Labor Head Andy Stern Has Some Unusual Corporate Bedfellows

By Liza Featherstone, The Nation. Posted July 2, 2007.

When Andy Stern, president of the Service Employees International Union (SEIU), and Lee Scott, CEO of Wal-Mart, appeared onstage together in early May, the pairing drew attention. The occasion was a lunchtime meeting of Better Health Care Together, a coalition of business, labor and political leaders, at a Hilton hotel in New York City. Stern had initiated the coalition with a letter to all the Fortune 500 CEOs inviting them to work with him on a solution to the nation's healthcare crisis. He says he was surprised that Wal-Mart -- and so many other companies -- responded. "When I write letters to CEOs," he explains matter-of-factly, "I usually don't get a response."

Outside the Hilton, several hundred men and women wearing United Food and Commercial Workers (UFCW) T-shirts, some of whom had come all the way from Maine and Pennsylvania, picketed the event, objecting to the "hypocrisy" of Wal-Mart CEO Lee Scott's appearance. Scott is accustomed to dodging protesters; his company has been engaged in a bitter public relations battle with the UFCW for years, with the union charging that Wal-Mart routinely violates the right to organize and offers stingy health benefits.

But the Wal-Mart boss wasn't the only target of righteous ire that day. The union activists were also upset about the presence of Andy Stern. "People feel he has sacrificed some of the basic principles of the labor movement" by appearing onstage with the Wal-Mart CEO, said Pat Purcell, an organizer of the Hilton picket. One of those principles is solidarity. "Our union is losing members every single day because of Wal-Mart," explains Purcell, director of special projects for UFCW Local 1500. "When we ask for help from other unions, we don't mean, You can have lunch with them but not dinner!" Though Purcell says he has "great respect" for Stern, he and other unionists feel that Stern enabled a public relations stunt by Wal-Mart, aimed at making the company look socially responsible.

Inside the Hilton, Stern was more popular. Over a dry repast of chicken, Pennsylvania Governor Ed Rendell hailed Andy Stern and Lee Scott as "the odd couple of healthcare." Stern beamed when Arnold Schwarzenegger, who spoke by satellite, thanked him for his "great leadership."

To be fair, this moment aside, Stern's relationship with Wal-Mart is hardly chummy. SEIU continues to fund Wal-Mart Watch, an organization dedicated to relentless criticism of the retailer's practices, and this year the union will allocate more funding than ever to such efforts. In March Stern gave a speech at a Bank of America gathering blasting Wal-Mart for undermining "fair competition" and adopting practices that were "bad for business overall."

But many in the labor movement view Stern's overtures to Scott as typical manifestations of his business-friendly unionism, more focused on partnering with employers than on joining other progressives in a struggle against corporate power. Stern's 2006 book, A Country That Works, is full of statements like "employees and employers need organizations that solve problems, not create them" and "all parties want a mutually beneficial relationship based on teamwork." (Sometimes the business-speak in this book reaches comic proportions; at one point Stern praises civil rights icon Jackie Robinson as "a change agent who endured indignities as a pathbreaker.") Stern has unsettled many of his staff by publicly suggesting that he might not be against Social Security privatization or school vouchers (one organizer in the Midwest probably speaks for nearly everyone in SEIU in calling such statements "a bunch of horseshit ... in fact we are against those things"). Paul Krehbiel, an organizer who until recently worked for SEIU Local 660 in Southern California, points out that Stern briefly attended the Wharton business school before becoming a social worker: "Andy's just doing what he started out doing. He loves the business community!" Rose Ann DeMoro, executive director of the California Nurses Association (which competes with SEIU to organize nurses), bluntly calls Stern "the neocon of the labor movement."

Many progressives would be startled by DeMoro's characterization of Andy Stern. His union is the employer of choice for many idealistic college graduates. That's only in part because the membership of SEIU -- African-Americans and immigrants toiling in underpaid jobs -- inspires a natural solidarity from the left. It's also because Stern's personal style is agreeable to middle-class progressives. The 1960s-generation, University of Pennsylvania-educated former social worker is reflective and contemporary, not macho or swaggering like many old-school union leaders. He's also willing to try new things, and like many of his generation harbors a profound contempt for stagnant bureaucracy. These attitudes can be refreshing in a labor leader. Even photo ops with Scott can be attributed to this aspect of his temperament: When Stern is asked about his perceived coziness with business, he is quick to insist that he is pragmatic, often using phrases like "it's not academic" or "these are real-life choices" to suggest that critics are ideologues or pie-in-the-sky idealists.

