Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘union blogs’

290,000 Jobs Created in April, Jobless Rate Worsens to 9.9 Percent

Thursday, May 6th, 2010

Some 290,000 jobs were created in April, the fourth straight month in more than year the nation has seen gains in employment. Yet the unemployment rate worsened to 9.9 percent from 9.7 percent in March, according to data released this morning by the Department of Labor. The total unemployment figure, which includes those who are discouraged or underemployed, worsened to 17.1 percent in April, from 16.9 percent in March—some 27 million U.S. workers without jobs or full-time work.

Yet economists say the increase in the unemployment rate can be viewed as good news because it means that more than 800,000 workers entered the labor force, many of them formerly discouraged workers who had stopped looking for work.

April job growth came in manufacturing, 44,000 jobs; service jobs, 166,000; construction, 14,000 and mining, 7,000. The jobs increase also was bolstered by the federal government’s hiring of 66,000 temporary workers to help complete the U.S. Census. The April jobless rate for black workers is 16.5 percent, for Hispanic, 12.5 percent and worsened for white workers, to 9 percent.

April’s jobs increase is a far better scenario than the hundreds of thousands of jobs lost each month in the past year—but nowhere near what the nation needs to fill the 11 million job deficit created by the past few years of economic maelstrom.

Especially bad new is the continued worsening in the number of long-term unemployed workers. In April, some 6.7 million U.S. workers were out of a job for 27 weeks or longer, compared with 6.5 million in March. In April, 45.9 percent of unemployed workers had been jobless for 27 weeks or more.

These data make it all the more essential that Congress extend the lifeline for jobless workers by extending unemployment insurance (UI) for a year, a move that is a key part of the AFL-CIO Jobs Agenda. Congress has passed several UI extensions, but only for up to 30 days. The length of time it takes to get a job in this economy, however, clearly shows much more time is needed.

A new report out from the John J. Heldrich Center for Workforce Development at Rutgers documents the challenges for unemployed workers in this economy.

In short, “No End in Sight: The Agony of Prolonged Unemployment” concludes:

While the worst phase of the Great Recession may be behind us, the vast majority of jobless Americans have not found new jobs.

The report finds only 21 percent of those unemployed and actively looking for a job in August 2009 found employment by March 2010. An even smaller number (13 percent) found full-time employment. Sixty-five percent who found employment searched for at least seven months. Twenty-eight percent looked for more than a year.

Among those still searching for work—many for more than a year—are millions who have never been without a job and who have at least a college education. And the jobs they’re taking do not fit their skills nor financial needs.

It is clear that many took their new jobs out of need rather than desire. The majority (61 percent) said their new job was “something to get you by while you look for something better,” while just 39 percent agreed with the statement that their new position is “something you really want to do and think it is a new long-term job.”

As part of the AFL-CIO Good Jobs Now campaign, we are calling for Big Banks to resume lending to help credit-starved communities create jobs. Clearly, small businesses are not getting the credit they need to expand and hire workers.

We are backing a bill co-sponsored by Rep. George Miller (D-Calif.) to save or create nearly 1 million local jobs. Developed with mayors, county officials and others, the Local Jobs for America Act will provide $75 billion over two years to local communities to stave off planned cuts or to re-hire workers laid-off because of tight budgets. Funding would go directly to eligible local communities and nonprofit community organizations to decide how best to use the funds. More than 100 co-sponsors have signed on. (Click here to urge your representative to become a co-sponsor.)

*This post originally appeared in AFL-CIO Blog on May 7, 2010. Reprinted with permission.

About the Author: Tula Connell got her first union card while she worked her way through college as a banquet bartender for the Pfister Hotel in Milwaukee (they were represented by a hotel and restaurant local union—the names of the national unions were different then than they are now). With a background in journalism—covering bull roping in Texas and school boards in Virginia—she started working in the labor movement in 1991. Beginning as a writer for SEIU (and OPEIU member), she now blogs under the title of AFL-CIO managing editor.

Workers Mobilizing to Get Fair Pay for Music Artists

Friday, April 30th, 2010

For the past 80 years, radio stations have used the publicly owned airwaves to make billions of dollars playing music without paying anything to the artists who created it.

