Temporary Suspension of Government Union Dues: A California Stimulus Proposal Whose Time Has Come

With 45.6% of their yearly budget sitting in reserve, these unions are flush with cash and in better economic shape today than most small businesses in California. 

The historic $2 Trillion federal stimulus package to combat the economic collapse caused by the Coronavirus pandemic contains critical financial tools to re-boot our economy. Arguably, the most meaningful element of this deal is sending checks directly to individuals – $1,200 for single Americans, $2,400 for married couples and $500 to parents for each of their children.

These checks will be a lifeline for many families – used to pay for rent, food, and other basic necessities. And it will be a much-needed shot in the arm for small businesses on the brink of bankruptcy as a result of shelter-in-place policies enforced by state and local governments.

Just as President Trump and federal lawmakers found a way to put cash directly into the pockets of most Americans, Gov. Gavin Newsom has an opportunity to do the same for Californians.

Gov. Newsom can immediately help get California’s economy moving again – at no additional cost to taxpayers – by suspending public sector union dues collections from government employee paychecks for three months.

According to UnionStats.com, there are more than 1.25 million public employees in California. My organization, the Freedom Foundation, has assembled publicly available payroll data showing these employees pay an average of $800 annually in union dues; therefore, suspending dues-deductions for three months will give these workers and their families an additional $200 in take-home pay and pump over $250 million dollars into the state’s economy.

And doubling this dues-suspension to six months would inject a half billion dollars back into the Golden State.

With respected economists, academics, and major banks predicting California’s economy will be the hardest hit of all 50 states by the looming recession, Gov. Newsom can soften the blow by doing similarly what his federal counterpart has done: put money directly into the hands of workers.

Opponents of this proposal, primarily government unions and the politicians they control, will argue it’s unfair to ask unions to temporarily forego dues collections – that it will harm them financially, and curtail their ability to organize and advocate.

None of Gov. Gavin Newsom’s shelter-in-place orders had any effect whatsoever on government employee unions.

But U.S. Department of Labor data reveals the top five unions representing California’s public employees (AFSCME, SEIU, CTA, CSEA, Teamsters), all of whom are private corporations, currently have cash reserves totaling over $270 million and annual revenue of over $605 million.

With 45.6% of their yearly budget sitting in reserve, these unions are flush with cash and in better economic shape today than most small businesses in California; and therefore, able to make this sacrifice.

And is a government union an “essential” business that should be treated differently than any other? In addition to paying six-figure salaries to dozens of high-ranking union officials, the overwhelming majority of this money is spent lobbying for special legislation and funding campaigns of their favorite political candidates and causes.

As small businesses across California close their doors and lay off employees, Gov. Newsom has a chance to take immediate action and help people in need.

It’s been nearly a month since Governor Newsom imposed shelter-in-place decrees for most workers; canceling virtually all public events and closing “non-essential” businesses. In issuing these orders his public remarks have always been couched in language that stressed the need for everyone to share the pain. Yet, none of his orders had any effect whatsoever on government employee unions.

Could this be because public-sector unions have spent decades quietly becoming the most influential special interest in California by donating generously to the campaigns of politicians like Gavin Newsom?

Our economy is in trouble. Wealthy government unions can do their part by temporarily foregoing the dues deductions so workers can keep more of their own money, spend it in the private sector, and get our state’s economy rolling again.

In these days of stress and uncertainty, we’re all being asked — and in many cases told — we need to do our share. Government unions have the same obligation.

The governor has authority to suspend state statues in time of emergency under the Emergency Services Act.

Gov. Newsom can move quickly and do the right thing by calling for a temporary, three to six months, halt in dues deductions – about the same amount of time some experts say it will take for Governor Newsom’s California lockdown to “flatten the curve.” Hard working Californians need that money more than government unions do.