You may know that union workers make more money than non-union workers, but did you know that 92% of union workers have a guaranteed pension compared to only 68% of non-union workers? Liz Shuler, the secretary-treasurer of the AFL-CIO, joins Traci on the podcast to discuss the future of defined benefit plans, the union brand, and busting her favorite myths about organized labor.

Some highlights from The Value of Union Membership with Liz Shuler include:

01:46 – Understanding the Value of Union Membership

06:29 – The Future of Defined Benefit Plans

09:30 – The Pension Model Evolves

13:38 – Union Myth-Busting

16:55 – The Digital Revolution and Union Innovation

22:06 – Racial Justice and a Blueprint for Change

Narrator  0:02  

This is The World of Multiemployer Benefit Funds Podcast with Traci Dority-Shanklin. If you’re interested in labor and union benefit funds, well, you’ve landed in the right place. We are a go-to source for all things union benefit fund-related. And we are going to bring you interviews with key decision-makers and fund professionals that guide these plans. They’ll share their insights, experience, unique perspectives, all of the latest developments, and tips to unlock the mysteries of multiemployer benefit funds. Time is short, so let’s get started.

Traci Shanklin  0:38

On August 5, 2021, Richard Trumka, the president of the AFL CIO, passed away. He was 72. Prior to his passing, I had recorded the following conversation with Elizabeth Schuler, the secretary-treasurer of the AFL CIO, and memory of Richard Trumka and his legacy. I would like to dedicate this episode to him, Liz Schuler, and everyone in the AFL CIO family.

Traci Shanklin  1:08  

If you’re just joining us on the podcast, I’ve been speaking with Elizabeth Shuler, the secretary-treasurer of the AFL-CIO. In the first part of our conversation, Liz and I talk about what it means to be a labor leader and some of her journey to the AFL-CIO. We also discuss the PRO Act and why it’s important to labor. Liz and I also touched on union favorability across the country, the highest numbers in 50 years, especially among millennials and Gen Z. Today, I am continuing my conversation with the AFL-CIO secretary-treasurer, Elizabeth Shuler. 

Traci Shanklin  1:46  

I spoke with a millennial organizer on the podcast, and he thought millennials and Gen Z might be underestimating some of the benefit that a labor union can provide. They seem to understand that they will make more money than their non-union counterparts. That for every dollar that a union employee earns, that same non-union worker earns 81 cents. However, when I asked him, “What do you expect in a retirement fund,” I thought I’d hear him mention a DB or a DC plan or a variable benefit plan or even a 401k. Instead, he surprised me by saying that he thought that the pension idea had gone away. Of course, this response alarmed me. Beyond individual retirement planning, it poses the potential for an economic crisis. Further, the millennials and Gen Z’s don’t even realize it’s an option for them, so they’re coming to the bargaining table with a lower expectation than previous generations. Do you get the sense that these generations genuinely understand the value of union membership beyond the activism, or better treatment and better pay?

Liz Shuler  3:00  

That’s a really good question. And I think we have a lot of educating to do, of course, but I think, you know, young people are balancing so much right now. A lot of them have student debt, stagnant wages. They don’t even realize a pension plan could be an option for them because of all that they’re balancing and just trying to get by, and trying to make it in the economy. Those who are outside unions, of course, don’t have the good-paying jobs. So often, they’re working more than one job. When they do join the labor movement, there’s this “A-ha” moment, where they find out that belonging to a union means so much more than just wages. They find out that they get great benefits. They find out “Oh, there’s this thing called a defined benefit pension plan,” but only until they’re in our ranks, do they start to get it. 

Liz Shuler  3:56  

So, we have a job to do to really raise awareness. What does it mean? What does it mean to have pension security, even though you’re young, you need to be thinking about this now. And I would like to think that the AFL-CIO, of course, plays a critical role in lifting up what we call the union advantage, right? What is the difference between being in a union and not being in a union? It’s a stark difference for people of color, for women, for immigrants, and for folks who confront workplace discrimination. I always like to say that a union contract is a potent weapon against unequal pay and structural racism because it establishes, you know, fair and transparent systems for hiring, for firing, for wages. 

