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The Force Behind Minimum Wage Protests Is Slashing Its Spending

The union that has bankrolled the Fight for $15 movement is slashing spending in preparation for a multi-pronged attack that could choke off its funding.

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The union that bankrolls the Fight for $15 minimum wage movement will slash spending in anticipation of its funding being "dramatically reduced" during the Trump administration.

The 2-million member Service Employees International Union will cut spending by 10% in the new year and by 30% in 2018, its president Mary Kay Henry announced in an internal memo earlier this month. The SEIU is the country's second-largest union and has been the primary backer of the movement to raise wages in the fast food industry and beyond, spending tens of millions of dollars on the campaign since its inception in 2012.

The memo, first reported by Bloomberg Businessweek, painted a dire picture of the labor movement's preparations for the Trump era, with looming Supreme Court rulings that could devastate the ability to collect membership dues from unionized government employees. The SEIU is heavily dependent on such fees from public-sector workers.

“Because the far right will control all three branches of the federal government, we will face serious threats to the ability of working people to join together in unions,” Henry wrote in the Dec. 14 memo, sent to all SEIU staff. “These threats require us to make tough decisions that allow us to resist these attacks and to fight forward despite dramatically reduced resources.”

Beyond the prospect of a conservative majority on the Supreme Court, the unions will face a hostile White House, Labor Department, and National Labor Relations Board, and emboldened Republican majorities in Congress.

Henry did not specify which programs and priorities will receive less funding, but nor did she say that funding for the Fight for $15 will be protected. The campaign has been seen as a rare success for the labor movement, transforming a $15 hourly minimum wage from a pipe dream to a legal reality in some of the country's biggest economies, including New York, California, Seattle and elsewhere.

But while the SEIU's membership pays for the expensive minimum wage campaigning, the fast food workers who benefit from it are unlikely to be unionized in the foreseeable future, meaning they will not contribute new revenue for the union. It puts the campaign in a precarious spot as budgets are cut.

"As we prepare to fight-back against the forth-coming attacks on working people and our communities under an extremist run government, we know we must realign our resources and streamline our investments," said SEIU spokesperson Sahar Wali in a statement to BuzzFeed News.

"As part of this process, we are currently looking at possible ways to improve our budgets. Once the path forward and the attacks we face become clear, we will make decisions on which financial refinements to implement that will best poise us to continue strengthening and growing our movement to ensure that all work is valued and every community can thrive."

The SEIU's membership, which includes healthcare and building-service workers, skews heavily towards government employees, making it particularly vulnerable to attacks on public sector unions. The Friedrichs vs. California Teachers Association case that came before the Supreme Court in 2014 posed a direct challenge to public-sector unions and looked likely to succeed, before the death of Justice Antonin Scalia left the court deadlocked.

That deadlock is unlikely to last for long once Trump takes office.

"We know that there will be a case similar to the Friedrichs case before the Supreme Court," said Ruth Milkman, professor of sociology at the City University of New York. "Once there is a ninth justice it is nearly inevitable that this decision will go against labor, surely cutting into the dues income of many unions, including the SEIU."

The challenges go beyond the Supreme Court. The five-member National Labor Relations Board, the quasi-judicial body that interprets federal labor law, currently has two vacancies, with a third to open in a year. All will now likely be filled by conservative appointees.

In recent years, the SEIU has supported cases before the Board that seek to declare corporate parent companies the joint employers of the workers in their franchised workplaces — a pillar of the attempt to unionize fast food and other low-wage workers. But given the likely conservative takeover of the NLRB, "the joint employer strategy SEIU has been pursuing will likely be dead," Milkman said.

There's also a possibility the new administration will try to amend the National Labor Relations Act to implement a national "Right to Work" law, which would further decimate private sector unions.

"Given all this (not to mention the nominee for the Department of Labor), unions would be wise to batten down the hatches and prepare for the worst," said Milkman. "I do think this is prudent move, in view of the anti-labor agenda the Trump administration has already signaled."

Charlotte Garden, an associate professor at the Seattle University of Law who specializes in labor studies, said the challenges facing the SEIU are "especially acute," thanks both to its large membership of government employees and its heavy investment in minimum wage campaigns like the Fight for $15.

"While these campaigns have been very successful in raising labor standards, they have not brought in many new dues-paying members," she wrote. "There’s the potential for a vicious cycle here, too. If significant numbers of represented workers stop paying for the representation they receive, it will be an increasingly tough sell to convince remaining union members to support both free-riding workers and Fight for $15-style campaigns."

Garden acknowledged, though, that the campaign is also an asset.

"The wave of minimum wage increases that has swept across the country is the labor movement’s most striking success of the last several years," she wrote, "And it will be easier to reinvigorate a labor movement with visible successes benefiting millions of workers, than one that is turning inward to focus on protecting the relatively small proportion of workers who are represented by a union."

Janice Fine, professor of labor relations at Rutgers University, pointed to Wisconsin, where new state laws allowing government workers to opt out of paying union fees have wreaked havoc on the labor movement.

"Unions in Wisconsin including AFSCME and the NEA lost significant percentages of their memberships after the state enacted a set of Orwellian rule changes," she wrote. "Union budgets shrank drastically."

But if politics of the Trump era choke off funding to labor, some believe the minimum wage movement championed by the SEIU could pay off in other ways.

"While the financial base of unions likely will come under significant pressure, I think the moral base of unions will be strengthened given the battles that lie ahead. It's not just labor that will be under attack," said James Parrott, the Deputy Director of the left-leaning Fiscal Policy Institute. "SEIU has deep roots in immigrant communities and many groups will rally with them on behalf of immigrants, and look to them for leadership in other areas."

Cora Lewis is a business reporter for BuzzFeed News and is based in New York. Lewis reports on labor.

Contact Cora Lewis at cora.lewis@buzzfeed.com.

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