Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘pension’

As the coal industry collapses, miners face losing their pensions

Wednesday, July 24th, 2019

Image result for molly taftJune, the Trump administration unveiled one of its largest environmental rollbacks to date: replacing the Obama administration’s  rule, which regulated carbon pollution from power plants. The rule had been a favorite target of President Donald Trump as he stumped on the campaign trail and held presidential rallies. “We’ve ended the war on beautiful, clean coal and we’re putting our coal miners back to work,” he said during a  in West Virginia last November.

But Trump’s promises to save coal have yet come to pass — and miners are becoming increasingly worried for their future.

This week, coal miners from across the country will visit Capitol Hill to demand that Congress protect their pension plans. The visit comes amid grim news for the industry.  have declared bankruptcy since October, with   going under in this month alone.

Coal workers, in turn, are pushing Congress to pass the , which would transfer federal funds into the troubled . But even if lawmakers figure out a solution for the problems plaguing the pension plan, it will be just the beginning of solving a larger issue. Thousands of retirees across the country are on the brink of losing healthcare and security in various pension and retirement plans as the industry takes a nosedive.

The pension plan dates to 1946, when the federal government  with the miners that required coal companies to provide pensions and health care for retired miners. In exchange, miners agreed to end a nationwide strike. The current formation of the fund was negotiated in 1974.

The fund guarantees  for working a dangerous job that often can take a serious toll on their health. But miners are now worried that guarantee won’t last. The fund lost  in the 2008 recession and took additional hits over the next few years after several coal companies went bankrupt. Since January, when Mission Coal went , only one of the original companies in the 1974 pension fund plan, , has been paying dues into the fund.

If lawmakers don’t stabilize the pension fund, the union expects nearly 100,000 miners will lose pensions and health care benefits around 2022. But if Murray Energy collapses, that could happen much sooner.

“If [Murray Energy] were to file bankruptcy — and a lot of coal companies are filing bankruptcy these days — the fund would collapse within a matter of six months,” said Phil Smith, director of communications and governmental affairs at UMWA. The 2022 expiration date, Smith explained, assumes no more coal bankruptcies over the next two years — an optimistic scenario. “We don’t believe we have that much time to wait,” Smith said.

Even if lawmakers shore up the UMWA pension plan, that will only cover some miners. Even more who belong to other pension plans negotiated by the union risk losing health care and retirement benefits as the industry plummets.

For nearly a year, miners at s mines in Wyoming, Colorado, and Montana have faced an uncertain future as the company, which does not contribute to the UMWA fund but does pay into a pension plan for its workers, goes through bankruptcy proceedings. In March, a bankruptcy judge ruled that the company  to freeze its current pension plan as it negotiated a contract with a buyer.

Companies often shed pension plans, health care benefits, and union contracts during bankruptcies, as they restructure and attempt to find new buyers. Bankruptcies also provide coal companies the opportunity to duck out of other financial liabilities, including environmental . This can free up money for costly executive payouts.

Bankruptcy filings show that Westmoreland  $10.2 million to executives in severance payments, salary bumps and bonuses a year before the bankruptcy, and short-shifted miners are calling foul.

“Coal miners, both underground and surface miners, are the hardest working people in America, and their safety and working conditions are the most dangerous in this country, with black lung, silicosis, and other breathing disorders, and from a safety standpoint, falling roofs, rocks, slips, falls, equipment mishaps, and working around beltlines, pulleys and other pinch points,” retired miner Jim Villos wrote in a  sent to the bankruptcy judge. “We, the miners, kept our end of the deal and Westmoreland needs to keep their promise, too!”

Over the past few years, coal companies in the West have largely  while Appalachian firms struggled, partially because western mines produce cleaner-burning coal that can be more easily mined. But now, even the western mines aren’t safe. And as Wyoming author Bob LeResche pointed out in a  in WyoFile, as the industry continues to collapse, companies are using bankruptcy proceedings to eke out money for those at the top while leaving miners without a safety net.

After the bankruptcy of a big coal company, LeResche wrote, those who move in to clean up the damage “will bleed the mines’ remaining assets and escape liabilities to workers, communities and the environment; liabilities that have accrued over decades. They tend to be litigious, and are not strangers to the world of serial bankruptcies and corporate manipulation. Their environmental records are seldom clean. These are not the operators and corporate neighbors one would normally invite into the neighborhood.”

As the 2020 election looms and conversation continues around the Green New Deal, the UMWA has invited presidential candidates to visit coal mines, where they will speak to  about their futures. What remains to be seen is how miners will cope with the death of their industry.

“The problem is bankruptcy laws are made for corporations,” UMWA’s Mike Dalpiaz  in March. “They’re made by rich guys in Congress for rich guys that own corporations.”

