Freedom matters spring summer 2018

Once they played an important role in the workplace. But increasingly, labor unions have made themselves irrelevant.

Spring/Summer 2018

Volume 3, No. 1

? t c n i t EX A Publication of the Freedom Foundation

T

he Freedom Foundation’s mission statement, as proclaimed on our website, is to promote the ideals of free markets and limited, accountable government. It’s been that way since the organization was founded in 1991 and we’ve never deviated for a moment from that goal.

Still, our adversaries claim this is just a smoke screen to camouflage our true objective of busting unions.

As always, they’re wrong on both counts.

First, it isn’t our intention to bust unions per se. We just cling to the old-fashioned idea that unions should play by the same rules everyone else does.

If they can do that and stay in business, they won’t have anything to fear from us. But if they can’t, don’t blame the Freedom Foundation.

We don’t bust anyone. We just level the playing field.

Their problem is, in a fair fight, the left can never compete on the basis of ideas alone.

We’re not camouflaging anything, either. Working to eliminate organized labor’s corrupting influence over the political system isn’t a substitute for promoting free markets and limited, accountable government – it’s an absolutely necessary step in the process.

Unions in general and publicsector unions in particular have made themselves the chief impediment to preserving the sort of nation the Founding Fathers intended this to be, and it would be negligence on our part not to address them as such.

At the Freedom Foundation, we don’t just point out problems and wait around for someone else to fix them.

We intend to be part of the solution.

For that reason, you’ll see articles in this issue of Freedom Matters about free markets and limited, accountable government, but you’ll also find us taking on union abuses directly.

To our way of thinking, there’s no question two are inextricably linked, and we don’t mind multi-tasking.

Enjoy.

Tom McCabe, CEO

Volume 3, No. 1

22. All Shook Up

Does funding higher education benefit the public or is it just more income redistribution?

Could California’s problems be remedied by subdividing the state?

10. Fuel’s Errand

26. Janus Fallout

Oregonians’ recent meltdown over the prospect of pumping their own gas just shows what happens when people are overregulated for so long they start to forget what freedom actually feels like.

Right-to-work laws in Wisconsin and Michigan arguably handed the White House to Donald Trump in 2016. What’s going to happen in 2020 when the whole country follows suit?

14. No Strings Attached

30. Unions Extinct?

Contents

6. What’s In It for Us?

The false promise of a Universal Basic income appeals to advocates from all shades of the political spectrum. What few seem to have considered is the price those who profit from others’ labors end up paying themselves.

18. Lights, Camera ...

Capitalism Business has been a frequent target of Hollywood for years. But if you look hard enough, there are a few surprisingly flattering movies.

There was a time when organized labor may have served a purpose.

But these day, they’re just an ATM for the left using someone else’s money.

34. Unions Stay on Losing Streak You’d think taking a beatdown in Janus would convince unions to reform. Instead, they’re sticking to the same playbook that created their problems in the first place.

38. Action Timeline

Freedom Matters is a publication of the Freedom Foundation, a nonprofit think and action tank based in Olympia, Wash., dedicated to promoting free markets and limited, accountable government. Nothing in this publication should be construed as an attempt to aid or hinder passage of any ballot measures or the election of any elected official or candidate. Publisher: Tom McCabe; Editor: Jeff Rhodes. Phone: (360) 956-3482.

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Government employee unions, left unchecked, will destroy this country’s free-market economy.

No one fights them more aggressively or successfully than the Freedom Foundation.

Support freedom today.

Call us at (360) 956-3482, or give securely online at: www.freedom foundation.com

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What’s in it for

Us?

By JAMI LUND Senior Policy Analyst

Does the public really have an interest in Higher Education, or is all of this just another scheme to redistribute your income?

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V

irtually from the moment the republic was founded, it’s been an article of almost religious faith that education in general – and perhaps higher education particular – were absolutely in the public interest.

This has led, naturally enough, to calls for greater and greater subsidy.

But if one were to judge the results by the objective standards used outside the dream worlds of academia and government, it’s at least arguable the true winners are those for whom the higher education apparatus itself provides a comfortable living.

Meanwhile, the benefits to students and to the taxpayers who foot the bill are much harder to pin down.

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Years ago, for example, the Freedom Foundation called for performance audits of Washington state’s institutions of higher learning and released a detailed report, “Performance Audit Tools for Higher Education.” This followed up the organization’s own assessment of these institutions, conducted in 2008, which showed that high expenditures have not yielded impressive results.

Ultimately, the matter of higher education “results” leads to an even more important question: Does the public really have any interest at all in taxpayer-funded higher education?

And if so, what is it?

In the wake of the crippling nationwide recession in 2007, Washington, like other states, encountered financial difficulty in 2008, and higher education funding, being one of the more discretionary of public expenditures a legislature must consider, was subjected to a level of scrutiny it wouldn’t have faced otherwise.

According to national budget figures, state and local funding per student declined from $9,489 in 1987 to $7,152 per student in 2015.

Despite the decline, however, it isn’t completely accurate to say that states are spending less on higher education; in fact, total state and local spending increased by 13.5 percent (in inflation-adjusted terms) from 1987 to 2015 nationwide.

Meanwhile, higher education advocates have been working on making higher education an entitlement.

Bernie Sanders made an issue of it among his followers, and the state of Maryland recently passed a law providing free community college to state residents.

But what is the benefit to the citizenry for funding college for other citizens? The advocates for publicly funded education will argue that college graduates, on average, earned 56 percent more than high school grads in 2015, according to data compiled by the Economic Policy Institute.

Lifetime earnings of college graduates are potentially $1 million more than that of high school graduates.

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Most assume that by subsidizing higher education we’re creating highly skilled workers who will, in turn, improve the quality of life for everyone. But are we, instead, simply transferring wealth from even the poor to sustain an education establishment that doesn’t need our help and isn’t producing the results we’re paying for?

The irony is that we will tax everyone – including the poor – to give this extraordinary earning power to a relative handful.

Again, what public purpose – if any – is served?

If alien policy researchers came to the United States and sought from the results to determine how the public benefits from the country’s massive tax investment in financial aid and direct institutional subsidies, they would have to conclude the real beneficiaries of this largesse are college payrolls, programs, buildings and loan companies.

Students benefit, too. But they show up much farther down the list.

Notably, more than 1 million students drop out of college each year, so we do not seem to care about whether students graduate.

An enormous number of students need more than the allotted four years to complete their college education. Meanwhile, most degrees are awarded in “soft sciences” like liberal arts and humanities, which actually do not produce noteworthy income for the student or fill gaps in society’s workforce.

Only payroll, programs, buildings and loan companies are efficiently served by the system we have created.

But does the public actually have an interest in these?

Empowerment – Breaking the Cycle of Poverty The public has an arguable interest in aiding those raised in poverty to reach a level of self-sufficiency.

Many of the discussions about the

tutions themselves or their employees, and that interest is minimal unless one does not trust the ability of the private sector to provide quality graduates.

Ramifications

benefits of higher education boil down to this point.

The public already invests in public assistance, but could save those costs by investing in higher education.

Stategic Workforce – Training the Highly Skilled Employees Needed by Technical Employers The anecdotal example of this interest is the need for nurses. Data and want ads demonstrate that some services are limited or exceptionally costly because of shortages.

The public has an interest in encouraging a ready supply of some services. Defining which services are of “public” interest and which are of individual or corporate interest is obviously tricky, but attempting to

do so would help prioritize strategies for serving the public.

Educated Workforce – Improving the Overall Level of Skill for All Types of Employers This is of keen interest to common employers. Nearly all professions routinely point to their retirement rates as a matter of public concern, as if individuals have no pre-existing concern in preparation for jobs that provide for their needs.

The assumption that this is a public concern belies a lack of faith in the laws of supply and demand to efficiently mitigate any community harms.

None of these three possible interests has any relation to the interests of the public higher education insti-

Thinking about the public interest allows one to leave aside the institutions’ interest in budgets, compensation, program additions and the number of employees. The “cost” of meeting the public interest is important, but is not necessarily tied to institutional accounting.

If we have correctly identified the public interest, achieving this interest efficiently could be considered.

For example, if the public interests are correctly identified above, the optimal program for meeting the public interest would be offering large scholarships for nursing training to poor students completing on time and getting placed in the profession.

Efficiency, relative costs and measures of success also become easier to identify once the “point” of the expenditure is established.

For example, keeping track of job placement and wage improvement would be essential to truly know if “breaking the cycle of poverty” was working.

Completion of public interest degrees and job placement in shortfall areas would be an important measure. It might even make more sense to vary tuition by degree area in the same manner we encourage select industries with varying business tax rates.

If the evidence suggests that geographical limitations are leading to a deficiency in access and infrastructure, it might still be a more efficient path to the public interest to incentivize private institutions as we do with firm siting in economic development policy.

Ultimately, framing the public interest would help with the development of any policy related to accountability and efficiency – unless the point of taxpayers subsidizing higher education is merely payroll, programs and buildings.

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Fuel’s� ERRAND

Oregonians’ recent meltdown over the prospect of pumping their own gas just shows what happens when people are overregulated for so long they start to forget what freedom really feels like

L

ike all Americans, Oregonians instinctively crave freedom.

But having been nourished for generations on a steady diet of liberal pablum, more than a few have seen their instincts dulled to the point where they’ve now surrendered much of their liberty in return for the false promise of cradleto-grave security.

