Posts

The Robot Revolution – How Union-Backed Policies Destroy Jobs for Humans

Summary: Labor unions and their left-wing friends are imposing a host of laws and regulations that are dramatically raising the cost of hiring workers. Minimum wage laws, Obamacare requirements, and many other policies are causing businesses to rethink new hires. Even expensive robots and other forms of non-human labor begin to make sense to strapped companies. Who will suffer the most under the new regime? The least skilled and the poorest—the very persons who were supposedly going to benefit from the new laws and regulations created. Call it “the War on Jobs.”

New technology creates jobs. The invention of the lightbulb puts candle makers out of work and the invention of the automobile puts buggy-whip makers out of work, but more jobs are created in the new industries than were lost in the old ones.

Until now, perhaps. The nature of the U.S. economy is changing. To a greater degree than ever before, politicians and bureaucrats and activist groups are working to make it too expensive for businesses to hire people for many jobs. Who will get those jobs? In many cases, robots.

Mechanical men

The term “robot” comes from the 1920 science fiction play R.U.R. (for Rossum’s Universal Robots), although the basic concept of a mechanical worker was not new. (For example, there’s the Tin Woodman, a human turned into a mechanical worker, in the Oz series beginning in 1900.) Pop culture has featured countless depictions of robots replacing humans, but in reality, robots were long limited to mindless, repetitive tasks such as certain work on assembly lines. The first ATM, which accepted deposits but didn’t give out money, was installed in New York City in 1961 and promptly rejected by customers. By the 1970s, cash-dispensing ATMs were being installed across the U.S., and robots began to be used in increasingly sophisticated ways.

20151030-UW_Robot

Now, things are getting serious. A recent book, Rise of the Robots by Martin Ford, depicts the robot revolution that is upon us, with the use of robots expanding in ways that hardly anyone expected. Ben Schiller of Fast Company wrote of Ford:

“Surveying all the fields now being affected by automation, Ford makes a compelling case that this is an historic disruption—a fundamental shift from most tasks being performed by humans to one where most tasks are done by machines. That includes obvious things like moving boxes around a warehouse, but also many “higher skill” jobs as well, such as radiology and stock trading. And don’t kid yourself about your own importance: that list almost certainly includes your job. . . .”

“It’s possible that at some future point, rapid technological innovations might shift the expectations of consumers about the likelihood and duration of unemployment, causing them to aggressively cut their spending,” he adds. “If such an event occurred, it’s easy to see how that could precipitate a downward economic spiral that would impact even those workers whose jobs are not directly susceptible.”

Among the jobs that could be taken soon by robots: flipping burgers. In 2013, Momentum Machines created Alpha, a robot that can make up to 360 hamburgers in an hour and pays for itself in a year. It shapes patties from ground beef, grills them, and makes burgers with onions, pickles, and tomatoes; it can customize burgers, making patties out of, say, one-third hamburger and two-thirds beefalo.

A typical fast food restaurant would be able to reduce management tasks and eliminate around $135,000 a year in labor costs with Alpha. Alexandros Vardakostas, the company’s co-founder, said the machine isn’t meant to make workers’ jobs easier. “It’s meant to completely obviate them.”

Restaurant chains such as Olive Garden, White Castle, Taco Bell, Applebee’s, Panera Bread, Burger King, Subway, Arby’s, and Chili’s are using specialized computer tablets for taking orders.

A startup called E La Carte makes a tablet called Presto that goes for $100 per month. According to Annie Lowrey of New York magazine, “If a restaurant serves meals eight hours a day, seven days a week, it works out to 42 cent per hour per table, making the Presto cheaper than even the very cheapest waiter. Moreover, no manager needs to train it, replace it if it quits, or offer it sick days. And it doesn’t forget to take off the cheese, walk off for 20 minutes, or accidentally offend with small talk, either.”

Mike Flacy of Digital Trends wrote that, “Hypothetically, a fast food restaurant could also place digital touchscreen panels with credit card readers and cash machines at the counter in order to eliminate all cashiers as well. The consumer would simply place an order through the touchscreen and wait for the custom hamburger to appear at the end of the assembly line, likely tagged with an order number.” Such a system would effectively eliminate most fast-food jobs.