Molly Taft writes for , a syndicated newswire covering climate, energy, policy, art and culture. You can follow her .

This article was originally published by Think Progress on July 24, 2019. Reprinted with permission. 

The Media Uses Coal Miners To Attack the Green New Deal—Then Ignores Their Pension Fight

Friday, July 12th, 2019

To stave off the worst effects of the climate crisis, at least 80 percent of coal reserves must stay in the ground, according to a conservative estimate in the journal Nature. This means that coal miners would see their already declining industry all but disappear. The Green New Deal, the resolution put forward by Rep. Alexandria Ocasio-Cortez (D-N.Y.) and Sen. Ed Markey (D-Mass.) for an economy-wide mobilization to address the climate crisis, call for a “just transition” that guarantees good new jobs for coal miners. Some insist that the “just transition” start now, which is why they are supporting the American Miners Act.

Introduced in the Senate on January 3, the Act protects the pensions of more than 100,000 coal miners whose retirement fund was depleted by the 2008 crash. It also rescues the healthcare benefits of miners whose companies went bankrupt last year.

But you wouldn’t know about this bill, or its sister legislation in the House, from reading the New York Times, the Washington Post or Politico, three influential outlets within the Beltway. None have reported on—or mentioned—the legislation since it was introduced in early January, even though it has the support of the United Mine Workers of America (UMWA) and high-profile cosponsors like Sen. Bernie Sanders (I-Vt.), Sen. Elizabeth Warren (D-Mass.) and Ocasio-Cortez.

Yet these outlets have given considerable space to coal miners and unions to advance other narratives. In a four month period this spring and summer (February 25 to June 25), the New York TimesWashington Post and Politico have published 34 articles and opinion pieces that touch on coal miners or their unions. Collectively, they paint coal miners primarily as a source of votes, and assume that the sole political motivation of that bloc is opposing environmental policies that would close mines.

Seven stories discuss the decline of the coal industry or the new mergers, without mentioning the American Miners Act. Seven describe Democrats’ attempts to reach out to coal miners. One mentions rising suicide rates among coal miners in the Midwest. One includes brief mention of a coal miners’ strike more than a century ago. Only one piece highlights coal miners’ present-day concerns about workplace conditions: an article about silica dust causing a resurgence of black lung, that was produced by Reuters and reprinted by the New York Times. And only one discusses how the Gre­en New Deal could support coal miners.

By far the most frequent reference, in 16 stories, was to depict coal workers as a conservative constituency. These 16 stories either pit coal miners’ livelihoods against robust climate action, reference miners’ support for regressive policies like environmental deregulation, or discuss miners who back President Trump. When coal miners speak against progressive policies, particularly environmental ones, they’re more likely to be given a platform. When they issue demands that affect their everyday survival, they’re on their own.

Politico and the Washington Post gave considerable space to the opposition of coal miners and unions to the Green New Deal, with three articles in this period highlighting the topic. By contrast, only one article, a 855-word opinion piece in the Washington Post, made the case for why coal miners should support the Green New Deal.

Overlooked blue-green alliances

These Green New Deal articles are worth examining, because they establish a narrative that there is an insurmountable divide between elite climate activists and workers just trying to get by. On March 12, the Washington Post ran the headline, “AFL-CIO criticizes Green New Deal, calling it ‘not achievable or realistic.’” The piece centered on a letter of opposition to the Green New Deal co-drafted by Cecil Roberts, the president of the United Mine Workers of America, and Lonnie Stephenson, president of the International Brotherhood of Electrical Workers, on behalf of the AFL-CIO’s energy committee.

Yet, on May 8, when Roberts rallied at Capitol Hill to call attention to the existential threat posed to retired coal miners’ livelihoods, the Washington Post was mum. Alongside the Alliance of Retired Americans, the Association of Flight Attendants (AFA) and multiple members of Congress, Roberts made an impassioned case for the American Miners Act, the aforementioned legislation that would transfer money to the UMWA pension fund, a boon to workers whose benefits were threatened by the Great Recession. “We didn’t get any of the money you sent to Wall Street. You bailed them out,” Roberts shouted from a podium. “What about the people who work for a living in America? What about the people who’ve given their health to America?”

The press conference would have also offered an opportunity to report on alliance-building between coal miners and Green New Deal proponents. And in fact, Sara Nelson, president of AFA and vocal supporter of the Green New Deal, spoke at the press conference. “Flight attendants are here, with our miners, to make sure that miners’ healthcare and pensions are preserved,” she said. “They earned them.”

In a May interview with In These Times, Nelson emphasized the importance of rallying behind the bill. “We need to push to adopt legislation that keeps America’s promise to coal miners of pensions and healthcare,” she said, “as well as addresses black lung— that’s the bare minimum to show good faith that this process of taking on climate change will focus on making coal miners’ lives better, not worse.”