Liz Shuler  4:49  

But, I will say healthcare has become such a big issue. It’s always healthcare and retirement with the growing crisis of healthcare costs, but having good benefits and health insurance is so critical. And it really is the difference-maker when you’re in a union to have the security of having healthcare, having retirement security. And certainly, we know that that magic age of 26 now, if you’re talking about younger people, I think last year, 26-year-olds had the highest uninsured rate of all age groups, followed by 27-year-olds, right. That’s no coincidence because of the Affordable Care Act, allowing young people up to age 26 to remain on their parents’ health insurance plans as dependents. Young people are staying on their parents’ plans longer. And then when they age out, they either don’t have health insurance, or they’re just not able to access it because their employer, it’s either too expensive or it’s not worthwhile. 

Liz Shuler  5:59  

So, I think we have a responsibility and an opportunity in the labor movement to again, lift up this union difference. That means healthcare benefits. It’s, you know, better contractual protections for safety, for job security, and just a powerful voice overall in your workplace. Again, to balance the scales of corporate power and make sure that we get the slice of the pie, right, that overall pie that we helped create.

Traci Shanklin  6:29  

I want to backtrack just a little bit and just ask you, what do you think the future of defined benefit plans looks like?

Liz Shuler  6:36  

Wow, that is a multi-bazillion-dollar question, right? Wish I had a crystal ball on that one. But we say that retirement security is a three-legged stool. And I’m sure your listeners have heard this, right, the Social Security, the defined benefit pension, and then the individual savings. So, 401k, IRAs, those are the three-legged stool, and each leg is important to make sure that working people retire with dignity and security. Unfortunately, though, today, fewer and fewer workers have access to a defined benefit pension plan, or can actually even afford to save for retirement on their own. For a lot of people, Social Security is all they have.

Liz Shuler  7:22

And we know that if you’re in a union, you’re far more likely to have access to retirement benefits at work. I think it’s 94% of union members have a retirement plan at work compared with just two-thirds of non-union workers. Union members are more likely to have that guaranteed defined benefit pension plan that provides a lifetime income, and retirement. Pensions were the cornerstone at one time when you went to work, and you aspired to have a defined benefit plan that you could pay into and have that security long-term. 

Liz Shuler  7:58  

So, we’re working overtime to make sure that they don’t become a thing of the past. Because as the island shrinks, as they say, have fewer and fewer people having a defined benefit plan, the pressures mount to chip away at that. And instead of saying we should aspire to everyone having access to a defined benefit plan, it instead becomes the opposite, right? Like, well, I don’t have that. So, why should you have it? We don’t think the answer is to get rid of defined benefit plans. We have to look at the bigger picture. We are living in a broken economic system, where the inequality rates are skyrocketing and are leaving millions of people behind. And we have reckless Wall Street behavior. We have deregulation, employers are misusing corporate bankruptcy codes. And that’s threatening the financial security of so many people who have worked hard their entire lives for secure retirement only to have that promise robbed from them. So, we have to protect the freedom of workers to come together in a union, fight for these defined benefit pension plans, and actually expand access to them for more people and think of creative ways to bring that benefit to more people. And I think that’s the responsibility we have in the labor movement.

Traci Shanklin  9:30  

Some public funds and multiemployer plans have implemented some version of a variable benefit plan alongside with their legacy plans. Well, American Rescue Plan Act shores up and protects some of these distressed plans. Could more unions move towards some version of a variable benefit plan or move away from a retirement plan completely as the Millennials and Gen Z’s take over the job market since they don’t really completely understand them?

Liz Shuler  10:01  

Well, you know, many pension plans are still recovering from the 2008 crisis. And industry-wide changes have also impacted certain pension plans. The bottom line is that employers need to pay their fair share for the retirement benefits that have been earned by the participants, and any plan design changes have to require that employers take responsibility for their unfunded liabilities and that their plan contributions be based on conservative low-interest-rate actuarial assumptions so that we can best protect workers retirement benefits. That’s what we need. 

