Our covariates for district characteristics include the following variables for grades three through eight: total enrollment, number of teachers, number of instructional aides, number of instructional coordinators/supervisors, number of elementary guidance counselors, share of students who are Hispanic students, share who are Black students, share who are Asian students, share who are Native American students, share who are eligible for reduced-price lunch, share who are eligible for free lunch, share who are English language learners, share who are special education students, and share who are public school students in charter schools. Covariates for community characteristics include median household income (in $), share of adults with a bachelor’s degree or higher level of educational attainment, share of households with children and headed by a female, share of households receiving Supplemental Nutrition Assistance Program (SNAP) benefits, share living in the same house that they lived in last year, share of adults who are unemployed, Gini coefficient, city/urban locale, suburban locale, and town locale.

In addition, we add state and year dummies to control for unobservable characteristics of each state and to allow for the effect of legal changes on teacher compensation to emerge over time, respectively (see full details in García and Han 2020).

Endnotes

1.  Labor unions and employers negotiate collective bargaining agreements that cover wages, working conditions, and other features of the employment relationship. Where allowed by the laws covering public- or private-sector collective bargaining rights, unions typically have required nonmembers who are covered by a collective bargaining contract (because they are part of the collective bargaining unit) to pay “fair share fees.” These fees are usually a percentage of regular union dues that covers only the most basic costs of union representation. The fees support things like negotiating contracts governing wages and workplace conditions or representing workers in the case of disputes, which can be costly.

2. The NLRA is also known as the Wagner Act. Under the NLRA, for instance, most groups of private-sector employees can collectively bargain and strikes are legal.

3. The first state to provide collective bargaining rights for public employees was Wisconsin, in 1958. Federal workers were not given collective bargaining rights until President John F. Kennedy signed Executive Order 10988 in 1962.

4. State RTW laws reduce the financial strength of unions by making it illegal for a group of unionized workers to negotiate a collective bargaining contract that includes fair share fees for nonmembers covered by the contract.

5. Three states have passed RTW laws since 2016: West Virginia, Kentucky, and Missouri. The laws affected different groups of workers across the states. The law in Missouri was defeated in a 2018 referendum before it could take effect. These states are not included in this analysis because our study period covers 2009–2016.

6. The public leaders backing the laws argued that they were needed to curb the growing compensation costs associated with public-sector workers. However, some scholars and economists have raised questions about the link, noting that public-sector workers were not overpaid, that the states curbing collective bargaining were not the states with the biggest budget shortfalls, and that there were many ways to balance budgets that did not involve cutting education funding (Allegretto, Jacobs, and Lucia 2011; Lafer 2013).

7. This literature finds that teachers unions are associated with higher salaries (Han 2019; Merkle and Phillips 2018; Belman, Heywood, and Lund 1997; Freeman and Valletta 1988; Ehrenberg and Schwarz 1986; Lipsky 1982). Several studies have also found that teachers unions play an important role in raising teachers’ nonwage benefits (Eberts and Stone 1984; Delaney 1985; Podgursky 2003; Cowen and Strunk 2015). Unions also improve members’ working conditions (student-teacher ratio, required hours, etc.) and general well-being (teacher morale, etc.) (Hoxby 1996; Han 2019; Han and Keefe 2020). Moreover, unionized teachers are more involved and engaged in politics when becoming aware of how legislatures impact school finances; this finding comes from research examining what happens in school districts when they are required by states to engage in collective bargaining with their teachers unions and have a larger capacity for political organization (Flavin and Hartney 2015; Paglayan 2019).

8. In general, the efficiency wages theory argues that higher wages can raise productivity in occupations or jobs that face certain challenges, making it hard to measure productivity (Katz 1986; Krueger and Summers 1988; Stiglitz 1986; Weiss 1980; Weiss 2017). Some of these challenges, such as difficulty in measuring worker productivity and monitoring worker effort, etc., are applicable to teachers.

9. We measure districts’ SES status with a composite index based on the share of children in poverty, median household income, the share of adults with a bachelor’s degree or higher level of educational attainment, the share of households with children and a female head, the share of residents living in the same house as in the prior year, the share unemployed, and the Gini coefficient. For details on how to construct the composite index for socioeconomic status of districts, see Fahle et al. 2017.

10. The teacher compensation penalty is how much less, in percentage terms, teachers are compensated relative to other professionals with similar characteristics in nonteaching careers.

11. As said, on average, teacher salaries are lower in low-SES schools and districts than in high-SES schools and districts. If the effects had been worse in high-SES districts, we could have expected some relative improvement or catching up of salaries in low-SES districts. Given the fact that the effects are similar, we would expect no relative improvement of the low-SES districts.

12. Spillover effects occur when the higher wages in the unionized sector cause unemployment. If the unemployed workers spill over into the nonunion sector, it will lead to a surplus of employment and lower wages in the nonunion sectors. Threat effects exist when the wages in the nonunion sector increase as employers react to the possibility that their workplaces could unionize.

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To get a sense of the number of workers directly affected by this decision, let’s take a look at state and local government employment. According to the Current Employment Statistics survey, there are nearly 20 million state and local workers in the economy today. This represents about 13 percent of the overall workforce. The majority of these state and local workers are in the education sector. State and local education workers top 10 million, representing 53 percent of all state and local government workers.

At the same time as attacks on public sector collective bargaining erode compensation and job quality, austerity has held back employment and wage growth. State and local workers—such as the teachers in West Virginia and Oklahoma who were recently protesting not just their low wages but lack of funding in the classroom—have already been hammered by years of austerity policy at all levels of government. In states like Wisconsin, tax cuts for the most well off in the early 2010s were financed by the layoffs and cuts to public employees’ wage and benefits. As of the beginning of this school year, local public education employment was still lower than it was before the Great Recession, and much lower than where it could be if employment had kept up with the growth in school enrollment. This means, in this past school year, we experienced a shortfall of over 300,000 public educators.

In addition to educators, state and local public sector workers work as police officers and firefighters, in hospitals and libraries, and provide important services in public transit, waste management, and home health care. In these ways, the Janus decision affects not just those public sector workers directly but also the critical services they provide. This attack on public sector workers and their well-being not only lessens those workers’ ability to make ends meet, but undermines the public services they provide.

On Friday, I will continue to track employment in both the public and private sector. As usual, I will also be closely examining labor force participation and nominal wage growth as the economy continues to slowly and steadily move towards full employment.

It is likely that the small group of foundations with ties to the largest and most powerful corporate lobbies that are behind the Janus case feel validated by today’s opinion that shamefully safeguards their interests by contorting the First Amendment. However, this victory will be short lived. Working people in this country know that the economy is not working for them. Today’s decision is likely to make that more true, but at the same time, it has already made workers’ right to a union and collective bargaining a topic covered by cable news and in newspapers throughout the country—a feat in and of itself. As was seen in the reaction to the teachers’ strikes in West Virginia, Oklahoma, and beyond, when issues of economic justice and workers’ rights are put front and center, the interests of the wealthy few rarely prevail.

Much will be said of Janus and its impact on unions—particularly union finances. But today’s decision is really about working people’s finances—our wages and our benefits. Unions provide a means for working people to come together and ensure that we are paid fairly and treated with dignity on the job. Unions are fundamental to a fair economy. Union membership cuts not just across political party affiliation, but also across race, gender, and ethnicity, ensuring that often marginalized voices are represented. Unions also provide an effective, organized voice for working people in our political process—helping to win minimum wage increases and civil rights protections for all working people. Today, millions of men and women in this country are union members, and millions more view unions favorably. Over half of all Americans say that the decline in union representation has been bad for working people in the United States. The Supreme Court today focused on fair share fees, but the focus going forward must be on a fair economy for working people and unions are clearly a critical part of that fight.

Today’s decision is the result of litigation financed by a small group of foundations with ties to the largest and most powerful corporate lobbies. Janus is the third case on this issue the Court has considered in five years. Today, these billionaire-backed organizations finally got their decision, succeeding in advancing an agenda that weakens the bargaining power of workers. The result will be a reduction in state and local government workers’ wages and job quality as well as in the critical public services they provide.

It is likely that today’s decision will lead to greater instability in state and local workforces. The recent teachers’ strikes in states like West Virginia and Oklahoma provide important examples of the effect of denying workers the right to effective collective bargaining. As more workers are forced to resort to tactics outside of traditional collective bargaining to preserve their wages and benefits, they will do so under the court’s newly conceived First Amendment doctrine, which will undoubtedly evolve in the coming months and years as additional cases are filed challenging its outer limits. This may prove problematic for those determined to strip workers of their rights—they may ultimately usher in a new era where workers in this country rediscover their voice.