AFL-CIO President Richard Trumka, American Federation of Television and Radio Artists (AFTRA) President Roberta Reardon and American Federation of Musicians of the United States and Canada (AFM) President Thomas Lee joined with members of Congress today to announce a strong push by the union movement to pass legislation that supports the fundamental right of American musical artists to be paid for their work.

AFL-CIO President Richard Trumka (third from left) jams with Rep. Jerrold Nadler, AFTRA President Roberta Reardon, musician Peter Yarrow and Reps. John Conyers and John Garamendi.

AFL-CIO President Richard Trumka (third from left) jams with Rep. Jerrold Nadler, AFTRA President Roberta Reardon, musician Peter Yarrow and Reps. John Conyers and John Garamendi.

The Performance Rights Act, H.R. 848, would close a loophole in copyright law that allows AM and FM stations to duck royalty payments to performing artists. The United States is one of a handful of countries that do not provide fair performance rights on radio. The others include Qatar, Iraq, Iran, North Korea and China.

Trumka told a Capitol Hill press conference that workers should not be cheated out of their wages:

The labor movement was founded on the principle that a hard day’s work deserves a fair day’s pay. That’s the principle at stake in the fight for the Performance Rights Act.

The reckless greed that drives Wall Street is the same as the unconscionable greed that drives the handful of conglomerate corporate radio executives that control 75 percent of our nation’s radio stations.

The bipartisan legislation, introduced by House Judiciary Chairman John Conyers (D-Mich.) and Rep. Darrell Issa (R-Calif.), has 46 co-sponsors. Both the Obama and Bush administrations endorsed the legislation along with House Speaker Nancy Pelosi (D-Calif.) and former House Minority Leader Dick Armey.

Reardon told reporters:

The Performance Rights Act will help thousands of hard-working, middle-income recording artists, legacy artists, and session singers earn a living, provide for themselves and their families and support an economy that works for everyone.

Big Radio has launched a propaganda campaign against the legislation led by Cathy Hughes, owner of the African American mega-company Radio One, which claims the legislation would hurt African American and small radio stations.

Last year, the Coalition of Black Trade Unionists (CBTU), the A. Philip Randolph Institute (APRI) and the NAACP endorsed the legislation saying it would not hurt black radio and that musicians, like all workers, deserve to be paid a fair wage.

Radio One is a classic example of corporate greed, Trumka pointed out. In the middle of the recession, Radio One executives fired workers, cut salaries and slashed benefits while setting themselves up with millions of dollars in bonuses.

Trumka issued a challenge to members of Congress and activists across the country:

If you care about music, if you care about the right of Americans to get paid for their work, if you care about doing what is right, be a part of the good fight for our performing brothers and sisters.

The Music First Coalition, which includes AFM, AFTRA and the Coalition of Labor Union Women (CLUW), is leading an effort to pass the bill. The AFL-CIO Department for Professional Employees (DPE) also is backing the bill.

*This post originally appeared in AFL-CIO blog on April 27, 2010. Reprinted with permission.

About the Author: James Parks had his first encounter with unions at Gannett’s newspaper in Cincinnati when his colleagues in the newsroom tried to organize a unit of The Newspaper Guild. He saw firsthand how companies pull out all the stops to prevent workers from forming a union. He is a journalist by trade, and worked for newspapers in five different states before joining the AFL-CIO staff in 1990. He has also been a seminary student, drug counselor, community organizer, event planner, adjunct college professor and county bureaucrat. His proudest career moment, though, was when he served, along with other union members and staff, as an official observer for South Africa’s first multiracial elections. Author photo by Joe Kekeris.

G-20 Labor Leaders Meet at AFL-CIO for Labor Summit

Thursday, April 22nd, 2010

When the world’s banks were going under, governments jumped to their aid. Now with record numbers of people out of work, it’s past time for governments to put working people first, or the fledgling economic recovery could fall apart. Leaders from the G-20 nations issued this warning while in Washington, D.C., this week for the first-ever meeting of G-20 labor ministers and employment ministers with labor and business leaders April 20-21.

