Government Subsidies and Other Sources of Union Support

Table 1
Table 1 - Release Time Used by State of Michigan Employees, Fiscal Year 1999

Besides membership dues, there are other means by which unions receive large amounts of financial support.  For example, unions receive substantial federal funds for education and training.  The Capital Research Center has uncovered records showing that the National Council for Senior Citizens, which had served as the AFL-CIO's lobbying arm on senior issues until it was disbanded at the end of 2000, received $332 million in federal funds between 1996 and 2000.  Much of this money may have been spent on political and lobbying efforts, such as the "Fair Taxes for All Coalition," which opposed President Bush's tax cut plan earlier this year.[18] 

During the same period, the Capital Research Center was able to document direct federal support totaling $6.6 million for the AFL-CIO itself, along with $3.6 million for the NEA, nearly $1 million to the American Federation of Teachers, and, and $447,000 that went to AFSCME.  These grants were tracked using the Financial Assistance Award Data System (FAADS) operated by the U.S. Census bureau.  FAADS data are not complete in many respects, so the figures compiled by the Capital Research Center are not necessarily comprehensive.[19]

Another form of support that clearly translates into greater financial clout for unions is "release time," which employers grant to union officials to engage in union related activities during working hours, at regular rates of pay. Release time is commonly included in contracts and it is primarily reserved to compensate employees for the time they devote to collective bargaining, contract administration, and grievance handling.

Accountability for the use of the time varies from contract to contract but generally  employers do not inquire in detail as to how union representatives are using their allotted union time. The amount of time available to union agents is usually determined by a negotiated formula and capped at an agreed-upon level.  If and when the ceiling is reached, unions bear the economic burden of compensating employees for the time they devote to union pursuits.

It is impossible to precisely quantify the economic benefits that flow to unions as a result of release time. But it is important to note that in public sector labor relations the time granted by public employers is paid for by tax revenues.

A case in point is revealed in Table 1 on page 10, which shows the 1999 labor relations "leave banks" (release time) for State of Michigan employees.[20] The information reflects the release time negotiated in collective bargaining agreements covering some 41,162 union-represented state workers in 1999.  According to this estimate, over 60,000 hours are available at a taxpayer-subsidized cost exceeding $1,000,000 (see table). These taxpayer funds would otherwise come out of union dues coffers and therefore represent a direct subsidy to union organizations that represent state employees.

[18] Policy Analysis: More Government for All, How Taxpayers Subsidize Anti-Tax Cut Advocacy, John Samples and Chris Yablonski, Capital Research Center,  (2001).

[19] FAADS data do not attempt to account for who controls various organizations.  Some grant recipients listed in FAADS may in fact be controlled by other organizations, including unions, and many grants do not have recipients listed.  The FAADS database can be accessed at

[20] Labor Relations Leave Bank, Michigan Department of Civil Service; this chart was prepared by the Department of Civil Service based on an overview of collective bargaining agreements and may not be all inclusive.