Liz Shuler  10:45  

And we need, you know, corporate Bankruptcy Reform to ensure that corporations are not able to use the bankruptcy code to get out of their pension obligations. And I think what unites all of us across generations is that if you work hard your entire life, you shouldn’t have to struggle in retirement. If you’re a Millennial or a Gen Z worker and you’re coming into this, and you’re seeing what’s happened to your parents, and what happened to your grandparents, you work hard. I think there is some skepticism among younger people, right? Like, is this worth investing in? Is this just gonna collapse around me like I’ve seen everything else do in the economy? I think it’s restoring faith that these systems can work. Millennials and Gen Z workers are the hardest hit, they are dealing with unparalleled levels of economic stress, I think we need to make sure that younger workers have access to these plans. And it’s up to us right now to ensure the health and longevity of them, so that they are there for this next generation. And sometimes, that requires making difficult decisions. 

Liz Shuler  12:05  

But, I will say we also want to make sure that as the model evolves, and we look at these new industries and how they’re changing and the future of work might look different. We have to be nimble and responsive and provide vehicles for workers who don’t have defined benefit plans. We launched the target-date funds. I don’t know if you’re familiar with the AFL-CIO, target-date funds for defined contribution? 

Traci Shanklin  12:35  

I am. 

Liz Shuler  12:36  

Yeah. So, I mean, I think that is a solution that offers a diversified investment portfolio that evolves from greater equity exposure to greater fixed income exposure through the investor’s working life. So, these funds offer low-cost democratic pricing. I think it’s 12 basis points, which is equal to point one 2%. That is actually incredible. If you compare it to the average target-date fund expense ratio of 58 basis points, right? It’s incredible. So, that’s what we do when we invest together at scale. In the labor movement, we can get these kinds of deals, these kinds of benefits, bringing our collective voice to the table with some of the country’s largest corporations. And then we can also vote the proxies through our shareholder activism. We can keep CEO pay in check and leverage social and governance changes at these corporate shareholder meetings.

Traci Shanklin  13:38  

In your bio, I loved that you wrote you were committed to busting myths about labor. I love that you’ve taken a negative such as union-busting and turned it into something empowering like busting myths. It always frustrated me to no end that if you do a Google search or see a story in the media about unions, it’s mainly negative and filled with stereotypes. Very rarely do you see unions portrayed in a positive way. Yet as I stated earlier, Millennials and Gen Z’s are very optimistic about unions. Again, one of the reasons I created the podcast is I wanted to show who the labor community is. Its humanity, tell those stories. It’s the community of people who work together. These people are family and friends, and they bring food and clothing and donations to communities when they’re in trouble like they did for the California fire victims. They opened their doors for higher education, green cards, and as you know, the list is endless. What are some of the myths that you’ve heard that you enjoy busting?

Liz Shuler  14:43  

Well, I think you captured it really well because you’re right. There are a lot of misperceptions and stereotypes out there that get repeated in newspaper headlines. And even sometimes when I’m watching a television show or a movie, you know, they love to throw out that stereotype of unions protecting lazy people or we’re thugs or whatever. I love being called a “union thug,” by the way.

Traci Shanklin  15:09  

I was gonna say, isn’t that fun.

Liz Shuler  15:13  

But, I think one of the myths that I think is out there that we need to work really hard to demystify is that we are of the past that we’re outdated or irrelevant. We needed them at one time, but we really don’t need unions anymore because we have laws. We have modern workplaces. That we don’t have sweatshops anymore, so we don’t need unions. I think that if we could use our communications tools more effectively, and lift up, like you were saying, all of the cutting-edge things that the labor movement does, people would see us as a modern movement because we’re pushing boundaries for social and economic justice. We’re pushing to make the rules of the economy work for working people. We’re on the cutting edge of workforce training. And if you think about the future of work, and how workers are going to be need to be fluid and mobile, what better to have the union be the center of gravity for you to upskill and get to that next great opportunity that’s emerging in a new market. We are reinventing the role of unions to meet the workforce of the future. I think that’s the myth — that we’re outdated and outmoded. No, we’re actually on the cutting edge. And in fact, we’re the only institution left standing that can balance the scales for working people. And if we can get the PRO Act passed, I think we’re in a moment where we can unleash incredible growth and opportunity for the labor movement.

