Thread: Head of Powerful SEIU Union Wants Europe as US Econ. Model

Andy Stern
Let's 'Share the Wealth'
America's most powerful union boss says Europe offers a good economic model.

By MATTHEW KAMINSKI
Washington

"We just won an election. It's no secret." By "we," Andy Stern means "American workers." He also means Big Labor. Speaking on behalf of the fastest growing trade group in America, the Service Employees International Union -- and as one of labor's most powerful figures today -- Mr. Stern sets this simple bar for the Obama presidency: "I expect nothing less than what he said he was going to do, and we should hold him accountable."

From his perspective -- atop SEIU's Washington headquarters, which offers an enviable view of the National Cathedral -- the first part is straightforward: "Massive investment" in a stimulus for the economy, the car industry, deficit-ridden states and infrastructure. Then universal health care, an issue on which the SEIU boss helped push the Democratic consensus leftward, and "tax cuts for the middle class" (and hikes for the upper bracketed). At the end of his list, Mr. Stern puts something particularly dear to unions: Quick adoption of the Employee Free Choice Act, commonly known as "card check," which would end secret ballots in union elections.

The bit about accountability is no idle warning. Organized labor put up some $450 million to get Democrats elected. The SEIU accounted for $85 million of that, making Mr. Stern's union the single biggest contributor to either party in this election cycle. And just in case, the SEIU set aside an additional $10 million fund to get people unelected if need be. "We would like to make sure people appreciate that we take them at their word and when they don't live up to their word there should be consequences," he says.

Wearing an open-necked purple shirt, the color adopted for the SEIU's rebranding, Mr. Stern makes his threat with a genial smile. He's in an ebullient mood these days, after all, and plainly not a labor boss out of central casting. Trim and 58, with no blue collar bona fides to speak of, Mr. Stern started at Wharton before switching majors -- 1968, he says, was no year to be a business student -- at the University of Pennsylvania to education and urban planning. He became a welfare case officer out of school and worked his way up the union hierarchy, becoming at 46 the youngest SEIU president in history.

Mr. Stern feels at ease with CEOs and in the media limelight. His sentences come seasoned with business phrases like "market share" and "our customers" alongside well-crafted ideological sound bites. As in: "This election was the end of the line for 25 years of market worshipping, deregulating, trickle-down economics. It's over. It didn't work. Greed kind of ruled the roost and we've taken the greatest economy on earth and have it staggering."

Admire or despise him -- and many union bosses fall into the latter category -- Mr. Stern is undeniably sharp, innovative and successful. In his 12 years atop the SEIU, membership more than doubled, to two million, as other unions stagnated. He has used his growing stable of janitors, nurses and office workers to wield political influence and challenge the old labor consensus. In 2005, he took the SEIU out of the AFL-CIO, criticizing the latter's emphasis on political over grass-roots organization and the movement's inability to adapt to the realities of a 21st century, service-dominated and global economy.

His tactics are controversial. The SEIU targets private equity firms, shames business leaders, and competes with other unions to build up its membership. Mr. Stern is unapologetic. "We like to say: We use the power of persuasion first. If it doesn't work, we try the persuasion of power." Inside the SEIU, a traditionally decentralized union, his dominant personality has earned him enemies among dissident local bosses. The biggest SEIU local in California is enmeshed in a corruption scandal. Some people wonder whether he's truly in charge. As an admiring adversary in Washington noted, these days "Andy Stern is surfing a high wave, and hanging on right by the edge."

It is the political seas in Washington, however, that look most interesting. The Obama camp says the future president, who won running left, intends to govern from the center. Moderate Democrats float possible delays, or the outright shelving, of legislation dear to the left. Card check, in particular, makes them nervous since it would provoke a battle with business in the midst of a recession. The U.S. Chamber of Commerce unveiled plans last week to spend $10 million to fight passage.

Mr. Stern betrays no doubts about future policy. I ask him which Obama pick so far pleases him most? "Obama," he shoots back. Yes, Larry Summers, the market-friendly free trader from the Clinton years, and Treasury nominee Tim Geithner, straight from Wall Street, headlined the economic team. But these "experienced, steady" men are there "to implement a new president's agenda" -- new financial regulations, job-creation programs and the rest. The pro-business, balanced-budget economics of the Clinton years isn't appropriate to today's world of income inequality and stagnant wages, he says. "It was not the same Larry Summers of '93 I saw on that stage."

All the political signs are favorable for a "universal," government-run health-care system. Mr. Stern hails the appointment of Tom Daschle to lead the push from the Department of Health and Human Services, and he considers Montana Sen. Max Baucus's reform plan a big step in the right direction. Unlike the last time it came up in 1993, Mr. Stern says, "it's hard to find an outspoken voice against comprehensive reform." Mr. Obama takes office at "an unusual Washington moment" when business, labor and the politicians "see common ground" on the president's headline initiatives, health care above all.

The exception is card check. And yet of all the things on the union wish list, this agenda item stands out as the single existential one for them. Its passage would ease organization and help reverse the decline in American union membership, today at just 12% of the workforce. Mr. Stern keeps the pressure on, saying card check ought to come up in the first hundred days. "You should do it early and I think it should be part of the basic second-tier economic package when we're dealing with health care, energy and other ways that over the long term begin to solve America's long-term economic problems." Just how it will pass -- in a single package, or a budget, or who knows -- is hard to predict amid all the economic uncertainty, he says.

