Right after my previous report on the AFL-CIO’s finances, I got a call from Joe Hill (uh, yeah, a pseudonym), an AFL-CIO insider who told me “it’s quite worse than what you wrote.” Hill pointed out that when John Sweeney took over, the AFL-CIO had no debt; now the debt stands at $28.5 million dollars. At the end of 1996, after one full year of the Sweeney Administration, the reserve fund was 56 million (I’ve been told by others it was upwards of $60 million but let’s just agree here it was large); at the end of 2003, the reserve fund was down to $28 million.
The AFL also took out a $25 million mortgage on its building to finance the broad renovation. As Hill pointed out, while the building is worth more (and certainly feels more modern), the building is no longer a liquid asset. In addition, though this is run out of a different budget, an additional $20 million mortgage was taken out on the George Meany Center (the Federation’s education and training center) to construct a new building.
As Hill observes:
These guys have spent money like no one I’ve seen in my life. Whatever happens [at the AFL-CIO convention] in July, and if there is a new president, the new team is going to inherit a very difficult situation financially. If you put the best face on it, our guys could argue that they were laying it out on the line and bet the farm. But, they bet the farm and it didn’t happen.
I’m told that this coming Tuesday, the word will come down on the much-anticipated and much-feared lay-offs rumored at the AFL-CIO. It will be brutal—more than 100 people out of about 425 will be axed (it’s interesting to note that those layoffs would take the Federation staff down to about the levels of the Lane Kirkland era, when about 300 people worked for 16th Street, from a high of over 500 about two years ago). The mood is downright awful at 16th Street.
The layoffs will be put in the current context of the political fight swirling around labor, particularly the proposals to rebate dues back to internationals. But, it’s a legitimate question to ask whether those layoffs would have been needed eventually even if no rebate proposal was under consideration. The money is just running out. And it won’t get better if SEIU (about $9 million in per capita payments) leaves the Federation, as is anticipated, followed perhaps by one or more large unions.
The problem, as I’ve said before, is that there needs to be a real assessment done of the proper role of the AFL-CIO and the record of the last ten years—and not in an accusatory fashion but with a recognition that people may have done the best they could have done but we need a different approach. If the argument for laying out the money and betting the farm was to increase our numbers through organizing and a bigger political operation, shouldn’t the following be relevant and be discussed: the labor movement is the smallest it has been in decades (percentage-wise in terms of representing the workforce) AND Republicans control the entire Congress, the presidency and, arguably, the judiciary at the most important levels.
Personally, I don’t care who is president of the AFL-CIO after the convention if we don’t address honestly what the hell has happened in the last decade. I’m wondering whether there is still time for what has become a political fight to be pulled back to where the debate started: what’s our plan and strategy to defend workers, here and abroad? How do we have an effective, STRATEGIC organizing program that everyone buys into, commits to and is held accountable for? If we are spending more money on politics, what’s the plan to reverse our irrelevancy at the federal level? How do we deal with the question of China?
