Democrat house votes to restrict unions

Measure would curb bargaining on health care

Robert J. Haynes, president of the Massachusetts AFL-CIO, said the union would fight the legislation “to the bitter end.” (M. McDonald for The Boston Globe)

By Michael LevensonGlobe Staff / April 27, 2011

House lawmakers voted overwhelmingly last night to strip police officers, teachers, and other municipal employees of most of their rights to bargain over health care, saying the change would save millions of dollars for financially strapped cities and towns.

The 111-to-42 vote followed tougher measures to broadly eliminate collective bargaining rights for public employees in Ohio, Wisconsin, and other states. But unlike those efforts, the push in Massachusetts was led by Democrats who have traditionally stood with labor to oppose any reduction in workers’ rights.

Unions fought hard to stop the bill, launching a radio ad that assailed the plan and warning legislators that if they voted for the measure, they could lose their union backing in the next election. After the vote, labor leaders accused House Speaker Robert A. DeLeo and other Democrats of turning their backs on public employees.

“It’s pretty stunning,’’ said Robert J. Haynes, president of the Massachusetts AFL-CIO. “These are the same Democrats that all these labor unions elected. The same Democrats who we contributed to in their campaigns. The same Democrats who tell us over and over again that they’re with us, that they believe in collective bargaining, that they believe in unions. . . . It’s a done deal for our relationship with the people inside that chamber.’’

“We are going to fight this thing to the bitter end,’’ he added. “Massachusetts is not the place that takes collective bargaining away from public employees.’’

The battle now turns to the Senate, where President Therese Murray has indicated that she is reluctant to strip workers of their right to bargain over their health care plans.

DeLeo said the House measure would save $100 million for cities and towns in the upcoming budget year, helping them avoid layoffs and reductions in services. He called his plan one of the most significant reforms the state can adopt to help control escalating health care costs.

“By spending less on the health care costs of municipal employees, our cities and towns will be able to retain jobs and allot more funding to necessary services like education and public safety,’’ he said in a statement.

Last night, as union leaders lobbied against the plan, DeLeo offered two concessions intended to shore up support from wavering legislators.

The first concession gives public employees 30 days to discuss changes to their health plans with local officials, instead of allowing the officials to act without any input from union members. But local officials would still, at the end of that period, be able to impose their changes unilaterally.

The second concession gives union members 20 percent of the savings from any health care changes for one year, if the unions object to changes imposed by local officials. The original bill gave the unions 10 percent of the savings for one year.

The modifications bring the House bill closer to a plan introduced by Governor Deval Patrick in January. The governor, like Murray, has said he wants workers to have some say in altering their health plans, but does not want unions to have the power to block changes.

But union leaders said that even with the last-minute concessions, the bill was an assault on workers’ rights, unthinkable in a state that has long been a bastion of union support. Some Democrats accused DeLeo of following the lead of Governor Scott Walker of Wisconsin and other Republicans who have targeted public employee benefits. “In the bigger world out there, this fits into a very bad movement to disempower labor unions,’’ said Representative Denise Provost, a Somerville Democrat who opposed the bill.

Under the legislation, mayors and other local officials would be given unfettered authority to set copayments and deductibles for their employees, after the 30-day discussion period with unions. Only the share of premiums paid by employees would remain on the health care bargaining table.

Geoff Beckwith, executive director of the Massachusetts Municipal Association, said that, even if the bill becomes law, municipal workers would still have more bargaining power over their health care plans than state employees. “It’s a fair, balanced, strong, effective and meaningful reform,’’ he said.

Unions lobbied to derail the speaker’s plan in favor of a labor-backed proposal that would preserve collective bargaining, and would let an arbitrator decide changes to employee health plans if local officials and unions deadlock after 45 days. Labor leaders initially persuaded 50 lawmakers, including six members of DeLeo’s leadership team, to back their plan last week. But DeLeo peeled off some of the labor support in the final vote.

Representative Martin J. Walsh, a Dorchester Democrat who is secretary-treasurer of the Boston Building Trades Council, led the fight against the speaker’s plan. In a speech that was more wistful than angry, he recalled growing up in a union household that had health care benefits generous enough to help him overcome cancer in 1974. He said collective bargaining rights helped build the middle class.

“Municipal workers aren’t the bad guys here,’’ he said. “They’re not the ones who caused the financial crisis. Banks and investment companies got a slap on the wrist for their wrongdoing, but public employees are losing their benefits.’’

The timing of the vote was significant. Union leaders plan today to unleash a major lobbying blitz with police officers, firefighters, and other workers flooding the State House. Taking the vote last night at 11:30 allowed lawmakers to avoid a potentially tense confrontation with those workers, and vote when the marble halls of the House were all but empty.

Michael Levenson can be reached at mlevenson@globe.com.

Teachers Unions Working Feverishly to Organize Charter Schools

APRIL 27, 2011


By Kyle Olson
4/27/2011

One of the things I’ve always liked about charter schools is they aren’t bound by onerous labor agreements that hamper innovation. Traditional public schools get boxed in with union contracts that literally stipulate when a teacher arrives in the morning and when he or she must depart. And that’s just the beginning of union-imposed regulations.

In charter schools, the interest of the students comes first, so adults oftentimes find themselves going above and beyond to ensure that students succeed. In the documentary “Kids Aren’t Cars,” the story was told of Tindley Accelerated School in Indianapolis. The principal said his teachers stay late and work Saturdays if necessary because they do not accept failure.

That’s why it is disturbing to watch labor unions organize charter school after charter school, with little being done about it. Their intent is clear. Consider what United Federation of Teachers Vice President Leo Casey said at the recent socialist Left Forum, courtesy of EAGtv:

“If we do not figure out how to organize charter schools and if we are not successful in doing that, we will end up in the same place as the auto workers. So there is no more key question before us as a union and a broader labor movement with regard to education than how we approach charter schools and our ability to organize them.”

What he’s saying is that the United Auto Workers unionized Ford, General Motors and Chrysler and ignored foreign competitors. As foreign market shares grew, the UAW’s membership rolls suffered. Casey’s envisioning a similar scenario with school employee unions.

He doesn’t care if charter schools benefit students. He just knows that they hurt his union, so they must be changed as soon as possible.