The meeting stems from the efforts by AFL-CIO President Richard Trumka and others at the G-20 summit in Pittsburgh last September to make jobs the central element in any global economic recovery. The G-20 includes the leaders of the world’s top 19 economies and the European Union.

During their meetings at the AFL-CIO before the labor ministers’ summit, the union leaders again strongly urged their governments to support the International Labor Organization’s (ILO) Global Jobs Pact, which includes comprehensive measures to stimulate employment growth and provide basic protections for workers and their families.

Sharan Burrow, president of the International Trade Union Confederation (ITUC), told the ministers:

Governments must show the same political will to attack global unemployment and underemployment as they did to tackle the banking crisis in late 2008. We cannot afford a lost decade of stagnant labor markets.

Trumka made it clear that if the jobs of the future are to be good, family supporting jobs, workers in all nations must have the fundamental right to form unions and bargain collectively:

In the U.S, tens of thousands of workers are fired every year for attempting to form unions. For example, there can be no excuse for T-Mobile, the U.S. telecommunications company, to viciously oppose unions in the U.S. while its corporate parent, Deutsche Telekom supports bargaining rights and unions throughout Europe. Unless workers’ rights are enforced in all countries, there will be a “race to the bottom” in wages and working conditions, a race that will undermine decent work everywhere.

For more information on the ongoing campaign to bring justice to T-Mobile, click here and here.

The union leaders also insisted that governments not reduce stimulus efforts until employment rates return to pre-crisis levels on a sustainable basis, and called for an equitable sharing of the cost of the recovery costs through more progressive tax systems, including the adoption of a financial transactions tax, actions the AFL-CIO strongly backs.

ITUC General Secretary Guy Ryder said:

We must halt the continuing rise in unemployment and create new jobs.  Furthermore, there needs to be an ongoing role for labor ministers within the G-20 in order to address the employment impact of the crisis with effective measures to help all workers, including the most vulnerable.

John Evans, general secretary of the Trade Union Advisory Committee (TUAC) to the Organization for Economic Cooperation and Development (OECD), added:

Increasing economic inequality over two decades helped cause this crisis. Fairer income distribution and restoring real purchasing power to working people is essential for sustainable economic growth in the future.

Check out the detailed proposals presented by the union delegation here. Read the ITUC/TUAC evaluation of the meeting’s outcomes here.

*This post originally appeared in AFL-CIO blog on April 22, 2010. Reprinted with permission.

About the Author: James Parks had his first encounter with unions at Gannett’s newspaper in Cincinnati when his colleagues in the newsroom tried to organize a unit of The Newspaper Guild. He saw firsthand how companies pull out all the stops to prevent workers from forming a union. He is a journalist by trade, and worked for newspapers in five different states before joining the AFL-CIO staff in 1990. He has also been a seminary student, drug counselor, community organizer, event planner, adjunct college professor and county bureaucrat. His proudest career moment, though, was when he served, along with other union members and staff, as an official observer for South Africa’s first multiracial elections. Author photo by Joe Kekeris

Senate Passes Jobs Bill, Obama Signature Next

Thursday, March 18th, 2010

Image: Mike HallThe U.S. Senate today passed a jobs bill that AFL-CIO President Richard Trumka calls a ”good start” in helping the nation’s workers climb out of the 11-million-deep jobs hole dug by the Wall Street greed that propelled the economy’s nosedive.

But he says the bill—which is on its way to the White House for President Obama’s signature—must be the first step of a broad and intensive effort to rebuild the economy.

Much more needs to be done. We need to restore the jobs that were lost to the financial debacle, and Wall Street should pay to create them. We must invest in rebuilding our crumbling infrastructure and in the green jobs of the future. We have to maintain funding for vital services by state and local governments and prevent destructive cuts in education, police and fire protection and more.

We must take the additional steps needed to extend unemployment insurance and health care lifelines to the unemployed. We must increase funding for neglected communities to match people who want to work with jobs that need to be done. And we should move right now to use leftover TARP money to get credit flowing to Main Street.

The $17.6 billion bill includes a one-year extension of the federal highway program, an extension of the Build America Bonds program that helps states finance certain infrastructure projects and tax incentives for employers to hire workers.

