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The human capital costs of the Janus ruling

Organized labor is not a monolith.  The organizational variation across the locals and internationals is wide.  Where one union might be full of “old, crusty white guys,” another is young, dynamic, and multi-cultural.  Where one might be singularly focused on the future of jobs for its members, another understands the important role the broader economic context plays for the people it represents.

Likewise, there is wide variation in the implications for unions, particularly public sector unions, from the recent Supreme Court ruling in Janus v. American Federation of State County and Municipal Employees.

Some public sector unions will see a significant change in funding, and will ultimately be able to play a relatively modest role on behalf of their members compared to the previous scope. Other unions have been planning ahead, responding to long term threats to union organizing, and will be in a reformed but still very strong position emerging from this time of transition.

However, even in spite of this diversity, I think there are some noticeable observations from the impact of the Janus ruling that spread across the spectrum of labor unions.

1. The anxiety about this ruling has been high, and has eroded morale at some unions.

The impact from Janus is significant.  But, even before the ruling, labor anticipated a similar result in 2016 in Friedrichs v. California Teachers Association.  At that time Justice Scalia’s unanticipated passing, along with election year politics, brought the Court to a 4-4 tie.  Had Scalia been present, it’s reasonable to conclude the impacts of the Janus decision would have been realized in 2016 with an anti-labor ruling in Friedrichs.

Anticipating that decision, some folks in public sector unions started looking around for potential opportunities outside of labor as early as 2015.  I had coffee a number of times with professionals in the labor community who were exploring possibilities expecting a 5-4 ruling in Friedrichs.

While the 4-4 tie was a reprieve, it forestalled the outcome rather than mitigated it.  Since then, morale has continued to suffer from some quarters inside the ranks of organized labor.

2. Older, more senior folks are likely to be less impacted than younger, newer hires.

This is not something that is discussed openly outside of the labor family very much.  But, not all labor unions are good at organizing in the new economy, or good at attracting a young, educated and dynamic professional staff.

Likewise, some simply haven’t done a great job of building economic security for young members in their ranks.  That translates to fewer young members on a local’s professional staff.  In turn, that means the view of educated, smart, professional staff who are in their 20s and 30s may be less well represented in labor policy conversations, further distancing 20th century organizing models from the new economy of the 21st.

The Janus ruling will put pressure on unions to retain dues-paying members, putting a burden on the budgets of the professional staff.  With a legacy (unequally applied, admittedly) of “last in, first out” when it comes to RIFs (reduction in force), many unions are likely to lean towards retaining older, more senior professional staff.  This will retain the experience, relationships, and wisdom of a senior staff member, but perhaps sacrafice innovation from a younger perspective.

3. Janus underscores a challenge of keeping young, smart folks engaged in the labor movement, with significant implications for the future of labor.

In the last two decades, young voices in organized labor have pushed both public sector and private sector unions to modernize in ways they might not have otherwise.  The schism in organized labor between the “new economy” unions (SEIU, Teamsters, etc) and locals representing more traditional industries became manifest over a decade ago. Many of those unions left the AFL-CIO organization for a time over concerns about organizing new, young workers that were operating in the unfolding new economy.

So, the idea of keeping young, educated, “new economy” workers in the labor fold is not a new concern.  It’s long standing.

Yet, it’s exacerbated by Janus in ways that will likely catalyze a process already underway.

With morale down, with a legacy of protecting older workers over younger, and with a new economy unfolding at rates that most labor organizations – both public and private – are not keeping up with, one of the most important impacts of Janus might be lost to outside observers.

Without intentional leadership to recruit, retain, and organize younger workers in the new economy, labor unions will continue their downward trend.  The Janus ruling will exacerbate that in ways that threaten to drain labor’s human capital as much as its financial capital.