Union Watch Highlights

USA’s top teachers union losing members
By Greg Toppo, July 3, 2012, USA TODAY
The USA’s largest teachers union is losing members and revenue, potentially threatening its political clout. The National Education Association (NEA) has lost more than 100,000 members since 2010. By 2014, union projections show, it could lose a cumulative total of about 308,000 full-time teachers and other workers, a 16% drop from 2010. Lost dues will shrink NEA’s budget an estimated $65 million, or 18%. NEA calls the membership losses “unprecedented” and predicts they may be a sign of things to come. “Things will never go back to the way they were,” reads its 2012-14 strategic plan, citing changing teacher demographics, attempts by some states to restrict public employee collective bargaining rights and an “explosion” in online learning that could sideline flesh-and-blood teachers. “We may be a little smaller, but we won’t be weaker — we’ll be stronger,” NEA President Dennis Van Roekel said. He said teachers “have been energized” by lawmakers’ bids in some states to make it harder to join a public-sector union. The losses hit as thousands of delegates convene this week in Washington, D.C., for NEA’s annual meeting. Democratic candidates for the White House traditionally have lined up to court the group and its 2.2 million members. (read article)

Labor Unions Suffer Defeat on Taxpayer Revolt
By Gina Loudon, July 3, 2012, Townhall
Californians, struggling with an $18 billion budget deficit, stuck with a Sacramento political class owned by Democrats who in turn are owned by labor unions, are facing a massive tax increase in November that will give California the unenviable distinction of having the highest per capita tax burden in the Country. Even modest efforts to reign in spending or do serious pension reform are easily thwarted by big labor lobbyists. For average Californians however, statistics like over 5000 former government workers receiving taxpayer funded pension payouts over six figures annually are really striking nerves. The notoriously generous left of center California voters appear to be in full revolt and they are taking it out on big labor. Less than a month ago, June primary voters in San Diego and even San Jose, voted to reform public employee pensions, ending budget busting defined benefit plans in favor of the traditional defined contribution plans that most Americans have. The efforts were fought by big labor vigorously but even the Democrat mayor of San Jose successfully urged voters to draw a line with unions and give him flexibility to balance the city budget. (read article)

U.S. unions disappointed with Airbus Alabama location
By Bill Rigby, July 3, 2012, Reuters
U.S. labor groups said they were disappointed with Airbus’ decision to build its first U.S. plant in Alabama, where it is effectively impossible to form a powerful union, and warned non-union work could drive down wages across the board in one of the last bastions of U.S. manufacturing. The move follows rival Boeing Co, whose commercial aircraft unit has made increasing use of non-union labor over the last five years, culminating last year in the opening of a final assembly plant for 787s in South Carolina. South Carolina and Alabama are among two dozen U.S. states which uphold so-called ‘right-to-work’ laws that prohibit compulsory membership of a union, making it very hard for a union to represent workers there. (read article)

Are unions beginning to collapse?
By Gary Shapiro, July 02, 2012, FoxNews.com
Government unions tout their ability to get workers higher salaries and better benefits, but union workers are finding that unions cost them more than they are worth. Wisconsin Gov. Scott Walker was able to pick up nearly 40 percent of union households when he triumphed recently in his recall election. But this is just one example. On June 21, the Supreme Court struck another blow when it ruled that public-sector unions could not just extract dues from non-members without proper notice. One union worker I know recently opened his paycheck and was stunned to find a $100 deduction for union dues and a mandatory $30 “political contribution” on top of the federal and state taxes already deducted. Just as taxes are unavoidable, union dues and their political contributions are inescapable for union workers because they are a requirement of their working contract. To make matters worse, while polls show union members split between Republicans and Democrats, more than 93 percent of union contributions go to Democrats. Many union members object to their union’s political spending. In fact, 80 percent believe that a government job should not come linked to union membership and compulsory political giving – all enforced by paycheck withholding from the government employer. Not only are workers paying for campaigns they don’t support, but also unions are using that money to enact anti-business policies like bailouts and shutting down profitable companies. The public is also growing ever more concerned about the cost unions impose on taxpayers. (read article)