Where once the state was characterized by the rugged individualism of its pioneers, Oregon has devolved into a place where its modern residents recoil in horror at the thought of having to pump their own gas.

Oregon’s ban on self-service gas pumps dates back to 1951, when the state was concerned about untrained pump operators spilling fuel.

By AARON WITHE Oregon Director But gas station attendants were the rule everywhere then rather than the exception as they are now.

The trend changed with the oil embargoes and subsequent fuel shortages and price spikes of the 1970s. In an effort to reduce overhead costs and pass the savings on to the consumer, retailers in most states began installing pumps even technology-challenged drivers could easily operate.

Today, pumping their own gas is something motorists in nearly every other state take for granted. But until very recently, Oregon continued to buck the trend.

The reasons why were never clearly articulated, but the ensuing years don’t seem to have seen an epidemic of gas pump tragedies.

So unless Oregonians are afflicted with some special handicap that renders them less capable than motorists in other states of handling these complex mechanisms, we can probably eliminate all the good reasons things developed and start considering instead n PAGE 11 FREEDOM MATTERS FREEDOM MATTERS n PAGE 11

the misguided, dishonest, selfish and downright stupid alternatives.

Most likely, given the political inclinations of Oregon lawmakers, it was a simple case of protectionism. Rather than allow one maverick entrepreneur to undercut his competitors with an ounce of innovation, Big Brother imposed yet another regulation whose all-too-intended consequence was the institutionalization of mediocrity and inefficiency for all.

Against all odds, however, the state finally thrust its toe into the 21st Century and, as of Jan. 1, 2018, at least some Oregon gas stations have been spared the needless expense of paying a fulltime employee to perform a function untrained consumers in other states have been doing for themselves for more than 60 years.

Mind you, the law initially applies only to standalone gas stations in rural communities with fewer than 40,000 residents, but it’s a start.

Remarkably, though, many Oregon residents – rather than displaying gratitude for having been presented with an option they didn’t previously have – chose to be incensed by the change.

Again, nothing in the new law actually requires drivers to patronize self-service stations, and astute consumers recognize the tradeoff allows the station owners to reduce the price they pay at the pump.

But such is the state of dependence and economic illiteracy in Oregon that many thousands apparently believe they’re entitled to the enhanced service – and business owners, in turn, are required by law to provide it – at no additional charge.

The delusion starts in Salem, where the state’s lawmakers employ scare tactics and false rhetoric in order to push this agenda onto Oregonians. Like lemmings, many accept their lies and, in blind obedience, happily hurl themselves over the cliff of economic logic.

Think about it. You probably know someone who thinks this way.

They’ll be the person at work who does only the bare minimum to keep from getting fired, or somebody in your social circle whose biggest ambition is to live off a government pension at 40 years old.

Or maybe they’re that relative who corners you at family gatherings and insists universal healthcare and free education are the way forward.

Millennials are especially susceptible to this affliction.

Not all of them, of course, but having been raised in relative comfort compared to preceding generations that were obliged to confront world wars and depressions – genuine calamities, as opposed to the imagined, self-imposed variety – it’s easy to see how any perceived offense would create an opportunity to break one’s righteous indignation out of mothballs.

In the absence of actual horrors in their lives, they’ve had to manufacture obstacles to overcome, and the abject fear of being offended is the best they could come up with.

With their $50,000 hybrid cars festooned with Feel PAGE 12

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the Bern bumper stickers, these people are anti-freedom, anti-pump your own gas, pro-union, pro-universal healthcare, pro-free education – all in an effort to do as little as possible.

Meanwhile, everyone else suffers due to their lack of desire to achieve and inability to work hard.

This is the same rhetoric that justifies government unions and collective bargaining. If they didn’t have these protections in place, heaven forbid, they might actually have to get out of their car and pump gas – or worse, stand in front of their supervisors during their yearly review and justify their demand for better pay and benefits as the rest of us do.

This “do-as-little-as-possible-for-as-much-as-we-canget” mentality is what created and sustains government unions. Their laziness transfers to their jobs, but when

By all indications, Oregonians are as capable of operating a commercial gas pump as their peers in other states. Unfortunately, living for generations in a nanny state has stripped them of their sense of self-sufficiency.

their employer tries to discipline them, the union steps in to defend them.

In the private sector, not even the union leadership would tolerate workers with such an attitude because anything that threatens profits threatens everyone’s livelihood. But government workers are paid through taxes, and when they have to be raised to satisfy the unions’ latest demands, it’s a simple matter of picking up the phone and calling a few of the politicians whose palms had been greased with campaign dollars extorted from workers forced to pay dues or be fired.

It’s this mentality that’s brought us to the point where people can express genuine outrage at nothing more than having been presented with an option they didn’t have before.

Because some individuals don’t want to do the work of

getting out of their car and squeeze a nozzle to put gasoline in a car like 95 percent of the population of drivers in the United States have to do, they demand that everyone else to pay a premium to subsidize their choice.

Imagine, for example, sitting at a gas station with 12 pumps but only one attendant on duty trying to serve six cars. Wouldn’t it be so much easier if you could simply get out and do it yourself?

It would save everybody time and money to have this ability.

Which once again begs the question, why is the state denying consumers the opportunity to make marketplace choices – and businesses the freedom to cater to these wishes?

The answer is simple. The liberal agenda that’s dominated Oregon politics for decades is based on a foundation of taxation and regulation of businesses and individuals throughout the state. To leftists, the answer to every problem is more money and less freedom when, in fact, just the opposite is true.

In the real world, entrepreneurs must compete every day for the loyalty of those who buy their product or consume their service. In one form or another, the only weapon in their arsenal is the ability to offer more value, lower prices or both.

In the public sector, by contrast, the narrative is turned on its head. By being less efficient instead of more, bureaucrats build a phony case for ever more government employees.

The cause is then taken up by public-sector unions, which are enriched with every new body in the government workforce. And the whole enterprise is engineered by politicians whose offices were purchased by confiscated union dues.

The end result is a mélange of unnecessary, unproductive agencies whose existence depends on the willingness of corrupt politicians to raise taxes rather than shrewd, innovative business people who profit only by providing what consumers are willing to pay when given a choice.

This is precisely how people who’d be perfectly willing to pump their own gas if it saved them a few pennies a gallon are prevented from entering into a voluntary transaction with a business owner who’d gladly perform that service.

Freedom – and the choices that result from its proliferation – are sacrificed on the altar of collectivism.

Absent the oppressive benevolence of government and the culture of corruption it breeds, freedom lovers will be just that – free.

Free from obscene regulation and taxation and able to do things that make sense – like pumping our own gas, to say nothing of working hard and earning money without the fear of being punished with more regulations and higher taxes as a punishment for the sin of success.

All things considered, it seems like a small price to pay for the inconvenience of occasionally, if we want to, getting out of the car long enough to slop a little gas onto our shoes.

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No Strings Attached?

The false promise of a Universal Basic Income appeals to advocates from all shades of the political spectrum.

What few seem to have considered is the price those who profit from someone else’s labor wind up sacrificing in lost freedom.

By AMBER GUNN n Policy Fellow

T

he next frontier in the battle to end poverty and wealth inequality will be the push for a government-guaranteed income, euphemistically known as universal basic income (UBI).

Although not new, the idea is getting a fresh look as automation expands, technology advances and the growing prosperity of Silicon Valley tech giants affords them the luxuries of both time and feigned contrition.

Various versions of the proposal exist, but in the United States the most common would have the federal government sending out regular, unconditional checks to everyone, regardless of income or employment.

Counterintuitively, the idea has support even among libertarian thinkers, who view the concept of a UBI as a pragmatic replacement to the current morass of welfare state programs.

But these advo-

cates are perhaps too clever by half.

A government-guaranteed, unconditional income would make dependents of us all. Rather than freeing individuals with the drive and capacity to succeed, we would revert to children who must be carefully tended by great intellectuals and politicians.

Individual liberty cannot survive in such a paternalistic, coercive and entitled environment, nor will people recognize its value.

Strange Bedfellows and Growing Enthusiasm for UBI UBI has drawn strange bedfellows. On the conservative-libertarian end of the political spectrum, prominent figures such as Milton Friedman, Friedrich von Hayek and Charles Murray have touted the concept.

On the left, Martin Luther King, Jr., former SEIU president Andy Stern and nearly every Socialist and Green party worldwide promote UBI as a utopian wealth transfer from capitalists to the working class.

Finally, in that strange apolitical nether region of tech giants—perhaps fueled by philanthropic guilt, perhaps by fear FREEDOM MATTERS MATTERS FREEDOM

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of the masses—Elon Musk, Peter Thiel, Mark Zuckerberg and other Silicon Valley entrepreneurs are jumping on board the UBI train.

Indeed, part of the reason for these strange alliances across the ideological spectrum is because most UBI proposals are half-baked and can be manipulated based on the features considered important to any given proponent.

General public support for a government-guaranteed income is growing.

In a recent Northeastern University/Gallup survey, 48 percent of Americans favored the idea for workers displaced by technology, compared to just 12 percent 10 years ago.

Most supporters surveyed were in favor of higher taxes on technology companies to pay for the plan.

UBI pilot programs are now underway in various locations around the globe, including Canada and Finland.

