The Questionable Authority

I’ve spent part of this morning doing some fairly serious research on health insurance in the United States, and who doesn’t have it. My curiosity on the subject was stirred up by a couple of things: after looking at a lot of DonorsChoose proposals from schools with high poverty rates, poverty is on my mind; and the President’s veto of the Children’s Health Insurance Program expansion got me thinking about what it actually means to be poor in this country, and what (if any) relationship the official poverty threshold has to actually being able to afford to provide for your family.

I was looking at a table in a Census Bureau document on poverty and health insurance (pdf) when a possible pattern caught my eye – the percentage of people who were uninsured in “right-to-work” states looked like it was a bit higher than in states where union shops are allowed. For those of you who aren’t familiar with the term, a “right-to-work” state is one where employees cannot be forced to pay union dues as a condition of their employment. This tends to undercut unions, making it harder for them to get new members or bargain at new businesses.

A while back, I looked at the effect that “right-to-work” laws can have on health care costs, not just for the uninsured, but also for those of us who do have coverage. That post looked at the effects purely in qualitative terms. Today, I’m going to look at a relationship between “right-to-work” and insurance coverage, and this time I have numbers.

Unless I specifically say otherwise, I’m drawing all my information from Income, Poverty, and Health Insurance Coverage in the United States: 2006, which is a report that was prepared by the United States Census Bureau.

It should come as no surprise if I tell you that people with jobs are more likely to have health insurance than the unemployed. It should also not come as a shock to learn that 88% of Americans who have private health insurance are covered through employment benefits. That’s where (I think) the “right-to-work” issue comes into play.

Unions are good at getting employers to give their employees more. That is their whole reason for existence, so that should be yet another non-shocker. That lead me to suspect that there might be more uninsured people in states that make it hard for unions to operate to their fullest potential. The Census Bureau report didn’t specifically address that question, but I did a quick back of the envelope calculation of my own. Table 8 in the report provides the number and percentage of uninsured people sorted by state. I combined that with the list of right-to-work states found in the Wikipedia article, and looked at the percentage of uninsured in each of the two groups. On average, 16% of people in “right-to-work” states are uninsured, compared to 13% in “union shop” states.

I don’t know about you, but that looks like a fairly interesting result to me. It’s anything but conclusive, of course, since I failed to take quite a few things into account – for starters, the percentage of uninsured in each state was calculated based on a statistical sample, and has its own margin of error. I completely ignored that, on the assumption that the errors would more or less cancel each other out in the end. I also ignored a whole range of other variables that could be more important than the “right-to-work” issue. Still, it’s probably something worth thinking about the next time you hear someone bitching and moaning about how bad unions are.

Comments

  1. #1 Mike
    October 5, 2007

    I guess I am not surprised that some people think a union is only operating at full potential if that union can have workers fired for not joining the union.

  2. #2 Lee
    October 5, 2007

    mike,

    They CANT fire you for not joining the union, at least in California.

    What happens in California is that, if you don’t join the union, you still pay a representation fee to the bargaining unit, to cover the costs of the work they do to get those wages, benefits and working conditions that are better than what you could bargain for as a single individual. Non-member fees can ONLY be used for bargaining and representation costs, not for organizing, publicity, or any costs other than representation.

    The intent is to keep non-members from free-riding on the efforts of the union.

    This is from memory – its been quite a few years since Ive had a non-exempt job and been a union member. But if the language I used is perhaps not quite right, the structure is.

  3. #3 6EQUJ5
    October 5, 2007

    Lee: The term I heard in California was ‘agency fees’ — the same money as the union dues but without the benefits of being a union member.

  4. #4 Brian
    October 5, 2007

    Without the benefits – except for, y’know, the health insurance. And the wages. And the pensions. That kind of stuff.

  5. #5 Mike Dunford
    October 5, 2007

    Mike (the other one):

    I’d have absolutely no problem with “right-to-work” laws were it not for one small problem. If a union exists in the workplace, and engages in collective bargaining, under federal law it must bargain on behalf of all employees. This includes employees who don’t belong to the union.

    In “right-to-work” states, the unions are not allowed to require people to join, and they’re not allowed to charge fees to people who don’t join – but under federal law, they still have to negotiate on behalf of those people. This means that someone who refuses to pay the union will still, by law, receive exactly the same pay and benefits as someone who does pay the union.

    To put it into the terms you used, the union is operating at less-than-full potential not because they can’t fire people for refusing to join the union but because they can’t refuse to provide the benefits of union membership to jerks who choose to ride for free.

  6. #6 Brian
    October 5, 2007

    Blech. Unions.

  7. #7 The Ridger
    October 5, 2007

    Yeah, “blech. Unions.” I’m all for letting the corporations make all the decisions about employees because, y’know, they have their employees’ best interests at heart. They’ll be sure to keep wages up and workplaces safe and hours reasonable and all those things they were doing before unions got in the way.

  8. #8 Brendan S
    October 5, 2007

    Honestly, I fall more on the Blech. Unions. side of things. I have worked in both Union and Non Union shops. And to be honest with you, I don’t see much of a difference. At least for retail unions there doesn’t seem to be a large difference. Maybe when you get out into more skilled labor there’s a difference.