“Organizing a charter school is like organizing WalMart. This is not traditional public sector organizing,” Casey went on to say, pounding his fist on the table. To say Big Labor has a distaste for WalMart is an understatement, so the comparison is all the more insulting to charters.

He continued on the WalMart theme, which would make one wonder if the union campaign to organize charter schools is because they believe charter teachers want their representation, or because a unionized charter school will soon turn into a run-of-the-mill, substandard school.

“The battle has to be to organize those schools. If those schools are organized, do you think WalMart is going to be pouring money into them?”

Casey’s strategy is a political one, not one born of a desire to create quality schools.

Stanley Aronowitz, a professor, union activist and former Green Party candidate for governor, also spoke at the event and concurred with Casey, “I’m for the position that charter schools are ratty and should be abolished yet at the same time we should organize them – I agree with that position.”

It is a shame teachers unions, principally the American Federation of Teachers, are unionizing charter schools simply as a power play – not because those teachers are seeking to organize or because unionizing creates a better education. It’s further proof that teachers unions look out for the adults instead of the children.

Kyle Olson

Kyle is founder and CEO of Education Action Group Foundation, a non-partisan non-profit organization with the goal of promoting sensible education reform.

Scott Walker column: Property tax relief needed

We need property tax relief.

For too long, middle-class taxpayers have been stuck with the costs of paying for more and more government. In 2000, the average property tax on a median value home in Wisconsin was $2,110. By 2006 it had risen to $2,729. Today it’s $2,963. Without the property tax reforms in our budget, these middle-class tax bills would rise to $3,425 by 2013.

These increases hurt middle-class taxpayers. They make it harder for the retired couple living on a fixed income to stay in their home or for the young couple who are saving to buy their first house so they can start a family. Rising property tax bills also hurt the blue-collar family who took a pay freeze to keep their jobs and they hurt small businesses that are struggling to cover payroll.

That’s why, amid all the difficult choices we had to make in our new budget, we’re implementing a real property tax freeze.

Our property tax reforms will save the typical taxpayer nearly $750 over the next two years. That’s real money we’re keeping in the pockets of middle-class taxpayers across Wisconsin.

Protecting the middle-class and promoting job growth are key components of our budget reforms that provide long-term solutions.

Think about this: How many people would run up a huge bill and then ask their children to pay it? Sounds pretty irresponsible, yet that is what the government has done for years. Given this fiscal instability, it’s not surprising that businesses have been hesitant to add more capital or hire more workers.

Two years ago, the last governor and state Legislature ran up the largest structural deficit in recorded history. Now we are stuck with the bill. In contrast, our budget makes the hard decisions. By tackling the tough choices, we are making a commitment to the future. We are showing our children that we are willing to take on today’s challenges, so they can grow up in a Wisconsin at least as great as the one we grew up in. In doing so, we also protectmiddle class taxpayers who always seem to get stuck with the bill.

Our budget plan balances a $3.6 billion deficit and reduces the structural deficit by more than $2 billion. That is why a national bond rating agency called our budget “credit positive.” (When was the last time anything in government was called positive?) These signs of fiscal stability will give job creators the confidence they need to begin expanding and start hiring.

I think our state is moving in the right direction. Since the start of the year, more than 24,000 jobs have been created in the private sector in Wisconsin, including more than 11,000 manufacturing jobs. Now, we are taking even more positive action through our fiscally-responsible budget proposal.

Getting the state’s finances in order, creating a better environment for job creation, protecting vital services and saving middle-class taxpayers money; these are the core objectives of our biennial budget plan. These plans will help get Wisconsinworking again.

Contact Gov. Scott Walker by email atgovgeneral@wisconsin.gov or by phone at 608-266-1212.

Benefit Reform Could Save School Districts Hundreds of Million$

MacIver News Service | April 27, 2011

[Milwaukee, Wisc...] School districts in southeastern Wisconsin are paying twice as much for health insurance as private sector companies in Milwaukee, according to a new study by HCTrends. That’s just the beginning of what the group found in its study of school district health insurance expenses in 2010.

“Health plan costs for the region’s teachers are 63 percent higher, on average, than the plans offered at private-sector companies with some union representation, and 80 percent higher than the average single-coverage cost for all private-sector plans,” according to the study.

“This combination of above-average plan costs and below-average employee contributions significantly increases the school district’s health care costs. While the average teachers’ plan costs 80 percent more than the average private-sector plan, the per-employee cost borne by the school district is twice as much as the cost borne by the average employer.”

HCTrends also debunks the public-sector union argument that they have foregone competitive pay increases in exchange for better benefits. The group found that since 2003 teachers’ pay has increased by 33 percent, while wages in the private sector have only increased 26 percent in Wisconsin.

“Teacher health plan costs are no longer comparable to the benefits being offered in the private sector, even at many larger firms with labor representation,” said Dave Jensen, Editorial Director of HCTrends. “As a result, school districts are paying twice as much as other employers for health care.”

Jensen said public officials can help alleviate their budget crunches by offering competitive, not exorbitant benefits.

“Bringing plan designs and employee contributions in line with the private sector would allow school districts to achieve significant savings even as they continued to offer competitive health benefits,” Jensen said.

Right now, schools in southeastern Wisconsin are paying about $1,400 per student on health insurance for their teachers.

The study also found that Milwaukee Public Schools could save $221 million a year by bringing teacher benefit plans more in line with the public sector. Even if the district were to merely enroll its teachers into the state health plan, it would save $64 million annually.

Paul Ryan Responds

Two months ago, the president introduced an unserious budget that locks in Washington’s spending spree, adds $13 trillion to the debt over the next decade, and accelerates our nation toward a fiscal crisis. His budget imposes $1.5 trillion in tax increases on job creators and American families, stifling the private-sector job creation that we urgently need. His budget commits seniors to bureaucratically rationed health care, burdens families with ever-higher taxes, and consigns our children and grandchildren to a diminished future.

