Image: US Democratic presidential candidate Illinois Senator Barack Obama on the phone.
Emmanuel Dunand  /  AFP - Getty Images file
On Election Day, Barack Obama joined workers who were calling voters from a United Auto Workers union hall in Indianapolis, Indiana.
By Tom Curry National affairs writer
updated 3/20/2009 10:56:14 AM ET 2009-03-20T14:56:14

So far, so good, union leaders say in assessing President Barack Obama’s performance in his first two months in office.

But the furor over bonus payments made to some AIG employees has caused a note of wariness to creep into labor’s most recent assessments of Obama.

“President Obama said very clearly the buck stops with him. He made it clear he objects to these bonuses and the administration will do everything it can to stop them,” said Rich Clayton, the research director for Change to Win, an alliance of seven unions including the Teamsters and the Service Employees International Union.

But, Clayton added, Obama and his aides “need to review right now whether the strategy put in place (to help AIG) last year is likely to work.”

The Obama team could be “much harder in bargaining with the counterparties” to AIG’s investment insurance contracts, he said. Those counterparties have included banks and financial firms such as Goldman Sachs and Deutsche Bank.

Change AIG strategy
“We strongly support the Obama administration, but we think they’ve got to make the case why they need to stick with the strategy” of subsidizing AIG, Clayton said. He suggested it might be preferable to let the financial products division of AIG enter bankruptcy while the rest of the business units are sold.

Obama needs to be able to defend his strategy as credible, one that will ensure that taxpayers bear minimal cost, Clayton said.

Before the AIG uproar reached deafening volume, labor leaders generally had warm praise for the new president.

Obama “has been an incredibly strong advocate for working families in this country,” said Anna Burger, head of Change to Win. “You hear members of Congress not being as big and bold as he is. In this economic crisis facing our country, this is the time for big and bold action.”

Thea Lee, policy director of the AFL-CIO labor confederation, pointed to Obama signing into law a bill making it easier for workers to file suit in cases of alleged sex discrimination, and a bill to expand taxpayer-provided medical insurance for children of low-income families.

“Pretty high marks for the Obama administration, given the depths of the economic crisis they face,” Lee said.

Decisions approaching for Obama
But some decisions are approaching which may test organized labor’s loyalty to Obama:

  • Obama may propose another subsidy bill to Congress which would require members to vote on whether to send more billions of taxpayer dollars to resuscitate financial firms;
  • In his detailed budget proposal to be released next month, Obama may call for the scrapping or delaying of two major Pentagon programs, the F-22 fighter and a new refueling tanker aircraft. Both programs employ thousands of union workers;
  • It’s not yet clear how vigorously Obama will press undecided Democratic members of Congress to vote for organized labor’s top priority, a bill that would make it easier for workers to join unions;
  • While Obama has warned of protectionism, his administration is signaling it isn’t keen on free trade agreements with America’s trading partners. Trade representative Ron Kirk said Obama is “prepared to walk away” from the pending free trade accord with Korea if the deal can’t be made more favorable to the United States. Detroit auto industry allies in Congress, such as Rep. Sander Levin, D-Mich., argue that the agreement would benefit Korean manufacturers while doing little to help U.S.-based firms such as Chrysler and General Motors who are edging closer to bankruptcy;
  • The survival of the Big Tree auto makers is still in doubt, as are the Obama administration’s intentions on providing more subsidies to keep the industry — and the United Auto workers jobs dependent on it — alive. The Obama administration said Thursday it will offer $5 billion to auto parts makers, but it has yet to reveal its decision on whether to give the car makers themselves more money.

Video: Labor to Obama: will you fight for us? These decisions by Obama will come at a time when, despite an uptick last year, union membership has long been in decline.

In 2008, union members accounted for 12.4 percent of employed wage and salary workers, up slightly from a year earlier, the Bureau of Labor Statistics said, but the long-term direction is down. In 1983, 20 percent of workers were union members.

Last year there were 1.6 million fewer union members than in 1983.

