December 3, 2012
1) The Perks of Being a Union Executive. We tend to pay a lot of attention to what teachers’ unions spend on politics, but even that lofty amount pales in comparison to what they what they spend on themselves. Like teaching, union work is a labor-intensive enterprise. Unlike teaching, the structure of union benefits resembles an inverted pyramid, where a lot of people receive similar perks and only the lowest level employees receive standard workplace accommodations.
Wage amounts are usually public record, but are perilously difficult to pin down. What a union executive makes can be inflated in the record by sick leave accrual or severance payouts, or can be understated because of tax deferments or allowances in lieu of pay. Still, with that caveat in place, an examination of 2010-11 tax records reveals wages of the highest paid employees of the National Education Association and its state affiliates – defined here as the money reported in box 1 of a W-2 form – ranged from almost $540,000 down to less than $92,000.
Financial records also show that certain perks are common among NEA and state affiliate executives, while others are controversial even in the corporate world.
Housing allowances are prevalent. Union officers often will receive a cash payment to cover the costs of maintaining a home near union headquarters, usually located in the state capital. Some affiliates actually provide a home. Which officers receive a housing allowance and for how much varies from state to state, but it ranges from 20 percent of salary all the way down to $800 per month.
One would expect the union to cover the costs of executive travel, but some affiliates allow first-class travel and many also reimburse for the cost of companion travel – in one case up to $2,000 per year. Unions have been known to reimburse officers for home, pet and garden care while they are away on business, although it isn’t known whether these kinds of perks have survived recent budget shortfalls. Auto allowances and gas cards are also common.
A growing number of officers receive payment for annual health or social club dues and initiation fees, with one affiliate offering up to $1,000 a year in “wellness-related expenses.” A handful of affiliates also provide the president with a discretionary spending account or clothing allowances.
Accounting for these varied forms of compensation can get complicated, so some unions provide free tax preparation. At least one affiliate even offers relief if a union officer’s accumulation of previously deferred payments or leave buy-outs leads to higher tax obligations – in the form of the “gross-up” payment.
If you are unfamiliar with the term, that’s when the employer picks up the tab for the additional tax the employee will have to pay for a unusually large lump sum payment. Of course, the “gross-up” payment itself is taxable, so it is often made large enough to help cover that extra tax as well. The practice has come under fire in corporate America, so it’s ironic to see it turn up in a union.
Since much of this alternative compensation is hidden, it will be difficult to discern how much it will be affected by membership losses and budget cuts. When revenues can’t cover payroll, union staffers are laid off. But executive officers are elected. Some have accepted pay freezes, but I haven’t heard any talk of rolling back these kinds of benefits. If done, it will be done quietly, so as not to alert the rank-and-file to their existence in the first place.
2) Last Week’s Intercepts. EIA’s blog, Intercepts, covered these topics from November 27-December 3:
* Graduation Stats Show Equality and Inequality. Racial gaps persist, but some states have equally bad stats across all groups.
* School Districts Ride CABs to the Poorhouse. Next big idea: payday loans!
* Tryptophan Coma at the New York Times. Thomas Friedman wasn’t the only one with goofy Cabinet suggestions.
* NEA Affiliate Staff Updates. Contract settlements are not always good news.
* Detroit President Re-Elected; Miami President Won’t Run Again. Apathy still in front.
3) Quote of the Week. “There’s a lot of cynicism in labor about the capacity of ordinary, working-class people to run their unions. Leaders think those people should have good lives, but they don’t think they have the capacity to do big things. Even among ‘progressive’ unions, democracy is not high on the list of must-haves. That has really hurt our movement.” – Mark Brenner, director of the pro-union publication Labor Notes. (November 30 In These Times)