Unionizing Independent Contractors an Ineffective Innovation

Labor unions developed for the service of employees, typically with a specific employer or as a sort of trade guild through which employers could hire them.  This model has two important safeguards for both the employer and the employee:

  1. The union members have a physical location in which they will interact with each other regularly, whether it’s the place of employment or the union hall to which they go for services or to check for work.
  2. The employers either directly supply the work or are in essence clients of the union, with either variation creating incentive for the union to consider the profitability and competitiveness of the employer in the course of negotiation.

In the case of government employees, the union members have the additional (some would say detrimentally excessive) advantage of being able to organize politically in order to choose the office holders with whom they’ll negotiate. A new innovation currently lining up for approval in Rhode Island has neither of the two safeguards and, while it will add pressure on government budgets, wouldn’t increase the members’ clout appreciably.

At some point in the coming weeks, the Service Employees International Union (SEIU) will hold in an election that may unionize independent in-home child care providers with clients who receive government assistance.  A report out today from the RI Center for Freedom & Prosperity (for which I work) notes that the results of similar efforts across the country have not produced the benefits that those who intend to vote “yes” may be hoping to realize.

According to ChildCareUnionInfo.com, in more than half of the states in which such independent contractors have unionized, the law allowing it to happen has been repealed or the contracts have simply expired or never been agreed upon.  Healthcare benefits are present in only three contracts for which there is information available, and those benefits are heavily limited, including consideration of the income level of the provider as well as the total number of providers who can receive the benefit.

At the same time, a majority of unionized child-care states have seen decreases in the number of providers, the number of children served, or both — regardless of whether total funding available has gone up or down.  All of this with dues reaching up to $900 per year per provider.

The role of the union between the providers and the state is peculiar, as well.  Because in-home child care providers are running their own small businesses, they will often have clients who do not receive state assistance and who, therefore, are not covered under the union’s purview.  And because the providers work in their homes and do not regularly interact with each other, they would be less of a unified group that is working with a union than a collection of independent people whose only relationship is the union.

In a more usual union arrangement, the members of the union would regularly interact, discussing things like working conditions as well as whether the union to which they pay dues is producing what they need it to produce.  Simply by interacting with each other, therefore, the members create a counter-weight to the interests of the national or international union and its own plans.  Their relationship apart from the union gives it incentive to work keep them satisfied with its management.

Put all together, the picture that begins to emerge of the SEIU’s plans with child care providers in Rhode Island is as a middleman between them and the state, taking a cut of the government assistance without much ability to improve the situation for its members and without much incentive to offer compelling services to the independent contractors it’s supposed to be representing.

Because the unionization election goes to the majority of those actually voting, it could take only a small, organized minority of the 580 or so providers to impose unionization on all of them.  But because their job does not inherently organize them as a community, the SEIU has the advantage, once again, in fending off any attempts to reverse the unionization.

It isn’t surprising, therefore, that labor unions are looking expand this new innovation in increasing their membership, and their power, as noted in the Center’s report.  The less a particular group of workers resembles an actual workforce, the more the union’s advantage in siphoning off money and increasing their own clout… for whatever goals they might have apart from providing employee services.

Disclaimer: The views and opinions expressed in The Ocean State Current, including text, graphics, images, and information are solely those of the authors. They do not purport to reflect the views and opinions of The Current, the RI Center for Freedom & Prosperity, or its members or staff. The Current cannot be held responsible for information posted or provided by third-party sources. Readers are encouraged to fact check any information on this web site with other sources.

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