The Senate first passed the legislation in February, but minor changes by the House forced a second vote on the legislation.

Other pending jobs legislation includes a December-passed House bill that is a more extensive jobs bill with an emphasis on jobs-creating infrastructure projects. The next step for the bill is uncertain—Senate leaders have promised to move further jobs-related legislation, but no time table has been set. Also this month, Rep. George Miller (D-Calif.) introduced the Local Jobs for America Act, which would create or save up to 1 million public- and private-sector jobs. Jobs saved would include those such as the firefighters, the police and teachers and others whose jobs are in jeopardy because of local government budget cuts.

*This article originally appeared in AFL-CIO blog on March 17, 2009. Reprinted with permission from the author.

About the Author: Mike Hall is a former West Virginia newspaper reporter, staff writer for the United Mine Workers Journal and managing editor of the Seafarers Log. I came to the AFL- CIO in 1989 and have written for several federation publications, focusing on legislation and politics, especially grassroots mobilization and workplace safety. When my collar was still blue, I carried union cards from the Oil, Chemical and Atomic Workers, American Flint Glass Workers and Teamsters for jobs in a chemical plant, a mining equipment manufacturing plant and a warehouse. I’ve also worked as roadie for a small-time country-rock band, sold my blood plasma and played an occasional game of poker to help pay the rent. You may have seen me at one of several hundred Grateful Dead shows. I was the one with longhair and the tie-dye. Still have the shirts, lost the hair.

Business Professors: Employee Free Choice Act Good for the Economy

Wednesday, July 1st, 2009

Two top business experts have taken to the pages of Business Week to make the case for the Employee Free Choice Act.

Paul Adler, a professor at the Marshall School of Business at the University of Southern California, and Donald Palmer, an associate dean and professor at the University of California-Davis, say corporate hostility to the Employee Free Choice Act and to workers’ freedom to form unions is short-sighted because communities with well-paid workers have economic advantages for business.

Adler and Palmer cite training, job satisfaction and the healthy communities that come from economically secure workers as reasons why businesses benefit when their employees can form unions and bargain.

They write in the op-ed:

When unions raise the wages of the lowest-paid workers, this increases savings and reduces income inequality, which has beneficial effects on a nation’s economic growth and investment, not to mention its health and social cohesion.

Adler and Palmer say the inability of workers to form unions has real consequences, not only for individual workers but also for communities and the entire economy. The failure to allow workers the freedom to bargain has put us in a “low-performing state,” they say:

Once unions are radically weakened, as they have been in the U.S. over the past few decades—and in no small measure as a result of the business community’s hostility—a race to the bottom starts. The whole economy slides to a lower-level equilibrium where workers earn less and have less influence in the workplace, where firms pay less for labor but get less qualified and less committed workers, and, where, as a result, society gets less output from its available resources.

Adler and Palmer say passing the Employee Free Choice Act will “secure a better future”—not only for today’s workforce, but also for tomorrow’s businesses and workers. They authors are among dozens of business and management scholars who share this view.

Read the op-ed here.

About the Author: Seth Michaels is the coordinator of the AFL-CIO’s presidential candidate website, Working Families Vote 2008. Prior to arriving at the AFL-CIO, he worked on online mobilization for Moveon.org, Blue State Digital and the National Jewish Democratic Council. Seth spent two years touring the country as a member of the Late Night Players, a sketch comedy troupe—but the battles of U.S. politics are even more entertaining.

This article originally appeared in AFL-CIO Now on June 26, 2009. Re-printed with permission by the author.

Congress Hears Demands for Health Care Reform in Town Hall Meetings

Tuesday, June 30th, 2009

Members of Congress met in town hall sessions Thursday with constituents who were on Capitol Hill to rally and demand health care reform. Read dispatches from some of the meetings.

—————–

Ohio Weighs In

After the rally, more than 250 activists from Ohio met at the Columbus Club at Union Station to plan for an afternoon of lobbying and hear from members of Congress about health care reform.

“Nothing is more important to me than ensuring that President Obama passes health care reform.”