A pilot program in Kenya will run a randomized control trial giving cash transfers to more than 26,000 people in 200 villages, with about 6,000 of them receiving a long-term, basic income for 12 years.

Trials are planned in Fife and Glasgow, Scotland, and a UBI was recently endorsed by the Indian government’s 2016-17 economic survey as “a powerful idea…whose time is ripe for serious discussion.”

Jury is Still Out on UBI Economic Data Empirical evidence is still lacking in terms of UBI outcomes. In explaining its financial support of the Kenya pilot program, the philanthropic investment firm Omidyar Network notes, “No study to date has been conducted with sufficient size, rigor, timescaleor universality to truly test the impact of a full-fledged UBI program.”

However, some supporters and detractors can point to real world “UBI-lite” illustrations to make their pro or con case.

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For example, although not officially a UBI program, proponents point to the Alaska Permanent Fund as a real-world example of how a UBI can positively impact recipient quality of life.

Since 1982, every man, woman and child in Alaska has received an annual “no-strings-attached” transfer payment from the state typically ranging from $1,000 to $2,000, funded by oil revenues.

Most Alaskans self-report the money makes a positive difference in their lives, and claim they use it for essentials, emergencies and future needs.

Nine of out 10 residents support the unconditional payment, in stark contrast with most targeted welfare programs, where the vast majority of Americans want work conditions for recipients.

UBI detractors point to studies on “per capita” tribal payments issued to members of various native American tribes.

Although many tribes are notoriously secretive when it comes to sharing data about their members, tribal per capita payments offer a valuable microcosm for studying the effects of unconditional cash on human behavior.

Standard microeconomic theory suggests that increases in unearned income result in decreased work efforts.

What economists often call the labor-leisure tradeoff model also explains why individuals require higher pay, such as overtime, as the demand for their labor increases.

A 2012 study by the Macrothink Institute concentrated on per capita payments made to members of three tribes in Michigan and found working hours decreased after per capita payments were introduced.

Another tribe, the Northern Ute, has made per capita payments to members for decades, yet 54 percent of its families live in poverty and 40 percent of adults on the reservation are out of the labor force.

Some tribal advocates have raised serious red flags about the powerful political effects per capita payments have on tribes, such as community division, political turmoil and mass disenrollment.

Gabriel S. Galanda, managing partner of Galanda Broadman, a self-described “American Indianowned law firm” wrote, “The per capita system dictates tribal election results and causes recalls and referendums. It shapes tribal fiscal policy and directly impacts tribal budgeting. It causes tribal program reorganization and reductions in force. It defines modern Indian citizenship … It starts civil wars within tribes, and between tribes.”

Of Math Problems and Moral Hazards In the end, advocates can cherrypick various examples on either side to make or break the economic case for UBI. But conservatives, libertarians and almost anyone on the pro-liberty, limited government side of the UBI debate should reject the concept soundly.

The promise of a simpler, more efficient welfare safety net as a replacement for our 70-plus welfare programs is a siren song that will be the undoing of whatever remains of what we think of as limited government, and in turn individual liberty.

For one thing, it’s a simple math problem. In America, a $10,000 UBI for 300 million people would mean $3 trillion per year—which equals the total amount of revenue the federal government collected in 2016.

Eliminating Social Security, Medicare and other payroll tax programs would only provide one-third of the needed revenue (and those programs are politically untouchable anyway).

In other words, even a belowpoverty UBI would eat up most of the federal budget and require a massive growth in government spending.

The only way around this

problem is to pitch it at a lower level—say $500 per month.

Politically, the only way to avoid the idea of a benefits cut for those who really need it and a benefit increase for those who really don’t, is to means test it, and to keep it in addition to current welfare programs.

As it so happens, Facebook cofounder Chris Hughes has proposed such a plan and is aggressively campaigning for its adoption. His plan would raise the top marginal tax rate on the wealthy to over 50 percent.

Asked by Forbes magazine whether such a rate would discourage entrepreneurs like himself, he responded, “I think that for the people that I went to college with ... wanting to be entrepreneurial is as much about leaving a mark on the world as it is about the financial reward.”

In a universal sense, it’s true that people are driven not just by financial success, but by compassion, philanthropy, honor, celebrity, legacy, duty and other motivations unrelated to economic gain.

However, contrary to Mr. Hughes’ anecdote, higher marginal personal income tax rates do, in fact, discourage entrepreneurship.

In most cases, starting a business requires significant risk. The entrepreneur must be prepared to take on debt and losses during the first few years until the business can turn a profit.

Governments take a cut of the business right off the top through licenses and fees, and more when it begins to turn a profit, but they do not share losses if the business fails.

The Trojan Horse for Unlimited Government Even if one could overcome the moral hazards and unintended consequences associated with UBI on both ends of the income spectrum, acceptance of such an idea would mean complete obliteration of the concept of limited government.

UBI is the pièce de résistance in a long line of Socialist ideas moving

us ever closer to total dependence on government largesse and alleged equality of outcomes.

In one fell swoop, the debate about whether an individual has a right to someone else’s labor in order to secure his own right to food, shelter, healthcare or any other human value would be forever closed.

We will have permanently and irreversibly ceded the philosophical ground staked in blood when the United States was founded—that all men begin equal, and that we have the right to be left alone to pursue our own happiness, not to have that happiness given to us at the expense of another person.

This is a unique and precious principle that has enabled economic prosperity, innovation, entrepreneurship and individual freedom to thrive simultaneously at a level unrivaled in human history.

An unconditional, cash-based entitlement, paid for and transferred by force from an economy’s job creators is utterly opposite the intellectual tradition of classical liberalism.

Frederic Bastiat perhaps explained this best in his classic work, “The Law”: “It is not considered sufficient that the law should be just; it must be philanthropic. Nor is it sufficient that the law should guarantee to every citizen the free and inoffensive use of his faculties for physical, intellectual and moral self-improvement. Instead, it is demanded that the law should directly extend welfare, education, and morality throughout the nation.

“This is the seductive lure of socialism. And I repeat again: These two uses of the law are in direct contradiction to each other.

We must choose between them. A citizen cannot at the same time be free and not free.”

Pragmatically speaking, it may reasonable for limited government advocates to be on board with a UBI that replaces the current 70-plus

welfare programs and provides a way to eliminate the so-called “poverty trap,” where means-tested programs encourage recipients to stay out of the labor pool in order to maintain eligibility.

Politically, however, it is far more likely that a UBI would be in addition to the current welfare state.

Liberty advocates who support UBI are on the wrong side.

Economist Milton Friedman was almost single-handedly responsible for the adoption of the federal withholding system, which was arguably one of the most devastating pro-government growth policies ever adopted.

Friedman was wrong about federal withholding, and he was wrong about UBI. Such a position is short-sighted and does not account for the very real danger that a people who no longer value individual liberty will cease to defend it.

If government is perceived as a father who doles out “free” gifts, rather than an imperfect institution that creates the conditions for peace and trade at a cost, there will be no end to the demands for trinkets and no comprehension of the tradeoffs involved.

There is a deeper issue at the heart of the UBI debate—that of the American Dream. Strip away all of the ancillary “pro” arguments, and you’re left with the core belief that America is no longer the land of opportunity for all and the middle class is dead.

Government is the savior that can equalize the playing field and unleash economist Thomas Sowell’s “unconstrained” vision of man.

Because government lacks its own money, solving poverty is not as simple as writing a check to every American from the Treasury.

A UBI does not generate wealth, it transfers it. We cannot live at the expense of the state, rather the opposite.

A government that attempts to be all things to all people can only end in tyranny.

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Lights....

Camera....

CAPITALISM

Business has been an easy target for Hollywood for generations.

But if you look hard enough, there are movies that portray free markets in a positive light.

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By JEFF RHODES n Managing Editor

t’s axiomatic that American businessmen and -women have never gotten a fair shake from Hollywood. Even during the industry’s gilded age, when the moguls running the studios were by and large first-generation immigrants filled with gratitude for this country and the institutions that had allowed them to become wealthy and powerful beyond their wildest dreams, the formula was too tempting.

Since nearly everyone buying tickets either was an everyday working stiff or at least identified as one, it made perfect economic sense to produce movies that depicted those who ran the workplace as inept, overbearing or in some other manner inferior to the story’s protagonist.

But it’s one thing to lampoon a flawed individual; it’s something else entirely to paint the

entire concept of capitalism with the same brush.

Even Orson Welles’ classic “Citizen Kane” – one of the first (and arguably still best) efforts to explore unsparingly the human face of corporate behavior – placed the blame for Charles Foster Kane’s eventual downfall squarely on his own shoulders rather than the free-market landscape he inhabited.

Again, the movie studios were run by people who harbored no illusions about the horrors of collectivist economies in comparison with the free-market system in which their fortunes were made.

Louis B. Mayer, for example, cofounder of MGM Studios, was born in Minsk and understood far greater than his modern contemporaries the abuses of Soviet Communism.

In his later years, he was a staunch conservative and one-time head of the Cali-

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fornia Republican Party.

Jack Warner, longtime president of Warner Brothers, was equally resolute in his conservative beliefs.

An ardent anti-Communist, he testified as a friendly witness during the House Un-American Activities hearings, voluntarily naming screenwriters who had been fired as suspected Communists or sympathizers.