Traci Shanklin  16:55

I read this comment, which echoes exactly what you just said, where a young person was opining that they wish they lived in the old days of the labor movement. And I remember thinking when I read it, “What do you mean, in the old days of labor movement. I mean, the labor movement is still here. It never went away. And it will always be.” I really think there’s an opportunity here to tell a story about the modern labor movement. I read an article where the managing director of Red Bull Media Werner Brell, stated, “There are rules that any brand can live and die by to create media, know your brand, and stand by its ethos; be relevant and authentic, surprise and innovate; be consistent and tell a real story.” So, unionism as a brand has an opportunity to make a comeback, in my opinion. How is the AFL-CIO building on its authenticity, and using innovation to build the next generation labor movement?

Liz Shuler  17:57  

In this moment where work is changing, I mean, we’re seeing technological shifts. And the pandemic is actually I think hastened the changes in technology in the workplace. It’s not just the next generation of workers that’s evolving; it’s work itself. That is really one of our lead issues that we’re working on and thinking about the digital revolution, right, has real potential to improve workers’ lives. But, it also has the ability to degrade our lives and eliminate millions of jobs. I think that these next-generation movements and what unions will be for the future has to be evolving and changing to meet the challenges of what the future of work are going to look like. And we had a commission on the future of work and unions that issued a report actually, just before the pandemic that has a number of different recommendations, but basically, that we need to work to make sure the benefits of technological change are shared broadly. 

Liz Shuler  19:11  

Because if we don’t make the right policy decisions, then that’s just not going to happen magically. We need to make sure it happens through advocacy and making sure those policy guardrails are in place so that we can share workers can share broadly in an equitable future of work. The models are changing. I know that many of our affiliated unions are looking to the workforce of the future and trying to figure out how they can embrace new ways of organizing. I know the Communications Workers of America, CWA recently launched CODE-CWA, another acronym, but they’re looking to organize video game workers and tech workers. And we’ve seen companies like Glitch take steps to organize and sign collective bargaining agreements. We’ve seen Alphabet workers, the folks at Google who have come together and are trying to leverage their company in a new way under the CODE-CWA umbrella, for example, changing the way their corporation does business. Are they engaging with clients or companies that aren’t true to our values as a country? I think that there is a moment where we can start to think differently and start planning for the future. And as you said, this is the moment that we have so much opportunity in front of us. And if we don’t take advantage of it and figure out ways to grow our labor movement now, then when?

Traci Shanklin  20:51  

On your LinkedIn page, you stated that you were interested in solutions-driven unionism. Can you tell me what that means? I assume that everything we’ve been talking about is solutions-driven unionism, but just define it for the listeners.

Liz Shuler  21:04  

Well, I think often we have a tendency in the labor movement to identify the problem, and we’re very good at pointing out what’s wrong. But, bringing solutions to the table to complex challenges, is what I mean by that, so that we often can be out in the streets protesting, and we aren’t afraid to stop traffic and raise our voices. But, at the same time, coming to a table with people that we often don’t agree with, you can sometimes make big progress. I think about some of the successful labor-management partnerships, for example, that have been able to both reward workers for hard work and bargain fair contracts, but also ensure the success of the industry and of the company, to make it clear that when the company does well, that we do well, and then we can do that together. So, that’s what I mean by solutions-driven unionism.

Traci Shanklin  22:06  

You have touched on diversity and inclusion. Typically, labor unions in the labor movement have kept in stride with the civil rights. The labor movement was part of the civil rights movement of the 60s and on the forefront of the woman’s movement and gay rights in the 70s. How has AFL-CIO and the labor movement adapted to the modern civil rights movement, like Black Lives Matters, and Time’s Up?

Liz Shuler  22:32  

We’ve become a part of it. We’ve embedded it in everything we do. I would say last July, in the wake of the murders of Breonna Taylor and George Floyd, we announced the creation of the AFL-CIO Task Force on Racial Justice. And that was the moment we knew we had to do more. We wanted to look at our internal structures. We wanted to look at how we were engaging with movements and the policies that we’ve put forward. What legislation we support, looking through the lens of racial justice and everything we do. 