As labor and climate activists grapple with difficult questions about how to transition away from a fossil fuel economy without leaving workers behind, major media outlets remain stuck in a reductive “elite vs. blue-collar” divide. In These Times contributor Michelle Chen noted that this false dichotomy appears throughout a June 1 Politico article, “Labor anger over Green New Deal greets 2020 contenders in California.” The article quotes Jack Pitney, described as “a veteran California political analyst and political science professor at Claremont McKenna College.”

He says there’s a “cautionary tale” for Democrats, who should remember that “West Virginia, until 2000, was considered solidly blue.” Republican strategist Karl Rove, working for candidate George W. Bush, pushed the fact “that the Democratic nominee was Al Gore, author of ‘Earth in the Balance,’’’ a fact that didn’t sit well with coal miners, Pitney recalls.

The piece cites unnamed coal miners as a warning to Democrats: If you campaign on the Green New Deal, you will lose elections. But reality is not so simple. While it is true that labor leaders in the building trades and extractive industries have expressed criticism or outright opposition to the Green New Deal, they don’t represent all of labor, nor all of their own rank-and-file membership. As Stanley Sturgill, a retired coal miner, told me at the People’s Climate March in 2014, “I worked underground for 41 years and I have black lung disease. I’m actually having a hard time breathing just to get to this stage. I am marching today because I want to build a bright future for my family, for Appalachia, and for this world. I have a vision where my children, grandchildren, great-grandchildren can have good jobs that support our families without doing damage to our water, air, land and climate.”

And in fact, a survey by the progressive think tank Data for Progress in June found that “union membership is one of the factors most highly correlated with support for Green New Deal policies, as well as the Green New Deal framework as a whole.”

Some unions, locals and labor federations have come out in support of the Green New Deal, including the Service Employees International Union, the San Diego and Imperial Counties Labor Council, the Maine AFL-CIO and the Los Angeles County Federation of Labor. And labor and climate groups worked together to pass landmark climate legislation through the New York legislature in June, thanks in part to the backing of the New York State Amalgamated Transit Union, Teamsters Joint Council 16 and the Communications Workers of America Local 1108. Environmental and workers’ groups have long tried to build cross-movement trust and solidarity, years before the Green New Deal was introduced.

The Black Mesa Water Coalition, for example, has long organized in Arizona to build support within coal mining communities for a just transition from coal. And Kentuckians for the Commonwealth organizes coal mining communities, including coal miners with black lung, to push for a transition away from fossil fuel extraction, rooted in opposition to climate change and the devastating health effects of coal mining. The organization has been talking about the need for a just transition for at least a decade, meaning that coal mining communities deserve partial credit for advancing this concept. In the former coal camps of Lynch and Benham, the organization is working to help residents envision and fight for a just transition to renewable energy, from protesting mountaintop removal to retrofitting homes.

The climate stakes

But perhaps the most glaring omission in Politico’s June 1 article is its failure to reckon with the stakes. Whether to support or not support a Green New Deal is not a question of political strategy to win voters or union support, devoid of context. The UN’s IPCC report, released in October, estimated that we have 12 years to keep global warming under 1.5 degrees Celsius and save hundreds of millions of people from devastating environmental destruction, poverty and death. This is a crisis that hurts poor and working-class people most, particularly those in the Global South, who are already seeing their societies uprooted by intensifying storms, draughts, and sea-level rise. Miners, who are on the front lines of hazardous fossil-fuel extraction, are not spared.

To be sure, a May 7 article in the Washington Post does emphasize the urgency of the climate crisis before noting the concern that it would “put coal miners out of work.” And it is worth noting the one Washington Post op-ed, published April 19, that defends the Green New Deal against critics like Rep. Garland “Andy” Barr (R-Ky.), who dared Ocasio-Cortez to come his district.

“The Green New Deal specifically addresses the need to help people in communities affected by the transition away from fossil fuels,” the article notes. “It calls for “directing investments [to] deindustrialized communities, that may otherwise struggle with the transition away from greenhouse gas intensive industries.”

Yet the 855-word opinion piece may do little to counterbalance the narrative of conservative, anti-environmental coal miners reinforced across many stories. This lopsided focus contributes to the impression that the gulf between coal miners and climate justice campaigners is impossible to bridge.

“Mine workers are not the enemy here, and I think the press does play them out to be,” says Uehlein. “But they’re not. They’re potential allies if we can wrap our heads around real full-spectrum ‘just transition’ policies and fight for them.”

Accomplishing this transformation will require nuance and respect for the lives of coal miners who are hurting from dried-up pension funds, something influential media outlets could use more of.

Anna Attie, Eleanor Colbert and Daniel Fernandez contributed research to this report.

