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Below is an important call-out from our Healthcare Sector Head Tom Tobin on union membership amid the Health Reform debate. The implications will extend into 2010 as the Democrats look to appease the unions and garner votes going into mid-term elections:

Union support of Health Reform is in the news.  With the Public Plan gone from the Senate version, the AFL-CIO and the SEIU are almost withdrawing their support.  I guess the political gambit for Democrats is where else can unions turn if the Dem's disappoint them?  Unions are an interesting participant in the Health Reform debate.  Presumably, by moving their negotiating partner when it comes time to talk about financing the health benefits of their workers, the government is a better choice than the Industries their workers serve.  Organizing union members for a politician’s campaign gives the union greater leverage, since the politician is presumably more interested in staying in office than concerned about spending tax dollars on benefits.  Grinding it out with Industry, who has a credible threat of moving jobs overseas, the union is in a  much weaker starting position. 

Union membership has been in secular decline for decades, although the rate of change has slowed materially in the last few years.  In recent PCE data, union dues have accelerated despite declines in payrolls.  Could membership be turning?  Union’s health benefits are good for health providers and neutral for Managed Care, since the benefits are managed through a TPA, or third party administrator.  Meanwhile, The Employee Free Choice Act appears to still have a lifeline.  With unions feeling snubbed over the public option and Politicians still needing campaign help, look for the unions to return for something.  Democrats will certainly be knocking on the door come 2010 mid terms. 

 Disunity - Labor Unions1

Disunity - Labor Unions2