Under the legislation passed by the House last year, if a majority of employees sign authorization forms, or cards, a union would be formed and employers would have 120 days to reach a contract. Failing that, the government would appoint an arbitrator to decide on the terms. This "minimum binding arbitration" provision worries employers as much as card check itself. But Mr. Stern rules out a compromise that would keep it out of the bill. Such arbitration has proven to be "a rational, reasonable, non-confrontational, cooperative way" to reach a deal. "It's not good for America when people fight," he adds.

The Democratic left frames the argument for increasing union membership in terms of closing the gap between the rich and poor. The question is, Mr. Stern says, "how to put money in peoples' pockets. One is to create more jobs and create wealth. The other is you find ways to, and I hate to use Joe the Plumber, to share the wealth differently. You do that through taxes, you do that through employee free choice. Employee free choice is only a process of giving workers the choice of sitting down with their employers about getting raises." He adds that "it's just amazing that people who don't want employee free choice, I'm not sure what they want to do."

Maybe, I venture, they just want to keep free elections for unions? "It is a total ruse," Mr. Stern responds. "We have a way of workers making the choice that no politician would ever live with." Employers can campaign directly with voters "and threaten them," and the union organizers "stand outside and hope to catch them coming home from work." Card check would do away with the secret ballot and ask workers publicly to declare themselves. This, the anti-card-check camp argues, would in fact make the choice anything but free and leave employees vulnerable to intimidation by unions and peers.

Another hot topic in the Democratic primaries was trade. Having backed trade liberalization in the 1950s, the unions today lead the charge to close borders. Mr. Stern plays down the opposition, saying the important trade deals have already been struck and ratified. The Korea, Panama and Colombia trade pacts now before Congress have little "economic impact." Though he won't endorse them, when I ask about a possible political trade-off, his eyes beam. "If they want to attach employee free choice to the Colombia free trade deal, I think we can work something out," he says, smiling again.

The current Washington preoccupation is the transition. Along with "200,000 others," the SEIU put forward a wish list for cabinet jobs as well as the alphabet soup of regulatory agencies. Aside from Mr. Daschle, the SEIU has close ties to Obama political director Patrick Gaspard and Mr. Stern "loves" Bill Richardson at Commerce. Mr. Stern wants an "an updating of our regulatory framework" at the National Labor Relations Board and the Occupational Safety and Health Administration to better "enforce its laws." That kind of talk fast gets the business community's hackles up.

Universal health care, widespread unionization, stronger regulations on business, profit-sharing for employees, higher taxes -- all that sounds like Western Europe. Mr. Stern considers that a worthy model. "I think Western Europe as much as we used to make fun of it has made different trade-offs which may have ended up with a little more unemployment but a lot more equality."

Again, perhaps channeling the old Wharton student within, he couches his pitch in business-friendly terms. "When you have universal health care, employers compete without health care being a competitive factor. When you have higher wages, people aren't poor, they get to eat, they get to live a better life and have a social safety net. I also think that when CEOs don't make as much money off of stock options they don't make risky investments." And does unionization improve competitiveness? It helps productivity, he counters, arguing that cheap labor, as in China, is a disincentive for industry to innovate and use workers efficiently.

Andy Stern's ambition would seem to be nothing less than to remake American capitalism from the ground up. His union, and the labor movement, hasn't had this good a chance to do so in a very long time. "Being heard and being listened to are two different things," he says, suddenly looking to strike a modest note. "But we'll start by being heard and hopefully we'll be listened to."

Mr. Kaminski is a member of the Journal's editorial board.

http://online.wsj.com/article/SB122852244367484311.html

Universal health care, widespread unionization, stronger regulations on business, profit-sharing for employees, higher taxes -- all that sounds like Western Europe. Mr. Stern considers that a worthy model. "I think Western Europe as much as we used to make fun of it has made different trade-offs which may have ended up with a little more unemployment but a lot more equality."

If Mr. Stern considers Europe a "worthy model" he is not as 'undeniably sharp' as Mr. Kaminski states. If he is that sharp, then he is a liar and has no interest in the welfare of the union members he so aggressively recruits. If the US economy copies the EU model, we will kill it. There will be fewer jobs. Even fewer in the service industries. American workers will not like living the life style of their EU counterparts.

Oh, some of the stuff is nice, to start. But I lived in Germany for four years. Most people did not own their own houses. Taxes and socialist policies stifled initiative. If every American could live in Europe for a year, there is no way most would even consider trading places with the Europeans. Great coffee and beer just are not worth it.

The ultimate problem with government sponsored anything--healthcare, social security, bailouts, etc.--is who pays for them. And we all know it is the average taxpayer that takes it in the shorts. Social Security and Medicare are on the brink of bankruptcy now. So if this banana truly believes bigger government, more taxes, more government programs are the answer he is an idiot. We will lower the difference between rich and poor alright. No one will be rich and we all will be poor.