This article was originally published at In These Times on January 8, 2018. Reprinted with permission. 

About the Author: Sarah Lazare is web editor at In These Times. She comes from a background in independent journalism for publications including The Nation, Tom Dispatch, YES! Magazine, and Al Jazeera America. Her article about corporate exploitation of the refugee crisis was honored as a top censored story of 2016 by Project Censored. A former staff writer for AlterNet and Common Dreams, Sarah co-edited the book About Face: Military Resisters Turn Against War.

I Work with Mark Janus. Here’s How He Benefits from a Strong Union.

Monday, May 14th, 2018

Like everyone else in the labor movement, I’m nervously awaiting the Supreme Court ruling in Janus v. AFSCME Council 31, which would weaken public sector unions by letting workers receive the benefits of representation without contributing toward the cost.

But I’ve got a unique vantage point: I work in the same building as the plaintiff, Mark Janus.

We’re both child support specialists for the state of Illinois, where we do accounting on child support cases. I do this work because it’s fulfilling to help kids and single parents get the resources they need to support themselves.

What convinced Mr. Janus to join this destructive lawsuit? Your guess is as good as mine. I do know it’s much bigger than him. He’s the public face, but this case is backed by a network of billionaires and corporate front groups like the National Right-to-Work Foundation.

But the truth is, even Mark Janus himself benefits from union representation. Here are a few of the ways:

1. Without our union, Mr. Janus’s job would probably have been outsourced by now.

A drastic provision in the state’s “last, best, and final offer” in 2016 would have given Governor Rauner the right to outsource and privatize state employees’ jobs without accountability. Our union is all that’s preventing critical public services from being privatized.

Our agency would be at particular risk, because Illinois already has a longstanding contract with a scandal-ridden, for-profit corporation called Maximus to perform some of our agency’s functions. They modify child support orders and interact with employers about income withholding—pretty simple tasks, yet state employees regularly have to correct their work. If they were to take over more complex tasks, we can imagine how badly that would go! Their concern is for profit, not kids.

If the governor could get away with it, it’s very likely he would expand the Maximus contract to privatize jobs like mine and Mr. Janus’s. He already did something similar to nurses in the prison system. But our union has to be consulted before the state can outsource anything. And when they do outsource, we monitor the contract and discuss how long it will continue. I go to those meetings for our union. Right now, instead of letting management expand its deal with Maximus, we’ve been pressing to cut that contract.

2. Mr. Janus has received $17,000 in union-negotiated raises.

Over his years working for the state, Mr. Janus has earned general wage increases and steps that would not have been guaranteed if not for the union.

3. The public—including the parents and kids Mr. Janus serves—has access to resources like childcare that our union has fought to defend.

Our union allows us speak up together on matters far beyond money. When Governor Rauner tried to cut childcare benefits for low-income single parents, we teamed up with outraged community members and made him back off. And when the budget impasse was forcing domestic violence shelters to close their doors, we kept pushing for years until a veto-proof budget was passed.

4. Our union blocked the employer from doubling the cost of Mr. Janus’s health benefits.

 

In negotiations the state has pushed to double our health insurance costs and drastically reduce coverage. The employer declared impasse and walked away from the bargaining table. AFSCME took the matter to the Labor Relations Board and the courts—securing a temporary restraining order that prevents the governor from imposing his extreme demands.

5. We make sure Mr. Janus’s office is warm in the winter and cool in the summer.

As a union we deal with health safety issues large and small. In the department that rescues children from household abuse and neglect, we’re continually pushing for sufficient staffing. The stakes are high: one member was killed on the job after she went out on an urgent call alone.

Other matters are less dramatic. In state office buildings we solve problems like flooding, mold, leaky windows, and toxic pigeon feces. One building had someone creeping up on employees in the parking lot, so we worked with management to get better lighting and security patrols.

In the building where Mr. Janus and I work, the heating and cooling system is extremely old. Twice a year they bring in a computer from 1982 to switch from heat to air conditioning for the summer, and vice versa for the winter. So when the weather fluctuates, we work to get portable heating or cooling units deployed where they’re needed.

Many of these are ongoing issues, where our union acts as a watchdog. We have a health and safety chair on the union executive board. Any time a problem comes up, he starts by approaching management to resolve it. If that doesn’t work, he can file an OSHA complaint plus a high-level grievance.

6. Thanks to our union, Mr. Janus will retire with a pension.

Our union has fought to save the defined-pension that Mr. Janus will receive upon retirement. A coalition of unions including AFSCME took the issue to court—and won. The Illinois Supreme Court ruled that employees’ pension benefits cannot be cut.