One of the more impressive innovations to hit a store near you is OSHbot, a robot helper at Lowes Home Improvement that speaks two languages, answers questions, and guides customers to items in the store either by name or with a scanner that can identify objects and provide product information. When the OSHbot’s battery runs low, it directs itself to a recharge station.

20150831-UW-Allen-Hardware
You can do it, we can help – we robots, that is…

McDonald’s has switched to touchscreen ordering at 7,000 locations in Europe, and the touchscreen/customization concept is now being used at some McDonald’s in San Francisco. Lifehacker reported in July that “Late last year, McDonald’s Australia introduced its first Create Your Taste restaurant: a premium dining experience focusing on gourmet ingredients, sit-down service and burger customization via in-store touch screens. The system is now available in every McDonald’s restaurant across [Australia]. That was quick.”

The Australian reported in May:

“In the world of cafes and restaurants, android waiters are making their mark, with China, Japan, and South Korea leading the way. In northeast China at Ningbo, they take orders, serve food, and use an optical sensing system to navigate. But they can utter only a handful of phrases in Mandarin. Other robots can prepare food. The Wishdoing restaurant in Shanghai boasts robots that can cook dishes in less than three minutes. That means the vast slab of restaurant practices—taking orders, preparing food and serving dishes—can be mechanised.”

The Daily Mail (London) reported in June that “A restaurant in Jiangsu Province, China, is staffed by 15 droids that carry food to tables, while a hotel that’s opening in Japan next month will be staffed by 10 eerily lifelike robots.” In Sasebo in southwestern Japan, “The humanoids will check in new guests before carrying their luggage and cleaning their rooms at Hennna Hotel”—that is, “the Weird Hotel.”

20150831-UW-Allen-Waiters
Robot Waiters in Jiangsu, China, carry your food to your table.

Foxconn, primary maker of Apple products, plans to deploy up to a million robots in its factories. A Nike executive noted a solution for rising wages in Indonesia: “engineering the labor out of the product.” Nick Romeo wrote in the Daily Beast that such a shift might “silence criticism about horrendous working conditions in international factories that make beloved American products.”

Using the term “robot” broadly to include all sorts of human-replacement technologies involving artificial intelligence, robots could do the jobs of pastry chefs, typists, paralegals, math teachers, and anesthesiologists. As Fast Company’s Schiller noted, there’s software that breaks projects into tasks that can be fully automated, tasks that can be crowdsourced (assigned to a networked group of humans), and tasks that must be, for now, handled directly by humans. Robots can write music, diagnose disease, and trade stocks. The number of traders on Wall Street has dropped by a third since 2001, thanks to trading algorithms.

Amazon, which started as an online bookseller, is quickly becoming an integrated online and physical operation, mixing the Internet with traditional bricks-and-mortar; the mix is called “clicks-and-mortar.” The company’s network of heavily robotized warehouses makes same-day deliveries possible in much of the country, and the company is famously experimenting with flying robots (drones) that could make those deliveries. In June, Google’s self-driving cars passed the million-mile mark in total travel, perhaps on their way toward taking the jobs now performed by bus drivers and cabbies.

20150831-UW-Allen-Drone
Prototype flying delivery drone – but will it be able to get your signature?

If you think your job is safe, consider this bit of sports news: “Things looked bleak for the Angels when they trailed by two runs in the ninth inning, but Los Angeles recovered thanks to a key single from Vladimir Guerrero to pull out a 7-6 victory over the Boston Red Sox at Fenway Park on Sunday.” A robot wrote that.

On the other hand…

The fear that technology will destroy jobs has long been a part of Western culture. Aristotle mused that if “the shuttle would weave and the plectrum touch the lyre without a hand to guide them, chief workmen would not want servants, nor masters slaves.” Queen Elizabeth I refused a patent for a knitting machine because she believed it would cause unemployment. In the 16th Century, the use of sheep for grazing was supposed to put humans out of work.

