Paycheck Protection Racket

Prop 75 is a false hope


To understand why California's Proposition 75—the "paycheck protection" act that aims to prevent public employee unions from using union dues for political campaigning without positive consent from members—has become this year's most popular initiative among Golden State conservatives and libertarians, all you have to do is watch TV.

Governor Arnold Schwarzenegger has loaded next week's special election with proposals that, while falling short of the revolutionary dreams that helped propel him into office, hold considerable promise for improving the state's financial condition and wresting its politics from the grip of some of the rustiest political machinery in America. Initiatives include a change to teacher tenure rules that could conceivably make it easier to fire non-performers, another attempt to rein in the growth of the state's budget, and an eminently reasonable redistricting amendment.

In response, Democrats and fellow travelers have hit the state with a vast barrage of TV spots accusing the governor of shafting teachers, defrauding firefighters' widows, and generally seeking to undo several centuries of western civilization. (My favorites are a pair of attack spots against the redistricting Proposition 77, in which a trio of mugging character actors play the "three retired judges" who will cut the state into a Republicanoid hellhole once Prop 77 unleashes them.)

The response from the pro-initiative side has been, by comparison, almost non-existent. Organized labor has made an unprecedented push to strangle the special election in its cradle, spending the better part of $100 million to defeat the governor's slate of initiatives. Schwarzenegger may have made his name out-muscling the overmatched Vernon Wells and the hapless Lou Ferrigno, but in special election campaign spending, he's been outgunned by a factor of three to one. You can't watch an episode of California's Gold or Bay Area Backroads without being bombarded by ads condemning the governor's favorite proposals.

Proposition 75 aims to change that. The initiative would reverse the negative option for public employee union members (as well as non-members) who don't want their dues spent on political campaigning. Unions would be required to get a positive affirmation from each member before spending his or her dues on political campaigns, renew that affirmation each year, and keep records of the members' permission forms. Prop 75 has been dubbed the "paycheck protection" initiative, but its real value is as a paperwork-creation initiative that would make it harder for unions to continue to monopolize the public's political attention. Not surprisingly, some of the most ubiquitous union campaigning has been directed at this initiative. That is, in their relentless anti-75 campaigning, the unions are demonstrating why 75 exists in the first place. A reasonable person would welcome any means fair or foul to weaken such a dominant political propaganda force.

The question is whether Proposition 75 is fair or foul.

Paycheck protection is a concept that has been circulating for years, and it's certainly got an appealing logic. Under the U.S. Supreme Court's 1988 Beck decision, union members and non-members have the right to prohibit unions from using their dues for functions unrelated to collective bargaining. Workers' being forced to pay for speech they may not agree with raises a perceptible First Amendment issue. But why should the burden of saying no be on the member rather than the organization?

The problem is even more pointed when the organization already enjoys outsized political clout. In an age of dwindling labor relevance, California public service unions function as a patron of the Democratic party—and like all patrons, the unions control the party as much as they support it.

None of which changes the truth that unions—even public sector unions—are private organizations whose members join of their own free will. (That is, at the very least they choose to work in unionized professions; there are legitimate questions about how free workers are to say no to union membership and how free non-members are to refuse to pay dues, but those problems could be better addressed by one of the right-to-work laws that have been adopted in 22 states.)

Prop 75's opponents are not the sort of people who generally object to involving the government in the workings of a private organization (thus the frequent objections that the initiative will empower "corporate interests"), but its supporters are. So here's an honest question: Should the state be taking such a close interest in the affairs of a non-governmental organization, especially when the goal is a campaign finance reform of questionable utility?

The answer may well be yes. Lobbying is not a free market; it's a zero-sum, rent-seeking economy where you will lose if you don't play. Seeking to hobble union political power, above all in California, is in itself a worthwhile goal.

But will paycheck protection do that? The history of campaign finance reform suggests not. For one example, Proposition 75 already excludes from its prohibition contributions "benefitting charities or employees." How long will it be before some smart lawyer (and I understand unions have a few of those on retainer) figures out a way to turn these exclusions into a 75-thwarting workaround? If not that, will there be no other way for organized labor to put just as much money into state politics? Is there any law strong enough to keep influence away from the largesse on offer in the Golden State? Just as the McCain-Feingold act gave rise to the dominance of 527 groups, and some other form of spending will rise up once the "527 loophole" is closed, Prop 75 will breed some new form of union political influence. In ten years some new Prop 75 will seek to close that loophole, and so on, until California sinks into the Pacific Ocean.

The pro-75 campaign, however, speaks less about hobbling the unions than about protecting members from hidden costs and from the above-mentioned First Amendment violations. This is a compelling argument, but union dues are hardly the only instance in contemporary America where a transaction that is consensual in its broad outlines contains small hidden costs and negative options that an uncharitable person might define as fraudulent. It's a rare phone or credit card bill that doesn't contain a few items a customer with plenty of time and patience could get waived after a few hours talking to the call center. Anybody who's given birth in the last twenty years knows that it is literally impossible to get a hospital to give even the roundest ballpark estimates of the cost of individual items (painkiller options, single vs. double room, length of stay, etc.), until your baby and your bill have both been delivered. In some of these cases, it's clear that regulation helped create the situation; it's much less clear that more regulation would solve it. There are First Amendment issues here too: Rumor has it the telephone, financial, and health industries do a bit of lobbying themselves, not all of which I agree with. Who's protecting me from being "forced" to support Cingular's political speech? More ominously, how long would it take before a class action lawyer on the left figures out that Cingular's customers deserve the same "protection" as members of the Association for Los Angeles Deputy Sheriffs?

Prop 75 would spare union members from having to go through this kind of rigmarole over a specific hidden cost. But they already have the option of saying no if they're willing to make the effort. The only thing Prop 75 does is shift the burden. If union members don't care enough to figure out where their dues are going, why should the rest of us?

If the latest polls are any indication, Proposition 75 is headed for defeat on Tuesday, as are several of Schwarzenegger's proposals. After a season of propaganda bombardment by organized labor, it's grim to consider the unions again defeating a reform effort. But if the only option is a new precedent for state meddling in the operations of a private organization, a new protection for individuals who are otherwise unmotivated to hang onto their own money, and a new campaign finance reform in an environment where we've already got too many of them, this is one defeat that isn't worth mourning.

Tim Cavanaugh, is Reason's Web editor.