7. Mr. Janus can get sick and still have a job when he comes back.

Before this job I worked without a union, in the retail industry, where I experienced what it means to be an at-will employee. Three absences would cost an employee their job—even if they called in sick and provided a doctor’s note.

8. Our union ensured that Mr. Janus could be fairly hired, regardless of his politics.

In public service our ultimate bosses are elected officials. There was a time in Illinois when to be hired or promoted, you were expected to make a contribution to the political party in power. But a 1990 Supreme Court case called Rutan v. Republican Party of Illinois put an end to that. Today our union enforces a triple-blind system for fair treatment in hiring and promotions, making sure seniority is followed. It’s one more way that even Mr. Janus benefits from having a union on the job.

This blog was originally published at Labor Notes and In These Times. Reprinted with permission.

About the Author: Donnie Killen is a child support specialist for the state of Illinois and vice president/executive steward of AFSCME Local 2600.

Transit Workers Reach Agreement to End Weeklong Strike in Philadelphia

Wednesday, November 9th, 2016

On Monday, transit workers in TWU Local 234 reached a tentative agreement with the Southeastern Pennsylvania Transportation Authority and ended a weeklong transit strike in Philadelphia. Nearly 5,000 employees are returning to work, and the deal now goes to the local’s membership for a vote, which is set for Nov. 18.

Willie Brown, president of Transport Workers (TWU) Local 234, lauded the agreement:

“This is a contract with many important gains, especially on pension benefits and a host of non-economic issues effecting the working conditions and job security of our members. As everyone with experience in collective bargaining knows, we didn’t get everything we wanted—but we came a long way from where we were prior to the strike. We made gains in pensions and wages and minimized out-of-pocket health care expenses at a time when health care costs are soaring, while maintaining excellent medical coverage for our members and their families.

“We worked day and night at the bargaining table in an attempt to finalize a new contract over the past week. We settled just hours before facing the possibility of a back-to-work court-ordered injunction. We ultimately prevailed because our members were determined and united from beginning to end. We also benefited from the assistance of city leaders such as Congressman Bob Brady and Democratic congressional candidate Dwight Evans, who worked to help us settle this dispute with a SEPTA Board controlled by Republicans.

“Our members will keep Philadelphia moving, and we will continue to fight for our members’ economic well-being and their rights on the job.”

Said TWU President Harry Lombardo:

“TWU’s members in Philadelphia are some of the hardest working people on the job. We’re pleased they’ll have a contract that recognizes that.”

Details of the agreement will be made public after the vote.

This blog originally appeared in aflcio.org on November 7, 2016.  Reprinted with permission.

Kenneth Quinnell: I am a long-time blogger, campaign staffer and political activist.  Before joining the AFL-CIO in 2012, I worked as labor reporter for the blog Crooks and Liars.  Previous experience includes Communications Director for the Darcy Burner for Congress Campaign and New Media Director for the Kendrick Meek for Senate Campaign, founding and serving as the primary author for the influential state blog Florida Progressive Coalition and more than 10 years as a college instructor teaching political science and American History.  My writings have also appeared on Daily Kos, Alternet, the Guardian Online, Media Matters for America, Think Progress, Campaign for America’s Future and elsewhere.  I am the proud father of three future progressive activists, an accomplished rapper and karaoke enthusiast.

LGBT Workers Face Rampant Discrimination, Higher Taxes and Receive Fewer Workplace Benefits

Friday, June 7th, 2013

Image: Kate Thomas87% of polled Americans believe it’s illegal under federal law to fire an employee just because that employee is gay or lesbian.

They’re wrong.

A new report demonstrates how 40 years of advocacy have yet to yield federal non-discrimination protections for LGBT workers. Instead of having a fair chance to get ahead, our existing federal laws result in LGBT workers and their families being held back by bias, fewer workplace benefits and higher taxes.

There are many ways America’s basic bargain – i.e. the widely-held belief that those who work hard can get ahead – is broken for LGBT workers. Here are just a few:

  • Lack of nondiscrimination protections.

    There’s no federal law – and only a minority of states – that provide explicit protections for LGBT workers. In 29 states, state law allows private employers to fire someone based on their sexual orientation — and based on their gender identity in 34 states. Progress has perhaps also been impeded by the fact that 87% of Americans think that it is already illegal under federal law to fire someone simply for being LGBT.

  • Higher levels of education lower unemployment rates.

    The National Transgender Discrimination Survey found that although transgender workers are more highly educated than the general population, their unemployment rates were twice the rate of the population as a whole–with rates for transgender people of color reaching as high as 4x the national unemployment rate

  • Family and medical leave.

    LGBT workers are denied equal access to unpaid leave to provide care for a same-sex spouse or partner. Transgender workers are often denied medical leave for transition-related medical care.

  • Family health benefits.

