Thursday, December 29, 2016

SEIU Announces 30% Budget Cuts in 2017 with AFSCME Merger on the Way

According to multiple press outlets, SEIU President Mary Kay Henry issued an internal memo on December 14 announcing plans for a 30% cut to SEIU International’s budget in 2017. Tasty’s sources say the plan calls for cuts of 10% in January 2017 and another 20% in July 2017.

News of the memo was first publicly reported by Josh Eidelson at Bloomberg Businessweek (Eidelson, “Fear of Trump Triggers Deep Spending Cuts by Nation's Second-Largest Union,” Bloomberg Businessweek, December 27, 2016).

In the memo, Henry says the cuts are necessary due to the Republican Party’s imminent control of all three branches of the federal government. Here’s an excerpt from her December 14 memo, according to Bloomberg:
Because the far right will control all three branches of the federal government, we will face serious threats to the ability of working people to join together in unions. These threats require us to make tough decisions that allow us to resist these attacks and to fight forward despite dramatically reduced resources.

Tasty believes the story behind the cuts is more complex than what SEIU describes in its memo.


There’s another reason for the cuts that so far hasn’t been mentioned – namely, SEIU’s planned merger with AFSCME.

More than 18 months ago, SEIU and AFSCME began merger talks spurred by concerns about Friedrichs v. California Teachers Association, the U.S. Supreme Court case that could weaken public-sector unions by challenging their right to collect fair share fees from nonmembers to cover the costs of representation, such as negotiating contracts. In February 2016, the sudden death of Justice Antonin Scalia left the court deadlocked on the Friedrichs case and apparently slowed the two unions’ merger plans.

In May 2016, SEIU approved a resolution leaving open the possibility of a full-blown merger while immediately calling for joint planning, organizing, bargaining, and political work between the two unions. In July 2016, AFSCME approved a nearly identical resolution.

With the election of Trump in November, both unions are likely speeding up their merger plans -- which undoubtedly will require the elimination of duplicate functions, departments, etc at the two unions. Tasty guesses this helps explain SEIU’s announcement of rapid budget cuts.

It also helps explain why other unions with large public-sector memberships haven’t also announced deep budget cuts.
SEIU's Mary Kay Henry

So why doesn’t Henry’s budget-cut memo mention the AFSCME merger? It’s easier to win the staff’s support for layoffs based on Trump.

If Tasty’s theory is correct, we’ll likely see evidence of expedited merger activity in the months ahead… and perhaps budget cuts at AFSCME as well.

As far as eliminating waste, SEIU should start by axing some of its highly paid officials inhabiting the top floors of the Purple Palace. For example, over a number of years, SEIU has almost doubled the number of its full-time “Executive Vice Presidents” (from four to seven EVPs). 

The latest increase came in May of 2016 when SEIU boosted the number of EVPs from six to seven-- at the same time that it passed the AFSCME merger resolution to prepare for SEIU's declining membership. Makes total sense, right?

Each EVP earns more than $200,000 a year, according to financial records. If you eliminate four of them, that’s more than $1 million in savings a year when you factor in benefits, etc.

Stay tuned.