Open Books, Tight Fists

Financial Integrity in a Rank & File Union

“If you want to maintain rank and file principles it is not enough to pass good resolutions. Make sure that we conduct our affairs honestly, that we protect the dollars of our members and we use them for the benefit of the entire membership.”

—UE General Secretary-Treasurer James J. Matles, speaking to the 38th UE Convention, Pittsburgh, 1973

“Working people in this country are ripped off every time they turn around. We know they’re ripped off by the bosses. But they’re ripped off by the government, they’re ripped off by the insurance companies. The last place we want our members to feel that they’re ripped off is in their union.”

—UE General Secretary-Treasurer Amy Newell, speaking to the 51st UE Convention, New York, 1986

“UE members pay dues so that we have a strong organization that can win better wages, benefits and working conditions from the boss, not so union officers can get big salaries or perks from the union.”

—From Them and Us Unionism, published by UE in August, 2020.

Introduction

Our union is unique. Unlike most others, it was built from the bottom up by the local unions which formed it in 1936. Democracy and accountability were the central themes of the founding convention and UE members and leaders have kept that spirit alive ever since.

Tired of the bureaucracy and the greedy, power-hungry “labor statesmen” who ran the American Federation of Labor, the founding delegates made sure they crafted a union which would be run by its members. More importantly, they wanted to be sure that their union would never drift away from this founding principle. 

Those who were to be the officers and staff would live like the members. Money to run the union — dues money from members’ paychecks — would be used to organize new members, defend existing members, and further the interests of all working people. Never would union dues be used for special perks, privileges, or high salaries. Simply put: the founding members of UE wanted to build a labor movement and not a labor bureaucracy. UE has never forgotten these beginnings.

Greed and Power

More than a half-century later, we still live in a system that is fueled by greed and abuse of power. 

Corruption “trickles down” from corporate boardrooms to the rest of society. CEOs and other top managers pay themselves exorbitant salaries and reward themselves with stock buy-backs while destroying profitable enterprises and laying off workers. Our political system is poisoned by the same big business corruption, as corporations spend millions on lobbyists, campaign contributions and outright bribery. 

Unfortunately, the labor movement is not immune to these influences.

Anti-union news media and politicians often take aim at the entire labor movement because of the notorious corruption of a few unions, creating the impression that all unions are corrupt. We know that’s not true — especially in our union: the bribes, kickbacks and collusion involving corrupt union officials and bosses represent the complete opposite of UE’s rank-and-file democracy. But there are other forms of corruption — legal corruption — that can take their toll on any union at the members’ expense. 

The Struggle Against Petty Corruption

Big salaries for union officers is a good example of where corruption often starts. Unions that pay their officers big salaries are only mimicking big business. “They figure the most important person in the organization is the corporate president — the one with the biggest salary,” says Amy Newell, UE General Secretary-Treasurer from 1985 to 1994. “That totally distorts the fabric of the union. The most important people in our union are the active members.”

Too many unions allow petty corruption — perks for officers and staff, for example — which corrode the fighting strength and democracy of their organizations. Officers and staff become used to their “perks” — and, once granted, they’re almost impossible to eliminate. They’ve become part of “what’s expected.” Over the last several decades, many AFL-CIO unions have faced bankruptcy — or merged into larger unions — in part because salaries and perks have gotten so far out of hand. 

Quoting “an old-time labor guy,” Red Block, who served as General Secretary-Treasurer from 1975 to 1985, put it this way: “I didn’t join this union to get something out of the union. I joined this union to get something out of the boss.”

UE Policy on Pay And Perks

UE officer and staff salaries are kept in line with those of the members they work for — the members who pay them. And that’s been union policy from the beginning. Dues money fuels the union’s “aggressive struggle to improve our conditions” and, by constitution, the UE national officers can be paid no more than the highest-paid UE member. 

A boss-size salary, quite simply, creates a boss-like point of view. But a worker-size salary keeps UE leaders living and thinking like workers.

This applies to region and local officers as well as the union’s three national officers.

One List UE Won’t Top. Ever.
Salaries of Union Presidents (2020)

Laborers
$604,297
ILA
$595,572
AFT
$426,327
IUOE
$420,020
IBEW
$413,779
AFSCME
$341,326
Teamsters
$331,745
UFCW
$298,109
IAM
$285,598
AFL-CIO
$272,250
SEIU
$266,115
UAW
$227,745
UE
$70,398

All figures are from salary data reported in the 2020 LM-2 reports filed by each union with the Department of Labor.

Along with salaries, UE also keeps a lid on expenses — and for the same reasons. There are no open-ended expense accounts. Reimbursement in UE is only of actual travel expenses plus a modest meal and car allowance. In fact, UE travel allowances are only meant to make up for the difference between the cost of obtaining meals at home and that of buying meals on the road. 

Unlike some other unions, UE policy does not allow for dues refunds or “salaries” for local officers beyond straight-time hours lost from work on union business. A dues refund actually makes someone ineligible to be a steward or officer because they wouldn’t be a dues-paying member in good standing!

Important Results

The results of this policy help UE remain an aggressive, democratic union. This policy: 

  • Allows UE to employ an adequate staff (for assisting locals and organizing) while keeping dues affordable.
  • Eliminates the incentive to seek officer or staff positions to gain a big salary or cushy perks, rather than wanting to contribute to making the union stronger.
  • Prevents a “big shot” mentality from infecting officers and staff, as happens in unions where they earn many times the average salary of the members.
  • Keeps the union financially sound ... and guarantees to UE members that their hard-earned dollars are being used for their benefit.