The session was introduced by Tim Burga of the Ohio AFL-CIO, who decried the “free market run amok” in the current health care system and affirmed that we must have a serious public health insurance option.

He introduced Hattie Wilkins, who made one of the most moving speeches of the event.

Her situation illustrates the deep problems working families have with the way the current system operates. Hattie is a member of the United Steelworkers (USW) union who worked for 35 years for Brentwood Originals, a pillow factory in Youngstown, Ohio. The USW struck Brentwood Originals in 2008, and more than three-quarters of the workforce has been laid off. She was fired because of her strong support for the union, Hattie said. She has been collecting $887 a month in unemployment since then. She has COBRA coverage, and now pays $275 per month—31 percent of earnings from unemployment—for her health insurance. She pays another $450 per month for her mortgage payment, leaving her only $162 each month for food, utilities, transportation and all her other expenses. Now her unemployment payments are ending and she doesn’t know what she is going to do.

At 58 years of age, Hattie is searching for another job at places like McDonald’s but has to compete with applicants much younger than she is. She gave us her cell phone number, though she wasn’t sure how much longer she would have it. Hattie came to Washington, D.C., to participate in the rally and make sure her elected representatives heard her voice on this critical issue.

Sen. Arlen Specter says health care is a right.

The Latest on Pennsylvania Town Hall

Sen. Specter has arrived, and compliments the crowd on its tenacity and commitment. Specter says he agrees that health care is a right and believes health care legislation will pass and will include a public option component. Of course, in a room full of union members, the Employee Free Choice Act came up. Specter says he is working hard to find an answer for early union certification and gaining first contracts.

Pennsylvania Update

The folks at Capitol City Brewing Co. are waiting for Sen. Arlen Specter to arrive. We hear reports he’s been at the White House.

From the North Carolina Meeting

Sen. Kay Hagan just arrived. She says the fight for health care reform is the “most important thing going on in our country.” Everyone in America must have health care coverage, she says, and patients with pre-existing conditions should be able to get health insurance.

About a public health insurance option plan, Hagan says some critics are getting caught up in nuance about language used in the debate. “I don’t care what you call it as long as it provides affordability accessibility and covers pre-existing conditions,” she says. We’d heard earlier reports that her staff told union leaders Hagan believes if health care reform passes, it will include a public option. The senator herself did not specifically say she supports the public option.

I think the key is if you have health insurance, you keep it. We don’t want to dismantle what exists.

More Pennsylvania Town Hall

Rep. Sestak arrived and talked about his daughter’s brain tumor and his health care plan to help keep her alive. Everybody deserves health care for themselves and their families, as well, he said. Sestak says his support for health care reform is “payback” to the country that provided health care for him and his family when he was in the Navy.

Everybody must be covered under health care reform, according to Sestak, and a public health insurance plan must be an option.

Nothing is more important to me than ensuring that President Obama passes health care reform.

Pennsylvania Town Hall

Hundreds of union members from Pennsylvania have packed a hall just a block from the U.S. Capitol to hear from their elected officials on the status of real health care reform. As they wait for Sen. Arlen Specter (D) and Rep. Joe Sestak (D) to appear, the chanting is in full force:

Congress, This is our demand. The option of a public plan.

What do we want? HEALTH CARE!

When do we want it? NOW!

Congress, This is our demand, the option of a public plan!

We are waiting for Specter and Sestak so we can spring that on them.

Rep. Kathy Dahlkemper (D) did not attend. A staff member is delivering her talking points.

Health care reform that guarantees quality, affordable health care reform must be passed.

We must ensure that patients’ choices are protected.

Maryland Town Hall

Sen. Barbara Mikulski, Rep. John Sarbanes and House Majority Leader Steny Hoyer speak to hundreds of Maryland workers and all support public option.

Rep. Blumenauer at Town Hall on Small Business

At a town hall focused on small business issues this morning at the U.S. Capitol Visitor Center, Rep. Earl Blumenauer (D-Ore.) advocated a public insurance option plan, guaranteed coverage and a “pay or play” system that would require businesses to provide health care coverage for their employees or pay into a fund. These reforms would level the playing field and reduce cost burdens on small businesses, he said.

