Financial Solidarity: The Future of Unions in the post-Janus Era

In 2018, the U.S. Supreme Court adopted a “right-to-work” (RTW) legal regime for the entire government workforce (Janus v. AFSCME). While many predict lower union membership, few have considered how Janus will challenge the overall cost-sharing strategy that unions use to ensure their affiliates’ organizational maintenance and survival. Using the National Education Association (NEA) as our empirical example, we develop and test a theory we call “financial solidarity,” which posits that union organizational maintenance hinges on the transfer of resources from affiliates in strong labor states to those in weaker labor states. We demonstrate that this system is in effect by showing that most NEA revenue originates from dues and fees paid by teachers in strong labor states and then by examining the causal effect of labor law retrenchment on affiliates’ reliance on their national union between 2005–2018. We find that the NEA transfers an additional $6–10 per member and is significantly more likely to make a political contribution in an affiliate’s state in the aftermath of retrenchment. These findings highlight that unions are maintained on an organizational model that relies on a balance of strong and weak state labor laws. By upending that equilibrium, Janus threatens to undermine the power of labor in American politics.