Fallout from legislative attacks on state and local government workers

If the Supreme Court rules in favor of the plaintiffs in Janus, the decision will weaken the bargaining power of state and local government workers. Other attempts to weaken the bargaining power of public-sector workers and cut their pay have hurt public servants and the services they provide. These other attempts have often been framed as defending taxpayer interests—taxpayers who are supposedly forced to subsidize allegedly overpaid government workers. In reality, state and local government workers—who, as we later show, are if anything underpaid—provide services on which the vast majority of taxpayers depend. These workers are teachers, social workers, police officers, and firefighters. In fact, in dollars-and-cents terms, efforts to shrink state and local workforces and reduce public-sector workers’ compensation in order to reduce taxes disproportionately benefit the wealthiest households. Wisconsin provides an important example of this impact. Lawmakers there passed $2 billion worth of tax cuts in 2011–2014, paid for by the layoffs and wage and benefit cuts of public employees. Far from benefiting the average taxpayer, fully half of the tax cuts went to the richest 20 percent of the state’s population.3

Further, an examination of Wisconsin’s education system reveals negative outcomes following the passage of a law that virtually eliminated collective bargaining rights for most state and local government workers. Far from improving public services, after the law passed, teacher turnover accelerated and teacher experience shrank; nearly a quarter of the state’s teachers for the 2015–2016 school year had less than five years of experience, up from one in five (19.6 percent) in the 2010–2011 school year.4 These data demonstrate that attacks on state and local government workers are likely to result in reductions in the quality of public services on which most state residents depend. For families who depend on public education, maintaining a stable, experienced education workforce is critical. And it is the stability and experience of state and local government workers—and the quality of services they provide—that is at stake in the Supreme Court’s decision in Janus.

State and local government workers provide critical services

The effects of decimated collective bargaining rights on Wisconsin’s education system should be especially concerning given the sheer number of educators—over 8.8 million—employed in state and local government nationwide and thus potentially affected by Janus. The vast majority (6.9 million) of state and local workers employed in education are in elementary and secondary schools. Table 1 shows the industries that employ state and local government workers. Workers in education make up more than half (51.0 percent) of all state and local government workers, with elementary and secondary school workers alone making up nearly 40 percent (39.9 percent). In addition to education, millions of state and local workers work in justice, public order, and safety activities (primarily police officers and firefighters); hospitals; individual and family services; bus service and other urban transit services; museums and similar institutions; libraries; home health care services; waste management services; child day care services; and on and on. These are the critical public services that are put at risk when attacks on public-sector collective bargaining erode compensation and job quality for these workers.

Table 1

State and local government workers provide important services while being relatively underpaid, not overpaid

As argued earlier, the claim that government workers are overpaid is a legislative ploy used to cut pay and curb bargaining rights. State and local government workers already earn less than similar private-sector workers. In particular, comparing the hourly wages of state and local government workers with those of private-sector workers, after controlling for education, age, gender, race, ethnicity, state, and other factors known to affect pay, we find that workers in state and local government make between 3.7 percent and 8.2 percent less on average than their private-sector counterparts.5 As shown in the next section, weakening public-sector unions will only exacerbate this public-sector “pay penalty.”

State and local government workers—like all workers—do better with collective bargaining rights

State and local government workers who are represented by a union earn substantially more than similar workers who are not. A careful analysis of wage data shows that state and local government workers who are covered by a union contract earn between 10.7 percent and 13.6 percent more in hourly wages than their nonunion counterparts with the same level of education, experience, etc.6 To provide a sense of the scope of this pay boost for union workers—and the corollary pay penalty for nonunion workers—consider a full-time, full-year state and local government worker who is in a union who earns roughly $40,000 a year. A similar state and local government worker who is not in a union would earn between $35,200 and $36,100 on average.7 That $4,000 or $5,000 less per year for the nonunion worker could, for example, be the difference between being able to save for a down payment on a house—or for a child’s college education or a secure retirement—and not.

The benefits of union representation are similar for women and men working in state and local government. Hourly wages of unionized women in state and local government jobs are between 9.7 percent and 12.7 percent higher on average than for nonunionized women in state and local government jobs, while the wages of unionized men in state and local government are between 9.2 percent and 12.1 percent higher on average than wages of nonunionized men in state and local government.

The benefits of union representation for state and local government workers are also very large for workers of color. Within the state and local government workforce, wages for black workers are between 10.4 percent and 12.4 percent higher on average than wages of nonunionized black workers. The wages for Hispanic and Asian workers in state and local government get a particularly large boost from union representation—by between 16.0 percent and 17.9 percent for Hispanic workers and between 16.6 percent and 17.8 percent for Asian workers.

These findings are consistent with other research showing that unionization confers wage benefits on workers in both the public and private sectors.8 In addition to wage benefits, union workers in general are more likely to be covered by employer-provided health insurance, and union employers contribute more to their employees’ health coverage than comparable nonunion employers. Workers in unions are also more likely to have paid sick days and paid vacation and holidays. Finally, union workers have an advantage in retirement security, both because union workers are more likely to have retirement benefits and because, when they do have retirement benefits, the benefits are better than those provided to comparable nonunion workers.9

Conclusion

Given the links between union representation, pay, and job quality summarized in this report, we argue that the Supreme Court’s ruling in Janus will likely have far-reaching implications for the nation’s 17.3 million state and local government workers.10 But this case goes beyond its impact on these workers. Critical public services stand to be affected as well.

The decision may lead to greater instability in state and local workforces, which would result in disruptions in the critical services these workers provide—services on which communities depend. The recent teachers’ strikes in states such as West Virginia and Arizona provide examples of the likely effect of denying workers effective collective bargaining.11 It is likely that other state and local government workers would be forced to resort to similar tactics following a Supreme Court decision in favor of the Janus plaintiffs. This means that more communities may face disruptions in the delivery of child and elder care services, public safety services, and municipal services.

This is what is at the core of Janus—whether a group of wealthy donors and corporations will be allowed to rewrite our nation’s rules to serve their own interests at the expense of the public good.12 The financial backers of this litigation likely do not rely on public services to educate their children, care for aging parents, or provide support for disabled family members. Increasingly, the wealthiest interests in this country are able to bypass the state for fundamental services. As a result, they exist apart from local communities and divorced from a shared interest in many public services. This results in cases such as Janus in which wealthy, corporate interests look for ways to reduce public spending on services that they don’t need to rely on. In Janus, these wealthy corporate interests are not just attacking state and local government unions’ ability to protect good, middle-class jobs in public employment—they are also attacking the crucial services on which most Americans depend.

Endnotes

1. Gordon Lafer, The Legislative Attack on American Wages and Labor Standards, 2011–2012, Economic Policy Institute, October 2013.

2. Celine McNicholas, Zane Mokhiber, and Marni von Wilpert, Janus and Fair Share Fees: The Organizations Financing the Attack on Unions’ Ability to Represent Workers, Economic Policy Institute, February 2018.

3. Gordon Lafer, Attacks on Public-Sector Workers Hurt Working People and Benefit the Wealthy, Economic Policy Institute, April 2017.

4. David Madland and Alex Rowell, Attacks on Public-Sector Unions Harm States: How Act 10 Has Affected Education in Wisconsin, Center for American Progress Action Fund, November 2017.

5. To estimate wage differences, we use ordinary least squares to estimate a wage equation using pooled Current Population Survey Outgoing Rotation Group (CPS-ORG) data from 2013–2017, restricting the sample to wage and salary earners ages 18–64 who are either state/local government workers or private-sector workers. For the base specification, we regress log hourly wages on dummies for being a state/local government worker, level of education, race/ethnicity, foreign-born status, gender, and state of residence, along with age and age-squared. The values given are coefficients on the state/local government worker dummy; the range is the result of the inclusion or exclusion of industry and occupation dummies in the specification. Note that by using hourly wages in the regression, we have accounted for the fact that some workers—for example, teachers—often don’t work all year.