This article originally appeared in AFL-CIO Now. Re-printed with permission by the author.


G8 Union Leaders Issue Urgent Call to Tackle Jobs Crisis

Tuesday, June 30th, 2009

The global union movement is issuing an urgent call for the leaders of the Group of Eight nations to tackle the deepening jobs crisis at their summit meeting in L’Aquila, Italy, next month.

The leaders must develop a coordinated and jobs-orientated international recovery and sustainable growth plan that focuses on creating good jobs and re-regulating the global financial system, AFL-CIO President John Sweeney told a gathering of G8 union leaders today in Rome.

 The global economy continues to deteriorate at an unprecedented rate.  Workers around the world—who are the innocent victims of this crisis—are losing their jobs and incomes.

The International Labor Organization (ILO) predicts that unemployment is likely to increase by up to 59 million worldwide by the end of 2009. Unemployment in the G8 countries—Canada, France, Germany, Italy, Japan, Russia, United Kingdom and United States—is likely to almost double over the next 18 months, according to the ILO. At the same time, more than 200 million workers could be pushed into extreme poverty, lifting the number of working poor to 1.4 billion.

Earlier this week, President John Sweeney and the union leaders of the world’s top economies outlined a plan to stimulate the global economy. Click here to read more about that plan.

When the global economic crisis is over, said Sweeney, the G8 leaders must ensure there is no return to “business as usual.”

While this crisis was caused by global economic imbalances and financial speculation, it was underpinned by the lack of effective economic regulation over preceding decades. Rather than planning “exit strategies” that are a more brutal version of failed past policies, there is a need to establish a new model of economic development that is stronger and more efficient, socially just and environmentally sustainable.

And this time, workers’ views should be represented in the plan, Sweeney said.

Trade unions and the workers we represent have no confidence that this time governments and bankers alone will get it right.  We are asking for a seat at the table.

About the Author: James Parks’ first encounter with unions was at Gannett’s newspaper in Cincinnati when his colleagues in the newsroom tried to organize a unit of The Newspaper Guild. He saw firsthand how companies pull out all the stops to prevent workers from forming a union. Parks is a journalist by trade, and worked for newspapers in five different states before joining the AFL-CIO staff in 1990. He also has been a seminary student, drug counselor, community organizer, event planner, adjunct college professor and county bureaucrat. His proudest career moment, though, was when he served, along with other union members and staff, as an official observer for South Africa’s first multiracial elections.

This article originally appeared in AFL-CIO Now on June 26, 2009. Re-printed with permission by the author.

Corporate Hypocrisy on Bargaining Highlights Need for Employee Free Choice

Tuesday, June 16th, 2009

The misleading attacks by Big Business on the Employee Free Choice Act now are aimed at the provision that would guarantee that workers can get a fair first contract. Their scare tactics are not only misleading, they’re hypocritical.

Right now, workers lack a legal means to ensure they get a fair first contract. Recent research shows that even after workers successfully win a union and the ability to bargain, they’re too often blocked from getting a fair first contract. Fifty-two percent of workers don’t have a contract a full year after the election, and 37 percent don’t have a first contract two years after the election. For too many workers, the promise of the freedom to bargain is out of reach because the law doesn’t offer them any help.

The Employee Free Choice Act provides a process to help first-time bargainers to reach an agreement, through mediation and, for issues the parties are unable to resolve on their own, arbitration. The reason we need first-contract arbitration is to create an incentive for companies to bargain voluntarily with their workers.

According to research from American Rights at Work, the record of first-contract arbitration provisions in the public sector and in Canada show that disputes rarely reach the arbitration stage; in most cases, the process works to help workers and their employers reach a contract on their own.

Yet corporations are increasing their negative attacks on this provision even though they frequently require consumers to commit to arbitration.

Supporters of the freedom to form unions are hitting this corporate disinformation campaign directly, in the field, online and in the press. American Rights at Work is taking on corporate hypocrisy with a new print ad running today in key newspapers. The ad demonstrates how corporations are attacking the idea of arbitration when it involves their employees—while supporting arbitration in a variety of areas where it benefits them.