Two weeks ago, House Republicans advanced their Fiscal Year 2012 budget resolution – The Path to Prosperity. The House Republican budget spurs economic growth and job creation, strengthens the social safety net for those in need, fulfills the mission of health and retirement security for all Americans, and lifts our crushing burden of debt. The Path to Prosperity prevents the president’s tax increases and instead focuses on the root cause of our debt problem: wasteful Washington spending. The House Republicans’ budget reduces government spending by $6.2 trillion over the next decade, and puts the budget on a path to balance in the years ahead.

The Path to Prosperity has reshaped the budget debate – giving the American people an honest assessment of our fiscal challenges and delivering real solutions that restore the promise of our exceptional nation. In the wake of criticism that House Republicans were leading where his budget had failed, the president followed with a speech intended to show that he shared our concerns about the nation’s most urgent fiscal challenges. Unfortunately, instead of delivering solutions, the president delivered a partisan campaign speech, heavy on overheated rhetoric and light on ideas. Where the president did offer ideas, it was more of the same: huge tax increases and a plan for Medicare that builds on last year’s government takeover of health care and involves restricting seniors’ access to care.

As I noted last week, the president’s speech was excessively partisan, dramatically inaccurate, andhopelessly inadequate to the task of averting a fiscal crisis.

Let’s examine further the factual missteps and egregious errors in the president’s speech.

Discretionary Spending

CLAIM: “A 70% cut to clean energy. A 25% cut in education. A 30% cut in transportation. Cuts in college Pell Grants that will grow to more than $1,000 per year. That’s what they’re proposing.”

REALITY: The House Republican budget simply returns non-defense discretionary spending to below 2008 levels. What the president is inadvertently admitting is that he and his party’s leaders in Congress have increased spending by these breathtaking amounts. Americans elected a new Republican majority in 2010 in part because they were appalled at this lack of spending discipline. The House Republican budget simply adheres to our mandate to stop the Democrats’ unchecked spending spree.

CLAIM: “These aren’t the kind of cuts you make when you’re trying to get rid of some waste or find extra savings in the budget…These are the kind of cuts that tell us we can’t afford the America we believe in.”

REALITY: Incorrect. By returning spending to below 2008 levels, they are the kind of cuts that tell us we cannot afford the Democrats’ unsustainable spending spree. The president has every right to defend his spending record, but implying that common-sense spending restraint is un-American crossed the line.

Medicare

CLAIM: “[The House Republican budget is] a vision that says America can’t afford to keep the promise we’ve made to care for our seniors.”

REALITY: The president’s commitment to the status quo will end Medicare, period. According to the non-partisan CBO, Medicare will go bankrupt in nine short years. The president announced in his speech that he would rely on strict limitations on how much care seniors could receive in order to achieve savings. Contrary to the president’s opinion, CBO does not believe this would result in lower costs. Current seniors would receive less care through Medicare against a backdrop of relentlessly rising health care costs.

This stands in sharp contrast to the House Republican Budget, which gives seniors the tools to fight back against rising costs by empowering them in a personalized Medicare program, giving future generations the same kinds of health care choices members of Congress now enjoy.

CLAIM: “It says that ten years from now, if you’re a 65 year old who’s eligible for Medicare, you should have to pay nearly $6,400 more than you would today.”

REALITY: This is a false comparison based on a false reality. As mentioned above, the CBO reports that Medicare’s trust fund will become insolvent in nine years unless we act. This would necessitate harsh restrictions on seniors’ access to care – the kind of restrictions that the president himself alluded to later in his speech. The president is taking CBO numbers out of context and omitting the CBO’s clear warnings about Medicare’s impending bankruptcy.
That’s why comparing a Republican plan that saves Medicare to an unsustainable status quo means comparing a real solution with a false reality.The Medicare program as it exists today cannot exist in the future.The real choice is this: Do we act now to protect the program for current seniors while building a strengthened Medicare for future generations? Or do we restrict access to care for currentand future seniors, as the president has proposed, while ignoring our crushing burden of debt until it becomes a fiscal crisis?

CLAIM: “It says instead of guaranteed health care, you will get a voucher.”

REALITY: The changes in the House Republican budget will not affect those in and near retirement in any way. When younger workers become eligible for Medicare, they will be able to choose the kind of plan that best suits their needs from a list of Medicare plans that are guaranteed to offer coverage to all beneficiaries regardless of pre-existing conditions. Medicare would then provide a payment to subsidize the cost of the plan. This is not a voucher – it is a payment that flows through to whatever plan recipients choose.

CLAIM: “And if that voucher isn’t worth enough to buy insurance, tough luck – you’re on your own.”

REALITY: Under the House Republican Budget, Medicare will provide increased assistance for lower-income beneficiaries and those with greater health risks, guaranteeing that Medicare will be there for those who need it most. Wealthy seniors will receive less assistance, and the Medicare benefit will grow every year, while using competition to lower costs and make health care for seniors more affordable.

CLAIM: “Put simply, it ends Medicare as we know it.”

REALITY: The president’s plan – a commitment to the status quo – condemns Medicare to a bankrupt future. The greatest threat to the health security of America’s seniors is the president’s plan to deeply and systematically ration Medicare.

Medicaid

CLAIM: “This is a vision that says up to 50 million Americans have to lose their health insurance in order for us to reduce the deficit.”

REALITY: Republicans have a vision for patient-centered health-care that requires the removal of the partisan roadblock to reform that the president and his party’s leaders enacted last year. Our budget repeals the government takeover of health care to make way for reforms that will make health insurance more affordable and accessible for Americans.

Contrary to the president’s false claims that the House Republicans’ Medicaid reform plan would leave millions without coverage, Medicaid spending grows every year under our budget. The Medicaid program is already failing those who need it most, because excessive federal mandates have made it so that the only way for states to control costs in the current system is to lower doctor reimbursement rates. This is why so many doctors refuse to see Medicaid patients. States need to be able to tailor their Medicaid programs to the needs of their unique populations. Our reforms help them create better programs. The president’s approach is just to throw more money at a broken system.

Taxes

CLAIM: “Worst of all, this is a vision that says even though America can’t afford to invest in education or clean energy; even though we can’t afford to care for seniors and poor children, we can somehow afford more than $1 trillion in new tax breaks for the wealthy.”