In contrast, some saw technology as a creator of jobs. The first great economist, Adam Smith, wrote in The Wealth of Nations (1776) about the effect of new technology for making pins. Suddenly, instead of making one pin a day or even 20 pins a day by hand, the average worker could make 4,800 pins a day. Were thousands of pin-makers thrown out of work? Hardly. The price of pins plummeted, increasing the demand for pins and the demand for people to work in pin factories, while businesses that used pins were able to cut costs, increase demand for their products, and hire more workers.

There’s an old story that a British weaver named Edward (Ned) Ludd (or Ludlam), one day in 1779, after being punished for idleness or taunted by local youths, went into a fit of rage and smashed two knitting frames. From this kernel of possible truth grew the legendary figure of General Ludd or King Ludd, the adversary of jobs destroying technology. Beginning in 1811, a group of English craftsmen known as the Luddites tried to bring the Industrial Revolution to a grinding halt. In the belief that new technology would destroy their jobs, they set out to smash textile machinery and put the torch to textile factories. It’s said that Belgian workers dropped their wooden shoes (sabots) into industrial machinery, becoming the first “saboteurs.”

Luddite ideas continued to impede human progress long after the original Luddites died. In 1930, John Maynard Keynes, the economist whose ideas led to many of the world’s economic problems today, wrote about a “new disease”: “technological unemployment . . . due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour.”

When the direct-dial telephone was introduced, the Communication Workers of America union did everything it could to stop the new technology, because union officials mistakenly assumed that it would cut the number of jobs. “Fortunately, we were unsuccessful,” CWA President Glenn Watts admitted some 30 years ago, “because the resulting boom in demand for telephone service created thousands more jobs.”

In 1910, the Bell System had one employee for every 578 calls per year. By 1981, it had one employee for every 250,000 calls. The number of employees did not go down. It increased 1600 percent.

Yet neo-Luddites thought of technology as jobs-destroying. In 1980, radical activist Tom Hayden, perhaps most famous for marrying Jane Fonda, listed direct long-distance dialing as part of a plot by the telephone company to cheat its customers, as an example of “corporations . . . externalizing costs to the consumer.”

Another Jane Fonda associate, Karen Nussbaum, executive director of “9 to 5” (the National Association of Working Women), warned in the early 1980s that technology meant repression. “Women office workers are going to find themselves working in dull, dead-end jobs for less money and in conditions that are going to lead to serious health problems.” (Nussbaum was later a key player in the takeover of the AFL-CIO by the radical Left.) Also in the ‘80s, California Rural Legal Assistance, a “public interest” law firm funded by taxpayers, sued to block the University of California from creating labor-saving devices for use on farms unless the university had first determined the “social consequences” of such technology.

That attitude toward technology was reflected in President Obama’s remarks during a 2011 interview with the Today show’s Ann Curry. Obama, promoting the efforts of his Jobs Council, sought to explain the weak economy as, in part, the result of jobs-destroying technology:

“There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM; you don’t go to a bank teller. Or you go to the airport, and you’re using a kiosk instead of checking in at the gate. So all these things have created changes in the economy, and what we have to do now—and that’s what this job council is all about—is identifying where the jobs for the future are going to be; how do we make sure that there’s a match between what people are getting trained for and the jobs that exist; how do we make sure that capital is flowing into those places with the greatest opportunity.”

Today, neo-Luddites seek to block new technologies such as GMO (genetically modified organism) foods, and they target companies like Uber. Indeed, Hillary Clinton, who admittedly hasn’t driven a car since 1996, attacked Uber in a July speech on the “gig economy.” CNET’s Stephen Musil:

“Many Americans are making extra money renting out a small room, designing websites, selling products they design themselves at home, or even driving their own car,” Clinton said during a speech at the New School in New York City. “This on-demand, or so-called ‘gig economy,’ is creating exciting opportunities and unleashing innovation. But it’s also raising hard questions about workplace protections and what a good job will look like in the future.

“Fair pay and fair scheduling, paid family leave and earned sick days, child care are essential to our competitiveness and growth,” the former secretary of state said, referring to benefits not accorded to independent contractors such as drivers at Uber.