6. To estimate wage differences, we use ordinary least squares to estimate a wage equation using pooled CPS-ORG data from 2013–2017, restricting the sample to wage and salary earners ages 18–64 who are state/local government workers. For the base specification, we regress log hourly wages on dummies for being in a union, level of education, race/ethnicity, foreign-born status, gender, and state of residence, along with age and age squared. The values given are coefficients on the union dummy; the range is the result of the inclusion or exclusion of industry and occupation dummies in the specification. Note that by using hourly wages in the regression, we account for the fact that some workers—for example, teachers—often don’t work all year.

7. This range is calculated as $40,000/1.107 and $40,000/1.136 and rounded to the nearest $100.

8. Josh Bivens et al., How Today’s Unions Help Working People: Giving Workers the Power to Improve Their Jobs and Unrig the Economy, Economic Policy Institute, August 2017.

9. The benefit comparisons in this paragraph are for all workers; they are not specific to state and local government workers as in the wage discussion. For more information on the benefits of unionization in general, see Josh Bivens et al., How Today’s Unions Help Working People: Giving Workers the Power to Improve Their Jobs and Unrig the Economy, Economic Policy Institute, August 2017.

10. For data on the size of the affected workforce and other key facts, see Julia Wolfe and John Schmitt, A Profile of Union Workers in State and Local Government: Key Facts about the Sector for Followers of Janus v. AFSCME Council 31, Economic Policy Institute, June 2018.

11. West Virginia prohibits collective bargaining for state and local government workers, as reported in Natalie Delgadillo, “Do Weak Labor Laws Actually Spur More Teacher Strikes?” Governing, April 3, 2018. West Virginia, Oklahoma, Kentucky, and Arizona are so-called “right-to-work” states with weak or no public-sector collective-bargaining laws, which has led educators to “press their demands through mass protest and the disruptions in public services that those entail,” notes Jason Walta in “Teachers Walkout without Bargaining Rights—Why It Matters for Janus,” ACS Blog (American Constitution Society), April 5, 2018.

12. Celine McNicholas, Zane Mokhiber, and Marni von Wilpert, Janus and Fair Share Fees: The Organizations Financing the Attack on Unions’ Ability to Represent Workers, Economic Policy Institute, February 2018.

The forthcoming Supreme Court decision in Janus v. AFSCME Council 31 will likely have profound implications for the 17.3 million workers in state and local government across the country. The case involves a First Amendment challenge to state laws that allow public-sector unions to require state and local government workers who are not union members, but who are represented by a union, to pay “fair share” or “agency” fees for the benefits they receive from union representation. By stripping unions of their ability to collect fair share fees, a decision for the plaintiffs in Janus would hurt all state and local government workers by impeding their ability to organize and bargain collectively.1 This report provides a profile of the 6.8 million of these workers who are covered by union contracts, and it reviews some key long-term trends in unionization in state and local governments.2

As this report shows:

• A majority (58 percent) of union workers (workers covered by a collective bargaining contract) in state and local government are women.
• African Americans, Latinos, and Asian Americans and Pacific Islanders make up one-third of unionized state and local government workers.
• While teachers constitute the single largest subgroup of union workers in state and local government, union workers also include those serving the public as administrators, social workers, police officers, firefighters, and other professionals.
• On average, union workers in state and local government have substantially more formal education than workers in the private sector. Over 60 percent of state and local government union workers have a four-year college degree or more education, compared with one-third in the private sector.

Data on union membership trends shed light on why a Supreme Court decision affecting the unionized state and local government workforce has broad implications. State and local government workers constitute the largest subgroup (42.1 percent) of all union members in the country. Over a third (36.1 percent) of state and local government workers belong to a union, compared with just 6.5 percent of workers in the private sector nationally. This 36.1 percent share is down from the roughly 38- to 40-percent share sustained throughout the 1990s and 2000s. In the 2010s, state and local government worker union membership has been slowly declining as attacks on public-sector unions have ramped up.3

Introduction: Union membership in the public and private sectors, 1949 to today

As of 2017, over one-third (36.1 percent) of state and local government workers are union members, compared with only 6.5 percent of private-sector workers (Figure A).4 We are able to make this comparison because data distinguishing state and local government workers from the entire public-sector workforce became available in 1989. As the figure shows, state and local government union membership rates held steady throughout the 1990s and throughout most of the 2000s, but have since started to decline. By contrast, in the private sector, union membership rates have been falling almost continuously since the mid-1950s.

Historically, the union membership rates in the overall public and private sectors looked very different than they do today. In 1949, just 12.1 percent of all public-sector workers were union members, while over one-third (34.7 percent) of private-sector workers were union members. Union membership in the public sector expanded rapidly from the early 1960s to the mid-1970s, dipped a little by the early 1980s, and remained fairly steady over nearly the next three decades. However, in recent years the public-sector union membership rate has experienced a slow decline.

The state and local government workforce of 17.3 million in 2017 is larger than the federal government workforce (3.7 million) and has a higher union membership rate (36.1 percent) than the federal government (26.6 percent). Thus, state and local government employees account for the vast majority (86.5 percent) of public-sector union members. Figure B tracks the public sector’s increasing share of union membership since 1949.

The number of total public-sector union members (including federal workers) has increased tenfold since 1949 and, as of 2017, stands at 7.2 million workers (Figure C). Most of this growth occurred between the early 1960s and mid-1970s; in recent years the number of public-sector union members has declined slightly. Meanwhile, despite greatly expanded total private-sector employment, there are just over half as many private-sector union members today as there were in 1949. In 2017, there were almost as many union members in the total public (local, state, and federal) sectors (7.2 million) as in the private sector (7.6 million).

Figure A

Figure B

Figure C

Union representation rates

Data that the U.S. Census Bureau’s Current Population Survey began collecting in the 1980s allow us to track “unionization” via the union “representation” rate: the share of workers (members and nonmembers) who are covered by a collective bargaining contract because they are part of a collective bargaining unit.

Union representation by level of government

As Figure D shows, the majority (56.0 percent) of all unionized public-sector workers are employed by local governments, while almost one-third (29.8 percent) work for state governments. Federal employees account for just 14.2 percent of the public-sector union workforce.

About one-third of federal (31.0 percent) and local (33.4 percent) government employees are represented by a union, while a larger share of state government employees (43.6 percent) are represented by a union.

Figure D

Union representation by state

State and local government unionization rates vary substantially by state, from a high of 73.1 percent in New York to a low of 10.1 percent in North Carolina (Figure E and Table 1). Despite the wide range of union representation rates, in 2017 union representation rates were higher in state and local government than in the private sector in every state. While most states have seen a drop in state and local government unionization since 1989, 11 states have experienced an increase. In 2017, the union representation rate in state and local government exceeded 20 percent in the majority of states. By comparison, not a single state had a private-sector unionization rate greater than 20 percent.

Figure E

Table 1

Union representation by occupation

Figure F shows that education workers make up the single largest occupation group in the unionized state and local government workforce, accounting for about four in 10 (42.8 percent of) state and local government workers represented by a union. This occupation group is primarily made up of public school teachers (but also includes a small share of education administrators). Table 2 shows that teachers also have the second-highest union representation rate among the major occupational groups: About half (51.5 percent) of state and local government teachers are covered by a union contract.

Figure F

Table 2

Professionals and office and administrative support workers make up the second largest occupation group in the state and local government union workforce, accounting for 15.9 percent of state and local government workers represented by a union. Almost one-third (29.3 percent) of these workers are covered by a collective bargaining agreement.

Just under one in 10 (9.3 percent) of unionized state and local government workers are in health care and social work occupations; of these workers, more than one-third (37.1 percent) are covered by a collective bargaining agreement.

Together, police and other protective services workers (11.3 percent) and firefighters (3.1 percent) account for 14.4 percent of the state and local government union workforce. These workers have very high unionization rates: Half (49.7 percent) of police and other protective services workers and two-thirds (66.6 percent) of firefighters are represented by a union.

Demographics of state and local government union workers

The state and local government union workforce has substantially more formal education than the workforce as a whole. Three in five (62.4 percent of) state and local government workers covered by a collective bargaining agreement have at least a four-year college degree and a third (33.8 percent) have an advanced degree (Figure G). By comparison, a third (33.6 percent) of all private-sector workers have at least a college degree and about one in 10 (10.7 percent) have an advanced degree. Just 14.0 percent of all state and local government union workers have only a high school diploma and very few (1.5 percent) have not completed their high school education. In the overall private-sector workforce, 27.7 percent of workers have a high school diploma but have completed no further education, and 9.4 percent have less than a high school diploma.