REALITY: The House Republican budget keeps revenue within its historical range of 18-19 percent of GDP. The president’s distortion is based on the fact that our budget prevents $1 trillion in tax increases. Many Democrats have claimed that our plan includes huge new tax cuts for the rich. This is completely false. Our plan calls for revenue-neutral tax reform along the lines of what the president’s Fiscal Commission proposed – lower rates with a broader base. The president appeared to have endorsed this idea in his speech, but he also called for higher rates. Despite this contradiction on tax policy, the president was clear in his intent to raise taxes again on job creators and American families.

Deficit reduction

CLAIM: “Today, I’m proposing a more balanced approach to achieve $4 trillion in deficit reduction over twelve years. It’s an approach that borrows from the recommendations of the bipartisan Fiscal Commission I appointed last year, and builds on the roughly $1 trillion in deficit reduction I already proposed in my 2012 budget. It’s an approach that puts every kind of spending on the table, but one that protects the middle-class, our promise to seniors, and our investments in the future.”

REALITY: The president’s plan lacks credibility. For one thing, is simply does not put “every kind of spending on the table” – the president ruled out changes to Social Security and exempted 90 percent of all federal spending from his debt-reduction as “failsafe.” For another, the president’s use of a 12-year budget window is bizarre – it is clearly contrived to make the president’s proposal appear to come close to matching the House Republicans’ proposal in terms of deficit reduction, when it actually falls a full trillion dollars short.

Conclusion

The president had an opportunity to reach across the aisle and work with Republicans by putting serious deficit-reduction ideas on the table. Instead, he decided to use this opportunity to kick off his 2012 campaign. It is no wonder that a few days after the president’s speech, rating agency Standard and Poor’s downgraded the U.S. debt outlook to negative, expressing skepticism about the president’s approach and implying that his stated position would make it harder, not easier, for the two parties to reach agreement on a serious plan before the 2012 election.

House Republicans will be here if the president changes his mind and decides that the next generation is more important than the next election. Until then, we will continue to lead.

-Congressman Paul Ryan

First 100 Days: Walker stands firm in his convictions

April 11th, 2011
By Kirsten Adshead Wisconsin Reporter

MADISON — One hundred days in and Gov. Scott Walker is steadfast.

In the face of protests, the rallies, the recalls, the lawsuits, Walker is resolute.

In a telephone interview Monday with WisconsinReporter.com, Walker was asked if, in hindsight, he’d do something different, given prior knowledge of how the collective bargaining changes he proposed would play out, Walker says “sure.”

“If we had known that the Senate Democrats would leave their jobs for three weeks, we might’ve formed a different strategy for that,” and asked Senate Republicans to push through the collective bargaining bill earlier than the GOP did, he said.

Asked to analyze his first 100 days, which conclude Tuesday, Walker went to familiar territory.

“(We’ve been) really aggressive, getting things done on all but one case a bipartisan basis, that in turn has sent a strong message that Wisconsin is open for business by improving the business climate and by doing things to control government spending and reform in government,” he said.

And asked if he’s willing to lose the governorship over the changes he’s proposed, notably reforming collective bargaining powers for most state public union employees, Walker reiterated what he’s said all along, “I don’t govern based on polls.”

It’s the kind of confident, bold attitude that Wisconsinites have come to expect from the governor since he took office Jan. 3.

Supporters love it. Critics loathe it.

Walker has plenty of both.

Brent Shelton, spokesman for FatWallet.com, which is relocating from Illinois to Beloit, said cited Wisconsin’s business practices — and Illinois’ decision to increase personal income taxes and corporate taxes — as reasons for the move.

“We’ve been welcomed with open arms and, moving forward, I’m sure Wisconsin will be at the top of our list for permanently (planting) our roots here,” he said, adding that “the lieutenant governor and governor have been very attentive to our needs and made sure our questions got answered so we could make a quick decision.”

Wisconsin PAC Executive Director Jeremy Ryan, who is coordinating efforts to try to recall Walker, Lt. Gov. Rebecca Kleefisch and Attorney General J. B. Van Hollen next year, cites his own reasons for wanting these three officials out.

He said they are guilty of: power grabs, refusing to compromise and undermining democracy.

“I would go as far as saying it’s the worst administration that Wisconsin has ever seen,” Ryan said.

Walker isn’t alone among newly elected governors taking office and immediately tackling serious, controversial issues, said Larry Sabato, a national politics expert from the University of Virginia.

Sabato also includes Ohio Gov. John Kasich, Michigan Gov. Rick Snyder, and Florida Gov. Rick Scott, who like Walker have pushed for everything from budget cuts to government consolidation to regulatory repeals in their first few months in office — often aimed at righting their state’s economies and balancing budget deficits.

There is, however, a political price to be paid.

A March 23 Quinnipiac University poll showed Kasich with a 30 percent job approval rating in Ohio. The poll, conducted March 15-21, had live interviewers calling land lines and cell phones of 1,384 registered voters in Ohio. The poll has a margin of error of plus or minus 2.6 percentage points.

Half the people in Michigan disapprove of Snyder, according to a mid-March poll conducted by Democrat-leaning Public Policy Polling. The polling group talked with 502 registered voters in Michigan from March 18-20. The poll has a margin of error of plus or minus 4.4 percentage points.

In the latest Quinnipiac survey of registered voters in Florida, 48 percent disliked the job Scott is doing, more than twice the number who said the same in February. Surveyors telephoned 1,499 registered Florida voters from March 29-April 4 and has a margin of error of plus or minus 2.5 percentage points.

And Walker?

In an early March poll conducted by Rasmussen Reports, 57 percent of respondents disapproved of Walker. The company surveyed 800 likely voters in Wisconsin on March 2. The poll has a margin of error of plus or minus 4 percentage points.

Sabato said the weak economy isn’t helping the public view of these governors, but they wouldn’t be tackling these big, controversial issues unless they believed action was necessary for the betterment of their states.

“The good news for all of them is they’ve got four years before the next election,” he said, noting, “I don’t believe a recall effort will succeed.”

Walker’s stance is a familiar one: “I don’t govern based on the next election. I govern based on the next generation.”

Forced Unionism Hurts Young Workers the Most

Forced Unionism Hurts Young Workers the Most

In these tough economic times, it’s no wonder many states are debating bans on forced union dues or fees. A new study demonstrates once again the economic benefits of Right to Work protections.