Liz Shuler  23:11  

That task force is working now on a series of recommendations and concrete actions with the goal of ending systemic racism. How is that for a goal, right? The task force is really engaging all corners of the labor movement in frank discussions about race about how can we open dialogue. How can we build a more diverse labor movement? How can we fight to make police reform the law of the land and really encourage law enforcement unions? Since we have 13 unions with law enforcement, how can we encourage them to be agents of change and a voice for reform? These are the complex issues that the task force is taking on, but we have great hope that this will be a monumental step forward for our movements. And we’ll be hearing more on those recommendations in the coming months.

Traci Shanklin  24:06  

Is there a fine line between demanding the social justice and defending workers’ rights and their rights to collectively bargain?

Liz Shuler  24:18  

We have to do both. We, as I like to say we have to walk and chew gum at the same time, right? We are a part of a social justice movement. That’s just the nature of being in a union and coming together with workers across all sectors of the economy — union and non-union alike, and unions have always been agents for change if you look throughout history. And we use the labor movement to advocate for those reforms that, you know, keep our communities safe. I think that they’re not mutually exclusive, right? It’s not either social justice or workers’ rights. And if you’re talking about in the context of public safety, we believe that all workers, including law enforcement officers, should have the right to a union and the right to bargain collectively. But the union should never be used as a shield for criminal misconduct. 

Liz Shuler  25:26  

And we’ve been very clear about that through the work of our policing subcommittee of Racial Justice Task Force where we have law enforcement at the table to really look in the mirror and examine the profession. From a worker’s perspective, because of all of the discussions going on about police reform, there really haven’t been the voices of law enforcement workers at the table. We thought this would be a unique role for the labor movement to play, to look in the mirror, look at the deficiencies that are in the profession because it really the systems are broken. They agree. And so, we just issued a blueprint for change. 

Liz Shuler  26:12  

That’s on our website that talks about a groundbreaking program called U-LEADS. It’s an acronym. We love our acronyms in the labor movement. Union, Law Enforcement Accountability and Duty Standards. It’s basically a program to hold our own members accountable for their actions and that the union owns and that we take responsibility for members who are in law enforcement who aren’t doing the right thing, who are abusing their power, and be honest about that. We would use the union to make sure that we have accountability mechanisms in place that allow the union itself to hold those members accountable. And ultimately, union membership could be revoked if a union member isn’t standing up to the values that we hold so dear in the labor movement.

Traci Shanklin  27:11  

I think it is very clear from our conversation today that the labor movement has challenged our country to create an economy of employers that give all members fair wages, workplace safety standards, and a retirement benefit. It holds non-union companies to a higher standard. And as unions fight for social justice, it bleeds into the general public, the early adopters, and the battle for every significant workplace improvement in America can be traced back to being initiated by a labor union. Once these reforms are in place, the union doesn’t get credit for its part. Today, there is an alignment that we have an opportunity to change this. So, Liz, I want to thank you for having this conversation and joining me on the podcast today.

Liz Shuler  28:07  

Thank you so much, Traci, it was a privilege. And I just want to thank your listeners too, for their advocacy and for making sure that we continue defined benefit pension plans well into the future. And the labor movement has a bright future, as we’ve talked about, and so much opportunity in front of us. So, thank you again for all your help.

Traci Shanklin  28:30  

If you’ve enjoyed today’s podcast, please subscribe to us and give us a five-star review. You can find us on Apple Podcast, Spotify, Google Podcast, and many of your favorite podcast platforms. You can also subscribe to our newsletter or listen to one of your favorite episodes on our website at www.multiemployerfunds.com. That’s www.multiemployerfunds.com. Thanks again for joining the conversation where listeners connect with leading experts throughout the multiemployer world. Be part of the change. 

Traci Shanklin  29:09  

And that’s it for this week’s episode of The World of Multiemployer Benefit Funds Podcast. We’d love to hear from you. And if you have any comments, questions, or suggestions, head over to www.multiemployerfunds.com, and let us know. Thank you for joining us, and we look forward to next time.

Transcribed by https://otter.ai