Workers Comp Zone


It’s a strange time.

There’s a lot of populism in the air. Folks on the left and right are suspicious of big money.

But unions have not been able to capitalize on these conditions.

Unions are seen by many as part of the problem, particularly public worker unions. Labor suffered a grievous loss in Wisconsin after staking a large amount of political capital on the recall of Scott Walker. Any alliance between the union movement and the occupy movement fizzled.

Here in California the role of unions is about to come to a boil. In November an initiative will be on the ballot which would prohibit direct union contributions to individual candidates and which would limit use of payroll deductions for political purposes.

The effect would be to limit labor union political power in California. While some independent expenditures could still be undertaken by unions, there would be significantly less money for them to distribute.

An article by Jon Ortiz in the Sacramento Bee notes that:

“Last year, public-sector and general-trade unions contributed $2.7 million to California political candidates and causes, according to campaign finance tracker Business interests, from the telecommunications industry and hospitals to computer firms and beer companies, gave $4.3 million.”

The initiative is sponsored in part by Charles T. Munger, Jr., a Stanford physicist whose father is a partner in Berkshire Hathaway with famed investor Warren Buffett. Berkshire Hathaway owns insurers who write significant amounts of California workers’ comp.

The fight over this initiative will be huge, given that a loss could cripple the political power of California unions and drastically change the California political landscape.

A recent article in the New York Times noted that in New York state there are tensions between public unions who oppose pension reform and building trades unions that are concerned with the impact of pension obligations on the New York budget which may affect construction trade worker employment prospects. But with the upcoming California campaign reform initiative those sorts of issues will not come to the fore, and labor will be united.

It’s curious, though, that we may be in the runup to major California workers’ comp reforms just a couple of months before the vote on the November initiative.

Any perception that California labor signs onto a package that despite some benefit increases has significant takeaways would be a divisive and bad development for labor as the campaign over the campaign finance initiative heats up. A political brawl in the Capitol over workers’ comp or a tepid deal revealed in a “September surprise” carry similar risks. Given what occurred in 2004, there will be intense focus on whether any deal really helps workers or whether benefit increases are illusory for most workers.

The political power of the California labor movement could be on life support if this initiative passes. A workers’ comp deal would come just as unions are trying to muster rank and file enthusiasm and help from progressives to fight the initiative.

For more information about the initiative, including links to its language and information in its funders, here is a link to ballotpedia: … nitiative_(2012)
Julius Young

Category: Political developments