    An employer that extends family health benefits to married opposite-sex couples can legally deny that same coverage to married and unmarried same-sex couples. When LGBT workers do receive these benefits, middle-income families pay an estimated $3,200 in extra taxes for the same benefits that heterosexual workers get tax-free.

  • Spousal retirement benefits.

    LGBT workers are systematically denied Social Security spousal benefits designed to protect workers’ families during their retirement years. This costs retired same-sex couples up to $14,484 per year and a surviving same-sex widow or widower up to $28,968 per year.

  • Death and disability benefits.

    If an LGBT worker dies or becomes disabled, the worker’s same-sex spouse–and in some cases, his or her children–will be denied Social Security disability and survivor benefits, costing a surviving spouse with two children as much as $29,520 in annual benefits.

 

Even if same-sex couples were granted the right to marry in all 50 states tomorrow, it would still be perfectly legal to fire someone for being gay under federal law and in a majority of states.

“The public increasingly gets that discrimination based on sexual orientation or gender identity is flat wrong, and it’s past time for our work place and public policies to catch up with public sentiment,” Mary Kay Henry, President of SEIU, said in a statement. “LGBTQ workers and their families deserve the same workplace protections and benefits as other workers and their families.”

This comprehensive report shows why it’s long past time for Congress and President Obama to take action to give LGBT workers the freedom to build a successful career without fear of harassment or discrimination based on who they are or who they love.

Giving credit where credit’s due: This report was created in coordination with a coalition of leading LGBT organizations, policy experts and business advocates that include the Movement Advancement Project (MAP), the Center for American Progress (CAP) and the Human Rights Campaign (HRC), in partnership with Freedom to Work, National Center for Transgender Equality, National Partnership for Women and Families, Out and Equal Workplace Advocates and SEIU.

A Broken Bargain: Discrimination, Fewer Benefits, and More Taxes for LGBT Workers – Read and/or download the full report and the executive summary at http://lgbtmap.org/lgbt-workers.

This article was originally printed on SEIU on June 4, 2013.  Reprinted with permission.

About the Author: Kate Thomas is a blogger, web producer and new media coordinator at the Service Employees International Union (SEIU), a labor union with 2.1 million members in the healthcare, public and property service sectors. Kate’s passions include the progressive movement, the many wonders of the Internet and her job working for an organization that is helping to improve the lives of workers and fight for meaningful health care and labor law reform. Prior to working at SEIU, Katie worked for the American Medical Student Association (AMSA) as a communications/public relations coordinator and editor of AMSA’s newsletter appearing in The New Physician magazine.

It’s Time To Mobilize Workers’ Capital

Friday, January 11th, 2013

jonathan-tasiniHere’s a riddle: what large entity has the theoretical access to deploy a few trillion dollars, quickly, if given the chance? If you answered the Chinese or US governments, thank you for playing and please try again another time. The answer: labor unions.

Piling up around the world is the largest and most accessible source of cheap capital you can imagine. No wasteful Wall Street brokerage fees. No fancy credit-default swaps. Just good, hard cash.

It is money accumulated in pension funds—workers deferred wages. Pension funds now own 73 per cent of stock issued by companies in the Fortune 1000.

Think about it: overnight, all those bridges, roads, schools, ports, climate-change energy projects—all of which are gasping for finance because governments are foolishly slashing budgets—could be underwritten by cheap capital.

Just increasing pension fund investments in green technologies and low-carbon projects from the current two to three per cent of portfolios to five per cent would pour US$300 billion over the next three years into such critical projects.

And that capital would come with a price tag, though not one motivated by personal greed: projects funded by pensions would need to be unionized and pay a living wage.

The idea to mobilize workers’ capital is hardly new. It has been actively talked about for at least two decades. But, with the exception of a few projects and a slew of corporate governance campaigns (primarily shareholder resolutions that rarely win but can bring pressure on issues such as out-of-control executive compensation), the power of the pension fund money has barely been used.

So, what’s holding us up?

To begin, the money isn’t simply at the sole beckon call of unions. Pension fund decisions are typically jointly reached by a board split equally between management and workers.

But, the legal “partnership” is a myth: the truth is that management usually holds the upper hand in dictating investment direction. While management board members are very comfortable with balance sheets, the typical union pension fund representative is woefully untrained, chosen often because of his or her long service and loyalty to the union.

And the pension fund investment options are almost always laid out, and controlled, by professional financial consultants who could not give a damn about anything but the rate of return—and their compensation.

Moreover, most of the legal regimes require that the assets be invested for the sole purpose of enhancing and protecting the benefits of retirees. That language has always been construed as a license to focus on a very conservative and unimaginative investment strategy—a strategy that union trustees have not challenged.