Democratic super PAC, major labor union reserve $20M ad buy for House races
By Associated Press, July 2, 2012, Washington Post
A major labor union and an outside group committed to electing Democrats to the House have reserved nearly $20 million in television ad time for the fall in districts from Illinois to Florida as the party tries to reclaim the majority, The Associated Press has learned. House Majority PAC, a so-called super political action committee that recently helped Democrats hold former Rep. Gabrielle Giffords’ Arizona seat, is investing $16 million, while the 2.1 million-member Service Employees International Union is spending $3.7 million, according to an official from the Democratic-leaning group who described planned spending. The official spoke on condition of anonymity to freely discuss the plans. The ad reservation targets at least 47 competitive House races that include vulnerable Republican incumbents as well as Democratic lawmakers facing strong challenges. Democrats need a net gain of 25 House seats to win back the control they lost two years ago. (read article)

SEIU boots join Democratic super PAC bucks
By Luke Rosiak, July 2, 2012, The Washington Times
One of the nation’s largest unions has teamed with a Democratic super PAC to run $20 million in advertising aimed at keeping House seats out of Republican hands, according to plans announced Monday. The partnership between the Service Employees International Union (SEIU) and the House Majority PAC, which most recently helped Democrats hang on to former Rep. Gabrielle Giffords‘ Arizona seat, marks the continuation of efforts to consolidate the work of multiple Democratic groups. In March, the House Majority PAC joined with the Majority PAC, its Senate-focused cousin, and Priorities USA Action, an Obama-blessed super PAC focused on the presidential race, to form an umbrella group called Unity 2012. The advertising blitz will cover at least 47 competitive congressional districts nationwide and involve media buys in 38 markets. Democrats need a net gain of 25 seats to win back the House. The 2.1-million-member SEIU will pay for less than 20 percent of the ad campaign’s cost, but under the new rules of the Supreme Court’s landmark Citizens United decision, the union’s biggest contribution may come in providing manpower, not cash. Last month, SEIU began one of the largest political efforts of its kind, taking advantage of newly relaxed campaign finance rules to send members knocking on the doors of thousands of homes that would have previously been off-limits. Prior to Citizens United, the union’s work targeting members had to be separate from any work aimed at swaying the general voting base. (read article)

Union OKs hiking Modesto workers’ pension contributions
Bee Staff Report, July 2, 2012, Modesto Bee
A union representing more than 200 city of Modesto employees has agreed to retirement benefit concessions. Employees with the Modesto Confidential and Management Association ratified a tentative agreement that increases the employee contribution for pension benefits and ends a program that allowed them to convert sick leave to retiree health coverage. Starting this month, the workers will pay about half of the employee contribution for pensions through the California Public Employees’ Retirement System. Effective July 1, 2013, the entire contribution, equal to 7 percent of monthly pay, will be deducted from their paychecks. In the past, the city has picked up more than 90 percent of the employee pension contribution. (read article)

Public kept in the dark on labor contract
Editorial, Sacramento Bee, July 2, 2012
The Sacramento City Council has signed off on a new deal with City Hall’s largest union that includes noteworthy progress on pensions. That’s the good news. The bad news is that the details of the pact with Local 39 – including an unpublicized plum for workers – were not disclosed until a scant seven hours before last Tuesday’s council meeting. That’s hardly enough time for the public and the media to review the agreement and come up with questions or criticisms. Indeed, if the Local 39 agreement hadn’t been pulled off the consent agenda, it would have been approved in one motion with 30 other items without any debate at all. The process was “an affront to any notion of government transparency,” Craig Powell, president of the watchdog group Eye on Sacramento, admonished council members. He’s right. His group is urging the council to adopt a “sunshine rule” on labor contracts requiring that the terms and the cost analysis be made public at least 14 days before a vote. That doesn’t seem too much to ask. Council members will have another chance soon to be more transparent. The firefighters union on Friday said members had ratified a tentative agreement to pay more into their retirement accounts. Even without a formal sunshine policy, the council could make sure that all details of this contract are made public well before the scheduled July 19 council vote. (read article)

War on pensions moves to new target: those already retired
By Terry Savage, July 1, 2012, Chicago Sun Times
When I wrote about the coming “Public Pension Wars” a few years ago, the responses ranged from astounded to angry. The very idea that a state or municipality could change pension contribution requirements — in the middle of an employee’s career — was shocking. Now we’re about to see the next level of state and municipal pension warfare: changes in benefits for those already retired. The city of Stockton, Calif., filed for bankruptcy late last week, creating a new challenge to public employee pensions and health care promises. Dozens of other cities and districts have filed for bankruptcy in the past — notably Orange County, Calif., Bridgeport, Conn. and Vallejo, Calif. But not only is Stockton the largest municipal bankruptcy in terms of debt load and population, it appears to be the first one in which the court will be asked to void retiree health care and pension promises. (read article)