As the new ad notes, corporations prefer to use arbitration in consumer disputes, personal injury claims, home construction contracts, nursing home injuries and conflicts related to real estate, credit cards and banking.

Business trade groups even wrote to Congress last year saying arbitration is an “efficient, effective” way to resolve disputes, reported The New York Times, and companies put arbitration provisions into 75 percent of consumer contracts.

So, if corporations want to require arbitration in so many other instances, why are they so afraid of the possibility of arbitration—only after months of negotiations—over a first contract for their employees?

About the Author: Seth Michaels is the coordinator of the AFL-CIO’s presidential candidate website, Working Families Vote 2008. Prior to arriving at the AFL-CIO, he worked on online mobilization for Moveon.org, Blue State Digital and the National Jewish Democratic Council. Seth spent two years touring the country as a member of the Late Night Players, a sketch comedy troupe—but the battles of U.S. politics are even more entertaining.

This article originally appeared in the AFL-CIO Blog on June 11, 2009. Reprinted with permission by the author.

Small Biz Group Says Health Care Reform Could Save Them $855 Billion

Monday, June 15th, 2009

Health care reform that requires employers to provide health care coverage for workers or pay into a fund—known as pay or play—could save small businesses as much as $855 billion during the next few years.

A new study by the Small Business Majority disproves claims by health care reform opponents that requiring businesses to provide coverage to their workers would destroy their bottom line.

The Economic Impact of Health Care reform on Small Business, written by Massachusetts Institute of Technology economics professor Jonathan Gruber, says that small businesses, more than any other sector of the economy, “suffer from our broken health care system.”

From spiraling premiums to inadequate access to health care for themselves and their employees, small business owners have seen their prospects for growth diminished and their profits slashed by today’s patchwork of inefficient health care options.

The report looks at three health care reform proposals—including President Obama’s—that call for pay or play by businesses, along with tax credits and other incentives to help offset the cost of providing health insurance to their workers.

This analysis demonstrates that the type of health care reform that is emerging from today’s debate will save small businesses hundreds of billions of dollars, protect small business wages and jobs—and allow small businesses to reinvest and grow.

Without reform, small business owners will pay nearly $2.4 trillion in health care costs for their workers over the next 10 years. But as the report points out, reform as outlined under the three plans,

could save as much as $855 billion with reform—a 36 percent reduction, money that can be reinvested to grow the economy.

Soaring health care costs are projected to cost some 178,000 small business jobs over the next decade, but health care reform, could reduce projected job loss by 72 percent job loss.

To benefit small businesses, their workers and the economy, the Small Business Majority report says that health care reform must:

  • Substantially contain costs.
  • Guarantee access to coverage regardless of health status.
  • Be based on shared responsibility among individuals, businesses, the government and the health care industry.
  • Provide appropriate assistance to small businesses to meet their health care obligations.

The Small Business Majority, founded in 2005 by executives of small companies who wanted to broaden the small-business discussion about health reform, isn’t the only small business group to back comprehensive health reform.

In January, the Main Street Alliance network of state-based small business health care coalitions, surveyed 1,200 small business owners and found they

  • Are concerned deeply about the adequacy of insurance, including the breadth and affordability of services covered by their plans.
  • Believe government should provide a public alternative to private coverage.
  • Want increased oversight of private insurers.
  • Are willing to contribute their fair share toward a system that makes health care work for small businesses, their employees and the communities they serve.

About the Author: Mike Hall is a former West Virginia newspaper reporter, staff writer for the United Mine Workers Journal and managing editor of the Seafarers Log. He came to the AFL-CIO in 1989 and has written for several federation publications, focusing on legislation and politics, especially grassroots mobilization and workplace safety. He carried union cards from the Oil, Chemical and Atomic Workers, American Flint Glass Workers and Teamsters for jobs in a chemical plant, a mining equipment manufacturing plant and a warehouse. He’s also worked as roadie for a small-time country-rock band, sold blood plasma, and played an occasional game of poker to help pay the rent. You may have seen him at one of several hundred Grateful Dead shows. He was the one with longhair and the tie-dye. Still has the shirts, lost the hair.

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