Labor Unions: The New, Old SuperPACs?

Tyler Durden's picture

Much has been said about the evil crony capitalism inflicted upon America as a result of PAC, SuperPACs, corporate donations, and just general bribery on behalf of America's corporations in broad terms, and Wall Street in narrow (and Private Equity firms in uber-narrow) terms. But is there an even bigger destabilizing force of "cronyness" in America? According to the WSJ, there well may be: labor unions.

Yes: those same entities that are so critical for Obama's reelection campaign that the president abrogated property rights and overturned the entire bankruptcy process in the case of GM and Chrysler, to benefit various forms of organized labor at the expense of evil, evil bondholders (represented on occasion by such even more evil entities as little old grandmas whose retirement money had been invested in GM bonds), appear to have a far greater impact in bribe-facilitated decision-making than previously thought.

To wit: "Organized labor spends about four times as much on politics and lobbying as generally thought, according to a Wall Street Journal analysis, a finding that shines a light on an aspect of labor's political activity that has often been overlooked." Because what labor unions lose in amount of money, they more than make up for in size: "This kind of spending, which is on the rise, has enabled the largest unions to maintain and in some cases increase their clout in Washington and state capitals, even though unionized workers make up a declining share of the workforce. The result is that labor could be a stronger counterweight than commonly realized to "super PACs" that today raise millions from wealthy donors, in many cases to support Republican candidates and causes." Which of course is to be expected: because there are two sides to every story, and nature generally keeps a balance (no matter how much central planners try to avoid a mean reversion), and just as two Koch Brothers can spend tens of millions of their agenda, so can tens of millions of unionized workers spend $1 each to further their particular political mission.

Just how big is Union clout? Big.

The usual measure of unions' clout encompasses chiefly what they spend supporting federal candidates through their political-action committees, which are funded with voluntary contributions, and lobbying Washington, which is a cost borne by the unions' own coffers. These kinds of spending, which unions report to the Federal Election Commission and to Congress, totaled $1.1 billion from 2005 through 2011, according to the nonpartisan Center for Responsive Politics.


The unions' reports to the Labor Department capture an additional $3.3 billion that unions spent over the same period on political activity.


The costs reported to the Labor Department range from polling fees, to money spent persuading union members to vote a certain way, to bratwursts to feed Wisconsin workers protesting at the state capitol last year. Much of this kind of spending comes not from members' contributions to a PAC but directly from unions' dues-funded coffers. There is no requirement that unions report all of this kind of spending to the Federal Election Commission, or FEC.


"We have always known that much of [unions'] influence comes from their political mobilization, but we have never been able to put a number on it," said Bob Biersack, a longtime FEC official who is now with the Center for Responsive Politics. "They are a human force in the political process, but a lot of that falls outside the kind of spending that needs to be disclosed to the FEC."


Laurence E. Gold, counsel to the AFL-CIO, said the Labor Department reports show that "unions by law are the most transparent institutions about their electoral spending."

Apparently not. And not only are unions great at hiding just how much money they spend, they are very good at spending at just the right times:

How does union spending compare to, say, SuperPacs:

Comparisons with corporate political spending aren't easy to make. Some corporate political spending, such as donations to the U.S. Chamber of Commerce's political wing, doesn't need to be disclosed. What does have to be disclosed can't be found in a single database or two, as is the case with unions.


Another difference is that companies use their political money differently than unions do, spending a far larger share of it on lobbying, while not undertaking anything equivalent to unions' drives to persuade members to vote as the leadership dictates.


Corporations and their employees also tend to spread their donations fairly evenly between the two major parties, unlike unions, which overwhelmingly assist Democrats. In 2008, Democrats received 55% of the $2 billion contributed by corporate PACs and company employees, according to the Center for Responsive Politics. Labor unions were responsible for $75 million in political donations, with 92% going to Democrats.


Unlike super PACs, which cannot directly support campaigns, corporate PACs give money from employees to candidates.

So why do Unions spend?

Unions spend millions of dollars yearly paying teams of political hands to contact members, educating them about election issues and trying to make sure they vote for union-endorsed candidates.


Such activities are central to unions' political power: The proportion of members who vote as the leadership prefers has ranged from 68% to 74% over the past decade at AFL-CIO-affiliated unions, according to statistics from the labor federation.


