On the surface, the fight between the governor of Wisconsin and organized labor is about balancing state budgets and collective bargaining rights. Behind the scenes, hundreds of millions of dollars in compensation to top labor leaders as well as campaign contributions to Democrats could be in jeopardy if workers lose.
The trickle-up effect of the standoff in Wisconsin and other states could irreparably damage the corporate-like compensation structures that the Top 10 labor unions have built over decades.
Union treasuries—filled by dues paid by union members—not only fund programs benefiting union members and their families. The money also pays six-figure salaries and benefits for labor leaders and their top staffs, and provides tens of millions of dollars for Democratic causes and candidates.
The Center for Public Integrity found compensation for leaders of the 10 largest unions ranged from $173,000 at the United Auto Workers to $618,000 at the Laborers’ International Union of North America and almost $480,000 for the president of the American Federation of State, County & Municipal Employees. The latter is the target of GOP governors in Wisconsin, Indiana, Ohio, Tennessee and Kansas.
“What’s very clear to union leaders is the huge threat this poses for the organizations they have built,” said John C. McAdams, political science professor at Marquette University in Wisconsin.
The standoff began when Wisconsin Gov. Scott Walker, elected as a Republican reformer, proposed deep cuts in state workers’ benefits to help close a projected $3.6 billion deficit in the state budget. Although unions have agreed to cuts in health insurance and retirement plans, Walker wants more.
Bolstered by business allies, Walker is pushing to deny state employees most of their bargaining rights. He also is aiming directly at the unions with proposals to make it harder to organize workers and collect dues.
Fueling this drive are reform minded Republican governors armed with studies—roundly disputed by Democrats and their union allies—that say government employees receive higher pay and better benefits than workers in non-government jobs.
“If the governor of Wisconsin wins this fight, for workers the state will begin to look like Oklahoma or Wyoming—unfriendly to unions and reliably Republican,” said Nelson Lichtenstein, a history professor who runs the Center for the Study of Work, Labor and Democracy at the University of California, Santa Barbara.
To counter daily protests by labor supporters, a pro-Walker demonstration was organized by Americans for Prosperity, a group funded by Charles and David Koch. The brothers from Kansas made their billions in energy and consumer products and were the fourth highest donor to Walker’s 2010 campaign.
In a Tuesday op-ed column in The Wall Street Journal, Charles Koch defended his family’s politics in the name of deficit reduction. “Because of our activism, we’ve been vilified by various groups. Despite this criticism, we’re determined to keep contributing and standing up for those politicians, like Wisconsin Gov. Scott Walker, who are taking these challenges seriously.”
Among those rallying support for the beleaguered state workers and the AWOL Democratic senators: AFL-CIO President Richard Trumka, Teamsters President James P. Hoffa, civil rights activist Jesse Jackson, and Gerald McEntee, president of the American Federation of State, County and Municipal Employees, whose local members have been targeted by Walker.
McEntee said Walker was retaliating for organized labor’s support of Democrats, in particular for the money given to his opponent in the 2010 election. “This is political payback, which does nothing to promote job growth or help the middle class,” McEntee said on The Huffington Post. “This is nothing less than union busting at its most transparent, designed to deny workers a voice in the workplace.”
The membership of AFSCME, which evolved from a state employees’ union organized in Wisconsin in 1932, has grown by 25 percent over the last decade. McEntee, who has been president since 1981, says more than 145,000 government employees have joined AFSCME since 2006.
AFSCME stands in stark contrast to the decline in traditional, private-sector unions. The Bureau of Labor Statistics recently reported that while less than 7 percent of private sector workers belong to a union, more than 36 percent of government employees—such as state and municipal workers, teachers, police and firefighters—are union members.
As membership in AFSCME has grown, so has its political activism and political spending. AFSCME spent $90 million in the 2010 elections, and most of that went to Democratic candidates and affiliated organizations.