Emily Zanotti wrote on the American Spectator website that Clinton spent half her speech “complaining about these young whippersnappers and their newfangled smartphones with the texting and the Facebooking and the Ubering. I mean, who do they think they are, circumventing an antiquated and burdensome, union-driven transportation boondoggle with ingenuity and common sense and a cooperative network that allows individuals to purchase products on a free market that they themselves police?”

Zanotti’s article was entitled: “Hillary Clinton, Old Person, Does Not Like This Newfangled Uber App.”

Hurting the working class

History shows that technology creates jobs—that is, that far more jobs are created by technological change than are eliminated. But has that formula been changed by the growth of the welfare state, together with all the rules and regulations and bureaucratic red tape that make it expensive to hire real people? Have unskilled and low skilled workers and many others been pushed out of the labor force?

As a presidential candidate, Barack Obama said he aspired to be a transformational president like Ronald Reagan. Reagan, he said, “changed the trajectory of America” and “put us on a fundamentally different path.” Just before the 2008 election, he declared that “We are five days away from fundamentally transforming the United States of America.”

In that, he has certainly succeeded. For one thing, the Labor Force Participation Rate—in effect, the employment rate—is the lowest it’s been since 1977. The current “recovery” is the first ever recorded in which the percentage of people with jobs declined. A study by the Federal Reserve Bank of St. Louis found that the U.S. was the only one of eight countries studied that was slipping backward by this measure, while a study by 38 developed countries by the international Organisation for Economic Co-operation and Development put the U.S. among only three countries with declining rates of labor-force participation.

The President brags about the decline in the unemployment rate—but that rate is relatively low only because it doesn’t count people who have given up looking for work (roughly 40 percent of the 8.5 million jobless, according to a Harris poll in May) and because it doesn’t count the 6.5 million who are stuck in part-time jobs when they want full-time work.

Today, more businesses are dying than are being created, for the first time in the 37 years for which these statistics are available.

For the most part, the well-off are doing all right. Some 95 percent of the economic gains during the Obama “recovery” have gone to the top one-percent of income earners. It’s working-class people and small business people who have suffered the most. They have been targeted by the President and his friends, who lead a Democratic Party that has essentially stopped pursuing policies to help the working class (or, at least, the segment of the working class that they classify as “the white working class”). Liberal writer Thomas Edsall wrote in the New York Times in November 2011 that

preparations by Democratic operatives for the 2012 election make it clear for the first time that the party will explicitly abandon the white working class.

All pretense of trying to win a majority of the white working class has been effectively jettisoned in favor of cementing a center-left coalition made up, on the one hand, of voters who have gotten ahead on the basis of educational attainment—professors, artists, designers, editors, human resources managers, lawyers, librarians, social workers, teachers and therapists—and a second, substantial constituency of lower-income voters who are disproportionately African-American and Hispanic.

Meanwhile, many on the Left have found common cause with Big Business against smaller businesses. Larger businesses are usually in a better position to deal with Big Government—to spread the costs of regulatory compliance over a larger number of workers or workplace locations, to hire accountants and “human resources” managers, and to lobby, conduct public relations campaigns, and make political contributions in order to receive better treatment. Businesses with bigger profit margins can pay regulatory costs that would sink businesses that are just getting by.

Indeed, regulations are often tailored to leave Big Business relatively unhurt while crushing the little guy. Often, companies like Walmart actually lobby in favor of regulations that force their less well-off competition to provide the level of wages and healthcare benefits that Walmart already provides or plans to provide in the near future. Similarly, Amazon once opposed sales taxes on Internet purchases, until the point at which such taxes actually came to benefit Amazon by helping the company weaken or eliminate the online competition.

The Obama administration and its ideological allies—including local governing boards in places like San Francisco, Seattle, and Washington, D.C.—are working to make it almost impossible to start or expand a small business. Indeed, there’s a term for the roadblocks built by politicians and bureaucrats that stand in the way of business creation: “barriers to entry.”