Stern is also an internationalist. He's assigned SEIU staff to Australia, Poland, England, India, France, Switzerland, Germany, the Netherlands and South America, with an eye to running global campaigns pressuring multinational employers. As Stern explains in his book, "Imagine simultaneous protests on service contractors' global clients, or outsourcing strikes to countries where strikes are legal and will not provoke government retaliation." When SEIU was having trouble organizing American security guards employed by the Swedish firm Securitas, it sought help from the Swedish Transport Workers Union, which had a good relationship with the company. Securitas agreed to drop its opposition to the union drive.

More controversially, Stern has formed relationships with the Chinese state union, which has been been criticized for helping the government suppress workers' rights. Stern, who played a key role in forcing Wal-Mart to allow the union into its Chinese stores, believes that a cold-war approach to China is obsolete. When I interviewed him, he had just returned from his sixth trip to China. "Our members and their members work for the same employers," he explained. "I just think workers' solidarity has a lot more possibilities when you're not dealing with ideology."

Another reason to cheer for Stern is that in a time of dismally declining union density, SEIU under his leadership has added members and seen some victories, improving the lives of home health aides, janitors and security guards, some of the country's most exploited workers. In May, for example, 4,000 Los Angeles security guards joined SEIU as part of a nationwide campaign to raise standards in that industry. Ruth Milkman, director of the UCLA Institute for Research on Labor and Employment, has called SEIU a "model of dynamic unionism," pointing out that "no other union has been more effective in organizing the unorganized in recent years."

But many observers wonder what Stern's new federation, Change to Win (CTW) -- founded with great fanfare when he led six other unions in a split from the AFL-CIO in September 2005 -- has thus far accomplished. ("Press releases," grumbles one internal skeptic. "Where is it headed? is something a lot of people here are asking.") Milkman, who championed the formation of CTW in articles, op-eds and scholarly work, calls it "a bit early to assess this" but agrees that "it is fair to say that, to date, there is not much to point to in the way of concrete organizing victories that were the work of Change to Win itself."

Within SEIU most people agree that Stern has been quite successful in implementing what is often referred to by his union's foot soldiers as "the program": building density in the union's three industries, building services -- the public sector and (most of all) healthcare. During his tenure, the union has grown by 980,000 workers (some of that growth has come about through mergers, but the "vast majority," according to SEIU communications director Steve Trossman, are newly organized members).

Stern believes that unions are losing political power -- and bargaining power -- because they represent a declining share of the population (at present, 12 percent of the workforce and 7 percent of private-sector workers). More controversially, he believes the only way to reverse this sorry state of affairs is to sign up more members by just about any means necessary. Many within SEIU worry that this near-exclusive focus on growth is hampering the union's ability to serve its existing members; they observe that with more resources directed to organizing, and more emphasis on consolidating small locals into larger organizations, it's becoming harder for workers to find their union rep or file a simple grievance. If union members don't feel the union is serving them, organizers say, they begin to ask why they are paying dues. Former SEIU organizer Krehbiel points out that in Stern's "200 page book, if there was half a page about current dues-paying members, that was quite a bit." Stern acknowledges the problem, but says, "You can't be islands of strength in a nonunion sea. ... The history of the labor movement is that we polish the pearls we have rather than trying to extend what we have to other people."

Stern is also coming under fire within the labor movement for, as CNA's De Moro puts it, "organizing corporations, not workers." Perhaps because Stern's views on these issues are so public, he's come to personify an increasingly common phenomenon in unions: a "partnership" approach to employers. Often, this means that companies agree to recognize the union if a majority of workers sign cards ("card check") in return for concessions from the union that will help boost company profits.

Many organizers -- inside and outside SEIU -- say that workers signed up for union membership in this manner aren't as committed to the union as those who have won membership themselves, through a fight in which they were personally engaged. This matters especially when the "partnership" sours and the union faces a decertification campaign. Krehbiel acknowledges that workers signed up for SEIU in this way are "better off" than they would be without the union. But, using a metaphor evoked by several other people interviewed for this article, he said of Stern's emphasis on density, "He's building this huge shell, hoping the size will somehow carry us."