McEntee’s pay and benefits have grown along with his membership stats. Reports by the union indicate that his salary has increased by about 4 percent a year, even as many workers have faced pay freezes and unpaid furloughs. In 2009, his compensation totaled almost $480,000. By comparison, the AFL-CIO’s Trumka was paid $283,340 in salary and benefits.
The union reports, filed with the Department of Labor, show that assets of the various labor unions run into the hundreds of millions of dollars and payrolls rival midsized companies. Among the Top 10 unions, dozens of top officials have salaries and benefits that rank them among the top percentage of income-earners in the country.
Although well-paid by most standards, McAdams acknowledged that a pay disparity exists between most union leaders and their members. He added that their income pales in comparison to corporate executives.
“Union leaders today are not really from the working class, and their incomes are not so high that they’re making out like bandits,” he said.
International Brotherhood of Electrical Workers was the only union that returned the Center’s phone calls and emails requesting comment on this story. Jim Spellane, director of media communications, said, “Our union president makes about what some of the highest paid workers in the union make. We’re proud that our leadership comes out of rank and file, people who worked in the trade.”
Union compensation is still a fraction of that paid to heads of Washington’s big trade associations. John Castellani of the Business Roundtable had a compensation package of $1.4 million in 2009 and Thomas J. Donohue of the U.S. Chamber of Commerce made $3.7 million. Castellani has since departed.
These are the 10 largest unions, noting the number of employees who earn more than $200,000, leadership salaries, and campaign contributions to federal candidates in 2009-2010.
Membership: 3.2 million
Assets: $216 million
The NEA, representing most of the nation’s teachers, has 31 headquarters officers and employees who earn over $200,000. The president, Dennis Van Roekel, received $397,721 in salary and benefits. Of the $3.7 million NEA spent on political activities in the last election cycle, 98 percent went to Democratic candidates. The NEA has 98,000 members in Wisconsin. Before taking the helm in 2008, Van Roekel received pay increases averaging more than 4 percent a year as NEA vice president. In 2009, public school teachers were paid a national average of $54,319 and received raises ranging from 2 percent to 4 percent over the previous five years.
Membership: 1.8 million
Assets: $187 million
The SEIU, whose membership has increased in recent years, has been organizing hospital, home care and nursing home workers, along with local and state government employees, janitors and security officers. The union has nine headquarters officers and employees who earn over $200,000. The former president, Andy Stern, was paid $306,388 in salary and benefits from the union in 2009. In his final year, Stern got a 5 percent pay boost, which came on the heels of the union growing by more than 88,000 members. Stern resigned in 2010 and was replaced by Mary Kay Henry, formerly the executive vice president. Over the past two years, SEIU gave almost $2 million to Democratic candidates and $8,500 to Republicans. It has 18,000 members in Wisconsin.
Membership: 1.3 million
Assets: $157 million
The UFCW, whose members work in meatpacking, food processing and retail grocery stores, has 17 headquarters officers and employees who earn over $200,000. The president, Joseph T. Hansen, received $360,737 in pay and benefits in 2009. Of the $1.9 million the union donated to political candidates over the past two years, 99 percent of it went to Democrats. The union drew criticism from members in 2004 for paying outgoing president Douglas Dority $709,000 in salary and benefits and for keeping retired officers on the payroll with six-figure salaries. At the time, more than 250 UFCW employees across the country were being paid more than $100,000.
Membership: 1.3 million
Assets: $175 million
The Teamsters, whose origins date to the horse- and mule-team drivers of the late 1800s, represents truck drivers and a wide array of blue-collar and government workers. Eight headquarters officers and employees received more than $200,000 in 2009.
The president, James P. Hoffa, was paid $362,869 in pay and benefits. Over the past two years, the Teamsters have donated $2.3 million to Democratic candidates and $46,500 to Republicans. Racketeering charges were filed against the union in 1989 after a Justice Department investigation that accused the Teamsters of being a “wholly owned subsidiary of organized crime.” Since 1992, the Teamsters have been overseen by an Independent Review Board.