The majority (58.3 percent) of state and local government workers covered by a collective bargaining contract are women (Figure H). This is a substantially higher share of women than in the private sector overall, where women make up just under half (46.7 percent) of the total workforce.

Workers of color account for nearly one in three (30.9 percent) of the state and local government union workforce (Figure I). As Appendix Figure C shows, that share has grown steadily since 1989, when just one in five (22.0 percent of) state and local government workers represented by a union were not white. The change has been driven primarily by the increasing shares of unionized workers who are Hispanic or Asian American/Pacific Islander. The share of black workers in the state and local government union workforce has declined slightly since 1989 (when it was 14.1 percent), but, at 12.1 percent, remains in line with the share of black workers in the overall private-sector workforce, 11.3 percent.5

Just over one in 10 (11.4 percent) state and local government workers represented by a union are immigrants to the United States (Figure J). As Appendix Figure D shows, this share is up from 6.9 percent in 1994 (the earliest year that the Current Population Survey asked respondents where they were born). State and local government union-represented workers are less likely than workers in the private sector to have immigrated to the United States: In 2017, 19.6 percent of private-sector workers said they were foreign-born.

Appendix Figures A–D provide more details on the change over time in shares of the state and local union workforce and private-sector workforce with given demographic characteristics.

Figure G

Figure H

Figure I

Figure J

Endnotes

1. Celine McNicholas, Zane Mokhiber, and Marni von Wilpert, Janus and Fair Share Fees: The Organizations Financing the Attack on Unions’ Ability to Represent Workers, Economic Policy Institute, February 2018.

2. Of the 6.8 million state and local government workers who are covered by a union contract, 6.2 million are union members (see Figure C in this report).

3. See Gordon Lafer, The Legislative Attack on American Wages and Labor Standards, 2011–2012, Economic Policy Institute, October 2013, and Josh Bivens et al., How Today’s Unions Help Working People: Giving Workers the Power to Improve Their Jobs and Unrig the Economy, Economic Policy Institute, August 2017.

4. The data in Figures A, B, and C through 1982 are drawn from Labor Research Association, “U.S. Union Membership: 1948–2004,” LRA Online, 2006. The data in Figures A, B, and C for 1983 to the present are drawn from EPI’s analysis of the U.S. Census Bureau’s Current Population Survey Outgoing Rotation Group (CPS-ORG) microdata.

5. See also Celine McNicholas and Janelle Jones, “Black Women Will Be Most Affected by Janus” (Economic Snapshot), Economic Policy Institute, February 13, 2018.

Appendix figures

Appendix Figure A

Appendix Figure B

Appendix Figure C

Appendix Figure D

Over the last decade, a number of cases attacking the rights of public-sector union members have been quietly working their way through the courts and, finally, up to the U.S. Supreme Court.

The most recent of these challenges is Janus v. AFSCME Council 31, which the U.S. Supreme Court will hear on February 26. If the court rules for Janus, it will likely have the most significant impact on workers’ freedom to organize and bargain collectively in 70 years.

Janus is the third case to come before the Supreme Court in five years involving public-sector unions’ ability to collect “fair share” (or “agency”) fees. As this report will show, Janus, and the two fair share cases that preceded it, did not grow from an organic, grassroots challenge to union representation. Rather, the fair share cases are being financed by a small group of foundations with ties to the largest and most powerful corporate lobbies. These organizations and the policymakers they support have succeeded in advancing a policy agenda that weakens the bargaining power of workers. In Janus, these interests have focused their attack on public-sector workers—the workforce with the highest union density.

We examine the core group of organizations financing this litigation. By tracing the origins of these legal challenges, and explaining how the challenges target unions, we show that challenging fair share fees in the courts appears to be part of a broader billionaire-financed agenda to weaken unions and shift power away from ordinary workers.

What are fair share fees and why are they critical for union existence?

Collective bargaining is the process by which workers join together to negotiate with employers for better pay and safer working conditions. Under federal law, no one can be forced to join a union as a condition of employment. Workers who choose not to join their workplace’s union—but are covered by the union’s collective-bargaining agreement—do not pay union dues; instead they pay “fair share” fees to cover the basic costs that the union incurs representing them.1 Because unions are legally required to represent all employees in a bargaining unit, not just union members, fair share fees are crucial to the work of collective bargaining. Stripping unions of their ability to collect these fees would encourage workers to access the benefits of union representation without paying for these benefits.2 In this way, eliminating fair share fees defunds unions and goes a long way toward stripping workers of their ability to organize and bargain collectively.

How fair share fees work

Just like in any democratic institution, when a majority of employees in a bargaining unit choose to be represented by a union, the union then becomes the exclusive bargaining representative of all workers in the unit. The union has a responsibility to represent all workers in the unit, union members and employees who decide not to join the union alike, and the employer has a duty to bargain with the union over employees’ wages and working conditions. Unions may bargain to include union security agreements, which allow them to collect fair share fees (also known as “agency” fees) from employees who do not join the union but are part of the bargaining unit (employees in a bargaining unit but not union members are referred to as nonmembers). Nonmembers’ fair share fees cover the union’s expenses related to collective bargaining and contract administration, but not expenses for political or ideological advocacy. These fair share or agency fees ensure that every employee represented by the union simply pays her fair share of the cost of representation. The fees are calculated as a percentage of union dues. Fair share fees can only fund activities related to collective bargaining and contract administration and are expressly prohibited from funding the union’s political advocacy.

How fair share fees prevent “free riding”

A union is required to represent a nonmember worker who is mistreated by the employer as the nonmember pursues a costly grievance process, even if it costs the union tens of thousands of dollars. Fair share fees enable the union to charge nonmember workers for the right to access that service if they need it. Without the ability to collect fair share fees, the nonmember worker could access these expensive representation services without having paid a dime.

Workers who choose not to pay union dues also receive the higher wages and benefits that the union negotiates on behalf of its members. Eliminating fair share fees encourages “free riding”: workers paying union dues see coworkers who are paying nothing but getting the same benefits, and they decide to leave the union and stop paying union dues. Public-sector unions have worked for decades to protect the rights of the teachers, nurses, firefighters, police officers, and other public servants that communities depend on. Taking away unions’ ability to collect fair share fees—while they are nonetheless required to provide services and representation to nonmembers—would threaten the very existence of unions by weakening their financial stability.

The possibility that workers could decide not to pay for the union benefits they receive if fair share fees are outlawed does not mean that they do not value these benefits. This proposition was explained in an amici curiae brief to assist the Supreme Court in understanding the free-rider problem at issue in Janus v. AFSCME, which was signed by 36 distinguished economists and professors of economics and law, including three Nobel laureates. The scholars explained that the free-rider problem is a well-established concept in economics. In particular, the brief shows it is widely accepted that if an individual chooses not to pay for a resource provided to him or her for free, it does not mean the individual does not value the resource, and that when individuals who benefit from a resource do not pay for it, the resource will be underprovided.3

For example, as the brief points out, a recent union recertification election in Iowa revealed that a majority of workers in the bargaining unit voted in favor of continuing to be represented by the union, even though most of them also opted out of paying fair share fees. A recent change in Iowa state law requires public-sector unions to hold a vote and be recertified before each new contract negotiation, and recertification requires not just a majority of those voting but a majority of all workers covered by the collective-bargaining agreement—union members and nonmembers alike. Since Iowa state law already prohibits fair share fees in public-sector unions, the nonmembers are not required to pay fair share fees, even though they are covered by and benefit from the union’s contract.4

In October 2017, the election results for AFSCME Iowa Council 61 revealed that 83 percent of all employees covered by the union’s collective-bargaining agreements voted in favor of recertifying the union.5 Only 15 percent of the workers failed to vote, and only 2 percent voted against the union. Yet a mere 29 percent of workers who are union members pay all of the costs of the union’s collective bargaining—despite the fact that the vast majority of employees agree they benefit from, and affirmatively voted for the union. The remaining 71 percent of the workers in the bargaining unit are free riders, in that they are covered by the union contract but are nonmembers and do not pay any fair share fees because Iowa’s law prohibiting fair share fees allows people to obtain the benefits without paying for them.6

A brief history of fair-share-fees cases before the Supreme Court

Constitutional challenges to fair share fees in the public sector involve the following argument: “Requiring the payment of fair share fees by nonmember objectors is a violation of the objectors’ First Amendment rights.” Yet the practice of collecting fair share fees has survived decades of legal challenges. More than 40 years ago, the Supreme Court unanimously affirmed in Abood v. Detroit Board of Education that fair share fees could be collected from public-sector workers. It was the first Supreme Court case upholding fair share fees.7 The court stated in Abood that any minor infringement of nonmember objectors’ free speech interests posed by agency fees was justified by the state’s legitimate interest in preventing free riders from undermining a union’s ability to represent the bargaining unit. Still, anti-union organizations have continued to litigate various aspects of fair share fees including which expenses are related to collective bargaining and thus chargeable to nonmembers. These organizations have picked at the seams of Abood for decades in an attempt to weaken the ability of unions to collect fair share fees. However, these legal challenges have gained new momentum over the last decade as an increasingly corporate-friendly Supreme Court has signaled a willingness to overturn Abood.

