The United Auto Workers union is considering hiking membership dues by 25 percent, the first increase since 1967, as it faces dwindling membership and rising costs, a top UAW official and several union sources said.
The UAW, the richest U.S. union with $1 billion in assets, is also one of the most politically influential, contributing to the campaigns of Democratic politicians from the state level to presidential candidates. However, the union's influence and finances have waned as membership has fallen 30 percent since 2005 to 382,500 members — a far cry from its peak of about 1.5 million members in 1979.
UAW leaders are considering increasing dues to the equivalent of 2.5 hours per month, up from two hours per month for hourly workers in the automotive industry as well as governmental, nursing, academic and other fields represented by the union, several people familiar with the discussions said.
A veteran UAW-represented worker at either General Motors Co , Ford Motor Co, or Fiat's U.S. unit Chrysler making $28.125 per hour pays union dues of $56.25 per month. That would rise to $70.32 per month. A recently hired worker making $15.78 per hour could see a rise to $39.45 per month from the current $31.56.
Jimmy Settles, UAW vice president and the top union official for workers at Ford, emphasized that the rise in dues is "only in the discussion phase. No decision has been made."
Loss of membership affects not only the UAW but most of organized labor in the United States, where union membership fell to 11.3 percent of the work force in 2012, the lowest percentage in 76 years.
Total assets of the UAW fell for their sixth straight year in 2012, according to the union's annual financial filing with the U.S. Labor Department.
Settles said it was not yet clear whether the possible dues increase would be decided by the UAW's leadership or by a vote of members, perhaps at the union's convention next June.
The discussion of a possible dues increase arose at a meeting of UAW Ford local leaders with UAW Secretary-General Dennis Williams and Settles in September in Kentucky, several union sources said. The reaction among the local leaders at the meeting was mixed, according to sources.
Williams is the heir apparent to succeed current UAW President Bob King, whose term expires in 2014.
The UAW faces the need to shore up its finances at the same time that it has to convince its current members to stay in the fold in so-called right-to-work states, including Michigan, home of the union and major U.S. automakers.
Michigan earlier this year became the 24th right-to-work state, which bans mandatory collection of dues from represented workers.
The dues discussion also comes as the union tries to organize workers at foreign-owned automotive plants, including the Volkswagen AG plant in Chattanooga, Tennessee.
Still, Settles told Reuters that he is confident that the dues increase, if King decides to go ahead with one, will be supported by most UAW members.
"I think the key is proper education," said Settles. "You give people the facts, they can get behind it. I know it's an emotional issue."
The UAW has faced dwindling membership since 1979, when U.S. automakers dominated the domestic car market and before the widespread use of robots and other manufacturing efficiencies cut the need for as many assembly line workers.
The UAW's membership sunk to 355,191 in 2009 at the depths of the U.S. economic recession but while U.S. auto sales have increased nearly 50 percent since that year, the union's membership has risen 8 percent.
Adding to the difficulty of the union to keep up with expenses is that less than half of its current membership works in the auto industry. Pay at industries represented by the UAW outside of automotive generally is less, meaning less dues are collected for the two hours per month.
In the 1970s, automotive workers made up about three-fourths of UAW membership.
Overtime pay is not included in the calculations of monthly membership dues. Salaried workers have 1.15 percent of their monthly pay taken out to support the UAW.
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