The National Institute for Labor Relations Research (NILRR), analyzing data collected by the U.S. Census Bureau, released a new study last month showing that states with Right to Work laws and low union-monopoly density have better climates for job growth.

These states serve as a “safety valve” for young Americans, aged 25 to 34, who are often unable to find jobs in states with high rates of union monopoly bargaining like California, Michigan, New Jersey, and New York.

Moreover, any expansion of union bosses’ monopoly bargaining powers, such as Card Check Forced Unionism, would disproportionately hurt these young workers who are so critical to the country’s economic growth and vitality.

This is just the latest in a growing body of evidence on the economic advantages of Right to Work laws, not to mention the strong moral case that workers should never be compelled to support a union against their will.

Thanks For Raising My Taxes–What Else Can I Do For You?

by Ann Coulter
04/06/2011

When Wisconsin Democrats fled the state in order to avoid voting on splendiferous public sector union contracts, did they happen to notice that the rest of the country is in the midst of a massive recession?


For years, Democrats have been using taxpayer money so that their buddies in public sector unions never have to know when there’s a recession. People who are already suffering have to suffer more so that those who are doing pretty well don’t have to suffer at all.

The high salaries and magnificent benefits paid to government employees are used to fund the public sector unions, which then funnel a portion of that money back to the Democrats, who vote for the pay packages of government workers. The unions function as a pass-through from the taxpayers straight to Democrats running for re-election.


As a result, taxpayers are paying people to continually raise their taxes.

In 2010, three of the five top campaign contributors to the Democrats were public sector unions. Service Employees International was No. 2 at $11.6 million in campaign contributions to Democrats, the National Education Association was No. 3 at $8 million, and the American Federation of Teachers was No. 5 at $7 million. (To put that in perspective, that’s even more than the $1 million given to Obama in 2008 by his second-largest contributor, Goldman Sachs!)

Liberals don’t love big government because they think it’s efficient, compassionate, fair or even remotely useful. They support big government because they are guaranteed the support of nearly everyone who works for the government.

Public sector employee contracts are written by the union and rubber-stamped by Democrats — and the taxpayers only find out years later that public school teachers are allowed to get a full year’s pay for 30 days’ work over three years after they retire — as is the case in Green Bay, Wis., where one out of every 12 teachers retired this year to take advantage of the “emeritus” scam.

This is what all the commotion is about in Wisconsin. Republican Gov. Scott Walker isn’t even trying to eliminate collective bargaining for government workers’ salaries. He only wants to eliminate collective bargaining over their conditions of employment, which has led to massive inefficiencies.

Thanks to union grievance procedures, the union representing school crossing guards filed a formal complaint over a sweet old man volunteering to get the kids across the street in Wausau, Wis. Warren Eschenbach, an 86-year-old retiree, had been volunteering each morning as a crossing guard at a school near his home. But according to the union, only a highly paid government employee should be permitted to do that job.

Fifth-grader Megan Sichterman, told WAOW, an ABC affiliate, “I was really sad because all the kids really like him. He’s really nice to everybody, and I was kind of scared at the same time that we wouldn’t see him on the corner anymore.”

Even in the middle of the battle over collective bargaining rights for government unions, just last month the snowplow operators’ union filed a grievance against Racine, Wis., to demand paid days off for snowplow operators … after a snowstorm.

After a massive storm shut down the city for two days, snowplow operators thought they deserved two paid days off on account of all the snow, like other government employees got.

The snowplowers’ union also filed a grievance against the city for hiring private plowing services to help with the snow removal. Perhaps it was that troublemaker Warren Eschenbach showing up with a snow shovel and volunteering to help clear the streets.

No government snowplow operators were laid off and plenty of them worked overtime after the blizzard — but the union thought Racine should remain immobilized by snow for a week so that government snowplow operators could get even more overtime.

In the private sector, a company that capitulated to such ludicrous union demands would go out of business — as would have happened to General Motors if the government hadn’t taken it over. Offered substandard products at exorbitant prices, the consumer would buy from a competitor.

But with government, the consumer has no choice: We have to buy from the company store. Government employees will always have more passion and commitment about increasing their own salaries and perks than will the taxpayers, who have to worry about their own jobs and salaries. The public — especially the taxpayer — will always lose.

That is simply a fact about government jobs that can’t be avoided. What doesn’t make sense is to implement a system that invites this kind of mutual back-scratching between the Democrats and public sector unions — to wit, collective bargaining where there is no “management,” but only co-conspirators against the taxpayers on both sides of the bargaining table.

Public-Sector Compensation: Correcting the Economic Policy Institute, Again

By Andrew G. Biggs, Ph.D. and Jason Richwine, Ph.D.
March 31, 2011

Abstract: Previous public–private pay comparisons at the state and local levels, including numerous reports published by the Economic Policy Institute (EPI), significantly undercount public-sector pension benefits, omit retiree health coverage, and ignore job security. Using California as an example, an analysis by economists Andrew Biggs and Jason Richwine showed that these errors can produce a substantial underestimate of public-sector compensation, leading to the erroneous conclusion that public workers receive compensation at or below market levels. In its rebuttal to the Biggs-Richwine analysis, EPI repeats the same errors, necessitating this response.

In recent months, a number of studies from left-leaning think tanks have argued that state and local government employees are underpaid compared to similar workers in the private sector.[1] The Economic Policy Institute (EPI) in particular has released a series of state-specific reports authored by Jeffrey Keefe of Rutgers University, including reports on workers in Wisconsin, Michigan, Ohio, Minnesota, Missouri, New Jersey, and other states.[2] We (the authors of this Heritage Foundation Backgrounder) criticized these reports in a recent Wall Street Journal op-ed[3] and an accompanying White Paper,[4] explaining in detail that these reports ignore the critical issue of job security, significantly understate public-sector pension benefits, and omit the value of retiree health coverage.

For California, the subject of our own recent study,[5] we found that properly accounting for these missing benefits adds approximately 30 percent to public-sector compensation, moving public workers well ahead of comparable private workers.