Pension evasion
Editorial, July 1, 2012, Riverside Press Enterprise
More talk will not slow the runaway cost of public retirements. Legislators have been sitting on the governor’s proposed reforms for eight months, making vague promises of some future action. The Legislature needs to end that charade and take real steps to curb the unsustainable expense of public retirement benefits. Legislative Democrats last month blocked a vote on pension reforms, saying that finishing the state budget on time took priority. That excuse was flimsy, given that Gov. Jerry Brown introduced his reform plan in October. Democrats last year quickly exiled the issue to the legislative Siberia of a special conference committee, which held a series of hearings without, apparently, nearing any determination. But budgeting no longer offers a reason for avoiding retirement reforms, anyway, because the Legislature finished the budget last week. And continued inaction on pension reform will only antagonize voters, who see rising public retirement costs squeezing government coffers and public services — all so legislators can keep pandering to their union benefactors. (read article)

Pension promises can be altered, legal scholar says
By Teri Sforza, June 29, 2012, Orange County Register
We have confessed that the pension wars conjure, for us at The Watchdog, our nerdy high school chemistry teacher, who made us chant (in unison) “Nothing, nothing, nothing, never, ever, ever, changes half-life.” He was talking about radioactivity, of course, but if you replace “half-life” with “pension benefits for public workers,” you get the mantra that’s chanted throughout California’s halls of power today. Nothing nothing nothing never ever ever can change retirement benefits once they’ve been granted. And now comes a piece in the Iowa Law Review by University of Minnesota law professor Amy B. Monahan, who agrees with the Little Hoover Commission. She says that the current perception about the invincibility of pension promises goes back to three words in a 1917 California Supreme Court decision about benefits for a police widow. The Voice of San Diego explains it well: “At issue in that 1917 decision was the legal status of pensions. The 1917 decision didn’t make a definitive call. Instead it used the three words, ‘in a sense,’ to link pensions to unbreakable contracts for the first time. In the 95 years since that initial decision, courts in California and other states have expanded on that three-word phrase to the point where we are now with pensions.” Law professor Monahan called this legal principle the “California Rule,” and argues that it’s all wrong. The courts improperly infringed on legislative power, she argues, and the rule doesn’t fit with contract and economic theory. The Legislature never said pensions were untouchable, she contends. (read article)

Stockton, California, Seeks Bankruptcy After Talks Fail
By Steven Church and Alison Vekshin, June 29, 2012, Bloomberg
Stockton, California filed bankruptcy after talks with bondholders and labor unions failed, making the agricultural center the biggest U.S. city to seek court protection from creditors. The city of 292,000 listed assets of more than $1 billion and debt of $500 million to $1 billion in court filings yesterday in U.S. Bankruptcy Court in Sacramento, California. The two biggest creditors named in the filing reflect the groups most likely to face cuts imposed as part of the bankruptcy: bondholders and city employees. Stockton said its biggest unsecured creditor is the California Public Employees’ Retirement System, or Calpers, , the largest U.S. pension fund, owed $147.5 million, followed by Wells Fargo Bank NA, as trustee for $124.3 million in pension obligation bonds, and Wells Fargo as trustee for three other sets of bondholders owed $107 million, according to court papers. “We are extremely disappointed that we have been unable to avoid bankruptcy,” Mayor Ann Johnston said in a statement. “This is what we must do to get our fiscal house in order and protect the safety and welfare of our citizens. We will emerge from bankruptcy with a solid financial future.” (read article)

Union Bosses: Are They Con Men?
by Jessica Miller on June 28, 2012, OpenMarket.org
The definition of a con man is “a dishonest person who uses clever means to cheat others out of something of value.” Nowadays, a fitting synonym for “con man” may very well be “union boss.” The good news: con men get caught. Earlier this week, the Supreme Court ruled against union bosses in Knox v. Service Employees Int’l Union, Local 1000. The court explained the basis for the case: In June 2005, respondent, a public-sector union (SEIU), sent to California employees its annual Hudson notice, setting and capping monthly dues and estimating that 56.35% of its total expenditures in the coming year would be chargeable expenses. A nonmember had 30 days to object to full payment of dues but would still have to pay the chargeable portion. After this 30 day opt-out period, however, the SEIU imposed an additional surcharge to fund its political activism surrounding the 2006 election. This left non-members powerless, and many were forced to fund political positions with which they did not agree. Like con men, SEIU was cleverly circumventing the law in order to cheat non-union members of their first amendment rights. Fortunately, the Supreme Court dealt a huge blow to unions looking to take advantage of non-union members. Now unions must allow workers to opt-in to special short-term assessments for political advocacy, rather than opting out. Additionally, employees can no longer be charged with “interim assessments.” (read article)

