Labor's Health Problem
Just as this campaign was gaining momentum, the AFL-CIO abruptly switched course. The labor federation embraced Bill and Hillary Clinton's Health Security Act, an ill-fated scheme that preserved the role of private insurers and was so convoluted that few unions could even explain it to their members. The Clinton bill represented a step backward for labor, mirroring conservative mandated-benefits legislation developed by Richard Nixon in the 1970s to fend off universal coverage based on the model of Medicare. But by 1993, most unions and Democrats were nevertheless rallying around the bill, which sought to shore up a private, job-based benefits system. Like similar proposals in some states today, Clinton's approach--obligating employers to pay for a portion of their employees' health costs--was strikingly out of sync with work-force trends, notably the creation of millions of part-time, temporary and independent-contractor jobs with little or no health coverage. As Marie Gottschalk shows in her incisive study The Shadow Welfare State: Labor, Business and the Politics of Health Care in the United States, labor's willingness to settle for the Clinton bill reflected crackpot realism at its worst, for the whole "system of employment-based benefits...was crumbling just at the moment when organized labor sought an employer-mandate solution."
After the Clinton plan flopped, most firms offering health plans devised managed-care fixes of their own, which kept the system's "crumbling" from becoming a collapse--at least for a few years. But management-imposed limits on employees' choice of doctors, hospitals and treatment options are no longer restraining costs. Premium increases may reach 15 percent this year, and business wants workers to foot the bill. Private health insurance for 16 million retirees is a primary management target, particularly in troubled industries like steel, where companies blame such "legacy costs" for landing them in or near Chapter 11. Twenty-five years ago, more than 80 percent of all medium- and large-sized firms offered medical benefits to retirees. Now only 40 percent do. Successful union resistance to cost shifting in the past is thus no guarantee that the same group of workers won't face benefits cuts in the future--even when they retire from a profitable company. Fourteen years ago, a four-month telephone strike preserved fully paid health coverage for then-Nynex workers in the Northeast; now its successor firm, Verizon, wants to cap all retiree medical contributions in bargaining this year--affecting many veterans of the 1989 walkout.
The challenge facing unions today is how to broaden their defense of negotiated benefits, for active and retired workers, when a record number of Americans--as many as 75 million at one point during the past two years--have no coverage at all. If struggles against cost shifting are framed narrowly, they will be, in effect, just another special-interest fight against givebacks by workers who already enjoy above-average coverage. However, if resistance to cost shifting is framed in terms of the larger political demand of healthcare for all, these fights could attract much broader labor and community support.
When GE workers struck in January, for example, they saw the big picture. IUE-CWA Local 201 joined forces with Jobs With Justice, as well as senior groups, the state nurses' association and low-income organizations, to hold a community rally for healthcare reform. Speakers highlighted the medical coverage problems of everyone from immigrant workers to the self-employed to retirees who get bounced around from one collapsing Medicare HMO to another. Pat Lawrence, a member of the Lynn Health Care Task Force, told the crowd, "We're here to support the GE workers because you will bring attention to those who have no insurance--the elderly, the disadvantaged and the homeless--through your strikes and walkouts."
Engaging this broader public during benefit disputes requires a candid admission by labor that today's healthcare crisis can't be settled at the bargaining table. This is particularly true when a unionized work force is low-paid, part-time or transient, and lacking strike leverage. In Boston this past fall, despite major community support, a citywide strike by immigrant janitors began to weaken after a month. It ended unhappily for many workers because larger wage increases were sacrificed to pay for expanded medical coverage--a benefit that will apply to only 1,000 part-timers out of 8,000. Given the nature of building services and other low-wage sectors, it's doubtful that collective bargaining will ever be able to achieve the quality of job-based benefits once enjoyed in traditional bastions of union strength like manufacturing, utilities and construction.
In trucking and the building trades, there's an additional complication: Many union officials don't want to forsake job-based medical coverage--no mattered how tattered--because they're in the benefits business themselves. As Gottschalk notes in her account of how labor conservatives have impeded past efforts at comprehensive healthcare reform, over half of all union members are still insured through Taft-Hartley funds, jointly administered by labor and management. Such arrangements have long been defended as a way to promote union loyalty. Unfortunately, by aligning the interests of union officials and insurers, the Taft-Hartley funds give one wing of organized labor what Gottschalk calls "a vested interest in maintaining the status quo." It also leads to AFL-CIO pronouncements that appear to be a balancing act between single-payer advocates, at the grassroots, and union affiliates more inclined to partnerships with employers that would preserve and extend job-based coverage.
Such internal tensions produce labor-backed legislative proposals--now being pushed in about ten states--that are a very mixed bag. In Ohio, leading unions and the state labor federation are uniting with healthcare professionals and community groups to build the Single Payer Action Network, a coalition seeking a comprehensive solution to the state's healthcare crisis. In California, however, the AFL-CIO threw its weight behind a far less ambitious pay-or-play bill. This would require employers to offer their workers health insurance or pay into a state-operated pool that would provide alternative coverage. The problem with "pay or play," says Dan Hodges, chair of California's Health Care for All (HCA), is that it "creates a two-tiered system in which people covered through their jobs might have adequate benefits but those who get public coverage will receive an explicitly bare-bones package. Since those with the public package will more likely be people of color, the two-tiered system will have a racial character as well." HCA and the militant California Nurses Association support an alternative bill, which would establish universal, publicly funded coverage.