EPI recently released a rebuttal authored by Keefe titled, “Desperate Techniques Used to Preserve the Myth of the Overcompensated Public Employee.”[6] Our analysis is anything but desperate: Authoritative evidence from academic and official government sources confirms that job security, the guaranteed high return on public pension plans, and retiree health benefits are substantial components of public-sector compensation. Failure to consider them invalidates most public–private pay comparisons.

Job Security

Much of the observed public–private difference in unemployment rates is attributable to the ability of unions to promote job security in the public sector.

—Steven G. Allen, Unions and Job Security in the Public Sector[7]

A basic theory in labor economics is that workers with a comparatively low probability of being discharged should, all else being equal, accept lower wages than workers with a greater chance of being discharged.[8] The theory is especially important for measuring compensation in the public sector, where job security is quite high by private-sector standards. For California public employees, we estimated that the value of their added job security is equivalent to about 15 percent more compensation.

In his rebuttal, Keefe acknowledges that “most labor economists believe that compensating wage differentials do exist.” Yet, he says, “Empirically, if job stability is as highly valued as Biggs and Richwine claim, we should be able to observe its effects on earnings across industries.” He then purports to show that no value for job security can be found in earnings data. But, as Keefe himself admits, parsing out differentials from survey data is “notoriously difficult.” One academic study showed that traditional approaches can understate true wage differentials by a factor of 10, sometimes even mistaking the direction of the effect—meaning, for instance, that jobs with less security would deceptively appear to pay lower wages.[9]

For those reasons, we simply started with the highly plausible assumption that job security has a value, and then estimated that value using a stylized model. The model produces a baseline public-sector job-security value of 6 percent, which hardly seems implausible.[10] This base premium then increases to 15 percent for California employees because of their higher assumed risk aversion, combined with the salary and benefit premium they enjoy compared to similar private workers. Perhaps 15 percent is too high or too low—we are open to alternative estimates. So far, neither Keefe nor the authors of any other recent pay studies have offered any.

Keefe also argues that the value of job security may be countered by other differentials, such as “a lack of control, autonomy, authority, or flexibility” in government employment. These are characteristics of large firms in general, which is one reason why we (and Keefe) already control for firm size in all pay comparisons. But even if other significant differentials remain unaccounted, it hardly follows that job security has no value. It would imply that Keefe’s analysis is even more incomplete than we have already documented.

Pensions

A private-sector employee would have to contribute a higher percentage of salary to a defined contribution plan to get the same benefit a State employee would receive from the defined benefit plan. 
—California Department of Personnel Administration, October 7, 2010[11]

Public–private pay comparisons face a challenge in measuring future pension compensation, which cannot be observed directly. Moreover, defined-benefit plans and defined-contribution plans in the public and private sectors have different funding standards and strategies, meaning that any given level of current funding could imply very different levels of future benefits. Any measurement of pension compensation must account for these differences.

Our method is simple: If two employees are going to receive the same pension benefits from their employers, we assign their pensions the same value. Keefe ignores future benefits and considers only current employer contributions, a method that systematically undercounts the value of public-sector pensions.

Consider the pension plans for North Carolina and Louisiana teachers. Assume that participants in those plans will receive the same benefits, down to the penny. However, North Carolina assumes a 7.25 percent return on plan investments, while Louisiana assumes an 8.25 percent return. Louisiana’s more aggressive funding strategy means it would make smaller annual retirement contributions than North Carolina, at the cost of higher contingent liabilities on Louisiana taxpayers should those investments fall short. According to Keefe’s methodology, which focuses only on current employer contributions, Louisiana teachers would receive lower compensation than those in North Carolina—despite receiving exactly the same benefit. This alone should be a signal that the methodology is severely flawed.

These problems become more pronounced in public–private pension comparisons, where funding strategies differ even more significantly. Private-sector defined-benefit plans discount benefit liabilities at the yield on corporate bonds, currently around 5.5 percent, requiring higher current contributions per dollar of future benefits than public-sector plans, which generally assume 8 percent returns. Defined-contribution plans—401(k) pension plans, for example—make no such calculation, but employers who want to guarantee their employees a future income would discount the desired benefit at the return on riskless U.S. Treasury bonds, currently yielding around 4 percent, and contribute to the 401(k) plans accordingly. By adjusting for different discount rates, our approach measures employee compensation based on what employees will receive. By eschewing such adjustments, Keefe’s estimates are skewed by differences in pension funding strategies.

Keefe responds to this argument with two of his own, neither of which is valid. First, he states that:

In discussing defined-benefit pension plans…Biggs and Richwine lose their focus. They incorrectly assert that ‘employer contributions to pensions are only a proxy by which we infer the value of an actual future pension benefit.’ This is blatantly wrong. The employer contributions are the cost of the employees’ compensation whether they are invested poorly or wisely.

Keefe is correct for a defined-contribution plan, where the employer’s obligation begins and ends with the contribution. But for defined-benefit plans, Keefe is himself blatantly wrong. Defined-benefit pension compensation is not a contribution today but a benefit tomorrow, the value of which derives from the formulas used to calculate benefits and from the government’s legal obligation to pay them. How much a pension plan currently contributes and how aggressively those contributions are invested have literally nothing to do with the actual benefits workers will receive. The employee’s entitlement to future benefits, an entitlement that is protected by law, exists even if zero employer funds were put aside in a given year.

Second, Keefe assumes (contrary to almost all financial economists^[12]) that public pensions’ more aggressive investment strategies reflect efficiencies inherent in government plans. This is irrelevant, even if true. If state and local pensions could really generate higher benefits at lower costs than private pensions, those higher benefits should not be excluded from the tally of public-sector compensation. The savings from the alleged efficiency could just as well be devoted to other government outlays or tax reductions rather than higher employee compensation. Thus, the need for accurate measurement remains.[13]

The state of California’s Department of Personnel Administration appears to agree with us wholeheartedly. In its “Total Compensation Survey” it includes an exhibit showing that “a private sector employee would have to contribute a higher percentage of salary to a defined contribution plan to get the same benefit a State employee would receive from the defined benefit plan.”[14] While the specifics of the department’s illustrations differ from ours, it reinforces a critical point—that including only employer contributions masks important differences in actual benefits.

