Teamsters Chief to Seek 25% Dues Hike to Stem Financial Crisis

In an unprecedented and controversial gamble to save the International Brotherhood of Teamsters from falling into dire financial straits, the union’s international president said he plans to ask members to vote soon to increase their annual dues by about 25%.

Ronald Carey contends the underlying cause of the 1.4-million-member union’s financial crisis is largely a combination of two factors: not raising the monthly per-capita union dues for 10 years and the union’s 1991 decision to nearly quadruple strike pay from $55 a week to $200 a week.

The per-capita monthly dues, which are paid to the international union by Teamsters locals, have remained at $3.70 since 1983. Dues pay for the strike fund and the operations of the international union.

Teamsters International Secretary-Treasurer Thomas Sever predicts the union’s strike fund will be depleted by June. The union now has about $18 million available and is distributing about $2.6 million a month in strike pay.

The Teamsters general fund has dropped from $59 million at the end of March to about $38 million.

Since Carey and his reform slate swept the 1991 Teamsters rank-and-file secret ballot elections, he has helped transform the Teamsters into an activist organization, using union resources for legislative lobbying, negotiating tactics and strikes and helping to elect Bill Clinton as President.

R.V. Durham, the North Carolina Teamsters leader who ran against Carey in the 1991 union presidential election, questioned Carey’s fiscal skills.

He accused him of trying to ram the dues increase through without a general debate, avoiding the usual process of calling a convention at which delegates would decide the issue.

“I don’t think any Teamsters officers want to see this union go down the toilet, but there has to be responsible decision-making,” Durham said.

Durham said he would prefer calling a convention where the union’s finances would be debated, followed by the rank-and-file referendum proposed by Carey.

Herman Benson, founder of the Assn. for Union Democracy, a union civil rights organization, said he couldn’t recall a union conducting a rank-and-file referendum on raising dues.

“Carey had two ways to resolve this financial situation,” Benson said.

“One way would have been to make a series of deals with the powerbrokers. Normally you have to pay something in return for that kind of support,” he said. “Instead, he is going to the membership.”

While Carey’s victory as a presidential reform candidate gave him control of the international level of the Teamsters, the old guard still dominates the local and regional offices of the union.

John Morris, Teamsters International vice president in the Philadelphia office, said that “some of the old guard would oppose Carey if it were a 3-cent-an-hour increase.” Morris was the leading advocate of increasing strike pay to $200 a week at the 1991 convention.

Under Carey’s proposal, which would have to be approved at the Teamsters General Executive Board meeting in Washington next week, the average Teamster member would see monthly dues rise from about $25 a month to $31.25. Union locals retain most of the money.

Dues would be increased from the current formula of two times a worker’s hourly pay to 2 1/2 times that.