When Push Comes to Shove, Labor Emerges as Big Winner of 2017 Session

When Push Comes to Shove, Labor Emerges as Big Winner of 2017 Session

As promised, the Democrat-majority California Legislature finished its session early Saturday morning by enacting a package of bills that lawmakers say will ease the state’s housing crisis, and failing to expand state environmental protections.

This year’s session was notable for its sometimes-fierce battles between key interest groups, namely environmental groups, and labor unions. Forced to pick sides, the winners were almost always unions, which are so closely aligned with the Democrats that it’s sometimes hard to tell the two apart.

On Friday, the last day of the 2017 legislative session, three housing bills were passed in the Senate — Senate Bills 2, 3 and 35. The first two will not fix the housing crisis. See here and here. The third, SB 35, has potential because it’s intended to streamline the home construction regulatory process. But its benefits are offset by its requirement that projects eligible for the fast track must pay the prevailing wage.

In California, prevailing wage law forces employers to pay workers the “rate paid on public works projects to a majority of workers engaged in a particular craft, classification or type of work within the locality and in the nearest labor market area.” This typically turns out to be union wage rates, which are negotiated, not set by the market. Consequently, prevailing wages are artificially inflated wages. The higher labor costs caused by SB 35 will not make housing more affordable, which is ironic given that housing affordability was a stated top priority for Democrats this session.

Encouraging the purchase of electric cars is a longstanding priority for Democrats. Yet even on that issue, Senate Democrats gifted unions with Assembly 134 on the last day of session. It appropriates $140 million for rebates for Californians who buy electric cars. But the rebates can be applied only on cars built by companies which the state labor secretary has certified “as fair and responsible in the treatment of their workers.” As we said last week, “that’s a shot at Tesla fired on behalf of unions, which have been unsuccessful in organizing the electric car maker.”

Additionally, legislation to transform the state’s power grid and enact a 100 percent renewable power requirement – the biggest priority of Senate President pro Tem Kevin de León, also stalled due to the strong objections of union workers over job protections.

While environmental activist organizations and unions are both tightly wound with Democrats, why did the Democrats choose the unions over the green groups during the last days of the legislative session?

Maybe it’s all about money.

During the first half of this year, union sources donated more than $2 million to the California Democratic Party, according to a list of the top 100 political donors compiled by the Sacramento Bee. The list shows only one union contribution to the Republican Party of California for $5,260 from the California Professional Firefighters.

The list does not include donations made directly to candidates. Environmental groups and unions are free to contribute the same amount to candidates’ campaigns that wealthy individuals like Tom Steyer can contribute – up to $4,400 per election, or $8,800 combined for the primary and general elections if they are registered as political action committees. The list of top candidate donors, however, is dominated by unions. The big money is sent to state party and independent expenditure committees, where there are no contribution limits. However, there are different rules for state and federal campaign giving, such as $10,000 limits for giving to state party committees under federal law.

Nor does the list show the non-monetary contributions that unions typically make to Democrats, which is significant. Unionized workers often volunteer for Democrats’ campaigns, knocking on doors, manning telephone banks, and working in precinct offices. This support can be massive. AFL-CIO President Richard Trumka said just before the fall 2012 election that unions had 128,000 campaign volunteers available nationwide. Among other activities, they were going to pass out 2 million leaflets before Election Day. Education Week reported that during the 2016 election, nearly 65,000 teachers and retired teachers “decided to pound pavement . . . on behalf of Hillary Clinton.”

In addition, unions wield a unique sort of political power in that they can easily persuade large groups of voters — their members — to support the candidates they choose. The monetary value of these contributions cannot be fully calculated.

Green groups can neither compete with unions’ political money nor unions’ ability to directly help candidates. No political interest can. To understand why unions fared so well during the session’s last days, do what the movie versions of Bob Woodward and Carl Bernstein were told to do: Follow the money.

Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.