    The thing I do know, is that in manufacturing, Unions seems to be driving companies out of the US. Take Delphi and the UAW union. The UAW was making on average $28/hour to make cars. That’s $58,000 a year to work on a car assembly line. IT Help desk makes $17,000 less then that, and is more skilled. In 2006, the median annual household income according to the US Census Bureau was determined to be $48,201. That means that Factory Workers are making, on average, $10,000 more then the average Salary in the USA.

    This makes moving over seas very attractive. It’s VERY expensive to do, you have to build a factory, then you have to expensively ship the goods back, which means you have to have a very high cost savings in Salary to move production. And unions, by holding the line and insist that Factory Workers need to make a very high wage, are pushing companies out of the US.

  9. #9 iRobot
    October 5, 2007

    The only people who dont like unions are company managers and fools. Companies without unions can fire you at will, pay you crappy wages and take what ever they want away from you when ever they want. Regular workers who buy into the “unions are bad” propaganda should have their weekends, vacations and all other benfits taken away from them, like it was before we had unions and labor laws.

  10. #10 PHB
    October 5, 2007

    Unions bad! Slaves goooooood!

  11. #11 Caledonian
    October 5, 2007

    If a union exists in the workplace, and engages in collective bargaining, under federal law it must bargain on behalf of all employees. This includes employees who don’t belong to the union.

    So change the law.

  12. #12 JohnnieCanuck, FCD
    October 6, 2007

    My experiences with a union mostly involved the IBEW. I didn’t like the way the executive and shop stewards positioned themselves as antagonists against management and tolerated no voices of moderation.

    Not only were they unconcerned about pricing their products out of the market by maximising wages and minimising production, but workers were encouraged to make costly mistakes, because they weren’t being paid to think. Establish a new higher skill/pay category if you don’t like it. No mention of the clever thought that went into getting away with the sabotage.

    The union seemed to feel that having been hired was an affront that required vengeance. Working to make the best product at the best profit, enabling the company to expand and say, double the workforce along with more money for better wages and benefits was not their agenda.

    Executives got elected by promising big wage increases and trash talking the evil minions of management. Given that this was a Canadian local, most of the dues headed south of the border to pay salaries and never came back.

    Soon enough, other companies with better products put the company out of business and as far as I know, the local was disbanded. Evolution in action, it occurs to me now.

    My ideal union team would determine how much of the pie had to go to shareholders, how much to management, how much to re-investment and make sure they got their fair share. Then the goal would be to make the pie as big as possible, in partnership with all the other essential parts of the company.

    Call it enlightened greed unionism.

  13. #13 Who Cares
    October 6, 2007

    The problem with unions is when there is (effectively) only one for a type of work. Then that union has a monopoly over the (renewable) resource called work.

    Unions themselves are not bad. One person making a demand gets laughed out of the HR office. 1 person making a demand for 1% of the workers at a location can expect to negotiate on the demand.
    But when you can shutdown every single production location (like the UAW can as shown on Sept 24 against GM) you don’t need to negotiate, just say we want that and expect to get it. Even that might not be so bad if the union could also take into account the needs of the employer, however that is contrary to what the union is made for (to maximize the amount paid for work done by it’s members).

    And as with any monopoly, focussed on extracting the most from the buyers of the resource it owns, the buyers will look for alternate sources of the resource.
    The effect can be seen in the previously mentioned example of Delphi and the UAW.

  14. #14 John Marley
    October 6, 2007

    So change the law.

    Of course! It’s so simple. Why didn’t we see it before?

  15. #15 Jud
    October 8, 2007

    Who Cares wrote: “But when you can shutdown every single production location (like the UAW can as shown on Sept 24 against GM) you don’t need to negotiate, just say we want that and expect to get it.”

    Oh, so when the UAW struck in order to get NO raises for the life of the contract, and the responsibility to take care of auto worker health insurance in return for a payment from GM that is a fraction of what GM expects the health insurance to cost, what it showed is that the UAW can expect to get whatever they want without even having to negotiate?

    If you doubt the above, you can check the facts in that pro-union rag, the Wall Street Journal.

    Re the original post: There are so many potential causes of the difference between average uninsured rates in right-to-work states and others that I would discourage speculation about any one possible cause until/unless your research turns up well-designed studies with regression analyses.

  16. #16 Tonia
    November 20, 2007

    My feeling is that the Unions demand money from union members and then shafts them when it comes to health insurance. In my opinion and experience we pay a heffty due and the union kept changing our health insurance untill finaly we ended up with a Crapy HMO, that require us to pay $50.00 for Doctors visit. I believe that we should have the right to say NO! we don’t want to be in the union it should be our choice not the Unions. In our case we are better off with out a union and their hands in our pocket. We want out is time for the Union to go they fight for nothing except keeping them selves rich thats my take on this.

  17. #17 Wayne Moynihan
    January 4, 2009

    I have worked in many fields in my 40 years from the U.S. Army to shoveling cow manure for 3.00 an hour.

    I am currently employed for the past 7 years in my first Union job and possibly losing it due to layoffs.

    In the past 7 years I have become a Union activist and am a firm believer that unions are the backbone to the middle class in this great country.

    What people forget was before unions on the job deaths where through the roof people were forced to work long hours for little pay no overtime pay little or no benefits,time off vacation or human rights

    The railroad workers had to fight private armies of armed Pinkerton guards to get their rights Imagine having to goto work with your rifle and having gun battles just to go home at night

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