But much of unions' spending on this effort—involving internal communication with members—doesn't have to be reported to the FEC. It does, however, have to be reported to the Labor Department.


The reports to the Labor Department also take in a broader swath of political activity by including spending on campaigns that aren't federal, such as for state legislatures and governors.


The Labor Department data show about 3,000 local unions, their national parents and labor federations reporting at least some spending on politics and lobbying each year since 2005. Just 35 unions accounted for more than half of it, according to the Journal's analysis.

Wonder why Government Motors happened? Here's why

Among the unions and labor federations, the five largest now devote greater portions of their budgets to politics and elections than they did in 2005, when the Labor Department first began tracking such spending. Politics and lobbying accounted for 13% of their total spending during the 2005-2006 election season. By the 2009-2010 cycle, this had risen to 16%.

The bottom line is that just as corporate spending relies on one centralized source of cash, so, on the other side of the spectrum, we have decentralized "bribing" by a very unlikely source. But bribing nonetheless. Which is actually the whole point: money is money, and it is fungible, and as we pointed out previously, the IRR for bribing a politician is the highest of any possible investment. Whether this money comes from corporations, or unions, is irrelevant. But ist most certainly comes from both.

And this finding is something that all those who decry corporatism as the only source of crony capitalism in America will certainly have to get comfortable with.

And as a reminder...

Presenting The Greatest ROI Opportunity Ever

The dream of virtually anyone who has ever traded even one share of stock has always been to generate above market returns, also known as alpha, preferably in a long-term horizon. Why? Because those who manage to return 30%, 20% even 10% above the S&P over the long run, become, all else equal (expert networks and collocated flow-frontrunning HFT boxes aside), legendary investors in the eyes of the general public, which brings the ancillary benefits of fame and fortune (usually in the form of 2 and 20). This is the ultimate goal of everyone who works on Wall Street. Yet, ironically, what most don't realize, is that these returns, or Returns On Investment (ROI), are absolutely meaningless when put side by side next to something few think about when considering investment returns.

Namely lobbying.

Because it is the ROIs for various forms of lobbying the put the compounded long-term returns of the market to absolute shame. As the following infographic demonstrates, ROIs on various lobbying efforts range from a whopping 5,900% (oil subsidies) to a gargantuan 77,500% (pharmaceuticals).

How are these mingboggling returns possible? Simple - because they appeal to the weakest link: the most corrupt, bribable, and infinitely greedy unit of modern society known as 'the politician'.

Yet who benefits from these tremendous arbitrage opportunities? Not you and I, that is for certain.

No - it is the faceless corporations - the IBM Stellar Sphere, the Microsoft Galaxy, Planet Starbucks - which are truly in the control nexus of modern society, and which, precisely courtesy of these lobbying "efforts", in which modest investments generate fantastic returns allowing the status quo to further entrench itself, take advantage of this biggest weakness of modern "developed" society to make the rich much richer (a/k/a that increasingly thinner sliver of society known as investors), who are the sole beneficiaries of this "Amazing ROI" - the stock market is merely one grand (and lately broken, and very much manipulated) distraction, to give everyone the impression the playing field is level.

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ndotken's picture

i dont know who to hate most ... Wall St banksters ... Uncle Ben the puppet ... government employees suckin on the teet ... corporate fatcats ... or the politicians that pander to all of them for $$$ ... but i'm fuckin sick and tired of workin my ass of every day and ending the day with nothing to show for it because all those greedy bastards want their cut ... it's a fucking mafia-style shakedown is what it is ... fuck em all

MeelionDollerBogus's picture

Then work under the table, prep for living off-grid and keep your assets as gold, silver, food, water, fuel, etc., in multiple locations. No one gets a cut of what they can't see you have or ever had. And make sure you have "boating accidents" if anyone figures out you had/have something of value (e.g. gold or silver).


Boating accidents, bitchez

critical tinkerer's picture

Your workers are your customers too

MrBoompi's picture

Unions have clout?  What a bunch of shit.  LMFAO  When was this drivel written, 30 years ago?

Tyler Durden's picture

3 minutes to read the whole article? Fast read! Perhaps you will clock in even faster when we discuss prejudice and bias.

