Collective Bargaining for Housing Makes Cents

I believe unions should do more than negotiate for better pay and benefits. That’s important, and United Food and Commercial Workers Local 770, which I lead, has won some of the best wages and benefits for food workers anywhere.

But many problems faced by our 30,000 union members transcend collective bargaining. In Los Angeles, a big concern is owning your own home. It used to be a top goal for working families, especially young people just starting out. Many of our members are younger workers.

Progress is often measured by the things we achieve for ourselves that our parents didn’t enjoy. Most younger members in the work force grew up in neighborhoods where their parents owned their residences. But fewer children are as fortunate today.

A recent state Senate report concluded that “home ownership is on the decline in this country for the first time since World War II.” For the first time since 1944, the percentage of U.S. households owning their homes decreased, from 65.7% in 1980 to 64% in 1987.

Last year, a median-priced home in Los Angeles topped $217,000, for a 25.9% jump from the year before. In 1988, you had to earn more than $51,000 a year to buy a medium-priced house; only 26% of California households could afford to make such a purchase. Few working men and women can meet that threshold.

The problem is worse for young people. In 1988, only 27.8% of 25-29 year olds in the western states owned homes, compared to 36% in 1980. A recent Harvard University study uses these and other statistics to predict “a permanent underclass of disadvantaged renters.”

The high cost of housing “jeopardizes the long-term financial security of future generations,” the Harvard report concluded.

Many working families, even those with two income earners, have been forced to settle for more affordable homes in the far suburbs and long commutes to work. Others have postponed or canceled plans to purchase a house.

A new proposal offers some hope for union members who would like to own their homes, but can’t afford to.

It began with an innovative contract negotiated in 1988 with Boston hotels by the Hotel Employees and Restaurant Employees Union. Under it, employers will pay 5 cents an hour into a joint trust fund to help hotel workers finance home purchases. Employers would then work together with the union in overseeing the program.

The money would help make down payments, pay closing costs or bank fees, obtain favorable interest rates or as collateral for mortgages.

But before the $1-million housing trust fund can be set up, the federal Taft-Hartley Labor Management Relations Act of 1947 must be amended. In now allows employers to write off as tax deductions only payments to employee health and welfare funds that cover workers for such things as health and dental benefits.

Amending the Taft-Hartley Act is controversial. Some union leaders and pro-labor Democrats worried that changing the Act to allow for the housing fund would open the door to other amendments hostile to working people.

Sen. Edward M. Kennedy (D-Mass.) solved the problem with adjustments to a bill he introduced in 1989. It would permit unions and employers to bargain about establishing and administering trust funds that provide financial aid for employees seeking to own their homes. The measure is also backed by Sen. Orrin Hatch (R-Utah).

The Kennedy bill was approved by the Senate late last year and was approved in early April by the House of Representatives. The Bush Administration backs the measure, and it’s expected to soon become law.

Sen. Kennedy thinks the housing trust fund idea could be adopted by unions across the country when the Taft-Hartley law is amended. He says his bill could serve as a “model for the nation” because it “recognizes the hardships of working families in finding homes.”

Later this year, Local 770 joins other Food and Commercial Workers local unions in bargaining for new contracts with the Southern California supermarket industry.

Persuading employers to contribute into trust funds aiding union members is not a new idea. Companies already pay into trust funds providing union members with dental, psychiatric, orthodontic and vision care plus hearing aids, speech therapy, preventive medicine, pensions and supplemental unemployment benefits.

Why not a fund to help with housing?

An informal survey of our union members has demonstrated much interest in pursuing a program to aid home purchasers--even if it means taking several cents an hour for housing trust fund contributions out of prospective pay raises. Employees are mindful that benefit increases must come from the same pot of money that goes to fund wage boosts.

A joint union-management trust fund won’t solve the housing crunch in Los Angeles. But it may be something constructive unions could do to help their members realize the dream of home ownership.