Federal Influence

Facing a severe cash crisis and the risk of insolvency, the state of California made budget cuts across the board, including wage cuts for health care workers.1 The SEIU represents 223,000 of these home health care workers and collects $5 million a month in dues.2

The SEIU opposed the wage cuts and used their political influence to have the Obama Administration threaten the state of California with withholding nearly $7 billion the state expected to collect from the Federal economic stimulus bill.3 The Administration included the SEIU in a conference call to discuss the issue with California officials, involvement that was called “unusual at best.”4

After the SEIU complaint, the Administration gave notice to California officials that the Federal government would withhold nearly $7 billion in stimulus money if the state did not rescind the wage cuts for the home health care workers.5 However, the Administration eventually backed off of their threat to rescind the stimulus money.6

With the State of California facing insolvency, the SEIU made its position clear: their dues revenue was more important than the well being of 36,000,000 residents of the Golden State.


1Shaun Bishop, “In-Home Care Workers Face Pay Cut,” Palo Alto Daily News, 5/19/09; Matthew Yi, “Daunting Deficit Estimate Released,” San Francisco Chronicle, 5/12/09
2George F. Will Column, “Tincture Of Lawlessness,” The Washington Post, 5/14/09
3Peter Nicholas and Evan Halper, “State May Still Get Stimulus Money,” Los Angeles Times, 5/12/09
4Sean Higgins, “Obama Aids Labor With Policy Shifts,” Investors Business Daily, 5/15/09
5Evan Halper, “Federal Threat Over Budget Move,” Los Angeles Times, 5/8/09; “Our View: California To Feds: Butt Out,” Merced Sun Star, 5/12/09
6Patrick McGreevy, “State Braces For Brutal Cuts,” Los Angeles Times, 5/21/09