Freedom Foundation

When Unions Shill For Business Interests

The Wall Street Journal recently noted a phenomenon highlighted in past Freedom Foundation research — union executives who exploit their captive audience for selling products.

In our 2015 study, “Collective Bargaining in Public Schools: Grading The Teachers Union Contracts,” we pointed out:

“. . . some (public school) districts saddle their employees with fringe benefits that the employee could purchase at a better rate outside of the group. Even if the rate is competitive, the employee might not purchase these benefits at all if given a choice. Forcing employees to purchase expensive or unwanted benefits instead of simply giving them the cash has a sinister side. The Washington Education Association has business relationships with providers of various fringe benefits. If the district is yielding to union pressure to drive business to high cost or unwanted providers, then the district is not using funds wisely and is not serving employees well.”

A Dec. 19, 2019 story in the Wall Street Journal describes how the Florida Education Association and the National Education Association steer teachers into retirement investments managed by firms that maintain a special relationship with the union.

The fees for these particular investments are significantly higher than other investment options. In classic “back-scratching” arrangements, unions can have business relationships with firms selling products and receive funds from them. Unions also can have for-profit subsidiaries that do business with public employers and employees.

When a union has a monopoly on access to public employees and extraordinary control over decisions made regarding their workplace benefits, its involvement in the markets for such products should not be allowed.

But until the day when laws protecting consumers begin to apply to unions, elected officials negotiating with unions have a duty to make decisions that serve employees best rather than benefitting the financial interests of a union enterprise.

The Freedom Foundation’s new resource, WA Union Contracts, allows workers, employers and elected officials in Washington state to quickly search contracts for specific provisions. For example, searching for “WEA Vision” or “WEA Dental” will produce contracts containing mandates that districts buy specified products for employees.

This resource and our educational efforts will help public officials to make decisions that provide the most effective use of taxpayer resources.