Abood affirmed the constitutionality of fair share fees

In Abood, the Supreme Court held that collecting fair share fees from public-sector employees to cover the costs of collective bargaining does not violate the First Amendment rights of public-sector employees. As the court explained, “Public employees are not basically different from private employees; on the whole, they have the same sort of skills, the same needs, and seek the same advantages.” Further, the court noted, “A public employee who believes that a union representing him is urging a course that is unwise as a matter of public policy is not barred from expressing his viewpoint. Besides voting in accordance with his convictions, every public employee is largely free to express his views, in public or private orally or in writing.”8

In fact, that same term, the Supreme Court held in Madison School Dist. v. Wisconsin Employment Relations Comm’n that “the First and Fourteenth Amendments protect the right of a public school teacher to oppose, at a public school board meeting, a position advanced by the teachers’ union.” The court, therefore, “recognized that the principle of exclusivity cannot constitutionally be used to muzzle a public employee who, like any other citizen, might wish to express his view about governmental decisions concerning labor relations.”9

However, the court in Abood also noted, “Equally clear is the proposition that a government may not require an individual to relinquish rights guaranteed him by the First Amendment as a condition of public employment.” Therefore, to address the plaintiffs’ concerns that their union dues were being used to support the union’s political activities with which they disagreed, the court struck a careful balance—one that has been in place for over 40 years—requiring the union to separate fair share fees used for collective bargaining from the portion of union dues used “for the expression of political views, on behalf of political candidates, or toward the advancement of other ideological causes not germane to its duties as collective-bargaining representative.”10

Harris v. Quinn: First strike against fair share fees

In 2012, the first case to “pick at the seams” of Abood was Knox v. SEIU, a case challenging the procedures by which a union notifies nonmembers of the fair share fee calculations.11 While the plaintiffs in Knox did not directly challenge the constitutionality of fair share fees, Justice Samuel Alito’s majority opinion characterized the constitutional justification for public-sector agency fees as “something of an anomaly.” Many observers considered this an invitation to argue for overturning Abood.

The first case in which corporate-backed plaintiffs took up that invitation was Harris v. Quinn.12 The case involved home care workers in Illinois. These workers were employed by the individual clients for whom they provided in-home care, but were only eligible for employment if they met the state’s basic qualifications, and were paid through state Medicaid funds. As state employees for the purposes of collective bargaining, the home-care workers elected the Service Employees International Union, Healthcare Illinois and Indiana (SEIU-HII) as their exclusive bargaining representative. The union represented the workers in collective bargaining, resulting in a contract that nearly doubled their wages, provided them with health insurance, and included training and workplace safety provisions.13 The contract also included a security agreement that required workers, including those who chose not to become members of the union, to pay a fair share fee.

In 2010, home health care worker Pamela Harris, represented by the National Right to Work Legal Defense Foundation, sued then-Illinois Governor Pat Quinn arguing that the fair share fee arrangement violated her First Amendment rights. A federal district court found such fair share fee arrangements constitutional under “longstanding Supreme Court precedent.”14 The plaintiffs appealed to the Seventh Circuit, which affirmed the district court’s decision in part. The Seventh Circuit relied on the Supreme Court’s longstanding precedent in Abood in upholding the constitutionality of fair share fee arrangements in the public sector, and determined that the only question in the case was whether home care workers were state employees.15 The court held that, given the state’s control over home care workers, they were state employees and, therefore, could appropriately be required to pay a fair share fee to the union representing them in contract negotiation and administration.16

The Supreme Court heard the case in 2014. The Supreme Court in Harris found that the home care workers were not “full-fledged” public employees. The court reasoned that because patients/clients had supervisory authority over home health workers, the state did not sufficiently govern their employment to make them state employees. The court then considered if fair share fee arrangements covering a special class of partial–public employees “serves a compelling state interest that cannot be achieved through means significantly less restrictive of associational freedoms.”17 The majority concluded that it did not and found that fair share fees violated the nonmembers’ First Amendment rights. The Supreme Court did not overrule Abood, instead it decided that Abood’s precedent regarding public-sector fair share fees in collective bargaining did not apply because the home care workers were not truly public employees. However, Justice Samuel Alito, again writing for the majority as he had in Knox, indicated his willingness to overturn Abood if the right case came along in the future.

Friedrichs v. California Teachers Association: Second strike

In April of 2014, Rebecca Friedrichs along with nine other public school teachers, represented by the Center for Individual Rights (CIR), filed suit against the California Teachers Association in a case that directly challenged Abood: they argued that the public-sector union’s fair share fee arrangement violated their First Amendment rights.18 They also argued that, if agency fees are allowable, the First Amendment requires that members opt in to pay dues as opposed to providing that nonmembers may opt out of paying dues.

While it is well-established that fair share fees can only fund activities related to collective bargaining and contract administration and are expressly prohibited from funding the union’s political advocacy, the Friedrichs plaintiffs argued that public-sector collective bargaining itself involves political speech because the subjects of collective bargaining in this context (public school teacher pay, benefits, and working conditions) are matters of public concern. The plaintiffs failed to point to a specific provision of a collective-bargaining agreement that they found objectionable, but instead focused their argument on sweeping generalizations about public-sector collective-bargaining agreements. Basically, they argued that as public employees, the terms and conditions of their employment are inherently political decisions. As explained earlier, this argument is not new, it was already dealt with and disposed of 40 years ago in the Supreme Court’s decision in Abood.19

Knowing that their arguments about the First Amendment had already been asked and answered in Abood, CIR filed a motion for judgment on the pleadings in favor of the union because the plaintiff’s claims were “foreclosed” by Abood. In other words, CIR asked the court to skip calling witnesses, taking testimony, and conducting discovery and review of documents and instead rule in favor of the union based solely on the precedent in Abood.

Why would CIR ask a lower court to rule against the plaintiffs? Because its strategy was to rush the case through the lower courts and produce little by way of a factual record. The lack of a trial record deprived the union of the opportunity to introduce evidence demonstrating the importance of fair share fees to the union’s ability to collectively bargain and enforce the contract. The union asked the court for the opportunity to develop a factual record in Friedrichs, well aware that the court in Harris essentially said that a union must prove that fair share fees are necessary, which involves evidence of the effect of the free-rider problem. CIR opposed that request. As the case was controlled by Abood, the trial court ruled on the pleadings alone, foreclosing the union from introducing information that would demonstrate the necessity of fair share fees. The plaintiffs then appealed to the Ninth Circuit, which affirmed the district court’s ruling. Friedrichs then petitioned the Supreme Court for review, which it granted on June 30, 2015.

Friedrichs quickly made it to the Supreme Court. The oral argument was held on January 11, 2016. Following the oral argument, many observers predicted that the court was likely to overturn Abood. However, Justice Antonin Scalia’s death on February 13, 2016, left the court without the five votes necessary to overturn Abood. So, on March 29, 2016, the Supreme Court issued a 4-4 decision in the case. The tie decision left the door open to continue the attack on fair share fees.

Janus v. AFSCME District Council 31: Third strike

On February 9, 2015, Illinois Governor Bruce Rauner issued an executive order instructing all state agencies to stop enforcing fair share union contract provisions and required that all such deductions be placed into an escrow account instead of being turned over to unions representing those workers.20 That same day, Governor Rauner filed suit in district court challenging the constitutionality of public-sector unions’ collection of fair share fees from nonmembers. The unions moved to dismiss the case for lack of subject matter jurisdiction and standing. While those motions were pending, Mark Janus and two other state employees filed a motion to intervene in the case. On May 19, 2015, U.S. District Judge Robert Gettleman ruled that Governor Rauner did not have standing to file suit and granted Janus permission to intervene.