MrBoompi's picture

Yes, 3 minutes to read the entire article.  I'm not pro- or anti-labor union, but we've seen union membership drop from 38% to about 8%, and we've witnessed a successful assault on what remains of them.  If they are indeed so "large and powerful", it seems the results don't quite support this prejudice and bias on your part.

The decline of unions mirrors the decline in wages and benefits.  The decline in unions, wages, and benefits also happens to have an inverse realtionship with wealth disparity and corporate profits.  But by all means, let's just do away with unions altogether, because god forbid labor play an active part in their own fucking lives.



Gringo Viejo's picture

Boompi: You're not only a troll but a transparent fucking liar as well. Fuck you AND your comrades!

MillionDollarBonus_'s picture

One of the reasons we need unions is because of the threat of small businesses competing with both respected corporations AND government institutions. For example, consider the threat that smaller taxi companies pose to public transport: if left unregulated, taxi companies could literally destroy the jobs of millions of public sector workers in the cities like New York and San Francisco. Consider another example - industrial scale agriculture companies have to compete with a myriad of smaller ranchers and farmers who threaten the livelihoods of their workers. Thanks to tireless lobbying by strong labour unions, the government finally agreed to enact sensible health and safety regulations that barred smaller incompetent farmers from competing. I could go on and on. Labour unions serve an important purpose to workers at large institutions by lobbying for good regulations which keep incompetent competitors out of the market. The threat of small businesses destroying jobs at larger corporations is not something people want to talk about, but it is a reality; and unions are working day and night with the government to protect their workers from this threat.

Dr Benway's picture

Those workers who think unions will protect their interest are idiots.


Adding unions is just adding one more layer of politics and executive thiefs over an onion of bullshit.


Union officials are yet another group making something of someone else, and handsomely too. Unions here in Australia have in several recent cases devolved into crime families, where the union thugs steal everything.

WillyGroper's picture

Precisely why I shredded my card.

francis_sawyer's picture

MDB ought to get many UP arrows (because he clearly took longer than 3 minutes to read the entire article)...

FL_Conservative's picture

My "lack of policy" beats your "policy" 24/7/365.  As if government has any fucking answers.

ThaBigPerm's picture


MDB, the trick to good devil's-advocate trolling is that it at least appears you believe what you post. You're usually good at that.  This one = fail.

Sauk Leader's picture

 "labour?" Is that "Million Dollar Bonus" Canadian? Or Pound Sterling? We changed our spelling decades ago buddy, to hard to learn to read the queens english....

gatorengineer's picture

Well Trolled MDB, Well Trolled.......

Aghast in Midlothian's picture

Is this satire?  We need unions to keep small businesses out of the market? Really? 

MeelionDollerBogus's picture

Yes, MDB is Troll-Satire.

Anyone worth their salt as an investor, libertarian and/or economist knows that unions, without government interference, are an evolution of the free market and belong in the free market until no one wants to be part of one because there's no economic benefit to it for all the parties involved.

Ookspay's picture

I see what you're doing here, I like it. Illustrate absurdity by being absurd, nice.

neidermeyer's picture

In my city there isn't much in the way of union strength ,,, however to go back to the taxi analogy there is only one real taxi company where I am ,, operating under multiple names ,, and it is the only company allowed to win any contracts at any taxi stand in the city... it's all about money and influence whether it's a taxi empire or the brotherhood of Electrical workers... and the main thing bought is regulations that block newcomers ... I could easily put 10 taxi's on the street and compete with good service against the established giant but I would be relegated to only serve the undesirable parts of the city and starved out.

dougngen's picture

Bar from competing you say comrade???? Lol

Freewheelin Franklin's picture



As a small business owner, that comes from a family of small business owners, that lives in a city literally built bY small business owners,


Henry Hub's picture

The Union movement is this country has been completely castrated over the last thirty years. And they want to pretend that they are a match for the corporate super-pacs.
What a sad joke!

WillyGroper's picture

And a big hearty fuck you to Ronnie RayGun.

WillyGroper's picture

RayGun was the beginning of the end for ALL unions. Back then they at least kept the abuses in check somewhat. Triangle shirtwaist fire anyone? Guess at least 10 of you worship him as some demi-god & admire how he threw the mentally ill out onto the streets only to end up in jail & prison. Ur tax dollars at work. Kinda ironic with alzheimers & all woodn't ya say? 

