Union Spending
Unions get almost all of their income from the workers they represent. What happens to that money?
There are three things unions want you to believe about how they spend workers' money:
1. It's the members who decide how the union spends their money
2. The union does not spend members' money on political activities
3. The union only spends money in ways that benefit the workers they represent
The facts show none of these statements is true.
1. Do the members decide how their union spends their money?
Unions say they do. For example, the International Association of Machinists (IAM) says:
The International Brotherhood of Electrical Workers (IBEW) similarly says:
To evaluate these statements, you first have to understand how unions are structured.
Nearly every union has three levels, and a few have four.
Here's how the IAM depicts their organizational structure:
To see how the IAM divides members' dues among levels, click here.
To see how the Steelworkers Union divides members' dues among levels, click here.
Members only have a say in how local union funds are spent; they have no control over what the District, Territory, State and International levels do with their money.
For example, the Machinists web site describes this,
and adds that members have very limited say
about how local funds are spent:
What do union members decide? NOT the money that goes to the International, Territory and District levels (which is most of their dues). NOT “regular bills” of the Local Union, such as office rent, union meeting hall rent, office salaries and supplies and “other similar bills.”
What else is there?
2. Do unions spend money on political activities?
Unions say they don't.
For example, the Utility Workers Union of America says:
The Steelworkers Union says:
In a letter to members, the President of International Association of Machinists Local Lodge 778 makes the same point: "Since taking office in January, I have had the opportunity to talk to our members on issues that affect their participation in our union. One of the issues that are brought up often is how their dues are being used for political campaigns. This is simply not the case...it's illegal for unions to use dues for political campaigns." Click here to see his entire letter.
The facts say unions spend millions on political activities!
Unions are required to file financial reports every year with the Department of Labor, and in those reports they are required to disclose how much they spent on "political activities and lobbying." Here's how much various unions spent, according to their two most recent reports:
3. Do unions only spend money in ways that benefit the workers they represent?
Naturally, that's what unions say. For example, in a letter to Delta flight attendants the IAM is trying to unionize, Stephen Gordon, a District President, said, "IAM dues are spent for the benefit of IAM members." To see the entire letter, click here.
The IBEW Local 45 web site similarly says:
See if you agree.
Union Constitutions say International Union Presidents can hire anyone they want and pay them as much as they want:
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International Brotherhood of Electrical Workers: "The International President has the power to employ such assistants as, in his judgment, are necessary to carry on the work of the organization, and to decide the compensation to be paid."
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Utility Workers Union of America: "The National President shall have the authority to appoint, direct, suspend or remove any Regional Director, National Representative, Organizer or other employee of the National Union as he/she may deem necessary . . . He/she shall fix their compensation..."
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United Steelworkers: "The International President shall have the authority to appoint, direct, suspend or remove such organizers, representatives, agents and employees as the President may deem necessary. The President shall fix their compensation..."
To decide for yourself whether International Union Presidents spend dues for the benefit of workers, you can see the financial reports unions file each year with the Department of Labor. Click here to go to the Department of Labor web site. Use the drop-down menu for the box labeled "Union name by abbreviation" to find the union you're interested in, and use the drop-down menu in the "union type" box to select "intermediate," "international" or "local" depending on which level you want to explore. Then click "submit" at the bottom of the page.
Here is what the 2014 financial reports (the most recent available) for a few unions show:
Because District and Local Unions get far less dues money than international unions, officers in those organizations have less money to spend. Still, 2014 financial reports for district and local unions show some interesting things. Here are examples from the IAM:
IAM District Lodge 54 (Columbus, OH):
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The District Lodge President was paid salary and “allowances” totaling $167,784.00, plus he charged the District Lodge $11,581.00 for his expenses.
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The District Lodge Secretary/Treasurer was paid salary and “allowances” totaling $105,713.00; his 2014 salary was $22,971.00 higher than his 2013 salary – a 29% raise! He also charged the District Lodge $16,981.00 for his expenses.
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The District Lodge paid one “organizer” $97,541.00 and five “business representatives” $142,209.00, $134,718.00, $131,117.00, $96,397.00 and $89,670.00.
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Health and pension benefits for District Lodge officers cost IAM members $229,737.00.
IAM Local Lodge 1943 (Middletown, OH):
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The Local Lodge President was paid a salary of $87,222.00 (up $3,586.00 from the $83,636.00 he was paid in 2013), and charged the Local $3,312.00 for his expenses.