Dues: Minimum, Automatic Increases

Local unions may set dues as high as the members want, but the UE Constitution sets a minimum dues level (2.5 times a workers’ hourly rate of pay for new locals; for older locals, $10 above the per capita due to the national union) and contains a provision for automatic dues increases: monthly or weekly dues are automatically increased by the same percentage as the average negotiated wage and/or cost-of-living increases. 

Ratified by UE conventions and by UE locals, these provisions are designed to “take the politics out” of adequately funding local unions. Candidates for office should be evaluated on the programs they propose for their local, not on promises of “no dues increase.”

Lost-Time, Parties and “Gifts”

Dues money should only be used to advance and protect the conditions of the entire membership, not to provide extra cash or freebies for a few. 

Local unions reimburse union officers for wages lost when they must conduct union business during working hours. Unfortunately, some local officers view lost time as an easy way to get out of work, at the members’ expense. Charging the union for lost time when no union work has actually been performed is outright corruption which should be challenged whenever it occurs. 

Exorbitant meal allowances, reimbursement for travel expenses not incurred and “embellished” bills designed to get a piece of the local union treasury are also examples of petty corruption and should also be challenged. “Making money” from a local union is no different than stealing money from UE members.

“Gifts” to members (hams and turkeys at Christmas are an example) should also be avoided: they do nothing to build a sense of unity or solidarity within the local union and frequently only mimic some “gift” handed out by the company. This practice can actually undermine the understanding that the members are the union by creating the attitude that the union “owes” them something more than aggressive representation of their interests. Members feel more ownership in their local union when they give to (with their time and effort) rather than take from it. 

Union sponsorship of social and recreational events has the merit of bringing union members together. However, members who participate should be asked to foot at least part of the bill too, rather than a limited number having a good time entirely on the dues money paid by all. (Some UE local unions fund their social activities through such things as raffles and 50-50s, which is fine — and also has the effect of allowing members to know exactly where this money is being spent.) 

Members pay dues to build a strong local union to fight for their interests in their workplace and in the larger society — not for “gimmies” that don’t amount to much for each individual member, but, added together, can put quite a dent in a local’s treasury. 

Financial Assistance During Strikes

If a local union has enough money in its general fund for its activities, more of the local’s dues should be directed to its strike fund. Every local is required by the UE Constitution to have a strike fund. The local strike fund, along with the national union’s strike and defense fund, provide UE members with the backing they need when battling the boss. Striking locals also receive financial assistance from other UE locals, regions and supporters. All funds are to be properly accounted for and spent in line with UE policy.

UE, unlike most unions, does not pay “strike benefits” during a strike. There is no benefit to being on strike except what you win from the boss — and our union is not in the business of “hiring” members to go on strike. 

A local committee decides how much financial assistance individual members need to survive the strike and not be forced back to work; a striker with a working spouse, for instance, requires less assistance than a couple who are both on strike. All checks are made payable to the creditors (landlord, utility company, etc.); no cash is given out. 

As always in UE, money spent to bring people together during the strike is the best-spent money. Soup kitchens, weekly distribution of groceries bought in bulk, etc., not only make the money go further but also raise morale. 

The local is responsible for raising financial assistance from other sources, and members who find other employment during a strike should be encouraged to donate part of their earnings to help other strikers. 

When a Local Disbands

Sometimes a local union disbands, usually as a result of a workplace closing. The UE Constitution requires that the remaining funds and assets of the local be sent to the national union.

Why is this provision in the Constitution? Because it’s simply not right (nor legal) that the handful of members left at the time of the closing should grab the treasury for themselves when hundreds or thousands of members may have paid dues into that treasury over the years. 

A motion at a membership meeting to “whack up the treasury” should simply be ruled out of order. No local may pass and act on a motion that violates the UE Constitution. 

Frequently, the money is needed to pay post-closing legal costs for the local’s members — bankruptcy court, lawsuits to protect retiree health benefits and WARN suits are some recent examples. Sometimes it’s used to subsidize a UE retirees’ association for the local. 

Even if the money is not spent for the purposes mentioned above, it will be used to help pay for the union’s work of organizing the unorganized. After all, somebody else’s dues money helped set up the local originally. When the local closes, the remaining resources are a living force enabling UE to bring union organization to other workers.

What Happens to Your Dues Dollar

Here’s how every national dues dollar is spent:

 45% for organizational, 28% benefits and taxes, 14% national office, 6% office expenses and 6% miscellaneous

Responsibilities of Local Trustees

The trustees elected by each local must rigorously audit the local union’s books every three months, give a report to the local’s members and send an audit report to the national office. 

And that’s not all. They should also audit for policy matters as well as correct bookkeeping and verification of the local’s assets. For example, was all the lost time paid to stewards and officers really necessary, or was somebody taking advantage of the members by seeking additional perks? Did the officers obtain prior approval from the members before buying that copier for the office? 

The Responsibility of UE Members

In a local union that functions in a really democratic fashion, members should demand the following from their local officers: 

  • A complete financial report every month from the local financial secretary.
  • A quarterly audit report to the local from the local trustees.
  • The right to approve in advance any large, non-routine expenses.
  • No extra “perks” (like dues refunds or salaries) to the local officers. 
  • No squandering of local funds on parties or “gifts” just because a handful of members pass a motion at a membership meeting.

UE members can rest assured that the money paid to their union is used exactly as it was intended — as it should be in a democratic, rank-and-file union. Our books are open  and not a dime is spent without remembering where it came from. Not only does this keep the spirit of UE alive but it helps ensure that our union will be around far into the future.