The studio scions of their era were too busy practicing capitalism to find fault with it. Their job was to make money for themselves and their investors, and the surest way to do so was by turning out a product that appealed to as wide an audience as possible.

Their work didn’t ridicule or offend Americans or America in the name of art. It celebrated them and all that made the country great.

Such movies have been few and far between in recent years, but there have been notable exceptions in every decade. In no particular order, here are five motion pictures that not only highlight the glories of capitalism but do so in a knowing, unapologetic way.

1. Patterns (1956) Like most of the films on this list, this one could be mistakenly interpreted as an indictment of big business.

And in the hands of any other writer than the incomparable Rod Serling, it might be true. But this is a truly nuanced tale that doesn’t lend itself to simple answers.

Serling’s protagonist is Fred Staples (portrayed by Van Heflin), a young executive just named to the management team of a huge New York conglomerate called Ramsey & Co. At first the former small-town factory manager is dazzled by his new surroundings, but he quickly realizes he’s been hired as the eventual replacement for the company’s affable but aging No. 2 man, Bill Briggs (played by the affable but aging Ed Begley Sr.).

By far the film’s most interesting character, however, is company president Walter Ramsey (played by “Citizen Kane” alum Everett PAGE 20

n FREEDOM MATTERS

Sloane), a mirthless efficiency expert who knows firing Briggs would be a breach of protocol, so he endeavors to make the older man’s life so miserable he’ll quit.

Instead, Briggs suffers a fatal heart attack, which Staples blames on Ramsey’s relentless abuse.

In the climactic scene, Staples confronts a grieving but unrepentant Ramsey determined to resign.

Instead, following Ramsey’s cold but clinical rationalization of the survival-of-the-fittest corporate ethos, Staples reluctantly agrees to stay.

“This is no one’s business,” Ramsey thunders. “It belongs only to the best. To those who can control it, sustain it, nurture it, keep it going.

Right now, it belongs to us because we’re producing. But in the future, it belongs to whoever has the brains, the nerve and the skill to take it away from us.”

Translation: A business either grows and prospers or it dies. As hard-hearted as it may seem seem, its managers have a responsibility to its investors, stockholders, employees and suppliers that’s bigger than any one person’s feelings.

2. ExecutiveSuite (1954)

istic young designer William Holden versus the company’s money-grubbing comptroller, Loren Shaw, played with reptilian malevolence by the incomparable Frederic March. It’s no secret which will ultimately win the job; the fun is in watching the twists and turns as the shortcomings and ulterior motives of the other board members are exposed one by one.

As is true in “Patterns,” the two contenders – while not equally likeable – nonetheless represent two sides of the same capitalist coin.

While Holden’s character, Don Wallingford, argues the company needs to be more concerned with reinvesting profits into research and development rather than paying dividends and raising the price of its stock, Shaw is also correct when he stresses the importance of a healthy bottom line.

“Shaw’s right when he says we have an obligation to our stockholders,” Wallingford concedes in his speech just before the vote is to be taken. “But it’s a bigger obligation than raising the dividend. We have an obligation to keep this company alive – not just this year, but next year and the year after that.”

What makes “Executive Suite” so watchable is that it doesn’t simply pit good against evil and then sit back and wait for good to prevail. It makes the struggle interesting by giving both a valid point of view.

Importantly, neither is advancing an agenda that questions capitalism or suggests an alternative. They’re simply coming at the problem from different perspectives.

3. Cash McCall (1960)

Many of the same points are points are addressed in a not-quiteas-dark movie made two years earlier. “Executive Suite” chronicles the board of directors of a major furniture company that must replace its charismatic founder and president when he dies unexpectedly without having designated a successor.

Ultimately the choice – if you want to call it that – comes down to ideal-

If’ you’d prefer your lesson on capitalism dosed out in a spoonful of sugar, this is the movie for you.

On its face, “Cash McCall” is a gauzy, otherwise-forgettable romance featuring James Garner in the title role. But what sets the movie apart from similar pot boilers is its being set against the backdrop of a corporate takeover.

In order to cement his relationship with Lory Austen, played by Natalie Wood, McCall schemes to

buy her father’s struggling plastics company for more than anyone believes it’s actually worth.

But once having done so, he soon discovers the company owns holds several important patents without which its biggest customer, a television console producer, can’t continue to operate.

McCall winds up buying the second company, too, rolling both together to form a defense contractor.

But when Lory Austen’s father finds out about the ancillary deal, he’s incensed, believing McCall used his daughter to cheat him out of what’s suddenly become a much more valuable property than the one he sold.

Garner’s McCall has a reputation for ruthlessness he shrewdly cultivates – at one point telling a business associate, “I’m a thoroughly disreputable character” – even though it’s largely undeserved.

In the end, however, he manages to clear up the misunderstandings and win over his future father-in-law, but that’s not why “Cash McCall” makes this list.

Again, look past the saccharine love story and enjoy the corporate machinations. Better still, revel in the fact that a major studio made a movie in which the hero is a lovable corporate raider and cast one of the industry’s most charming leading men in the role.

Think that’s likely to happen again in our lifetime?

4. Other People’s Money (1991) It’s hard to figure out how this one escaped the notice of Hollywood dream makers and their Utopian

vision of a collectivist world – for the rest of us, that is. Either someone in charge actually does understand capitalism, or capitalism is so obviously superior to any other economic system that even dialogue that’s intended to condemn it winds up endorsing it.

In the movie, Danny DeVito plays Lawrence Garfield, aka “Larry the Liquidator,” a remorseless yet still likeable corporate raider whose latest acquisition target is a struggling but solvent wire and cable company run by its impossibly benevolent president “Jordy” Jorgensen (portrayed

by Gregory Peck as though Atticus Finch had simply traded in his seersucker suit for a lab coat and moved north).

The movie’s climax comes when both men address a stockholders’ meeting at the plant.

Jordy leads off with a predictable liberal stemwinder about how the company has an obligation to the residents of its community – most of whom will lose their jobs if the plant is closed down as Garfield proposes.

But Garfield follows with a spot-on rebuttal during which he observes that no one will benefit if the company stays on its present course and gradually goes bankrupt. “(L)est we forget,” he reminds the stockholders, “that’s the only reason any of you became stockholders in the first place. You wanna make money. You don’t care if they manufacture wire and cable, fried chicken or grow tangerines … Take the money. Invest it somewhere else. Maybe, maybe you’ll get lucky and it’ll be used productively. And if it is, you’ll

create new jobs and provide a service for the economy and, God forbid, even make a few bucks for yourselves. And if anybody asks, tell ’em you gave at the plant.”

5. Atlas Shrugged (2012) No homage to capitalism would be complete without at least a nod to the woman who all but invented the concept.

Ayn Rand’s 1957 magnum opus took five decades to make it to the screen and, even at that, it wasn’t released by a major studio or feature a big-name star.

No matter. Any motion picture that includes even one of the book’s many soliloquies on the subject of capitalism and free trade is worth watching – if not studying in a classroom.

Fracisco D’Anconia’s withering response to the cliché that “Money is the root of all evil?” It’s in there.

Hank Reardon’s classic courtroom self-defense when charged with the crime of putting his own interests first? Absolutely.

John Galt’s riveting radio address explaining to the rest of the world that its productive members have effectively gone on strike against the government because they were tired of having their creativity stifled and their industry stolen by a system that enriches those in the income-redistribution business while impoverishing everyone else? You bet.

It’s too preachy, too convoluted and much, much too long. But like the other entries on this list, “Atlas Shrugged” is a tonic for film-goers who believe capitalism is the solution, not the problem FREEDOM MATTERS

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By SAMUEL HAN California Director

All Shook Up PAGE 22

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California’s economic problems are painfully obvious, as are the reasons for them. The question is whether a maverick billionaire’s idea to subdivide one big state into five small ones is a solution everyone can live with.

S

ince Gov. Jerry Brown was sworn in for his second crack at making the turning the Golden State into fools gold, more

than 240,00 of its residents have fled in favor of other states like Texas and Nevada.

Both of those states, whose populations – and economies – are growing, have zero income

tax, whereas California has the highest marginal income tax rate in the nation.

Despite California having the sixth-largest economy in the world, it boasts one of the highest poverty rates in the nation.

That’s because the cost of living drags down its economic output and accelerates its poverty.

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California also ranks No. 4 among states with the highest levels of income inequality, which creates a rallying cry for liberals and their allies in public-sector unions.

As always, their preferred solution to the state’s myriad problems is from an old and tired playbook to tax the rich and redistribute to the poor.

In other words, exactly what got the state into this fix in the first place.

Thanks to various incomedistribution schemes like business regulations, cap-and-trade, as unsupportable minimum wage and outrageous workman’s compensation laws, businesses are finally calling California’s bluff and relocating their headquarters elsewhere.

Toyota shifted its U.S. corporate offices – along with thousands of jobs formerly located in California – to Texas, while Nestle USA moved its headquarters from Los Angeles to Virginia, taking another 1,200 California jobs with it.

Incomprehensible though it may be to Brown and his acolytes, businesses are committed to their bottom line and their investors, not some leftist vision of Utopia in which profits are optional. If the cost of doing business is better in another state, it’s the fiduciary responsibility of a company’s management (to say nothing of plain common sense) to jump at those opportunities.