To many others, the idea of post-class-conflict partnership obviates a union's most basic purpose: to defend workers' interests. To DeMoro, Stern's view of a union's role amounts simply to supplying capital with workers -- and managing those workers. "To him, the union is just a human resources department," she says. "Or a temp agency." (DeMoro is an outspoken Stern critic. But committed SEIU staff members interviewed for this article -- mostly on the condition of anonymity -- shared most of her concerns. As if they were working for Wackenhut or Wal-Mart, some were even afraid to communicate using SEIU e-mail addresses or phones.)

But there's an even more controversial aspect to Stern's commitment to "partnerships." In his book, Stern writes that unions should "add value" to companies and assist "employers in overcoming unnecessary legislative and political obstacles to their success." These ideas have played out in recent contracts. Internal memos -- obtained by SF Weekly -- show that two large SEIU locals had made a deal with a group of California nursing homes, in which SEIU agreed that workers would not speak out publicly against abuse of patients, or health code violations, and would lobby for limiting patients' right to sue. (SEIU later backed out of its commitment to tort reform.) In exchange, the union could organize a certain number of nursing homes without interference. The SF Weekly story was based in part on an internal report from one of the largest locals involved in the deal, United Healthcare Workers West (UHW-West).

Such deals raise questions about how far unions should go in this vaunted pursuit of density. Many wonder if it is wise in the long run to act against progressive ideals in order to win new members. Working against patients' rights could, after all, alienate natural allies. Backroom moves like this also undermine the union's efforts to emphasize common interests among healthcare workers and patients. In June SEIU launched SEIU Healthcare, which will push for reforms like improved nursing staff-patient ratios and more training for nurses, changes that would be in the interest of members and would also, as SEIU's Steve Trossman is quick to point out, "improve the quality of care."

When I asked Andy Stern about the deal discussed in the UHW-West memo and the SF Weekly article, his response was strange and contradictory. He at once questioned whether SEIU had in fact made such a deal, claimed he wasn't familiar with the details and blamed the local. (Much of the criticism of the nursing home deals -- inside and outside SEIU -- has been directed personally toward Stern, and it is clear from some UHW internal documents that the local holds the international at least partly responsible.) Stern admitted that sacrificing principles for growth is a danger in partnership deals but pointed to the complexity of organizing in today's workplace: "Here's the question we face. Ninety percent of nursing home workers in this country live pretty much in poverty. Don't have unions. Don't have healthcare. All of our activities to date to solve that part of the problem have not worked. So every day, nursing home workers go to work and they're poor." To some organizing in the SEIU trenches, their boss's realism resonates -- to a point. "We've negotiated some really shitty contracts," says one staff member. "Sometimes you have no choice -- you just keep trying to build density and hope you build enough power to get a better deal next time." But even this veteran of labor realpolitik said he was surprised by the California contract: "The tort reform is bad!"

What's more, Stern's business-friendly orientation appears to influence his approach to national policy questions. More problematic than the photo-ops with Lee Scott, Stern's crusade for "healthcare reform" is vague ("not even an inch deep," according to one SEIU researcher). His support for any sort of change has been promiscuous: He's praised Mitt Romney's Massachusetts plan and Arnold Schwarzenegger's proposal in California, which have been criticized as giveaways to the insurance industry and don't adequately address affordability or cost issues. Asked if the Better Health Care Together Coalition has agreed on anything more than the fact that there is a problem, Stern says, "That's probably all we will agree on." Of a single-payer system, Stern said in a speech given at the Brookings Institution, "I think we need to find a new system that is not built on the back of the government. I am here to also say I don't think we need to import Canada or any other system." One SEIU staff member says sadly of such comments, Stern "doesn't hold social democracy in high regard."

Stern is not oblivious to the suffering caused by health insurance companies denying care -- a problem that none of the incremental plans he supports can address. But to him, the problem of insuring the uninsured is the paramount moral question: "It's a question of, How are we going to get everybody covered?" Then, Stern thinks, something more like a single-payer system will be more politically palatable: "Once we have everybody covered we're going to realize there are more efficient ways and less efficient ways. More costly and less costly ways to do it."