Retiree Health Benefits

State employees receive generous retiree health benefits, the costs of which are often overlooked as a portion of their compensation. 
—California Department of Personnel Administration, October 7, 2010[15]

It is easy to overlook the value of retiree health benefits. Most private-sector employers do not offer retiree health coverage to their employees, and it is not included in the Bureau of Labor Statistics data series commonly used to measure benefits. Consequently, as best we can tell, neither Keefe’s studies nor other similar ones make any mention of retiree health benefits.

The omission is significant. The California Department of Personnel Administration provides information on annual expected employer contributions to retiree health care for employees retiring at age 60. (See Table 1.) These average annual employer payments begin at slightly above $9,600 in the first year of retirement, rising to $21,000 in the 10th year and to nearly $50,000 in the 20th year of retirement. Over the course of retirement, the department points out, the typical state employee would receive $493,851 in retiree health coverage—obviously not a trivial value.

A more precise valuation is possible. As the California department points out:

[B]y the time the next survey of total compensation is conducted, public employers will have implemented new standards from the Government Accounting Standards Board (GASB) that require future health costs to be included as outstanding liabilities. This change will allow the survey to more fully compare the “worth” of retiree health benefits.[16]

This is exactly the method we used in our report. California is required by GASB Rules 43 and 45 to publish the “normal cost” of Other Post-Employment Benefits (OPEB)—principally retiree health coverage—which “can be thought of as the cost for OPEB being earned by employees in exchange for [their] services now.”[17] The normal cost of retiree health care for employees under the California Public Employees’ Retirement System (CalPERS) is 10.2 percent of wages, a rather substantial sum to omit from a pay comparison.[18]

Moreover, the 10.2 percent normal cost reflects the cost to the government, not the full value to employees. Lacking retiree health coverage, a retired public-sector employee would purchase coverage in the individual market, where costs are on average 25 percent higher than under group coverage.^[19]Thus, the value of retiree health coverage to California state employees would be approximately 12.75 percent of annual wages. Put another way, a California public employee would be more or less indifferent to choosing between retiree health coverage and a 12.75 percent salary increase.

In his response to us, Keefe measures effective compensation through retiree health benefits by dividing the cost of benefits paid to current retirees by the level of wages paid to current workers. This is an invalid approach—it measures effective compensation neither for the currently retired nor for the currently employed. As the GASB points out, current benefit expenditures and future entitlements may be “vastly different.” The GASB states that retiree health benefits “are a part of the compensation that employees earn each year, even though these benefits are not received until after employment has ended.” The normal costs expressed in GASB rules 43 and 45 statements are the proper measure of this compensation.[20]

While comprehensive data on public and private retirement coverage is lacking, certain generalizations are possible. According to the Center for State and Local Government Excellence, 92 percent of states offer their employees retiree health care, while 61 percent of localities do. According to the Pew Center on the States, 82 percent of state and local government employees in governmental units larger than 200 were eligible to receive retiree health care.^[21]

In the private sector, retiree health coverage is indeed becoming scarcer. As of 2009, only 6 percent of private firms and 34 percent of the largest firms (1,000+ employees) offered coverage, down from 11 percent and 52 percent, respectively, in 1997.^[22] Even among relatively large employers (100–999 employees) only 7 percent offer retiree health coverage. Around 21 percent of all employees were eligible for retiree health care as of 2007, down from 40 percent in 1993.^[23]

Moreover, broader availability of retiree health coverage in the public sector is buttressed by greater generosity. Using certain approximations, on a population-weighted basis, state governments pay approximately 70 percent of health premiums for retirees under age 65.[24] In the private sector, employers have both tightened eligibility standards and increased cost-sharing through new formulas or explicit global caps on employer subsidies.[25]

The reduced generosity of private-sector coverage is illustrated in Table 2, which makes a selective comparison of the size of per-employee accruing retiree health benefits in the California state government and several large private firms that continue to offer coverage. In 2010, California employees accrued future retiree health benefits with a value of roughly $1.9 billion, while for General Electric, benefit accruals were only $442 million, and only $55 million for IBM. On a per-employee basis, California’s accruals were anywhere from two to 30 times larger than in these selected private-sector firms. Due to the difficulty of finding private-sector payroll figures, comparisons as a percentage of wages were not possible.

We acknowledge that broad data on retiree health benefits is lacking, making a comprehensive national comparison of state and local employees to private-sector workers difficult. But this is not a good reason for simply excluding retiree health benefits from the analysis.

Conclusion

Previous public–private pay comparisons, including numerous reports written for EPI by Jeffrey Keefe, significantly undercount public-sector pension benefits and omit retiree health coverage and job security. Our own report, using California as an example, showed that these errors can lead to a substantial underestimate of public-sector compensation.

Keefe’s response—denying the undercounting of pension benefits, claiming retiree health coverage and job security have little to no value, and characterizing our position as “desperate”—offers little substance and no corrections. It is a disservice to policymakers and American taxpayers who have a justifiable interest in getting public pay right.

—Andrew Biggs, Ph.D., is a Resident Scholar at the American Enterprise Institute, and Jason Richwine, Ph.D., is Senior Policy Analyst in the Center for Data Analysis at The Heritage Foundation.

The Future of Union Transparency and Accountability

http://www.insideronline.org/summary.cfm?id=14875
April 05, 2011

The financial activity of unions is not an open book. Political activity is not always disclosed. Payments to third parties, often put down as charitable contributions, are in turn used for political activity. Some of this can be observed from the forms, but other activity is still hidden. Some payments are directed to third parties who have conflict of interest with union officials. Disclosure and protection should be extended to union assets and activity so that union members know that their contributions are being wisely used.

Just as Sarbanes-Oxley sets standards for corporate disclosure so that shareholders have full information, the same protection should be extended to union assets and activity so that union members know that their contributions are being wisely used.

Unions and Racism

http://www.redstate.com/laborunionreport/2011/04/10/unions-racism-an-age-old-institutional-problem-continues-unabated/

Posted by LaborUnionReport (Profile)

Sunday, April 10th at 3:00PM EDT


It is rather ironic that, last week, union bosses used the anniversary Rev. Martin Luther King’s assassination to try to drum up support for the union cause. You see, even after all these years, racism and discrimination within the walls of the House of Labor is still very real. As noted by UnionFacts.com, since 2000, there have been over 4,200 complaints filed against unions for racial discrimination with the Equal Employment Opportunities Commission. In some cities, it is a bigger problem than in others. However, the one area where union racism seems to rear its ugly head the most often is with the construction trade unions, where African Americans are often excluded from work.