Sauk Leader's picture

They are a match. Do SuperPacs bus people into the polling booth? Yes, they are a dying breed, mainly because they have priced themselves out of the market and now have to resort to desperate tactics to keep the extortion going.

Freewheelin Franklin's picture

Really? Come to Philadelphia. The unions send people out into the lower class neigborhoods on election day and give people "walking around money".

"Hey buddy, here's 20 bucks from your friedly neighborhood union and Democratic Party supporter. Did you know today is election day? Be sure to stop by the voting booth before you go see the crack dealer."

TMT's picture

Please show me the causual relationship between the decline of unions and the decline in wages and benefits?

From the article:

These kinds of spending, which unions report to the Federal Election Commission and to Congress, totaled $1.1 billion from 2005 through 2011, according to the nonpartisan Center for Responsive Politics.

The unions' reports to the Labor Department capture an additional $3.3 billion that unions spent over the same period on political activity.


It appears those billions of dollars would have been better spent on higher wages, versus political payola.  Essentially, the unions are, in part, responsible for their members' low wages.

dark pools of soros's picture

drivel much?  so when your union boogie man is gone will you finally open your eyes to the real reason for lowered wages?  Globalization

WillyGroper's picture

>>>>>>>It appears those billions of dollars would have been better spent on higher wages, versus political payola.  Essentially, the unions are, in part, responsible for their members' low wages.


Yes, because the sluts are in bed with the corporations.

valkyrie99's picture

I'd call it more an approaching -1 correlation then causational, but as per your order

U6 Alabamian's picture

8%?  Then we still have work to do.

gaoptimize's picture

I have no sympathy for unions lobbying to destroy the educational opportunities and quality available to my children.  I will call you out with the facts at every possible opportunity.


terryfuckwit's picture

fair point... we have the very rich paying the very rich(MSM) to convince the middle classes that the poor are to blame for our current crrisis. I would hope ZH never succumb to this inverted reality and yes some union behaviour is tantamount to cronyism of the worst kind... but keep things in perspective..jump in a time machine if you really really want to know what life was like pre unions.....

Ookspay's picture

I don't hear anyone in the MSM blaming the poor for anything. Quite the opposite they keep blaming the rich; the very people who have the skills to create and manage companies who create jobs.

The demands of unions coupled with government regulation and taxation have chased jobs and job creators offshore.

Obama has added 135,000 government jobs in 3 years, they will not be there to help business be more competitive I assure you. They will be there to tie our hands with needless regulation, arbitrary and punitive auditing, then finally with excessive taxation.

dougngen's picture

As a former 20 year union member (IAFF) I quit when I realized my name and my money was being used against me!! (Firefighters for Obama) What a joke!! Fortunatly, I live in a right to work state that allows me to quit the communist er... union organization. The local is fine, the international... criminals all. Thank God for Scott Walker and people that insist on real freedom! 

The unions have gotten out of control and public workers should NEVER be pitted against the taxpayer!! Public sector unions and their cronies have to go!!!

buzzsaw99's picture

the day walmart or mcdonald's unionize this argument might hold sway. the unions are tiny and dying. it is the billionaires who are perverting markets, corrupting the political process, brainwashing the masses, oppressing the poor etc..

francis_sawyer's picture

Thanks buzz... (+1)

There's been a strange infiltration of idiots on ZH lately... f_s is glad to read on old voice chime in...

Crack-up Boom's picture

Why read when you can skim?  Why invest when you can bribe?

WillyGroper's picture

Not that my opting out of PAC $ in 1981 made a whit of difference, but there's no way in west hell with 6-7% of this country in a unionized workforce can keep up with the likes of the DC chamber of commerce & the Kock (sic) bros. Might need to factor in right to work states. Total BS.

Rearranging Deckchairs's picture

You may have missed some key language in the article:

"The reports to the Labor Department also take in a broader swath of political activity by including spending on campaigns that aren't federal, such as for state legislatures and governors."