Texas and Virginia won in these cases because the government structure in those states sees businesses and they jobs they bring as an asset to be cultivated, not a necessary evil to be over-regulated and bled dry.

Local governments have a role they can play in creating a thriving business environment for planned communities. Employers want to recruit top talent and they know that their employees want affordable housing, access to great education, safe communities and leisure opportunities.

PAGE 24 n FREEDOM MATTERS

California MFG job growth continues to trail rest of US

But while it’s the corporate giants that garner the headlines, the stories of small business owners who employ five to 10 workers are in many ways even more compelling. Individually, they barely show up as a blip on the state’s economic radar. But collectively, they employ far more Californians than all the Toyotas and Nestles combined.

And the burdens they’re saddled with by the state’s lawmakers are just as unbearable.

Unfortunately, these businesses do not have the luxury of tax-savvy lawyers and access to capital to move their location across state lines. Their only recourse is often bankruptcy.

One such employer Trevor O’Neil, who owns a small, privatepay home healthcare company that provides aid and homecare services to senior citizens in Orange County.

Every year, the O’Neil and the Legislature fight a deadly duel over his ever-shrinking profit margin. The state’s lawmakers see his meager earnings as theirs to trade in return for votes. They do this by requiring mandated sick pay, failing to address climbing unemployment insurance tax rates and workers compensation insurance premiums, and growing a huge state bureaucracy that now regu-

lates caregiving services.

Like any entrepreneur, O’Neil understands what politicians apparently don’t – that you can only raise prices so much before pricing yourself out of the market. He says that if he didn’t have these costly burdens, he could and would pay his employees at least 20 percent more than they make now.

Why is his industry under assault? Beyond the business obliviousness of Brown and his fellow tax-and-spend liberals, homecare workers are currently affiliated under a pair of powerful unions in the state of California. In 2017 alone, the United Domestic Workers (UDW) and Service Employees International Union (SEIU) collected more than $90 million in dues from California caregivers.

In turn, many of these dollars went right back into the political machine that keeps the liberal cabal in Sacramento in power.

This is where we get the term for crony capitalism.

Big industries, however, can play both ends against the middle, and some industries with powerful lobbyists can curry favor to avoid the expensive regulatory environment in California. For example, Brown and his fellow Democrats play favorites with environmentalist groups and are happy when Toyota leaves the state but will

Jefferson

North California con Sili

bend over backwards to persuade Tesla to open a new factory in town.

Another industry that gets special attention is Hollywood. This special bastion of liberal elites was able to secure a $100 million film and TV Tax Credit program from the state. The bill was touted by politicians on both sides of the aisle as a way to bring good-paying jobs back to California. But if tax breaks work for one industry, why not extend the same privileges to all businesses?

Assemblyman Donald Wagner (R-Irvine), who voted for the measure, explained, “Many Democrat members don’t enter the chamber with business experience and don’t recognize what it requires to sign the front of a paycheck, only the back of one.

“In this case,” he said, “you have the Democrats willing to acknowledge certain industries are worth saving, and if we can give them a competitive advantage, we should.

I only wish they would apply that same logic across the board.”

While Brown and his cronies play favorites with certain industries, it doesn’t help the overall picture of job losses. According to

y

le Val

a study by California Manufacturers and technology Association, California currently lags behind the country in manufacturing job growth by almost 50 percent.

Some on the left claimed California experienced a surge in jobs in health and food industry, but the report suggests this job growth is greatly undercut by the losses of jobs in manufacturing.

The average salary in manufacturing and technology is $90,000, whereas a job in the health, sciences and food industry is only $50,000. The real depletion here is the loss of the middle class. Compound this effort with other regulations in place like

Central California

West California

South California

prevailing wage laws and a complicated legal structure, and the issues of California seem almost too big to solve.

Some critics claim that apart from declaring bankruptcy, California may be too far gone fiscally to save.

Enter Tim Draper, a billionaire venture capitalist most famous for his investments in Tesla and Skype, as well as being an early investor in Bitcoin.

Arguing that California has become increasingly ungovernable, Draper filed a petition in 2014 to begin collecting signatures to divide California into six smaller states.

The proposed states were to have been named Jefferson, North California, Silicon Valley, Central California, West California and

South California. A board of 24 commissioners would have also been appointed to negotiate how to divide the state’s existing assets and liabilities among the new entities.

Opponents of the plan argued it would greatly diminish the state’s prestige in the world economy. It would also have negative implications that could cost California’s businesses and taxpayers tens of billions of dollars in duplicate government offices, additional laws and the additional burden of federal regulations regarding interstate commerce.

But proponents of the measure favored the proposal because it made California’s state government closer to its people and better able to regulate the state’s regions in areas like job creation, education, affordable housing, and water transportation in a manner consistent with the region’s needs.

Assemblyman Wagner also commented that the proposal is an opportunity to start over and to abandon some policies that have become entrenched in California government for over 60 years.

Laws like the prevailing wage laws, and right-to-work legislation, can be changed and states can have an opportunity to experiment with free market and small government solutions.

The initiative ultimately failed to qualify due to a lack of signatures, but the idea continues to resonate with many across the state. Recently, however, a new organization called “New California” published a document online declaring its independence from California, which they describe as “ungovernable.”

The group writes, “After years of taxation, regulation and monoparty politics, the state of California and many of its 58 counties have become ungovernable.” It is unclear whether the group has enough support to finally break up California but, successful or not, this will not be the final attempt as long as California’s government remains in the clutches of a powerful few.

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The political fallout from Janus could be

HUGE

The introduction of right-to-work laws in Wisconsin and Michigan arguably tipped the 2016 electoral scales in Donald Trump’s favor.

What’s going to happen when the whole country follows suit?

By BEN STRAKA n Labor Policy Analyst

W

ith the way government unions have been screaming bloody murder about the U.S. Supreme Court’s expected decision in Janus v. AFSCME (2018), it’s pretty clear they believe the case, which challenges the constitutionality of mandatory union fees in the public sector, will severely cripple organized labor’s influence over American politics for years to come.

One can but hope.

In fact, most union spokespeople have convinced themselves that’s the true objective of the shadowy figures actually orchestrating the case. Using their calculus, plaintiff Mark Janus is merely a pawn in a larger game whose aim is to reduce government unions’ ability to fund liberal political candidates and causes.

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Their overheated conspiracy theory conveniently overlooks the fact that Janus has an extremely compelling case based on genuine abuses of his First Amendment rights. Nonetheless, the fear mongers aren’t entirely wrong about the downstream effects of the case.

Some experts predict that if the Supreme Court rules that forcing public employees like Janus to pay union fees against their will is unconstitutional, public-sector union budgets could take at least a 30 percent hit in the years that follow.

And it’s not just theoretical.

Right-to-work protections, as they’re called, have already been enacted in 28 states without the court’s help and have proven to have a drastic effect on conservatives’ ability to make electoral gains in places once thought to be firmly under Big Labor’s control.

Take Wisconsin, for example.

Although considered something of a battleground state when Republican Scott Walker was elected governor in 2010, government unions had enjoyed a long history of political dominance in the Badger State.

As is usually the case, however, organized labor’s gains had come at an immense cost to taxpayers. By the time Walker took office, the state was facing a multi-billion dollar budget deficit.

Walker and the state’s Legislature quickly took steps to rein in the runaway cost at its source, enacting the “Wisconsin Budget Repair Bill” in 2011 to, among other things, limit certain aspects of public-sector collective bargaining, reduce the state’s obligation to pay into public employee pensions, end the state’s practice of automatically deducting dues on behalf of unions and require government unions to compete in annual recertification elections.

Four years later, in 2015, Wisconsin lawmakers formally passed a statewide right-to-work law.

The resulting change in Wisconsin’s political landscape has become a prime example of just what can happen when the playing field is leveled between government unions PAGE 28

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and the taxpayers who were previously forced to fund their liberal agenda.

For starters, Walker easily survived a union-backed recall election in 2012, winning by an even larger margin than he had in 2010. Republicans in the Wisconsin Legislature also survived enough of their own recall elections in 2011 and 2012 to maintain control going forward.

And then something even more unexpected happened – Donald Trump won Wisconsin on his road to the presidency.

Trump became the first Republican candidate since Ronald Reagan in 1984 to win the state, and his victory there shocked both his opponents and the mainstream media.

Most pundits expected the state would be a relatively easy win for Democratic candidate Hillary Clinton, and when Trump came out on top, many shook their heads and simply attributed the victory to Trump’s rhetorical appeal with “white working-class voters.”

But while Trump’s message clearly resonated with all kinds of voters across the country, a more plausible explanation for the seismic shift in a state like Wisconsin – both during the 2016 presidential campaign and in the years prior – is that Big Labor, finally obligated like all other organizations to collect fees from only those employees who wished to support its exclusively liberal agenda, had far less money to spend on the campaign.

This reality may have been beyond the mainstream media’s comprehension, but it made perfect sense to those paying attention. In the years since Walker’s budget reforms and right-to-work legislation had come to Wisconsin, public-sector union membership and funding had plummeted.

Overall union membership in the state fell by more than 30 percent between 2010 and 2016, according to federal statistics, and government unions themselves acknowledged they had far fewer resources following the legislation.

By 2015, two out of three state

Most pundits expected the state would be a relatively easy win for Democratic candidate Hillary Clinton... workers had dropped out of their AFSCME union, and by 2017, the Wisconsin teachers’ union had reportedly lost more than half of its dues-paying members.

