With last week's Supreme Court ruling allowing corporations to spend freely on attack ads during this year's contentious midterm elections, the debate has turned to questioning whether the financial might of corporate America will drown out significant, but less wealthy political players, such as organized labor.
The argument goes something like this: Corporations make billions; labor groups make millions. When push comes to shove, if corporations were to bring to bear all of their financial resources, the flood of money would crush labor like a doomsday tidal wave.
The numbers certainly bear that out. The largest Fortune 500 company based in California, Chevron, recorded $263 billion in revenues last year, according to CNN. That’s enough to pay for every single presidential election in recorded history with enough left over to bail out a few banks.
By comparison, the state’s largest labor organization, the Service Employees International Union Local 1000, reported taking in about $50 million in union dues in their 2007 tax filing, the latest available. At the rate candidates are spending, you couldn’t even pay for the California governor’s race with that.
The Center for Public Integrity in Washington, D.C., looked at national labor unions earlier this week and reached a similar conclusion:
So what does this mean? It means that if a company like Exxon Mobil decided to invest just five percent of its profit in political ads, that nearly $2 billion sum would exceed the entire $1.6 billion annual operating budgets for the top ten labor unions combined.
Political scientists, partisan think tanks and bloggers have long argued that political contributions are subject to diminishing returns.
In other words, after a certain point, there's only so much another few thousand dollars can do for a campaign. Even the pro-public-financing group Americans for Campaign Reform acknowledges in one of its policy papers that, “Once candidates exceed the competitive spending threshold and voters learn who they are, more spending does not measurably increase the share of votes.”
Political strategists will also tell you that significant liabilities come with having your campaign underwritten by big business. For example, one of the largest corporate Republican donors in California is Altria, the tobacco giant formerly known as Philip Morris.
And as one Democratic consultant once put it to me, taking tobacco money “is like the kiss of death” for a campaign.
What remains to be seen is whether the amount of money it takes to run a viable campaign will rise in light of the ruling. And will the escalating price of campaigns be enough to strain labor organizations to a point where their campaign contributions are any less relevant than before?
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