In California, where many burdensome regulations kick in once a company has 50 employees, companies avoid the burden by limiting themselves to 49 employees. (The companies are called “49ers.”) Under Obamacare, with obligations that kick in once an employee becomes “full-time” at 30 hours a week, some workers will be limited to 29 hours. (They’re called “29ers.”)

These policies are backed by unions that claim to represent poor, downtrodden workers. Yet, as we reported in the November 2013 Labor Watch, the grassroots lobbying for Obamacare was coordinated by unions, including the AFL-CIO, the Communication Workers of America, the teachers’ unions (both the National Education Association and the American Federation of Teachers), the American Federation of State, County and Municipal Employees (AFSCME), the United Food and Commercial Workers (UFCW), the United Auto Workers (UAW), and the Service Employees International Union (SEIU), along with Working America, an AFL-CIO front group run by the aforementioned Karen Nussbaum.

Regarding the “minimum wage,” Elizabeth Stelle and John R. Bouder of the Commonwealth Foundation wrote:

So who gains from raising the minimum wage? Politicians and labor unions. Minimum wage increases tip the balance in favor of higher-skilled—and higherwage—unionized workers by raising the floor from which they negotiate compensation. Politicians, on the other hand, can act like they did something for the little guy while receiving union support—which is no small matter. In 2012 alone, government union SEIU Local 668 spent more than $200,000 of its members’ dues on political activity and lobbying.

Mike DeRosa, a small business franchisee who owns several Burger Kings, points out that every time the minimum wage goes up, he has to fire employees. Asked about protesters calling for a $15 minimum wage, he said, “Whenever I hear somebody say that, my first thought is to hand them the keys and tell them, ‘You go run it.’ If you start to raise the minimum wage that much, you’re going to have to cut your staff by a third and you probably won’t be hiring youngsters for any of this.”

Regarding the Obamacare regulation that classifies a 30-hour-a-week worker as full time, DeRosa said: “Like every outfit in the country, we have modified schedules, and there’s a lot of people that have lost those two to five hours a week to get under the 30-hour-a-week hurdle.”

Last October, the Wall Street Journal editorialized about the “minimum wage” campaign:

Amid a historically slow economic recovery, 1970s labor-participation rates and stagnant middleclass incomes, we understand that people are frustrated. Harder to understand is how so many of our media brethren have been persuaded that suddenly it’s the job of America’s burger joints to provide everyone with good pay and benefits. The result of their agitation will be more jobs for machines and fewer for the least skilled workers.

Dan Mishek, managing director of Vista Technologies, told the New York Times in 2011 about the “hidden costs” of hiring, beyond the expenses of salaries and benefits:

“I dread the process we have to go through when we want to bring somebody on,” he said. “When we have a job posting these days, we get a flurry of résumés from people who aren’t qualified at all: people with misspellings on their résumés, who have never been in the industry and want a career move from real estate or something. It’s a huge distraction to sort through all those.” Culling the résumés takes three days. Then he must make time to interview applicants, and spend $150 for each drug test. Once a worker is hired, that person must complete a federally mandated safety program, which Vista pays an outside contractor a flat fee of $7,000 annually to handle. Finally, Vista’s best employees spend several months training the new hire, reducing their own productivity. “You don’t have to train machines,” Mr. Mishek observes.

Will there be a point at which it just isn’t worth it to hire people to do the jobs that robots can do?

Since the beginning of civilization, the course of history is that human ingenuity creates new technology and new technology means more jobs. Has Big Government grown so big that the course of history is changing?

From “minimum wages” so high that unskilled workers are effectively banned from the workplace… to overtime rules (being expanded to people making more than $50,000 a year)… to Obamacare mandates (including a new IRS fine of $36,500 a year per person for helping employees pay their insurance premiums)… to rules limiting employers’ ability to use flexible, “justin-time” scheduling… to requirements, current or proposed, for paid leave or paid vacations or “free” childcare… to licensing requirements (five percent of the working population needed a license or the equivalent in the 1950s; today, it’s almost one-third)… to “nondiscrimination” rules so varied and complex that they expose employers to unfair, possibly crippling lawsuits… to classifying contractors as employees and franchise businesses (often familyowned) as co-employers with their giant franchisors like McDonald’s… federal, state, and local governments are engaged in a war on jobs.