The plaintiffs in Janus are attempting to pick up where Friedrichs left off, and are making the same argument that was addressed over 40 years ago in Abood. As in other cases challenging the collection of fair share fees, the plaintiffs in Janus have acknowledged that they could not prevail in the district or appellate court, which are bound by the Supreme Court precedent in Abood. As a result, the case has been rushed through the courts. On June 6, 2017, the National Right to Work Legal Defense Foundation filed a petition for writ of certiorari in the case (a document filed by the losing party in a case asking the Supreme Court to review the decision of a lower court). The Supreme Court granted the petition on September, 28, 2017, and will hear oral arguments in the case on February 26, 2018.21

Who is behind the fair share cases?

Litigating a case all the way to the United States Supreme Court is expensive: years of attorneys’ fees, court costs, and trial expenses add up. How is it that a few public-sector employees who seek to challenge union representation are able to shoulder these costs? The plaintiffs in Harris, Friedrichs, and Janus have all been represented by wealthy legal foundations, providing pro bono representation in each of these cases.

Donor public financial disclosures

The Internal Revenue Service (IRS) requires nonprofit organizations to file a federal tax form known as the 990. These forms contain detailed information on a nonprofit’s finances, including how much top employees are paid, how much money they received in contributions, their assets and liabilities, and other information that help shed light on the organization’s priorities.22 Nonprofit organizations generally also must document and include every donation they received, including the donor’s name and address, on Schedule B of the Form 990. However, while most of the completed Form 990 is publically available, Schedule B is exempt from this public disclosure requirement to protect the privacy of donors.23 A sample 990 can be found as Exhibit A1 in the appendix.

However, a separate schedule of the Form 990, Schedule I, requires a nonprofit organization to list any grants distributed to other organizations, and this is made publically available upon request. Therefore, it is possible, although very time consuming, to map the portion of a specific nonprofit’s revenue that came from contributions from other nonprofits by searching through all of the Schedule I’s that exist. The American Bridge 21st Century Foundation uses IRS filings to track the financial ties of conservative nonprofit organizations and makes this information available online in Conservative Transparency, a searchable database of this information. The organization examines and aggregates donations, providing information on the financial backers of the largest and most powerful corporate foundations.

We used information from the Conservative Transparency database as well as data made publically available by the IRS to create a database of financial transactions of organizations involved in the cases involving a challenge to fair share fee collection. After reviewing over a thousand transactions in the database, it remains difficult to develop a clear picture of the complete financial landscape of these cases. What is clear is that a core group of foundations with ties to the largest and most powerful lobbies representing corporate interests have provided consistent financial support for the fair share fee cases.

Organizations litigating fair share fees and their donor foundations

The box below describes the main legal foundations involved in the Supreme Court litigation challenging fair share fees. In some instances, these foundations have participated in more than one case.

A closer look at the donor organizations supporting the anti-union litigants in fair-share-fee cases

The National Right to Work Legal Defense Foundation, Center for Individual Rights, and Liberty Justice Center are separate nonprofit organizations, but they share many of the same donors. The box below profiles a few of these organizations’ major donors, based on data found in their 990 filings.

Table A1 in the appendix provides a somewhat more comprehensive breakdown of which entities are funding the organizations that are trying to outlaw mandatory fair share fees in the courts.

The link between anti–fair share and the broader attack on workers

Many of the organizations financing the legal challenges to workers’ rights have also been funding legislative battles focused on limiting workers’ rights.32 How do these groups benefit by limiting workers’ rights? Anti-worker policies shift a greater share of economic gains to corporate players and away from ordinary workers. This is evident in the relationship between declining union membership and rising inequality. As union membership has fallen over the last few decades, the share of income going to the top 10 percent has steadily increased. When union membership was at its peak (33.4 percent in 1945) the share of income going to the top 10 percent was only 32.6 percent. In 2015, union membership was 11.1 percent, while the share of income going to the top 10 percent was 47.8 percent—the largest share going to the top 10 percent since 1917 (the earliest year data are available).33 The erosion of collective bargaining is a core part of our nation’s problems of wage stagnation and rising inequality. Workers who are not in a union have much less power to negotiate with their employers for higher pay (or more hours, or better working conditions). Further, the erosion of union coverage hurts workers who aren’t in a union; research shows that when the share of workers who are union members falls, wages of nonunion workers are lower. For example, wages of nonunion male workers in 2013 would have been 5 percent higher (that’s an additional $2,704 in earnings for year-round workers) had union density remained at its 1979 levels.34

The decline in union membership rates does not reflect a declining desire to organize in the workplace and collectively bargain. In fact, surveys show that nearly half of nonunion, nonmanagerial workers would vote for union representation if they could.35 Furthermore, a majority of Americans support the right of workers to join a union.36

Their support for unions notwithstanding, fewer and fewer workers successfully form a union. And, when the majority of workers elect union representation, employers often refuse to bargain with workers or delay the bargaining process. In fact, a majority of newly organized bargaining units had no collective-bargaining agreement one year after the election and more than one-third still had no contract two years after workers elected to bargain. A driving factor behind these trends is an increasingly energized and well-funded campaign against workers’ rights. This campaign has occurred across all levels of government—federal, state, and local.37

Conclusion

The legal attack on public-sector unions “fair share” or “agency” fees poses the greatest immediate threat to workers’ meaningful participation in our democracy. If unions are prohibited from collecting fees from workers they are required to represent, they will be forced to operate with fewer and fewer resources. This will lead to reduced power—at the bargaining table and in the political process.

In a political system dominated by moneyed interests, workers are left with little power if they do not have an effective mechanism to pool their resources. It is profoundly undemocratic to elevate the objections of a minority over the democratically determined choices of the majority of workers. This principle is what is at stake in Janus. The decision in this case will determine the future of effective unions, democratic decision-making in the workplace, and the preservation of good, middle-class jobs in public employment.

Appendix

Exhibit A1

Appendix Table 1

Endnotes

1. National Labor Relations Board, “Rights We Protect,” accessed January 29, 2018.

2. Jeffery Keefe, Eliminating Fair Share Fees and Making Public Employment “Right-to-Work” Would Increase the Pay Penalty for Working in State and Local Government, Economic Policy Institute, October 13, 2015.

3. Brief of Amici Curiae Economists and Professors of Law and Economics in Support of Respondents, January 18, 2018.

4. The Iowa law is what is known as a “right-to-work” or RTW law. Right-to-work laws make it illegal for employees and employers to negotiate a union contract that requires all employees who benefit from the contract to pay their fair share of the costs of negotiating it. See Iowa Code Ann. § 20.15

5. Brief of Amici Curiae Economists and Professors of Law and Economics in Support of Respondents, January 18, 2018, pages 23–24.

6. Brief of Amici Curiae Economists and Professors of Law and Economics in Support of Respondents, January 18, 2018, pages 23–24.

7. Abood v. Detroit Bd. of Ed., 431 U.S. 209 (1977).

8. Abood v. Detroit Bd. of Ed., 431 U.S. 209 (1977).

9. Madison School Dist. v. Wisconsin Employment Relations Comm’n, 429 U.S. 167 (1976).

10. Abood v. Detroit Bd. of Ed., 431 U.S. 209, 235 (1977). 429 U.S. 167 (1976).

11. Knox v. Serv. Employees Int’l Union, Local 1000, 567 U.S. 298 (2012). The issue in dispute in the Knox case involved the type of notice a union must give to nonmembers when it issues a special assessment or dues increase. While the parties in the Knox case did not directly challenge Abood or the constitutionality of fair share or “agency fees,” Justice Alito, on his own initiative, questioned the constitutionality of the Abood decision as an aside, when he wrote the majority opinion in Knox.

12. Harris v. Quinn, 134 S. Ct. 2618 (2014)

13. Kagan dissent at 2648.

14. Harris v. Quinn, No. 10-cv-02477, 2010 WL 4736500 at 9 (N.D. Ill. Nov. 12, 2010).

15. Harris v. Quinn, 656 F.3d 692 (7th Cir. 2011), aff’d in part, rev’d in part and remanded, 134 S. Ct. 2618 (2014)

16. Harris v. Quinn, 656 F.3d at 699 (7th Cir. 2011).

17. Harris v. Quinn, 134 S. Ct. 2618, 2639 (2014).

18. Friedrichs v. California Teachers Ass’n, 2013 WL 9825479, at *1 (C.D. Cal. Dec. 5, 2013), aff’d, No. 13-57095, 2014 WL 10076847 (9th Cir. Nov. 18, 2014).