Looking inward, an honest analysis would admit that most unions have not been very interested in the idea of capital power. As long as the pension fund reported fair returns and retirees were happy, the average union leader considered that performance adequate.

But, two developments converged. The global financial crisis, triggered by the immoral (and, in my view, criminal) behaviour of virtually every international Wall Street-financial firm, wiped out trillions of dollars in wealth, and pension funds took massive hits. That made labor people pay attention.

And, coupled with the Global Financial Crisis, a number of forward-looking labor leaders, faced with declining numbers and an organizing environment that has grown increasingly hostile, began spending more time thinking about new strategies to put into play.

That all led to a renewed focus on workers capital.

There is some positive progress to report.

Sharan Burrow, the General Secretary of the International Trade Union Confederation, has made it her mission to jump-start this area.

She recently asked the right questions:

At what point did we allow our funds to become captive of the dominant market frame without question? Have we lost a perspective of the original labour rationale for bargaining for deferred wages into retirement income and/or advocating for the legislative/regulatory guarantees for dignified retirement incomes?

More recently, the Teachers Retirement System of the City of New York pledged $1 billion to infrastructure, in advancing a $10 billion goal for a new asset class of infrastructure that will help spur Hurricane Sandy recovery efforts and upgrade the city’s infrastructure. The initiative came directly out of the AFL-CIO’s commitment at the inaugural Clinton Global Initiative America meeting in 2011.

And on the West Coast of the US, a multi-state exchange between California, Oregon and Washington will jointly look for projects worth plowing money into.

All of this is a proverbial drop in the ocean, a speck of sand on the beach of capital pools waiting to be used. Global union federations and national unions need to create a planet-wide network of pension fund trustees who can be trained and act in unison when investment opportunities arise. Those trustees need to map joint campaigns.

Would it not be a delicious turn of events to basically fire the Wall Street financiers—the circle of people who destroyed the economic wellbeing of tens of millions of people—and, instead, watch bridges go up that not only buck up a city’s economic heartbeat but also provide the bulwark for a decent standard of living.

This post was originally posted on December 28, 2012 at WorkingLife. Reprinted with Permission.

About the Author: Jonathan Tasini is a strategist, organizer, activist, commentator and writer, primarily focusing his energies on the topics of work, labor and the economy. On June 11, 2009, he announced that he would challenge New York U.S. Senator Kirsten Gillibrand in the Democratic primary for the 2010 U.S. Senate special election in New York.[1] However, Tasini later decided to run instead for a seat in the House of Representatives in 2010.

Hostess Blames Union For Bankruptcy After Tripling CEO’s Pay

Monday, November 19th, 2012

Today, Hostess Brands inc. — the company famed for its sickly sweet dessert snacks like Twinkies and Sno Balls — announced they’d be shuttering after more than eighty years of production.

But while headlines have been quick to blame unions for the downfall of the company there’s actually more to the story: While the company was filing for bankruptcy, for the second time, earlier this year, it actually tripled its CEO’s pay, and increased other executives’ compensation by as much as 80 percent.

At the time, creditors warned that the decision signaled an attempt to “sidestep” bankruptcy rules, potentially as a means for trying to keep the executive at a failing company. The Confectionery, Tobacco Workers & Grain Millers International Union pointed this out in their written reaction to the news that the business is closing:

BCTGM members are well aware that as the company was preparing to file for bankruptcy earlier this year, the then CEO of Hostess was awarded a 300 percent raise (from approximately $750,000 to $2,550,000) and at least nine other top executives of the company received massive pay raises. One such executive received a pay increase from $500,000 to $900,000 and another received one taking his salary from $375,000 to $656,256.

Certainly, the company agreed to an out-sized pension debt, but the decision to pay executives more while scorning employee contracts during a bankruptcy reflects a lack of good managerial judgement.

It also follows a trend of rising CEO pay in times of economic difficulty. At the manufacturing company Caterpillar, for example, they froze workers’ pay while boosting their CEO’s pay to $17 million. And at Citigroup, CEO Vikram Pandit received $6.7 million for crashing his company, walking off with $260 million after the business lost 88 percent of its value.

This article was originally posted on Think Progress on November 16, 2012.

About the Author: Annie-Rose Strasser is a Reporter/Blogger for ThinkProgress. Before joining American Progress, she worked for the community organizing non-profit Center for Community Change as a new media specialist. Previously, Annie-Rose served as a press assistant for Representative Debbie Wasserman Schultz. Annie-Rose holds a B.A. in English and Creative Writing from the George Washington University.

 

The Truth About Public Employees, the New Convenient Scapegoats

Thursday, January 20th, 2011

kari-lydersenIt’s become a common refrain: public employees from teachers to parking meter attendants to firefighters to nurses are bleeding state and local budgets dry with exorbitant wages and pensions.