It’s worth repeating: In just a few years following the enactment of right-to-work protections, half of Wisconsin’s public school teachers and two-thirds of its AFSCME-represented state employees had opted out and were no longer paying union dues.

If you’re looking for an explanation of now-President Trump’s historic win and the resurgence of conservative politics within the state, look no further.

But while government unions cry foul play, it’s important to remember their decline in dues revenue is self-inflicted, a mere representation of the value (or lack thereof) workers place on their services and the objections many workers have to paying dues to organizations that don’t reflect their values.

The story in Michigan was nearly identical. Did Trump win the state because of Clinton’s over-confidence, or is there a more substantive reason?

As with Wisconsin, we need look no further than right-to-work. Prior to enacting right-to-work legislation in 2012, Democratic campaigners in Michigan had for years been able to rely on heavy union funding to bolster their ground game during campaign season.

Yet unsurprisingly, post-presidential election reports from Michigan specifically highlighted the lack of funding allocated to the Clinton campaign effort, even pointing out that local campaign organizers were scrambling to raise their own funds to enable door-knocking efforts prior to election day.

Coincidence? Hardly.

Although the Clinton campaign may have suffered in part from its own negligence, the fact remains that in traditional labor strongholds like Michigan and Wisconsin, government unions’ inability to collect forced dues from public employees is a much more quantifiable reason for Democrats’ weakened ground game.

And you can bet the effects of Janus v. AFSCME will be the same – only greater.

Unlike the right-to-work laws passed in Michigan and Wisconsin, the Janus decision will affect public employees nationwide.

So if the U.S. Supreme Court rules in Janus that public employees in every state can opt out of paying union dues, which union stronghold will be the next to flip from blue to red?

Oregon? Washington? California?

Perhaps there is no limit. While the playing field may take longer to level out in more populated states like California or New York, it’s not rocket science to figure out what could realistically happen by 2020 in liberal strongholds like Washington and Oregon.

Take Oregon, for example.

When the U.S. Supreme Court ruled in Harris v. Quinn (2014) that certain state-paid caregivers could choose whether or not to pay any union dues or fees – effectively giving them right-to-work – the Freedom Foundation embarked on a campaign the following year to ensure every caregiver was informed of their right to opt out.

The results have been eyeopening. When given a choice, more than 40 percent of these workers in Oregon have chosen to opt out of SEIU since 2015, costing the state’s largest government union more than $4.5 million per year.

Janus v. AFSCME promises to bring every state, county, city and public school employee the same option. Because of that, it’s not unreasonable to think that Oregon publicsector unions could lose between 30 and 40 percent of their overall funding by 2020.

With 30 to 40 percent less union money available to spend on political activity, liberal candidates and causes could be in big trouble in future elections.

Already in 2016, Republican Dennis Richardson won a surprise victory over his heavily union-backed opponent to win the Secretary of State race, marking the first time since 2002 a Republican had been elected to statewide office.

Voters also soundly rejected a union-backed tax measure in 2016,

and when it comes to the governorship, the Oregon media and the public at large have rightfully criticized the past two Democratic incumbents for their scandals and failures to address the state’s Wisconsin-esque budget crisis.

Still, the state’s powerful government unions have managed to keep tight control of the Oregon Legislature in recent years and have successfully warded off any recent Republican push for governor.

Janus v. AFSCME could set the stage for that to change. As both Wisconsin and Michigan have shown, even labor fortresses like Washington and Oregon can turn from blue to red in the wake of rightto-work.

Recent history has shown that when government employees have the right to leave and quit paying their unions, many of them do just that – taking the unions’ lifeblood with them.

Union officials may feel that Janus v. AFSCME is an attack on their finances, but that’s nothing compared to the way public employees have felt for years as they’ve been forced to fund political candidates and causes with which they disagree.

Now that many of those employees are poised to reclaim their hardearned money, it’s understandable that unions are scrambling to figure out new ways to maintain their political clout.

But they simply won’t be able to. Not without the ability to force workers to pay dues or fees.

Unions are barking up the wrong tree when they claim Janus v.

AFSCME is a coordinated attack on their political influence. Janus has been, and always will be, a case seeking to protect public employees’ First Amendment rights.

But because the existing government union model is fundamentally built upon violating individuals’ First Amendment rights, the unions are right about one thing – Janus will likely spell the end for them.

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Have Unions

A

Outlived Their

Usefulness?

s the world anxiously awaits a ruling by the United States Supreme Court in Janus v. AFSCME that will directly impact more than 20 million public-sector employees across the nation, we’re left with a critical question: If the plaintiff, Mark Janus, prevails, how should the ruling be implemented by each state to ensure the decision produces intended outcome?

It is, after all, one thing to make laws and issue legal rulings protecting the First Amendment rights of publicsector workers who don’t wish to be bullied into a union.

But as history has shown, it’s something else to make the unions and the state lawmakers whose strings they pull comply.

For example, a number of unions around the country, anticipating an

Once, organized labor performed a necessary service. Nowadays, it’s nothing but the funding arm of the political left, living on past glories.

By JENNIFER MATHESON n Paralegal adverse ruling in Janus, have adopted “opt-out” schemes designed to deceive and make it nearly impossible for public-sector employees to leave the fold.

The unions go to great lengths to keep these unsuspecting, hardworking Americans in the dark while ensuring they continue to fill their coffers and pad the wallets of their high-level union executives – most of whom are generally out of touch with what the average working union member faces on a day-to-day basis.

At its core, a union is simply a group of people who affiliate for a

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n PAGE 31

common purpose, a term of art in labor relations that represents the basic collectivization effort and unit.

Historically, unions served an important purpose in this country.

Beginning in 1828 a group of workers in Philadelphia grew concerned about their low social and economic status and organized the first union in the United States.

It was called the Working Man’s Party, and it heralded a new age of collective worker power as more and more unions began to take shape around the country.

These groups have evolved into the unions of today, which now look far more like the mega-entities they were founded to fight.

Workers in previous generations often joined unions to protect their rights and advance their interests.

These days, however, workers are leaving unions to achieve the same results.

Two important developments have contributed to this shift: (1) the growth of unions’ colossal political involvement; and, (2) unions’ annexation of public-sector workplaces.

As union membership has grown over the last century, unions have gone from free association boon to boondoggle.

Indeed, it has become difficult to gauge when representation for a common purpose becomes an infringement on First Amendment Rights.

Beyond that, ensuring workers can easily opt out of the unions they choose not to support continues to be a major hurdle in obtaining worker freedoms.

Over the last century, workplace laws and norms have evolved to accomplish what previously only aggressive union bargaining could achieve.

In 1936, for example, the WalshHealy Act was enacted to secure workers a minimum wage, set limit maximum hours worked per week and establish enhanced safety and health standards.

All private-sector workers enjoy the benefits of these laws, and PAGE 32

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governments have instituted compaUnions were formed in response to blatant abuses such as child labor, not to serve as a funding source rable measures for for liberal causes and candidates using dues money their public employee confiscated from workers who don’t share the union’s workforces. Which values. begs the question, do workers still need unions?

Onward the unions marched, and in 1938 the focus became child labor, and thus the Fair Labor Standards Act (FLSA) was passed, containing strong provisions regulating child labor. The FLSA ensured that when young people work, they’re kept safe and their health, well-being and educational opportunities are not compromised.

As a civilized society, we’ve come to recognize unions, that is) intend to survive, that workers’ rights and well-being they’ll need to stop focusing on how should not just be limited to union much power they can accumulate members, and we, as a citizenry and and go back to their roots by ofas a country, have initiated protecfering the kind of advocacy publictions and passed laws for the protec- sector employees would be willing tion of all workers. to pay for.

The unions had an important role Chief Justice John Roberts to play in getting us all here, but suggested during oral arguments their time has passed. They must for Janus in February that eliminow adapt if they wish to survive. nating forced payment of dues may Unions must offer their members force unions to search for “markettrue value. Public-sector unions are oriented characteristics,” or perhaps big businesses that generate mila business plan. lions of dollars each year, but the A modern-day business plan could dues-paying members no longer help unions refocus on their percepreceive the benefits those dollars tion and branding for their “customshould be buying. ers” – the union members. It is well The unions are no longer a understood that when a business strong-armed watchdog protecting implements a new business plan the weakest of society. Instead, it may be required to make some they more closely resemble nothing major changes in order to provide more than a street corner swincustomers a tangible return on dler or snake oil salesman. Their investments. behavior “conjures up images of In the current arrangement, seedy profiteers trying to exploit public-sector unions have obtained an unsuspecting public by selling it more and more money while defake cures.” manding increased allegiance from Luckily, Mark Janus saw politicians – allegiance that pays off through the slick sales pitch. Conse- for the union and its executives, but quently, if the unions (public-sector not the rank-and-file member.

Prior to the Janus case, there seemed to be no end in sight. Big payoff “donations” to politicians by unions resulted in legislation favoring organized labor and giving it still more power.

As the saying goes, power corrupts and absolute power corrupts absolutely.

Present-day unions are proof of this, as they have become identical to the corporate dragons they were created to slay a century ago.

Well before Mark Janus filed his lawsuit, union leaders understood they must allow individuals to opt out on request.