19. See Abood v. Detroit Bd. of Ed., 431 U.S. 209, 227 (1977) (“The appellants’ second argument is that in any event collective bargaining in the public sector is inherently ‘political’ and thus requires a different result under the First and Fourteenth Amendments.”)

20. State of Illinois, Executive Order 13 (2015), February 9, 2015.

21. “Janus v. American Federation of State, County, and Municipal Employees, Council 31,” SCOTUS Blog, February 16, 2018.

22. Caroline Chen, “How to Dig Deeper into a Nonprofit’s Finances,” Reveal News, from the Center for Investigative Reporting, July 11, 2013.

23. Internal Revenue Service, “Public Disclosure and Availability of Exempt Organizations Returns and Applications: Contributors’ Identities Not Subject to Disclosure,” August 4, 2017.

24. Information on NRTWLDF’s work and funding comes from Mary Bottari, “Who Is Behind the National Right to Work Committee and Its Anti-union Crusade?” Center for Media and Democracy’s PR Watch and American Bridge 21st Century Foundation, “National Right to Work Legal Defense Foundation,” Conservative Transparency database, accessed August 17, 2017.

25. Information on CIR’s funding comes from American Bridge 21st Century Foundation, “Center for Individual Rights” and “Donors Trust and Donors Capital Fund,” Conservative Transparency database, accessed August 17, 2017.

26. Information on funding for LJC and IPI comes from American Bridge 21st Century Foundation, “Illinois Policy Institute,” Conservative Transparency database, accessed August 17, 2017.

27. Information on the relationship between Donors Trust and Donors Capital Fund and contributors to Donors Trust comes from Andy Kroll, “Exposed: The Dark-Money ATM of the Conservative Movement,” Mother Jones, February 5, 2013, and American Bridge 21st Century Foundation, “DonorsTrust & Donors Capital Fund,” Conservative Transparency database, accessed August 17, 2017.

28. The other two Scaife family foundations are the Allegheny Foundation and the Carthage Foundation. Information on Richard Mellon Scaife and the history of the Scaife foundations’ giving comes from Paul Valentine, “Richard Mellon Scaife, Billionaire Who Funded Anti-liberal Causes, Dies at 82,” The Washington Post, July 4, 2014. Information on Sarah Scaife Foundation grantees comes from American Bridge 21st Century Foundation, “Sarah Scaife Foundation,” Conservative Transparency database, accessed August 17, 2017. The American Legislative Exchange Council and the State Policy Network are both headquartered in Virginia. ALEC is a conservative nonprofit organization that drafts and promotes model legislation for state level legislators to use. SPN is a network of state level think tanks, such as the Illinois Policy Institute. Both of these corporate-funded organizations play a large role in promoting conservative legislation at the state level. See Ed Pilkington and Suzanne Goldenberg, “State Conservative Groups Plan US-wide Assault on Education, Health and Tax,” The Guardian, US edition, December 5, 2013. Also, a 2013 report by EPI noted the role of ALEC and the State Policy Network in advancing a corporate-backed policy agenda in state legislatures to lower wages and labor standards, weaken unions, and erode workplace protections for union and nonunion workers. See Gordon Lafer, The Legislative Attack on American Wages and Labor Standards, 2011–2012, Economic Policy Institute, 2013.

29. See the Lynde and Harry Bradley Foundation Grants 2011–2015 database published with Daniel Bice, “Hacked Records Show Bradley Foundation Taking Its Conservative Wisconsin Model National,” Milwaukee Journal Sentinel, May 5, 2017.

30. Information on Uihlein’s influence in politics comes from Lynn Sweet, “Mega Donor Richard Uihlein Ramps Up Donations to Conservative Causes,” Chicago Sun-Times, November 27, 2017. Information on the foundation’s giving to IPI/LJC from American Bridge 21st Century Foundation, “Ed Uihlein Family Foundation,” Conservative Transparency database, accessed August 17, 2017. Information on the Uihlein family’s connection to the Bradley family and its business interests comes from the archived 2015 “Board of Directors” page on the Lynde and Harry Bradley Foundation website and “David Vogel Uihlein,” (obituary), Milwaukee Journal Sentinel, January 31, 2010.

31. Information on the Dunns’ giving comes from Inside Philanthropy, “Wall Street Donors Guide: William and Rebecca Dunn,” accessed January 29, 2018. Information on the foundation’s giving since 2010 comes from American Bridge 21st Century Foundation, “Dunn’s Foundation for the Advancement of Right Thinking,” Conservative Transparency database, accessed August 17, 2017.

32. A 2013 report by EPI listed many organizations involved in advancing a corporate-backed policy agenda in state legislatures to lower wages and labor standards, weaken unions, and erode workplace protections for union and nonunion workers. See Gordon Lafer, The Legislative Attack on American Wages and Labor Standards, 2011–2012, Economic Policy Institute, October 31, 2013.

33. Josh Bivens et al., How Today’s Unions Help Working People: Giving Workers the Power to Improve Their Jobs and Unrig the Economy, Figure A, Economic Policy Institute, June 26, 2017.

34. Jake Rosenfeld, Patrick Denice, and Jennifer Laird, Union Decline Lowers Wages of Nonunion Workers: The Overlooked Reason Why Wages Are Stuck and Inequality Is Growing, Economic Policy Institute, August 30, 2016.

35. In 2012, 48 percent of all nonmanagerial workers surveyed by the AFL-CIO Workers’ Rights Survey (May 2012 Hart Research Associates poll) said they would “probably” or “definitely” vote to form a labor union if an election were held tomorrow.

36. Mixed Views of Impact of Long-Term Decline in Union Membership: Public Says Workers in Many Sectors Should Be Able to Unionize, Pew Research Center, April 27, 2015.

37. See Bivens et al., How Today’s Unions Help Working People, August 24, 2017 and Gordon Lafer, The Legislative Attack on American Wages and Labor Standards, 2011–2012, Economic Policy Institute, 2013.

While the outcome of the case will affect about 17 million public-sector workers across the country, black women in particular could be hurt by Janus, as they are disproportionately represented in public sector jobs. They make up 17.7 percent of public-sector workers, or about 1.5 million workers.

Figure A

Black women have traditionally faced a double pay gap—a gender pay gap and a racial wage gap. EPI research has shown that black women are paid only 65 cents of the dollar that their white male counterparts are paid. However, unions help reduce these pay gaps. Working black women in unions are paid 94.9 percent of what their black male counterparts make, while nonunion black women are paid just 91 percent of their counterparts.

If the Supreme Court decides in favor of weakening unions, it will impact the future of democratic decision making in the workplace and the preservation of good, middle-class jobs in public employment that have traditionally benefited African American women who have chosen to serve the public for their careers.

The brief, from Dan Jackson at Keker, Van Nest & Peters, argues that the free-rider problem has broad application and acceptance in economics. While this is obvious to economists, it is at issue in this case. The key point the brief makes is that it is well established in economics that if an individual chooses not to pay for something that will be provided to them for free, that does not mean they do not value it. As explained in the brief, “Withholding financial support does not imply antipathy; it follows from individual self-interest and the collective nature of the benefits provided, even in the absence of any disagreement about those benefits. That is the essence of the free-rider problem.”

The economic luminaries behind the brief also point out that the greater good would be harmed if the Supreme Court rules for the petitioners, saying in part “…even if some contributors persevere the amount of the collective good will be sub-optimal, and will tend to decrease further and further below the optimum as the contagion of free riding spreads, resulting in increasing exploitation of the dwindling contributors.”

List of signers:

Henry J. Aaron is the Bruce and Virginia MacLaury Senior Fellow in the Economic Studies Program at the Brookings Institution.

Katharine G. Abraham is Professor of Economics, Professor of Survey Methodology, and Director of the Maryland Center for Economics and Policy at the University of Maryland. She served as Commissioner of the Bureau of Labor Statistics from 1993 through 2001.

Daron Acemoglu is the Elizabeth and James Killian Professor of Economics at the Massachusetts Institute of Technology. He received the John Bates Clark Medal in 2005.

David Autor is Ford Professor of Economics and Associate Head of the Department of Economics at the Massachusetts Institute of Technology.