As recent news reports and communiqués by conservatives have pointed out, a portion of public sector employees do earn what many middle- and working-class Americans would consider very generous wages and benefits. USA Today reported that on average, public workers earn $11.90 more per hour than comparable private sector workers.

But such numbers constitute misleading propaganda, according to labor analysts and proponents and several recent studies, including an April report by the Center for State and Local Government Excellence and the National Institute on Retirement Security (NIRS). “At its heart,” Amy Traub wrote in the The Nation in July, scapegoating of public employees is an insidious way to divide public and private sector workers who share many of the same interests.”

The NIRS study noted that when education and work experience are considered, state and local employees earn 11 to 12 percent less than comparable private sector workers; and their compensation is still lower when their benefits plans are figured in (6.8 percent lower for state workers and 7.4 percent lower for local workers).

The study notes that while public employees may appear to earn more than their private sector cohorts (for example in Michigan), when their education is considered they are actually earning less than they theoretically could on the private market. The study found 23 percent of local and state workers have college degrees, compared to only 16 percent of all federal workers.

The average state worker appears to earn more only because the state hires more of those in the highly educated categories that tend to earn more, not because workers with the same education earn more in the public sector.

When public employees do earn high wages and receive great benefits, rather than engendering resentment and jealousy, labor proponents say, these should be held up as examples of the security and quality of life that all working people should enjoy, whether in the public or private sector.

Although a small percentage of public sector salaries may be relatively high, they are doubtless still only a drop in the bucket compared to federal spending on defense, state tax breaks to corporations and the like.

Former Labor Secretary Robert Reich recently opined:

Public servants are convenient scapegoats. Republicans would rather deflect attention from corporate executive pay that continues to rise as corporate profits soar, even as corporations refuse to hire more workers…It’s far more convenient to go after people who are doing the public’s work – sanitation workers, police officers, fire fighters, teachers, social workers, federal employees – to call them “faceless bureaucrats” and portray them as hooligans who are making off with your money and crippling federal and state budgets.

The story fits better with the Republican’s Big Lie that our problems are due to a government that’s too big.

Public employees do periodically make headlines for gaming the system – collecting two pensions simultaneously, collecting a pension while still working a public job, or getting a “promotion” immediately before retirement to boost their pension, for example.

But Reich notes that such pension exploitation is a relative rarity, and most public employees are lucky to collect modest pensions that don’t even cost much to taxpayers. An average government worker who retires with a salary of $45,000 will collect a $19,000-a-year pension, he says—“few would call that overly generous.”

While they’re working, most public employees contribute a portion of their salaries into their pension plans. Taxpayers are directly responsible for only about 14 percent of public retirement benefits. Remember also that many public workers aren’t covered by Social Security, so the government isn’t contributing 6.25 [percent] of their pay into the Social Security fund as private employers would.

CalPERS, the California Public Employees’ Retirement System, describes the reality for California public employee pensions, on a “myth busting” website addressing common misconceptions—including the idea that “public pension benefits are excessive and a drain on the public.”

The average CalPERS pension is about $25,000 per year. Half of CalPERS retirees receive $16,000 per year or less in benefits. Unlike the private sector, many CalPERS members do not receive Social Security, making their CalPERS pension their sole source of pension income, other than savings.

The site also says that: “California public retirees put back $2 into the economy for every $1 they receive in pensions.”

Many Republicans argue that even granting collective bargaining rights to public sector employees is a recipe for financial disaster and endangers the public. Nevada, North Carolina and Arizona are among the states that don’t allow collective bargaining for government employees. Labor advocates argue there’s no reason a right enshrined in labor law and guaranteed to private sector workers should be denied to dedicated public employees. If the right to strike endangers public welfare in any way – for example among firefighters or police officers – they can still be allowed collective bargaining rights with some of the same strike-related caveats that affect workers in private industries from transportation to healthcare.

The NIRS “Out of Balance” study concludes:

Although the current recession calls for equal sacrifice, the long-term pattern indicates that state and local workers are not, on average, overcompensated. If the goal is to compensate state and local sector employees in a manner comparable to those in the private sector, the data do not call for reductions in state and local wages. If anything, they call for increases.

An organization called Brave New Foundation has collected stories of public employees facing layoffs and wage freezes, describing the effect on their own lives and on citizens who need their services. A blogger on the site NewsHound reported:

It absolutely infuriates me the way the right wing is trying to demonize – in an effort to cut back benefits of public workers at the same time that they demand a giant windfall from the public by way of tax cuts for the wealthy.

This post was originally published on Working In These Times.

About the Author: Kari Lydersen, an In These Times contributing editor, is a Chicago-based journalist writing for publications including The Washington Post, the Chicago Reader and The Progressive. Her most recent book is Revolt on Goose Island.

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