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Policy: Labor

Big Labor now worrying Obamacare will undermine the argument for joining a union

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Politics,Beltway Confidential,Sean Higgins,Labor unions,Obamacare,Labor

Catching up on a story from earlier in this week, the Wall Street Journal has a solid piece on how unions are beginning to realize that Obamacare — which they backed — will likely prompt many employers to drop health care coverage, letting the federal government take up the slack. That will limit the ability of unions to negotiate with employers for benefits in coverage — one of the main benefits of being in a union. As one labor official notes in the story: “If we’re not offering our members insurance and pension, why would you want to be union?”

Their solution is to try to press the Obama administration for special benefits for unionized companies, but that would make Obamacare even more expensive at a time when the administration is struggling to keep costs under control:

John Wilhelm, chairman of Unite Here Health, the insurance plan for 260,000 union workers at places including hotels, casinos and airports, recalls standing next to Barack Obama at a rally in Nevada when he was a 2008 presidential candidate.

“I heard him say, ‘If you like your health plan, you can keep it,’ ” Mr. Wilhelm recalled. Mr. Wilhelm said he expects the administration will craft a solution so that employer health-care plans won’t be hurt. “If I’m wrong, and the president does not intend to keep his word, I would have severe second thoughts about the law.”

If unions don’t win the subsidy argument, they say that companies with unionized workers would become less competitive, especially compared with rivals too small to face the law’s new requirements.

For the Obama administration, holding firm against union demands for subsidies risks alienating a key ally. Giving unions a break, however, would not only increase the cost of the law but likely open the door to nonunion employers in a similar situation who would demand the same perk.

 

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