Membership: 1.5 million
Assets: $97 million
AFSCME, one of the fastest growing unions in the United States, was founded in Wisconsin almost 80 years ago. At union headquarters in Washington, 10 officers and employees receive more than $200,000 a year. Gerald McEntee, who was first elected union president in 1981, was paid $479,328 in salary and benefits in 2009. Over the past decade, his salary has increased at almost 4 percent a year. Over the past two years, AFSCME has donated $2.3 million to Democratic candidates and $13,000 to Republicans. In the 2010 elections in Wisconsin, AFSCME gave almost $83,888 to Democratic candidates. Half that amount went to the campaign of Tom Barrett, whose top 10 donors were unions. Barrett lost to Republican Scott Walker, who promised during the campaign to take on the organized labor if elected.
Assets: $134 million
The Laborers represent mostly construction workers in 500 locals in the U.S. The headquarters in Washington has 18 officers and employees who earn more than $200,000 a year, including 11 who earn more than $300,000. Terence O’Sullivan, union president since 2000, received $618,000 in salary and benefits in 2009. Of the $1.7 million donated to political candidates over the past two years, 95 percent went to Democrats. In 2006, the Laborers broke from the AFL-CIO to join a new, rival labor federation. In 2010, the Laborers rejoined the AFL-CIO.
Assets: $115 million
AFT is the smaller of the two teacher unions and also represents school support staff, higher education faculty and staff, health care professionals and state and municipal employees. At AFT’s headquarters in Washington, nine officers and employees earn more than $200,000 a year. Randi Weingarten, who was elected president in 2008, received $428,284 in salary and benefits. Of the $2.4 million donated to political candidates in the past two years, the union gave all but $10,000 to Democrats. In 1998, a proposal to merge the AFT and the much larger NEA was rejected by NEA members.
Assets: $482 million
IBEW represents electricians, linemen and other public utility employees, along with some computer, telecommunications and broadcasting workers. Sixteen of the IBEW’s officers and employees in Washington earned more than $200,000 in 2009. Edwin D. Hill, the union president since 2001, received $375,767 in pay and benefits. Hill and other top officials received salary increases averaging at least 4 percent each in the past several years, even as membership declined by 5 percent. Membership peaked at about 1 million in 1972. The IBEW says a chief reason for the decline was a loss of union jobs when the Bell System was broken up and deregulation of the utility industry.
Assets: $147 million
IAM, which grew out of a secret meeting of 19 machinists in a Georgia rail yard in 1888, represents machinists and aerospace workers in over 200 industries. At the union’s Maryland headquarters near Washington, 34 officers and employees earn over $200,000 in salary and benefits. Robert Buffenbarger, who became president in 1997, received $284,975. Over the past two years, the IAM donated $1.98 million to Democratic candidates and $34,000 to Republicans. Popularly known as the machinists union, IAM is affiliated with the AFL-CIO. Its membership jumped in the 1950s and 1960s with the growth of the airlines and aerospace industries. More than 1 million belonged to the union in 1968. In the early 1970s, membership began declining, a change the union blames on layoffs in the defense industry.
Assets: $1.2 billion
The UAW, founded in 1935 by automobile plant workers, currently represents workers at General Motors, Ford and Chrysler, along with workers in the aerospace and agriculture industries. None of the officers or employees at the UAW headquarters in Detroit earn over $200,000 a year. Ronald Gettelfinger, who resigned as UAW president in 2010, was paid $173,065 in salary and benefits. Elected to replace Gettelfinger was Bob King, a bargaining member at Ford’s plant in Dearborn, Mich. Over the past two years, the UAW donated more than $1.6 million to political candidates, and all but $3,000 went to Democrats. Union membership hit 1.5 million in the late 1970s, but a decline in the U.S. auto industry and opening of non-union plants in the South took its toll on membership. The UAW’s success over the years at negotiating higher pay and benefits, including one of the wealthiest pension and health plans for retired autoworkers, was blamed by domestic automakers and conservatives in Congress for the industry’s crisis in 2008 and 2009.
Aaron Mehta and Laurel Adams contributed to this report.