Jobs for humans, at least.

*   *   *

Dr. Steven J. Allen (J.D., Ph.D.) is editor of Labor Watch. Alec Torres is a communications aide and speechwriter for House Majority Leader Kevin McCarthy. The opinions expressed are the authors’ alone. This article originally appeared in the July 2015 issue of “Labor Watch” and appears here with permission.

Unions Have Buyers Remorse Over Affordable Care Act

In last year’s blog, The Devil is in the Details: Buyer’s Remorse over Obamacare, Except for SEIU, Big Labor’s dissatisfaction with Obamacare was exposed. The exception being the SEIU, who was allowed to be the architect of the Affordable Care Act as repayment for its role in the President’s 2008 Election. There has been little written about labor union’s dissatisfaction with Obamacare. Big Labor, however, has not been vocal or shown visible support of Obamacare, especially during this time when the President has proclaimed the program’s success. This success has been attributed to 8 million people having signed up — despite the fact approximately 6 million people lost their private health care and that same 8 million is no where close to the 30 million uninsured Obamacare was supposed to cover.

It now appears many of the Big Labor bosses are experiencing buyer’s remorse! As Obamacare becomes a reality, many of the unions are demanding government subsidies to remain competitive at a time when membership is at a historical low. Only 11.3% of the total workforce and 6.3% of the private sector work force are unionized. Apparently most Big Labor bosses forgot the basic fundamental premise “Caveat Emptor” – meaning “let the buyer beware” – when supporting the President’s re-election campaign and backing his signature law, Obamacare (see Some Unions Grow Wary of Health Law They Backed). Evidently those astute business people bought in to Nancy Pelosi’s famous quote, “We must pass the bill so we can find out what’s in it!” Well, that is true for most Big Labor bosses, except for those at the SEIU.

20140605_Bego

Recently big labor bosses have received a new wake up call, as those collective bargaining contracts signed before Obamacare was put into law are now expiring, and they are facing a new hurdle of deciding whether to negotiate increased health care costs due to Obamacare mandates such as dependent children must be kept on their parents health insurance until age 26 as well as increased future costs for premium plans and other mandates as chronicled in Unions, employers square off over ObamaCare costs, or to continue to press for employee wage increases as they have traditionally done. Unions, including the SEIU, representing housekeepers, transit workers, flight attendants and more are waking up to the fact that their buddy in the White House steamrolled them, just as he has in his support of climate change and rejection of the keystone pipeline (as chronicled in Obama and NLRB Continue to Cost Union Jobs).

Ironically, the SEIU was the President’s major supporter for the Democratic Presidential Nomination in 2008. In fact, Andy Stern, then President of the SEIU, made it very clear that the SEIU would not support any candidate that would not make universal health care its primary objective during the first term of office. Then Presidential candidate, Senator Barack Obama, leapt on board, knowing full well he not only needed the financial support of the largest union in the country, but also its vaunted ground game! Although his campaign was supported by the other unions, all of which also supported universal health care, the devil was in the details. When the SEIU saw an opportunity, they took it.

The difference between the SEIU and the other major players now wary of Obamacare, unions such as the Teamsters, AFL-CIO, Unite Here, The Sheet Metal Workers International, International Union of Operating Engineers and others, is that the SEIU represents a majority of unionized workers in the U.S. health care industry! The SEIU not only represents nurses, orderlies and other medical personnel at healthcare facilities, but also other important and necessary support positions at these facilities such as janitors, security personnel and food service workers. Additionally, the SEIU represents home health care workers and health insurance employees in many states (see Is Obamacare Redistributing Wealth to Big Labor?).

Universal health care was envisioned as a veritable jackpot by the SEIU as the positions mentioned previously would expand exponentially with the projected 30 million new Americans on health care, and to date, are looking at a net increase of approximately 2 million. This would have served as a means to substantially increase the SEIU’s membership and subsequent revenues from dues in a relatively short period of time. What a let down for the SEIU! Of course that bonanza also meant increased political donations and ground game foot soldiers for the President and the Democratic Party.