But while complying with the letter of the law, the unions have created a nearly impenetrable maze of rules an individual must navigate to successfully opt out.

The worker remains trapped in a labyrinth with ever-changing passageways while monthly union dues continue to be skimmed from every paycheck. Each local union has different opt-out procedures and each is designed to make the process as complicated as possible.

The window of opportunity during

which a person can opt out of their union is typically a limited number of days that comes around once per year and may be either the anniversary of the date the collective bargaining agreement was signed or when the individual signed their union membership card.

Unions know the employee is inundated with paperwork during the hiring process and the likelihood of each employee keeping their membership card or knowing the date on which the collective bargaining agreement was signed is

slim to none.

To further complicate matters, does the date of signing change if the collective bargaining agreement is subject to automatic renewal on a different date?

Many would-be defectors have found the process for opting out so onerous that they’ve sought the help of outside agencies.

When those requests have been submitted to the unions through the assistance of those agencies, they are often rejected on the basis of being a “third-party request.”

Where does it end?

Ideally (and constitutionally), a worker’s decision to join his or her union should never be forced on them.

If the union offers a service workers find valuable, they will choose, freely, to join.

While the idea of unions voluntarily adopting opt-in systems may be a pipe dream, at a minimum the “opt-out” process needs to be overhauled.

All public-sector unions should adhere to a uniform means by which workers can exercise their First

Amendment rights to opt out at least as easily as they opt in.

The Freedom Foundation outlined specifically in two amicus briefs how simply ruling that compulsory union fees are unconstitutional does not stop unions from collecting them.

The amicus supporting the Petition for Writ of Certiorari for Riffey v Rauner outlined how opt-out practices used by unions have undermined Harris v Quinn.

The only way to protect workers’ First Amendment rights is to require prior, affirmative consent to collect dues. In an amicus brief filed in favor of Mark Janus in Janus v AFSCME, the Freedom Foundation asserted if all public employees are given the right to “choose whether they will financially support unions, that right should be meaningfully safeguarded”.

If the court does not rule opt out schemes violate workers’ First Amendment rights in Janus, they should do so in Riffey. As outlined in both briefs, requiring an opt-in system would ensure protection of workers’ First Amendment rights.

Over the past century publicsector unions have stopped serving a common purpose and are largely self-serving. Individuals should no longer be required to join these unions and for those that have, they should have the ability to leave when they want to.

The Supreme Court decision in Janus should not only be concerned about the current violation of the First Amendment by public-sector unions but also in the steps that must be taken to implement the court’s decision for all public-sector employees.

Unions need to reacquaint themselves with the free market and provide services workers are eager and willing to subsidize. This would safeguard workers’ rights and make unions better.

Protectionism for existing union bosses via compelled fees, opt-out schemes, and the like incentivize the inflexible, stagnant, abusive status quo.

FREEDOM MATTERS

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T

By MAXFORD NELSEN n Labor Policy Director

o change or to double down? That is the question faced by government unions representing public employees in non-right-to-work states in a ruling that literally may have been issued by the U.S. Supreme Court in the days since this magazine was printed and found its way into your hands.

Like all losing gamblers, however, union leaders seem intent on ignoring the fact that it was precisely the hubris of the former strategy that caused their dilemma in the first place.

Certainly the unions themselves expect an adverse decision in Janus v.

AFSCME. At the Washington Federation of State Employees’ 2017 annual convention, president of the American Federation of State, County and Municipal Employees (AFSCME) Lee Saunders admitted there is a “very good chance” the court will rule against the union and in favor of Mark Janus, an Illinois state employee who objects to being

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forced to financially support the union as a condition of employment.

Accordingly, government unions in the 22 states allowing mandatory union fees for public employees are planning for the worst. For decades, these unions have taken the stability of their legally mandated dues-collection scheme for granted. If public employees can make their own decisions about whether to pay union dues, however, unions may have to fundamentally rethink how they do business.

When it comes to politics, for example, unions routinely donate almost exclusively to leftist candidates, even though sizeable minorities of public employees tend to vote Republi-

You’d think they’d learn from the historic beatdown they’re about to take in Janus. But their response just appears to be be more of the same.

Unions Stay on Losing Streak FREEDOM MATTERS

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can. In May, for instance, the Washington State Labor Council endorsed more than 100 candidates for Congress and the Washington State Legislature.

Not one was a Republican.

While unions like to claim they don’t spend dues money on politics, the reality varies somewhat by state.

Unions do face some restrictions in contributing dues money to candidates for federal office, but most states place no restrictions on unions’ ability to use dues money to engage in state and local politicking.

In Washington state, about threequarters of the funds unions spend on electioneering comes straight from dues-funded treasuries.

Accordingly, public employees with different political views than those of the hard leftists running most government unions may jump at the chance to prevent their money from supporting organizations with beliefs so divergent from their own.

A rational response given this reality would be for unions to pare back their hard-edged political activism, or at least attempt to be more balanced in their political giving.

Similarly, unions could opt to step up their game in proving the services they provide are worth what members surrender in dues. Unions’ currently complex hierarchical structure, however, makes this difficult, if not impossible.

Teachers’ unions like the National Education Association (NEA), to cite one example, have as many as four layers of dues-hungry bureaucracy to feed. A public school teacher in Washington state doesn’t just pay dues to support the bargaining and representational work of his or her local, but also the regional “UniServ” Council, the statewide Washington Education Association and the Washington, D.C.-based NEA. Despite its large office buildings inside the Beltway and lavishly paid executives, many rank-and-file union members see little benefit returned from the funds eaten up by these behemoths.

Such dissatisfaction is already causing friction in the labor movePAGE 36

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They still don’t get it “I am not prone to hyperbole, but we face a clear and present threat to American democracy by those who want to further rig the system toward the already powerful.”

RANDI WEINGARTEN American Federation of Teachers

“We won’t back down from this fight and we will always stand up to support working people, our students and the communities we serve.”

“The anti-worker extremists behind this case want to divide working people, make it harder to pool our resources, and limit our collective power. But SEIU members won’t let any court case stand in our way of sticking together for good jobs and strong communities.”

LILY ESKELSEN GARCIA NEA

ment. In April, after a lengthy legal and public relations spat, the 11,000 members of the Clark County Education Association in Nevada (a rightto-work state) voted to disaffiliate from the Nevada State Education Association and the NEA. Consequently, Clark County educators will pay significantly lower dues, likely without any perceptible decrease in the quality of their representation.

Government unions looking to demonstrate value in a world in which dues payment can no longer be taken for granted would be wise to seriously consider a similar move.

In addition to retaining membership, unions may have to navigate the challenges posed by the altered legal terrain. Government unions’ chief argument against right-to-work is that it forces them to provide representational services to nonmember “free riders.”

But the requirement that unions represent nonmembers comes from

MARY KAY HENRY, SEIU

state laws backed by unions in the first place. Unions demand: (1) a monopoly on providing workplace representation services to public employees; and, (2) the ability to compel people to pay for such services.

Absent the latter, they complain about the supposed obligations of the former.

Admittedly, a more just system would allow unions to negotiate on behalf of and represent only those employees who choose to join as members. Conversely, nonmembers would be freed from the once-sizefits-all strictures of a union collective bargaining agreement and free to negotiate the terms of their employment directly with their employer.

While the concept of jettisoning the “free riders” has gained a small following among labor intelligentsia, there has been not a single practical sign that unions are actually going to move in this direction.

In fact, existing evidence strongly indicates unions will reject each of

Even with their very existence in doubt thanks to a court ruling that promises to make union dues voluntary for all public-sector workers, labor leaders would still rather rail against the boogeyman than look in the mirror and confront the true architects of their downfall.

“The Janus case is about trying to take away (the right of public service workers to organize) to protect the most-vulnerable in our society. The billionaires and special interests” funding Janus “don’t believe we should have a seat at the table.”

LEE SAUNDERS, AFSCME “From the boardroom to the steps of the Supreme Court, a dark web of corporate interests is trying to stop us with everything it has.”

Richard Trumka, AFL-CIO

these reasonable responses to the post-Janus world. Instead, unions appear intent on doubling down on hard-edged political activism and coercive dues collection.

Rather than moderate their political appetites, many within the labor movement contend unions need to become more focused on “militant” activism like strikes and work stoppages. During oral arguments in Janus, AFSCME’s attorney warned (threatened?) that the loss of mandatory union fees would raise “an untold specter of labor unrest throughout the country.”

Writing about the recent teacher union strikes in West Virginia, Kentucky, Oklahoma, Arizona and North Carolina, the senior counsel for the National Education Association recently wrote that similar strikes and unrest “could be coming soon to a state capital near you” if the court strikes down compelled union payment in Janus.

Others contend unions have to fo-

cus on backing sweeping, and controversial, policy reforms as an organizing tool to prove they care about all workers, not just those in unions. In so doing, they risk further alienating the more conservative elements of their membership.

But government unions have a response to this, too – make it nearly impossible for public employees to leave even after the court frees them.

Again, while nothing is certain, the Supreme Court in Janus probably won’t go much further than finding public employees cannot be forced to financially support a union as a condition of employment. Thanks in part to political strongholds in states like Washington, Oregon and California, unions have many tools at their disposal to maintain their coercive dues collection ability just short of whatever line the Supreme Court draws.