Dwindling membership since 1983
In the depths of a recession, union leaders are hoping to get some help in expanding their membership. Unions represent 37 percent of public-sector workers; where the unions most need help is in private industry, where only 7.6 percent of workers are union members.

The biggest priority for organized labor is the bill introduced by Sen. Edward Kennedy, D-Mass., and Rep. George Miller, D-Calif., which they call the Employee Free Choice Act or EFCA.

It mandates that a workplace be unionized once a majority of employees request it by signing a petition to join a union, rather than requiring workers to vote by secret ballot.

It would also impose binding arbitration when labor and management are unable to reach an agreement on pay and benefits.

Bill Samuel, the director of governmental affairs at the AFL-CIO, said Obama has repeatedly voiced his support for the bill since his election. “That’s what we want him to do and that’s what he’s done,” said Samuel. “Other members of the administration, I have no doubt, are talking to the congressional leadership and helping to put the votes together to pass this bill. I have no criticism at all of what the administration is doing.”

“We’re pressing for early action,” Samuel said. “We think we are ready to go. We think the support is there. We’d be ready to do this later on in the spring.”

“One senator who is committed to this bill hasn’t been seated yet,” Samuel said, referring to Minnesota Democratic Senate candidate Al Franken, who is fighting a court battle with Republican Norm Coleman over the disputed election.

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Under Senate rules, 60 votes would be needed to bring the bill to a final vote. “We think we’re just about there,” Samuel said.

“We’re talking to several Republicans” in the Senate to win their support for EFCA, Samuel said. In the end, the bill’s fate is likely to hinge on centrist Democrats such as Sen. Ben Nelson of Nebraska and Sen. Mark Pryor of Arkansas.

Organized labor’s honeymoon with Obama comes almost exactly one year after many unions decided to back his presidential bid in late February 2008.

But in the early months of the Democratic presidential contest, several major labor unions had made the wrong bet: they’d supported Sen. Hillary Clinton over Obama. By late February of last year, once Obama started winning primaries, unions such as the Teamsters and the Service Employees International Union were lining up behind him.

Obama went on to clinch his party’s nomination and to win three out of five voters in union households in last November’s election.

Machinists chief was Obama foe in 2008
When the AFL-CIO delivered its endorsement of Obama in June of 2008 there was one conspicuous exception: the 700,000-member International Association of Machinists and Aerospace Workers, headed by one of Obama’s harshest critics Tom Buffenbarger.

“He doesn’t have a clue,” Buffenbarger said in 2007 of Obama’s stance on union members losing their jobs at Maytag in Galesburg, Ill. “He didn’t lift a finger to help those people when they needed help the most.”

Obama, said Buffenbarger last March, is “a poet, not a fighter.” The union president said Obama “cocks his head back, lifts his nose up, and turns his ear, so he can hear the roar of his adoring crowd.”

Video: In California, Obama becomes salesman-in-chief Only in September of last year, long after Clinton had conceded to Obama, did the Machinists give their blessing to the Democratic nominee.

But now Buffenbarger needs something from Obama: the president's decision to continue building the F-22 fighter. Thousands of Machinist jobs depend on keeping the program alive.

Continued production of the F-22 beyond the 183 planes already on order, Buffenbarger told Obama in a recent letter, “will directly support 25,000 high-wage, high-skill manufacturing jobs in forty-four states making the F-22 a critical national jobs program.”

Will labor be happy in the end?
Will organized labor ultimately be happy with how Obama delivers on its agenda? It’s too soon to know, but over the past 20 years labor has become accustomed to supporting Democratic presidents and presidential candidates even when they sometimes advocated policies which the unions detested.

The unions backed Bill Clinton in the 1996 election even after he pushed Congress to approve the North American Free Trade Agreement in 1993. Unions strongly oppose NAFTA.

As he rounded up the votes for NAFTA, Clinton blasted the unions for using “raw muscle” and “naked pressure” to try to persuade House members to vote against the trade deal. After the House approved NAFTA, some union leaders vowed to get revenge against Clinton, but by 1996 they’d relented.

And in 2000, labor backed Democratic presidential candidate Al Gore even after he advocated a trade accord with China that was anathema to the unions.

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