The continued clout of Hawaii’s public labor unions

In 2018, the US Supreme Court dealt a deathblow to public worker unions, some have said. However, recent events show that predictions of the unions’ demise have been greatly exaggerated.

Last month, after Governor David Ige announced big cuts in the hours – and wages – of government employees to address a projected budget deficit, government unions rose, the governor backed down and furloughs went off the table at least until June 30.

Unions have shown they still have muscles. And the numbers back it up. Despite recent declines, more than 68,000 employees fill the combined roles of the Hawaii Government Employees Association, the Hawaii State Teachers Association, the United Public Workers, and the University of Hawaii Professional Assembly. This generates more than $47 million in annual membership dues and supports a robust roster of executives who earn six-figure salaries and deep war chests for political lobbying.

Tony Gill, a Hawaii attorney representing the UH faculty union, agrees that the Supreme Court’s 2018 decision in Janus v. AFSCME didn’t hurt the unions as much as some people had predicted.

“It wasn’t the mass exodus that people with the right to work expected,” he said.

Unions were not the only factor opposing Ige’s proposed furlough. There was also Hawaii House of Representatives Finance Committee Chairwoman Rep. Sylvia Luke, who said the state could save $130 million in salaries and benefits for state employees simply by not filling vacancies.

And there was the federal government announcing more aid money in December, as well as President-elect Joe Biden’s promise of even more money later this year to help state and local governments.

“Following an initial review of the new $900 billion federal COVID-19 relief law, we found that it supports programs in Hawaii so directly that we are deferring vacation for executive branch employees until at least July 1, 2021 can,” Ige wrote in a Dec. 29 memo to state officials.

Longer term, Biden has said aid to state and local governments needs to be included in a new round of relief funds.

HGEA headquarters is located at 888 Mililani Street.
With nearly 40,000 members, the Hawaii Government Employees Association remains a powerful player in state politics, despite a slight decline in recent years. Cory Lum/Civil Beat/2021

Whether the unions made Ige blink or the government bailed out Hawaii just in time, it’s clear that the organizations were not disappointed in the Janus decision, as some prominent economists had predicted.

Janus discussed whether government employees who are subject to a union contract could be required to pay part of their paychecks to fund union administrative activities if the workers did not want to be in the union. For years such fees were allowed in a case called Abood, although workers could opt out of paying for political lobbying. Janus essentially overturned Abbood, saying government employees didn’t have to pay fees if they didn’t want to.

At the time, some leading economists predicted a mass exodus from public union roles. Reasonable people simply wouldn’t pay a union dues when they could get the same benefit without paying, wrote a group of economists including three Nobel laureates, a former vice chairman of the Federal Reserve and a former US Secretary of Labor, in a friendly brief in the Janus Case.

“Indeed, ‘rational, self-interested individuals’ often ‘will not act to achieve their common or group interests,’ even if they agree on those common interests and how to achieve them,” the economists wrote. “Not only is this well established in economic theory, it is also supported by empirical data – including the results of recent union recertification elections.”

But that didn’t happen.

“Public sector unions aren’t doing so bad after Janus,” Gil said.

“Events have clearly demonstrated that government action, or more broadly ‘collective action,’ plays a critical role in our economy and the well-being of our residents,” said Lawrence Boyd Jr., Hawaii labor economist and professor emeritus at the University of Hawaii.

Boyd cited both the 2008 financial crisis and the COVID-19 pandemic to show the importance of the government’s response.

“Fleapages were a political discussion that went beyond balancing the budget – they would damage the economy and the health of citizens,” he said. “There was no clever tactic, just the obvious fact that furlough was a bad idea, as was quitting a union.”

Christian Fern, executive director of UH’s faculty association, noted: “We see government as one of the pillars of the economy.”

And many economists agree. In fact, an article by economists at the University of Hawaii Economic Research Organization, often cited by labor unions, estimates that every dollar of government spending increased gross domestic product by $1.50 due to the multiplier effects of the money circulating in the economy. a measure of all goods and services produced.

“Given the severity of the economic downturn, the true impact may be underestimated at this time,” UHERO said. “That means every dollar of federal spending that gets here has a significant positive macroeconomic impact. It also means that any large cuts in federal or state spending would also have large adverse effects.”

In other words, the argument went, a time when industries like tourism were dead was not the time to cut government salaries.

But the call for government jobs to be maintained to boost the economy was only part of a multi-pronged campaign. UHPA also filed a legal challenge, arguing in federal court that the vacations violated the treaty clause of the US Constitution. The Hawaii State Teachers Association, meanwhile, filed a complaint with the state employment agency.

And there were other problems. In an interview, Corey Rosenlee, president of the Hawaii State Teachers Association, said previous furloughs imposed by former Gov. Linda Lingle in 2009 had resulted in a long-term pay freeze for some teachers.

Finally, there was the need for government services, including the need for public health resources and the need to get children back to school.

Union leaders flush with cash

Despite Ige’s letter to staff, Gill said the UHPA is still awaiting a clear promise from the Ige administration that it will not be back later and will request furloughs before July. He said the governor’s letter to state officials was merely a “joyful conversation.”

“There was a broadcast full of happy chats with the staff, but no official engagement,” Gil said.

Meanwhile, union roles and finance remain strong. The public unions represent a range of workers including teachers and librarians, principals, court administrators, district workers and the like. UPW also has private members, including employees at a number of hospitals. Although indirectly funded by state taxpayers, government workers’ unions are private, not-for-profit organizations, and they have deep pockets to support members in things like grievances and influencing state officials.

For example, according to its most recent available 2018 990 federal tax return, HGEA generated more than $17 million in revenue, almost entirely from membership dues. UPW reported revenue of $9.6 million in 2018. The teachers union had revenue of $9.3 million, including $8.7 million from dues for 2017, the most recent year available. And UHPA reported sales of just under $3 million for 2018.

This provides the unions with substantial coffers for executives, political campaigns and lawyers.

Randy Perreira, CEO of HGEA, earned a base salary of $308,000 for his 40-hour job in 2018. That compares to Ige’s $158,700 salary, and it doesn’t count Perreira’s benefits, which totaled more than $132,000. A total of eight HGEA employees had six-figure annual salaries. HGEA donated an additional $65,000 to its political action committee, the HGEA Political Contribution Account.

While Perreira’s salary dwarfs that of other government union leaders, it’s not uncommon to have a solid bank of highly paid executives.

HSTA, for example, had half a dozen executives earning six figures in 2017, with Wilbert Holck, the organization’s chief executive, leading the field with just over $190,000 in salary and benefits, slightly more than Rosenlee’s $186,000 compensation package U.S. dollar. Teachers donated $118,900 to the PAC that year.

UPW state director Dayton Nakanelua received a compensation package worth more than $220,000 and the union spent an additional $2.1 million on legal fees, including $1.8 million for the Takahashi law firm and Covert.

Though smaller, UHPA was of the same magnitude: Fern earned more than $167,000 plus $48,500 in benefits, topping a list of four executives with salaries and benefits of nearly $200,000 each. UHPA donated nearly $98,000 to its PAC and paid an additional $613,000 to Gill’s law firm, Gill, Zukeran & Sgan.

To maintain such solid finances at a time when members have the ability to opt out of paying dues, it’s important to show members that the organization provides value, said UHPA’s Fern.

The university’s faculty are seldom “afraid to speak their minds,” Fern said.

“We have to be much more responsive than in the past,” he said.

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