Defeat of Calif. teacher bill shows union power
By Christina Hoag, June 28, 2012, San Jose Mercury
Mayor Antonio Villaraigosa slammed it as “cynical political manipulation,” Los Angeles schools Superintendent John Deasy termed it shameful, but for the California Teachers Association, it was a victory. The defeat Wednesday of a proposed law that would have made it easier for school districts to fire teachers in cases of sexual and other egregious misconduct has shone a spotlight on the strong sway of the California Teachers Association, widely considered the state’s most politically influential labor union with more than 325,000 members. SB 1530 had previously sailed through the Senate, but ran into a stepped up lobbying effort by the CTA at Wednesday’s hearing of the Assembly Education Committee. Teachers from around the state travelled to Sacramento to testify, successfully arguing that the bill violated teachers’ right to due process. The bill garnered five votes. It needed six to exit committee to head to the Assembly floor. “Clearly, they have a powerful voice,” said a disappointed Sen. Alex Padilla, D-Pacoima, who authored the bill. “It made an impact.” Padilla introduced the bill earlier this year, spurred by the case of a veteran teacher at Miramonte Elementary School in Los Angeles who was arrested in January on 32 lewd conduct charges involving school children. (read article)

Union dues and don’ts
Editorial, June 27, 2012, Los Angeles Times
A union can’t force nonmembers to pay for its political causes, the Supreme Court rightly reaffirmed. In states like California that allow “agency shops,” unions have the right to charge even nonmembers dues to cover the costs of collective bargaining that benefits all workers. But the 1st Amendment prohibits them from forcing those nonunion employees to pay for political campaigns they don’t support. The Supreme Court has reaffirmed that reasonable principle with a decision that requires an employee to agree to such payments in advance. By a 7-2 vote, the court ruled last week that the Service Employees International Union violated the 1st Amendment when it collected an extra $6.45 per month from nonmember state employees in 2005 to be used in a campaign against two California ballot measures opposed by labor. One of those measures, coincidentally, would have required public employee unions to obtain workers’ written consent before charging them fees to be used for political purposes. Both questions failed to win voter approval. (read article)

Stockton council votes to go into bankruptcy protection
By Peter Hecht, June 27, 2012, Sacramento Bee
Years after betting on a sustained housing boom to bankroll a waterfront redevelopment and dole out salary and benefit perks to city employees and retirees, Stockton cashed in its chips Tuesday in a plan that will lead it into bankruptcy. The City Council voted to approve an austerity plan, including stopping bond payments and making deep cuts in retiree health care, as part of a plan to file Chapter 9 bankruptcy. The insolvent city of nearly 300,000 residents, home to America’s second-highest rate of foreclosure, is now certain of the additional ignominy of becoming the largest city in America to declare bankruptcy. Only six years ago, Stockton had appeared to be a boomtown as median home prices shot up from $110,000 to $400,000. Bursting with new tax revenue and anticipating 10 percent annual increases in its budget resources, Stockton cashed in by selling bonds for an urban renewal including a $68 million arena and invested $125 million in a pension fund that resulted in fiscal disaster. On Tuesday night, in preparation for the bankruptcy filing, the City Council voted 6-1 to enact a plan to slash retiree health coverage starting this year and possibly eliminate it next year. Stockton also will use bankruptcy protection to suspend contracts with its public employee unions to cut city employee pay and benefits. It will also stop bond payments as it seeks protection from creditors and renegotiates its debts. (read article)

About the author: Jack Dean is editor of
PensionTsunami.org, formed to monitor developments in all three pension spheres nationwide — public employees, corporations and social security. PensionTsunami, like UnionWatch, is a project of the California Public Policy Center. Dean is a former newspaper editor and a past executive director of the Reason Foundation. He has been active in politics for more than three decades and currently serves as president of the Fullerton Association of Concerned Taxpayers.

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