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The Local Lodge Business Rep/Secretary/-Treasurer was paid a salary of $79,105.00 (up just $488 from his 2013 salary), but the expenses he charged the Local were $11,765.00, compared with $4,138.00 a year before. The Local does not explain why his expenses nearly tripled from the previous year.
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Health and pension benefits for Local Lodge officers cost members $16,222.00.
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The annual picnic at Kings Island cost $28,333.00. Since the Local collected just $11,565.00 in ticket sales, the picnic was mostly paid for by members who didn’t go.
In a letter to members, the President of IAM Local Lodge 778 in Kansas City described the burden of supporting the union's hierarchy:
"We must face the fact that this local has not accounted for increased per capita requirements passed down from the Grand Lodge that have occurred since 2008, and have been supplementing the deficit by withdrawing from our reserve account each year to make up the difference. The per capita requirement or tax is a large part of the dues we all pay and goes to the Grand Lodge for operations.
I know that any increase in your dues is unpopular, but if we do not address this issue immediately and head on, the alternative will be much worse when it is finally addressed."
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Local Union or Lodge: groups of workers covered by the same contract are called "Local Unions" or "Local Lodges." Members usually pay dues to the local union, but much of that money is passed on to the International Union. For example, the Steelworkers union says 44% of members' dues stays at the local level, while Machinists union web sites say as little as 13% of members’ dues stays at their Local Lodge.
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District Union or Lodge: unions often group several “locals” into a “district” (the IBEW calls theirs "System Councils"). Machinists union web sites say 32% of members’ dues goes to their District Lodge.
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Territories: a few unions have larger "territories" made up of several District and Local Unions (the IBEW calls theirs "Leadership Councils"). Some unions also have state offices or councils. Usually, these union offices get their money from the International Union.
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International Union or Grand Lodge: this level consists of top union leadership and headquarters. Machinists union web sites say 55% of members' dues goes to the Grand Lodge, while the Steelworkers union says their International Union gets 54% of members' dues .
Every union spends dues money on political activities and lobbying, and some, like the Steelworkers, spend millions.
When unions say the law prohibits members' dues from being used for political purposes, they are only telling part of the truth. Unions are not allowed to make direct contributions to individual candidates. Some have set up Political Action Committees (PACs) for that purpose and ask their members to contribute.
But unions do many other things to promote causes and candidates chosen by their leaders (not the members). The video to the right, done by a member of the Steelworkers who does not approve of his union's choices, shows how the Steelworkers spent huge amounts of members' money on political activities, despite saying they don't.
Members have no say in which causes and candidates union officers decide to support.
Some of the highest-paid union leaders in the nation were these:
Annual union financial statements show that unions spend workers' dues on pay and benefits for union officers and employees, and on political causes and candidates union leaders decide to support.
The workers who pay for all this have almost no control over how their unions spend their money.
The International Association of Machinists (IAM):
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Even though the IAM lost over 1,100 members between 2013 and 2014, the Grand Lodge took in $3 million more in dues and "per capita tax." Apparently, individual members were forced to pay more in 2014. Also, all 11 of the Grand Lodge officers got a raise in 2014.
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The IAM International President, Robert Buffenbarger, hired two people to "assist" him: his son Andrew, "Special Assistant to the President" (paid $205,742.00 in 2014) and Owen Herrnstadt, "Chief of Staff to the President" (paid $264,277.00). The two "Special Assistants to the General Secretary/Treasurer" were paid $214,475.00 and $198,892.00, and the 8 "Chiefs of Staff" were paid an average of more than $200,000.00 each. Top officers in other unions usually don't have so many assistants.
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The IAM Grand Lodge has 377 employees (in addition to the 11 officers), and about one-third are paid $150,000.00 or more. In total, Grand Lodge employees were paid more than $43 million – an average of $114,525.00 per person. That's far more than workers represented by the IAM typically get.
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The IAM Grand Lodge paid more than $20 million for their employees’ health, vision and dental benefits, plus pensions and scholarships for their kids. Most workers represented by the IAM do not get benefits that good.
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The IAM Grand Lodge paid $1,629,267.00 to The McLaughlin Company for “union liability insurance.” The McLaughlin web site explains that this insurance protects union executives from members who sue the union for failure to represent, negligence in contract negotiations or illegal actions during union officer elections. In other words, workers paid $1.6 million for insurance that protects IAM executives from the workers themselves!