Stern's views on this are significant because several other major labor unions and other progressive groups -- buoyed by Michael Moore's new movie -- have been campaigning to pass single-payer healthcare in California. SB 840, written by State Senator Sheila Kuehl, passed the State Senate, 23 to 15, in early June and is headed to the Assembly. Given the tremendous public interest in and the widespread frustration with the current system, many activists think we have the best opportunity in years for comprehensive reform. Stern's lack of enthusiasm for single-payer healthcare is one of the main reasons the California Nurses Association, a longtime independent union, joined the AFL-CIO this year when that federation agreed to support single-payer. Explaining why it is so important that unions work toward this goal, CNA's DeMoro, whose union is leading the California fight, explains, "There has never [in any country] been a single-payer healthcare system without the labor movement."

To the CNA, Stern's refusal to put his political weight behind single-payer is unconscionable. "The single biggest obstacle to single-payer healthcare in this country," says Michael Lighty, CNA's policy director, "is Andy Stern." I laugh at this, thinking of a few others (the insurance industry and American individualist, anti-government ideology, to name a couple). But DeMoro clarifies her colleague's point with an analysis of the current fight in California: Stern "is the biggest obstacle to moving the Dems, because he gives them cover to do nothing."

However, when asked about single-payer, Stern insists he's not against it: "We supported Howard Dean, and he was for single-payer." (In fact, when Dean ran for President, he said he would not propose such a system, because it wouldn't pass Congress. He also said, "I do not believe in free healthcare or free anything. ... If you want to totally reform the healthcare system, I'm not your guy.") More significant, Stern claims that in California SEIU has been lobbying for Sheila Kuehl's bill and expects to support some version of the governor's as well. Indeed, besides the CNA, he boasts, SEIU is "probably the leading supporter" of the single-payer bill. Those involved in pushing for that bill in Sacramento were, to put it mildly, surprised by this contention (reactions ranged from "outrageous" to "bullshit -- absolutely not!"). SEIU has turned out members to some hearings in support of the bill but has not otherwise been active in the fight. Yet Stern's statement is, in a Clintonian way, true: SEIU has formally endorsed SB 840 and is one of the largest organizations to do so.

Nationally, Stern says, SEIU is supporting a single-payer "Expanded and Improved Medicare for All" bill introduced by Representative John Conyers, in addition to several other healthcare proposals moving through Congress. Defending his strategy of lobbying for multiple, often conflicting, reforms, Stern is (almost) self-deprecating: "People at the Brookings Institution joke, Next month we're going to have four different proposals about universal healthcare and Andy Stern's going to be supporting all four." To justify his support of tepid reforms, Stern tells me several heartbreaking stories about people he has met who have no healthcare, including a man in Minnesota who sat with his wife at the kitchen table and decided which of their kids was least likely to get sick, since they couldn't afford to insure all of them. Of the Massachusetts plan, Stern argues, "People are working now, through a political process, particularly now that we have a new governor there, to make it better. Most states have nothing to make better. Is it better to be in Massachusetts with someone trying to make it better, or waiting for California to pass single-payer? I don't know." He adds defensively, "We are not going to let the perfect become the enemy of the good on this issue."

Within SEIU, the rumor mill hums with speculation that Andy Stern has ambitions beyond the union. Certainly, some of his rhetoric and triangulation make him sound like a politician, but Stern denies any plans to step down from SEIU or seek public office.

Labor dissidents can denounce him as a sellout, and of course some will. But they could also read Andy Stern as a sign of the times. When Stern makes compromises that cause fellow progressives and unionists to cringe, it's because he doesn't think there are other ways for the labor movement to grow. He speaks of unions "adding value" to corporate enterprises and crusades for dubious, middle-of-the-road reforms because he doesn't think there is any other language, or any other ideas, that will resonate with Washington policy-makers. An effective grassroots movement for social democracy could change that. The rumblings of discontent within SEIU -- and the growing movement for real healthcare reform in California -- may be hopeful signs. Stern is a close reader of the zeitgeist. As Rose Ann DeMoro says, "If he sees the tide is turning, he'll change."

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Liza Featherstone is a New York City-based journalist. She is the author, most recently, of "Selling Women Short: The Landmark Battle for Workers' Rights At Wal-Mart" (Basic).

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