Systemic racism in the building trades has been built into the construction industry as Harry Alford, President & CEO of the National Black Chamber of Commerce, has noted.

Due to the Jim Crow laws of the South, there were many Black southern craftsmen who would travel to perform their skills. Many would go to places like New York, Philadelphia, Detroit, etc. and would out compete local white contractors who could not perform as well as they did and could not settle for their affordable pricing. It was because of this, that construction unions in the North were formed to block out Black crews from coming into communities and providing a better service for a cheaper price. Soon after the unions were formed they set in motion the Davis-Bacon Act (named for two New York congressmen). This act set up arbitrary labor wage scales so that Black craftsmen could no longer under price their white counter parts. They all had to pay a certain price, prevailing wage, at a minimum and competition became no more. With the price competition out of the way, the whites moved in through political favor and blatant racism. This would be followed with Project Labor Agreements which meant some projects would be declared “Union Only”. With the construction unions discriminating against Blacks, PLO’s [sic] would also mean “Whites Only”.

This exclusionary racial system is still prevalent today and has been the subject of much controversy in the City of Brotherly Love, Philadelphia.

A January 2008 review of trade unionists working on $500-million worth of Philly public projects during the preceding five years conducted by then Inquirercolumnist Tom Ferrick concluded, “these well paid union jobs … remain all-male, nearly all-white and the majority live in the suburbs.”

The source of this current suburban give-away by Mayor Nutter is a thing called a Project Labor Agreement (PLA).

PLAs are contractual arrangements giving construction trade unions control over jobs, generally on public works projects. PLAs require all companies receiving contracts for those projects to hire union workers.

PLA’s have an ugly history of working against the inclusion of minority workers and minority contractors.

The exclusion comes from the legacy of aggressive job discrimination in too many trade unions … race discrimination by the large white construction firms that generally get public works contracts abet both actively and passively.

[snip]

Plus, PLAs raise the costs of public works project.

PLAs raise costs by requiring the payment of union wage rates plus contributions to unions’ pension funds, health funds and other miscellaneous administrative fees that tack on upwards of 18 percent to a project’s labor costs.

[snip]

PLAs make little sense for minorities historically excluded from the lucrative construction which is why PLAs are opposed by the National Black Chamber of Commerce, the Latin Builders Association, the U.S. Pan-Asian Chamber of Commerce, the American-Asian Contractors Association and Women Construction Owners and Executives, USA.

“The execution of project labor agreements [are] disadvantageous to minority-owned construction companies and their desire to employ minority workers,” Anthony W. Robinson, president of the Minority Business Enterprise Legal Defense and Education Fund stated during Capitol Hill testimony last September.

While one Philadelphia-area local has had a more than 30-year history of discriminatory practices, in 2007, the controversy erupted again when a hangman’s noose was discovered on Philadelphia’s union-only Comcast construction project. The incident prompted construction workers and city officials to rally in anger, calling for the city’s construction industry to be more racially balanced.

“Let’s also be clear that the kind of racial harassment that Paul Solomon experienced is not limited to just him,” demonstration leader A. Bruce Crawley, former head of the African American Chamber of Commerce, said in a statement. “In fact, we’ve been informed that racial discrimination and harassment against black workers and businesses take place at virtually every construction site in this city.”

Rather than union bosses addressing the problem of racism, however, the offender continued working, while the victim had to go find other work.

Councilwoman Blondell Reynolds Brown asked him [Pat Gillepsie, Business Manager of Philadelphia's Building and Construction Trades Council] what happened to the white construction worker accused of displaying a noose at the Comcast Tower construction site and to the black worker who complained about it.

“That really set people off,” Councilman W. Wilson Goode recalled. “She asked what happened to that guy, if he was still working, and he said, ‘Of course he’s working. He’s a skilled tradesman.’

“His response about the black worker was essentially that he has to get his own job.”

Across the country, in California, the exclusion of minorities has led to the Aboriginal Blackmen United pushing back at the IBEW for solar-panel work.

Now, in Las Vagas, it is not necessarily the workers themselves who are creating a ruckus over racist unions, but the minority owners of businesses.

In an economy like ours, jobs are hard to come by. However, one group of struggling business owners claims that in its case the economy is not blame.

The group has filed a lawsuit against Laborers’ International Local No 872 for racial discrimination, breach of contract, and misleading business practices.

The group, made up of several African American business owners, claims the union blocked them from getting work.

Group members say they are either out of business or close to it and blame racial discrimination.

“We asked everyone to come because we’re filing a racial discrimination lawsuit against Local 872,” said Gene Collins.

Collins is leading the effort against Local 872 and its business manager, Tommy White. Collins and several African American-owned construction cleaning businesses claim the union is purposely keeping them from getting work because of their race.

“What did occur is we got put on a list,” said Collins. “Phone calls [were] made to general contractors saying that we were not in compliance with Local 872 and therefore they cannot do business with us.”

Laborers’ local 872’s business manager, Tommy White, denied the group’s assertions, claiming that the black business owners are playing the race card.

“By flipping through this, I truly believe it’s frivolous; there’s no merit to it,” said White.

White says the union never sought out the companies in the lawsuit and that there would not have been any benefit in doing so.

[snip]

“I think it’s an action by several contractors that just have poor business practices,” White continued. “This is what I would refer to as using the minority card; using the fact you’re a minority to make big ruckus against Tommy White, against 872, when it’s going to come out that this is just a bunch of lies.”

Were the most recent allegations of discrimination in Las Vegas an isolated case, one might possibly believe the union boss out of hand. However, with a history of union racism prevalent among construction trade unions, it is not without reason to believe that the business owners have a legitimate case.

Union bosses [most of whom are white] are trying to lay claim to Reverend King’s legacy. Yet, racism is still very prevalent in certain unions. Given this, minorities might want to consider whose interests are really being served by pairing Reverend King with today’s union bosses—and who will ultimately lose if that King’s legacy is given up.