Ian Ayres is the William K. Townsend Professor at Yale Law School and a Professor at Yale’s School of Management.

Alan S. Blinder is the Gordon S. Rentschler Memorial Professor of Economics and Public Affairs at Princeton University. He served as Vice Chairman of the Board of Governors of the Federal Reserve System from 1994 to 1996.

David Card is the Class of 1950 Professor of Economics at the University of California, Berkeley. He received the John Bates Clark Medal in 1995.

Kenneth G. Dau-Schmidt is the Willard and Margaret Carr Professor of Labor and Employment Law at Indiana University—Bloomington.

Sir Angus Stewart Deaton is a Senior Scholar and Dwight Eisenhower Professor of Economics and International Affairs Emeritus at Princeton University, and Presidential Professor of Economics at the University of Southern California. He was President of the American Economic Association in 2009, and received the Nobel Prize in Economics in 2015.

Bradford DeLong is Professor of Economics and Chief Economist of the Blum Center at the University of California, Berkeley.

John J. Donohue III is the C. Wendell and Edith M. Carlsmith Professor of Law at Stanford Law School.

Ronald G. Ehrenberg is the Irving M. Ives Professor of Industrial and Labor Relations and Economics at Cornell University. He is past President of the Society of Labor Economists.

Henry S. Farber is the Hughes-Rogers Professor of Economics and an Associate of the Industrial Relations Section at Princeton University.

Robert H. Frank is the Henrietta Johnson Louis Professor of Management and Professor of Economics at Cornell University’s Johnson Graduate School of Management.

Richard B. Freeman holds the Herbert Ascherman Chair in Economics at Harvard University, and is currently serving as Faculty co-Director of the Labor and Worklife Program at the Harvard Law School.

Claudia Goldin is the Henry Lee Professor of Economics at Harvard University. She was President of the American Economic Association in 2013.

Robert J. Gordon is the Stanley G. Harris Professor in the Social Sciences and Professor of Economics at Northwestern University.

Oliver Hart is the Andrew E. Furer Professor of Economics at Harvard University. He received the Nobel Prize in Economics in 2016.

David A. Hoffman is a Professor of Law at the University of Pennsylvania Law School.

Lawrence F. Katz is the Elisabeth Allison Professor of Economics at Harvard University.

Thomas A. Kochan is the George Maverick Bunker Professor of Management at the Massachusetts Institute of Technology Sloan School of Management. He is a past President of both the International Industrial Relations Association and the Industrial Relations Research Association, and a recipient of a Lifetime Achievement Award from the Labor and Employment Relations Association.

Alan Krueger is the Bendheim Professor of Economics and Public Affairs at Princeton University.

David Lewin is the Neil H. Jacoby Emeritus Professor of Management, Human Resources and Organizational Behavior at the University of California, Los Angeles, Anderson School of Management. He served as President of the Labor and Employment Relations Association in 2013.

Ray Marshall is Professor Emeritus and holds the Audre and Bernard Rapoport Centennial Chair in Economics and Public Affairs at the University of Texas at Austin. He was the United States Secretary of Labor from 1977 to 1981.

Alexandre Mas is a Professor of Economics and Public Affairs at Princeton University.

Eric S. Maskin is the Adams University Professor in the Department of Economics at Harvard University. He received the Nobel Prize in Economics in 2007.

Alison D. Morantz is the James and Nancy Kelso Professor of Law at Stanford Law School.

J.J. Prescott is a Professor of Law at the University of Michigan Law School.

Brishen Rogers is an Associate Professor of Law at Temple University.

Jesse Rothstein is Professor of Public Policy and Economics and the Director of the Institute for Research on Labor and Employment at the University of California, Berkeley.

Cecilia Elena Rouse is the Dean of the Woodrow Wilson School of Public and International Affairs and the Shirley Katzman and Lewis and Anna Ernst Professor in the Economics of Education at Princeton University.

Jeffrey D. Sachs is University Professor and Director of the Center for Sustainable Development at Columbia University.

Stewart J. Schwab is the Jonathan and Ruby Zhu Professor of Law at Cornell Law School.

J.H. Verkerke is the T. Munford Boyd Professor of Law and the Director of the Program for Employment and Labor Law Studies at the University of Virginia School of Law.

Paula B. Voos is a Professor in the School of Management and Labor Relations at Rutgers University.

David Weil is the Dean and Professor of the Heller School for Social Policy and Management at Brandeis University.

Memphis Mayor Henry Loeb fought to break the workers’ strike, and “refused to take dilapidated trucks out of service or pay overtime when men were forced to work late-night shifts. Sanitation workers earned wages so low that many were on welfare and hundreds relied on food stamps to feed their families.” As Michael K. Honey writes in Going Down Jericho Road: The Memphis Strike, Martin Luther King’s Last Campaign, one of the things Loeb was most fervent about opposing was the dues-checkoff provisions that the sanitation workers wanted in their union contract. The workers on strike in Memphis knew that a dues checkoff—whereby union members voluntarily authorize the employer to make regular deductions from an employee’s wages to pay their union dues—was crucial to the union’s survival, especially given that Tennessee had passed a so-called “right-to-work” law, which allowed nonunion members to refuse to pay their fair share of dues but still collect the same benefits as union members. Loeb surely knew that the powers conferred to workers in the union contract—including an increase in black sanitation workers’ wages, protections for black workers from race-based employment discrimination, and a procedure for the black sanitation workers to file grievances against their white supervisors—would become wholly ineffective if the union could not collect dues to support its basic operations. More than once, the city had offered to settle the strike on the condition that dues checkoff be prohibited from their contract—but workers persisted, knowing that the “dues checkoff remained crucial, for without it, the union would not survive.” One of the cofounders of the Community on the Move for Equality, Reverend Malcom Blackburn, even embodied dues checkoff in his call to action.

Our Henry, who art in City Hall,

Hard-headed be thy name.

Thy kingdom C.O.M.E.

Our will be done,

In Memphis, as it is in heaven.

Give us this day our Dues Checkoff,

And forgive us our boycott,

As we forgive those who spray MACE against us.

As lead us not into shame,

But deliver us from LOEB!

For OURS is justice, jobs, and dignity,

Forever and ever. Amen. FREEDOM!

—“Sanitation Workers’ Prayer,”

Recited by Reverend Malcom Blackburn

The day after King arrived in Memphis the night of April 3, 1968, to speak to the group of sanitation workers, he was shot and killed stepping out of his room at the Lorraine Motel. On April 8, Coretta Scott King, the Southern Christian Leaderships Conference, and union leaders led approximately 42,000 people on a silent march through Memphis in Dr. King’s honor, demanding that Loeb recognize the sanitation workers’ requests. On April 16, the city finally recognized the sanitation workers’ union and negotiated a contract, which included a dues checkoff.

Now, fifty years after Martin Luther King’s efforts to help the sanitation workers gain union recognition, corporate interests are still fighting to undercut public-sector unions by crippling their financial support. On February 28, 2018, the Supreme Court will hear oral arguments in a case called Janus v. AFSCME. Just as the funding for the sanitation workers union was at issue in their battle over a dues-checkoff provision in their contract, the financial stability of public-sector unions at issue in the Janus case.

Janus v. AFSCME could profoundly affect the ability of public-sector workers to improve their wages and working conditions. The case threatens the right of the majority of workers, through their democratically elected union, to bargain a contract with their public employer that requires every employee covered by the contract to pay their fair share of the costs of negotiating it, administering it, and enforcing it. The Supreme Court decided this issue forty years ago in Abood v. Detroit Board of Education and it has been the law of the land since.

Janus is nothing more than the latest attack on workers’ rights to organize and bargain collectively. The Supreme Court considered this issue in its 2016-2017 term in Friedrichs v. California Teachers Association, which resulted in a 4-4 split decision upholding a lower court decision that permits public employee unions to assess fees on non-members who benefit from collective bargaining and union representation and who unions are required to represent. In any other circumstance, it would be outrageous to demand the benefits of a common enterprise without paying one’s fair share. Union representation is no different. Eliminating fair share fees protects people who want to get something for nothing and as a result, starves unions. It is also profoundly undemocratic to elevate the objections of a minority over the democratically determined choices of the majority of workers.

This principle is what Dr. Martin Luther King, Jr., was fighting for on the day he was killed, and it is what’s at stake in Janus. The decision in this case will determine the future of effective unions, democratic decision making in the workplace, and the preservation of good, middle class jobs in public employment.