Copying SEIU’s response to the U.S. Supreme Court’s decision in Harris v. Quinn (1977) — which

made union dues payment optional for “partial-public employees” like homecare aides serving Medicaid clients — government unions are almost universally changing the terms of their membership forms to make it very difficult for card signers’ to cancel the deduction of union dues from their pay.

Membership forms being distributed, for example, by Education Minnesota — the teachers’ union in that state — only permit signers to cancel the deduction of union dues from their pay if they rescind the authorization in writing between Sept. 24 and Sept. 30 each year. Other forms, like the one being distributed by Teamsters Local 117 in Washington, state that dues deduction is “irrevocable” unless the signer submits a written request “not less than thirty (30) and not more than forty-five (45) days prior to the annual anniversary” of the day the membership agreement was signed.

Such efforts are even being sanctioned by union-controlled state legislatures. As part of its recently enacted state budget, New York amended its labor laws to require government employers to deduct union dues unless an employee “revokes membership… in accordance with the terms of the signed authorization.”

For years, union executives have described the impending loss of agency fees as an opportunity to be seized.

Such rhetoric especially made sense given unions’ steadily diminishing presence in the private sector.

But recent efforts do not paint a picture of a labor movement seeking to reinvent itself for the 21st century.

At least in government, unions are seeking to change as little as possible and hope to reconstitute, in a dozen smaller ways, the dues collection ability provided for decades by the cleanly compulsory system of agency fees.

Whether this works to unions’ benefit in the long term remains to be seen.

What is clear, however, is that even a victory in Janus will not put an end to unions’ violation of public employees’ First Amendment rights.

FREEDOM MATTERS

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ACTIONTIMELINE ACTION TIMELINE Highlighting a few of the Freedom Foundation’s signature accomplishments over the past half year

November 28 The Wall Street Journal’s lead editorial hails a King County judge’s ruling that Seattle’s proposed income tax on the wealthy is illegal. The editorial cites the Freedom Foundation by name for its efforts to fight the measure. “The Freedom Foundation,” it notes, “a local think tank, and other organizations sued to block the ordinance … That’s another setback for the organized labor-progressive coalition that wanted to use this legal battle to reverse decades of precedent on income taxation in Washington.”

December 5 The Freedom Foundation submits a pair of amicus curiae briefs in support of the petitioner in Janus v. AFSCME, the pending U.S. Supreme Court case that could bring “right-to-work” protections to public employees nationwide. One brief offers evidence to disprove the union contention that forcing all government workers to pay at least an agency fee to the union leads to fewer strikes and more “labor peace.”

The other brief encourages justices to not only rule in favor of the plaintiffs but also to include language in the ruling that would make it easier to enforce.

December 14 As in previous years, the Freedom Foundation this year dispatched representatives dressed as Santa Claus to visit state office buildings in Washington and Oregon handing out literature to government workers explaining their constitutional rights to opt out of full union dues. At the Washington State Department of Ecology, however, union operatives persuaded security PAGE 38

n FREEDOM MATTERS

guards to deny the Freedom Foundation team access to the employees. Freedom Foundation attorneys maintain they have the right to stage a peaceful protest in a public space and plan to file a lawsuit.

DECEMBER 13 The Freedom Foundation files a lawsuit in Thurston County Superior Court alleging Teamsters Local 117 attempted to conceal political activity worth tens of thousands of dollars – if not more. The discrepancies come from a Teamsters-operated “separate segregated fund,” which the union created to preserve its tax-exempt status.

This SSF is treated as a distinct, separate entity. Federal law, however, generally requires these separate “527 organizations” to report the source of their funds and how they’re spent.

JANUARY 7 The Orange County Board of Supervisors grants the Freedom Foundation’s request to formally consider whether to provide all new incoming IHSS providers a written and oral notice of their First Amendment rights in relation to their union. The idea to implement this was unanimously agreed upon and the discussion now awaits the next appropriate steps. This is a potential win for more government transparency and for all future IHSS providers as they go about their business of taking care of loved ones.

JANUARY 10 The Freedom Foundation files a lawsuit against Oregon Gov. Kate Brown and SEIU 503 alleging the union – with the governor’s blessing – has refused to honor numerous care providers’ constitution-

ally protected requests to opt out. The suit, Entwistle v. Brown, includes 14 care providers represented by SEIU 503 who’ve submitted forms to the union requesting it stop deducting dues and fees from the paychecks they receive for looking after a disabled loved one.

Feb. 5 Freedom Foundation attorneys file an amicus brief with the U.S. Supreme Court in Riffey v. Rauner encouraging the Court to review the case, brought by an Illinois in-home caregiver, and squarely address whether opt-out dues collection schemes violate the First Amendment rights of workers. In 2014, the U.S. Supreme Court held in Harris v. Quinn that Illinois caregivers like Pamela Harris and Theresa Riffey could not be forced to pay union fees as a condition of receiving Medicaid reimbursements for their work. Harris has served as the primary catalyst for much of the Freedom Foundation’s work ever since.

Feb. 7 Service Employees International Union (SEIU) Local 503 relinquishes its hold over 14 Medicaid-compensated homecare workers in Oregon who for many years were forced to pay union dues against their will.

The union’s change of heart came only after the Freedom Foundation’s legal team sued SEIU 503 and Gov. Kate Brown on behalf of the homecare workers in federal court, alleging the union, its board of directors and the state of Oregon had repeatedly refused to honor each caregiver’s First Amendment rights under Harris v. Quinn (2014) to opt out of union membership and dues.

Leave a legacy of freedom

Feb. 8 In the first of numerous editorials published by Washington newspapers critical of Senate Bill 6199, which would exclude the birthdates of home healthcare providers from normal public disclosure laws to prevent the Freedom Foundation from telling them they no longer have to support a labor union just to keep their job, the Seattle Times blamed the bill on, “…an ideological war between the conservative Freedom Foundation and a powerful union representing in-home care providers.”

Feb. 10 In a column savaging the list of prounion, anti-Freedom Foundation bills introduced by labor-affiliated Democrats during the current legislative session, Spokesman-Review columnist Sue Lani Madsen takes a swipe at the organized labor-created Northwest Accountability Project’s hypocrisy in claiming the Freedom Foundation lacks transparency. She wrote, “Here’s the irony. The Freedom Foundation is upfront about its true agenda to ‘reverse the stranglehold public-sector unions have on our government.’ It’s not hidden. You can find photos and contact information for all staff members on the organization’s website. They answer their phone. And they used to proudly post a list of trustees and major donors, until groups like the Northwest Accountability Project used it as a hit list.”

March 2 For the fourth time in two years, the Freedom Foundation and the Service Employees International Union (SEIU) 775 squared off in a battle over open and transparent government and the right to inform

The wealth of our country exists in large part in the savings and hard-earned assets of good people who have endured, sacrificed and succeeded. It is their legacy that stands poised to be transferred to the next generation.

Will these funds be a windfall profit for government programs, new capital for center-left organizations? Or will they be a responsible transfer of values held dear by the good people who earned the money?

Join the fight against the tyranny of the government unions.

Become a member of the Freedom Foundation today. Donate online at www.freedomfoundation.com For information on how to become a member of our Legacy Society, contact www.freedomfoundation/legacy

childcare providers of their right, under the First Amendment, to opt out of union membership and dues payments. In a union lawsuit trying to prevent the state from releasing the contact information for SEIU 775-represented home healthcare providers to the Freedom Foundation, the unions attorneys argue Initiative 1501, passed by state voters in 2016, prohibits the release of worker birth dates. A Thurston County Appeals Court judge, however, notes the Freedom Foundation requested the information before the ballot measure passed and ruled it can’t be imposed retroactively.

March 3 An article is posted to the website of the New Labor Forum – a publication of the City University of New York’s (CUNY) Murray Institute – intending to slam the Freedom Foundation in general and CEO Tom McCabe in particular. Instead, it comes off as an unintentional compliment. Headlined, “Organized Money: What is Corporate America Thinking – Freedom’s Janus Face,” the piece positions McCabe as the face of the nation’s burgeoning anti-government employee union movement.

March 8 Freedom Foundation staffers, accompanied by three home healthcare providers who had previously opted out of SEIU 775, hold a media event outside Gov. Jay Inslee’s office before delivering nearly 1,000 signed petitions from caregivers demanding he refuse to sign SB-6199, which would overturn Harris v. Quinn and deny the providers’ right to decline union affiliation.

April 3 The Freedom Foundation files a lawsuit in Thurston County Superior Court alleging the SEIU Political Education and Action Fund (SEIU PEAF), an out-of-state political action committee run by the SEIU’s national headquarters, violated the state’s Fair Campaign Practices Act (FCPA) when it failed to properly disclose more than $290,000 in campaign contributions during the 2016 election cycle.

April 13 KVI talk show hosts Kirby Wilbur and John Carlson report that Republican King County Prosecutor Dan Satterberg has embarked on a politically motivated and specious criminal prosecution of a former employee of the Service Employees International Union Local 775, at the special request of SEIU and one of its chief lobbyists, former State Republican Party Chairman Luke Esser. The alleged crime?

The employee gave his own lists of home healthcare providers forcibly represented

by SEIU to the Freedom Foundation, which then informed the providers about their constitutional rights to choose whether or not to remain in the union and continue to pay union dues.

FREEDOM MATTERS

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