Obamacare May Put Some Unions Out of Business
The subsidies will undercut their biggest selling point
Yesterday
I asked whether Big Labor was turning on Obamacare, after the Roofer's
union called for its appeal. This morning I got to talk to an expert
who pointed out that the roofers are in a particularly unattractive
position. Roofing companies are mostly small shops, which makes them
hard to organize. And it just got much harder, because now open-shop
roofing companies are essentially getting subsidized health insurance
for their employees.
Under
Obamacare, small firms don't have to provide insurance to their
employees. That probably describes most of the non-union roofing firms
in the country. Meanwhile, non-union roofers are going to be eligible
for heavily subsidized insurance on the exchanges. Union workers get
the health insurance, but no subsidy. This will mean one of two things:
1. Union workers will get paid less than non-union workers, as wages are diverted to cover the union health plan.
2.
Union firms will have higher costs than non-union firms, as they cover
the extra cost of an unsubsidized union health plan.
Either
way is bad news: it will be difficult to recruit new workers, and/or
difficult to find work for the people in the union. No wonder the union
is freaking out.
But
while their situation may be particularly bad, it's hardly unique.
There are a lot of unions whose workers are increasingly in competition
with small, open-shop firms. And it seems that Obamacare may threaten
their continued existence. It's also probably the final nail in the
coffin of the oft-expressed hope that folks like the SEIU will find a
way to expand unionization in the service industry. Benefits are one of
the major ways that unions recruit and retain members. And there's no
way that they can compete for low-wage workers with the heavy subsidies
the government is offering.
It
would be ironic indeed if many of the private sector unions who
supported Obamacare (with the promise that these problems would later be
fixed) had actually signed their own death warrant. But it seems this
may be what has happened. There's no money in the budget for the
government to extend subsidies to the union plans, or exempt them from
the various coverage expansions and taxes. And there's no money in the
union coffers to compete with the government subsidies that have already
been enacted.
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