The United Steelworkers Union (USW):
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The USW lost 9,492 members between 2013 and 2014, but the International Union took in $4.1 million more in dues and "per capita tax." Every officer of the USW International Union got a raise in 2014.
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Hundreds of USW International Union employees are paid more than $100,000.00, including 40 "Assistants" (4 of whom are paid more than $150,000.00), 51 "Technicals," 322 "Staff" and "Key Staff" (many get more than $130,000.00), and one "Clerical." Of course, even more is paid to "Attorneys," "Department Heads," "Program Directors" and other management positions.
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The USW International Union paid $19,802.00 for Pittsburgh Steeler tickets (the International Union headquarters is located in Pittsburgh). The workers whose dues paid for those tickets probably weren't invited to the games.
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The USW International Union paid $589,781.00 to AON Risk Services Central, Inc. for insurance that protects USW executives from the workers whose dues pay for that insurance.
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The USW International Union paid more than $76 million (up from $70.5 million in 2013) for their employees’ hospitalization, life and long-term care insurance, pension benefits and "relocation and transportation."
The Utility Workers Union of America (UWUA):
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On their annual financial statements, the UWUA has reported exactly the same number of members (50,000) every year since 2005. However, financial statements filed by UWUA local unions show more than 500 fewer members between 2013 and 2014, and over 5,000 fewer members since 2005. Apparently, the UWUA International Union refuses to report they are losing members.
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The UWUA took in $1.4 million more in dues and "per capita tax" in 2014 than they had in 2013, suggesting that each worker the union represents is being forced to pay more. Every officer of the UWUA International Union received a raise in 2014.
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The UWUA International Union has just 24 employees, but they were paid an average of $137,569.00 in 2014. Four people were paid more than $190,000.00.
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The UWUA International Union paid $1.7 million for their employees' health and life insurance and pension contributions, plus annuity benefits and 457 plan distributions for retired employees (who are a major cost to this small union).
The United Mine Workers (UMW):
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Unlike most unions, the UMW International Union took in less dues and "per capita tax" in 2014 than they had in 2013, as income dropped by $439,302.00. Nevertheless, every officer of the International Union got a raise in 2014.
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UMW executives were supported by an "Executive Assistant to the President" (paid $146,981.00), an "Executive Assistant to the Secretary-Treasurer" (paid $144,347.00), two "Administrative Assistants" (paid $131,705.00 and $107.691.00) and a "Special Assistant" (paid $125,261.00).
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Despite being a relatively small union, the UMW paid more than $100,000.00 to 12 "International and District Representatives."
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The UMW International Union paid $9.7 million (up from $8.5 million the year before) for their employees' group health insurance, prescription drugs, pension, and short and long term disability insurance.
The International Brotherhood of Electrical Workers (IBEW):
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The IBEW lost 755 members between 2013 and 2014, but the International Union took in $5.3 million more in dues and "per capita tax." Every officer of the International Union got a raise in 2014.
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IBEW employees who provide support to IBEW officers received big pay increases, including "Senior Executive Assistant to International President" (who was paid $268,237.00, up 14% from 2013), a "Confidential Secretary" ($147,148.00, up 53%) and second "Confidential Secretary" ($190,998.00, up 61%). IBEW officers also are supported by two "Executive Assistants" (paid $264,107.00 and $217,988.00) and two "Executive Secretaries" (paid $112,695.00 and $102,987.00).
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The IBEW International Union paid more than $100,000.00 each to 58 "Organizers" whose job is to unionize workers who often make much less, and more than $150,000.00 to 145 "International Representatives" who job is to stay in touch with the workers IBEW has unionized (94 of those 145 made more than $175,000.00, and 11 made over $200,000.00).
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The IBEW International Union spent $66,671.00 for their Christmas party, up from $61,198.00 the year befoe. The workers whose dues paid for those parties probably weren't invited.
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The IBEW International Union paid $37.1 million (up from $34.7 million in 2013) for their employees’ health, vision, prescription, dental and legal plan benefits, plus pensions and employee assistance benefits. The workers whose dues paid for these benefits probably do not have such comprehensive plans.
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The IBEW International Union paid $69,745.00 to The McLaughlin Company for “union liability insurance” that protects IBEW executives from the workers whose dues pay for that insurance.