On a Federal level you may be correct. However, on a state and local level the public employee unions have huge influence in blue states and municipalities.  Why else do you think California, New York, Illinois etc are bankrupt? Why do you think cities in California are going bankrupt? 


mjk0259's picture

$4 billion over 7 years ? 550 million a year. Divided by 50 states $10 million a year, divided by what 1,000 local elections per state? Not much.


WillyGroper's picture

I don't think city employees are the reason for the turmoil in Bell, CA. 

Regardless, I protested ANY of my dues going to ANY PAC contributions & got pro-rated rebates on said dues. There was a 3 week window in which to send certified mail to protest political contributions in order to get that portion of dues refunded. Never voted a straight ticket in my life, nor did I feel it right for the union to use my money for PAC's. Now there's no point in even voting because it's two horns on the same goat. I was further dismayed when I found out that the president of the local contracted out the waxing of the union hall floors to his family at a cost of $10K. They were also buying 1st class airfair tickets to conventions, then exchanged them for coach & pocketing the difference. They became as corrupt as their masters. On the other hand, had it not been for them, no 40 hr. work weeks, livable wages, safety regulations, etc. 

As one can see from MEE, worker safety protections are non-existent. There's a billion Chinese to take ur place. 

Public employees may have influence, but I'm a bit more inclined to be prejudiced against the banksters when it comes to municipal bankruptcy.

InjuredThales's picture

A) Why would you use [sic] in a context where you are not quoting someone else's error?  Are you just a pretentious douchebag?

B) You seem very upset that someone would suggest unions use member money to influence the political process and have been extremely successful in doing so.

C) This article ignores the main way that unionized individuals impact the political process: the so-called 'education' system.

i) Teachers are unionized government employees.  I wonder what their bias is.  I also wonder if, as human beings, they capitalize on their soapboxes to beat the living shit out of that dead horse of an ideology they have going on, in order to effect the kind of change we all can believe in.

ii) University professors are largely unionized pseudo-government employees. I wonder what their bias is. I also wonder if, as human beings, they capitalize on their soapboxes to beat the living shit out of that dead horse of an ideology they have going on, in order to effect the kind of change we all can believe in.

iii) Neither of the above likes the idea of competition or destruction of their way of life

D) What the hell does 'might need to factor in right to work states' even mean?

E) Why do all you lefty wingnuts hate the Koch brothers so much?  Oh yeah, successful, intellectual entrepreneurs who are willing to put their money where their mouths are when it comes to free markets.  Sure they are buying regulators, but so is everyone else.  Sometimes the only way to play fair is to cheat.  The Koch brothers have done more for humanity than 6 billion of you would in 100 lifetimes.  They have actual skills and insight. You have none.

geekgrrl's picture

The Koch brothers have done more to humanity than 6 billion of you would in 100 lifetimes.

Fixed it for you.

They have no productive skills. They have money, and they use it buy influence. Wakey wakey.

Ookspay's picture

Dear God Geekgirl, you have become a cliche. Try to create an original thought and not just gargle the luke warm socialist cum!

geekgrrl's picture

Based on the evidence (I am an empiricist, not an ideologue), I think history is going to be extraordinarily harsh on those two. And on Murdoch. These people are sociopaths of the highest order. I can hardly believe I'm getting pushback here, but then again, I always did think you were a spook, and I would also hardly be surprised if the Koch's have put together a ZH disinfo team to skew the discussion here in their favor.

That is to say, in case it isn't already clear: I don't fucking care what you think.

My position is not a matter of any ism, it's basic fact. Things that can't be denied. Like CO2 concentrations rising, in large part because of coal fired PPs. Like funding climate-change disinfo groups. Like trying to crush the public unions first in Wisconsin, and then (presumably) the rest of the country. Like listening-in illegally on people's cell phone calls. These people are utterly a disgrace, IMO, of course.

I'm amazed that some people latch onto an ideology and just get completely blinded to what is right in front of their eyes.

I don't think I'm the one gargling cum.

InjuredThales's picture

David Koch: BSc Eng., MSc Chem Eng.

Charles Koch: BSc Eng., MSc Mech Eng., MSc Chem. Eng.

Sorry what fucking skills do you have, internet troll?  You don't have 1/2 the IQ needed to even complete one of those degrees. I can't wait for your next comment about how easy those disciplines are.