Incidentally, it is common knowledge that very rarely were people turned down care at emergency facilities and that Medicaid was already available for those in need, obviously one of the major reasons Medicaid was insolvent. Don’t misunderstand; it is important that affordable health care be available to all Americans who wish to be covered. However, available coverage for all could have been achieved through allowing freedom of choice, and not a mandate. As for affordability, we could have accomplished this feat by removing barriers to the free market, utilizing ideas to eliminate restrictions on competition across state lines, developing legislation for tort reform and producing meaningful modifications to the immigration laws. Unfortunately, this common sense style approach does not work for the President, liberal democrats or unions like the SEIU, who all depend upon each other for survival.

Don’t be surprised if the President and his Administration don’t reverse field in an attempt to find a way to placate the currently disenfranchised big labor bosses before the 2014 Mid Term Elections, where maintaining a majority in the Senate is imperative to both the Administration and the big labor bosses. After all, it is vital that they keep the circular money pump in motion in order to stay in power and avoid extinction, no matter the expense to the American people, including rank and file union members.

*   *   *

David A. Bego is the President and CEO of EMS, an industry leader in the field of environmental workplace maintenance, employing nearly 5000 workers in thirty-three states. Bego is the author of “The Devil at My Doorstep,” as well as the just released sequel, “The Devil at Our Doorstep,” based on his experiences fighting back against one of the most powerful unions in existence today.

Obamacare Provides Unfair Advantage to Unions

Virtually unnoticed and ignored by the media is the fact that big labor benefited tremendously from the deal struck last week to avoid the “catastrophic” fiscal cliff. The President abandoned his own concept of fairness, which of course is nothing more than a hypocritical one way street, in order to reward his big labor buddies and to ease the pressure they have asserted. As discussed in Promises, Promises: Desperate Unions Grow Weary of Phony Distractions, the President clearly understood the displeasure of big labor with respect to Obamacare, and realized that he desperately needed to throw them a bone, and a big one at that!

In his own inimitable way, the President did so at the expense of  roughly 89% of the workers across this great country who are not members of unions. With this gift,  President Obama’s Ego Continues to Trample American Freedoms as he places the burden of the cost of Obamacare on the everyday working person and on small business. Additionally, it provides big labor with the money to continue to inflict Death by a Thousand Cuts and Corporate Campaign tactics on businesses. This is all part of the plan concocted by big labor and the Obama Administration to force unionize employees, as discussed in The Devil at Our Doorstep, and to continue to control political agendas with excessive political donations and massive ground games. It also provides big labor with an unfair advantage to attract potential members with misleading information during collective bargaining negotiations.

Surprise! Unions Get Their Way on Obamacare… In the deal the President struck with Republicansunions were made exempt from paying what is referred to as a “Transitional Reinsurance Fee,” a $63 tax assessed on nearly every health insurance plan enrollee for the next three years. The Affordable Care Act (“ACA”) established programs to provide payments to health insurance issuers that cover higher-risk populations and to more evenly spread the financial risk carried by issuers. These programs, which will be effective in 2014, include the Transitional Reinsurance Program.

The Transitional Reinsurance Program is intended to help stabilize premiums for coverage in the individual market during the first three years of the exchange operation (2014 through 2016) when individuals with higher-cost medical needs gain insurance coverage. This program will impose a fee on health insurance issuers and self-insured group health plans. ACA requires health insurance issuers and third-party administrators (TPA’s) of self-insured group health plans to pay fees to support the reinsurance program. The proposed regulations clarify that, for self-insured group health plans, the plan sponsor is liable for paying the reinsurance fees. In essence, unions and businesses both would have had to pay the fee under the program, but unions have now been given an exemption, providing them with huge cost savings.

The fee is based on the number of members actually enrolled in the medical plan, such membership consisting of employees, their spouses and dependent children covered by the medical plan. As an example, the SEIU, with approximately 2 million members, can expect to save BIG! Assuming that 60% of the membership is enrolled in a union-sponsored health plan, you would have 1.2 million members, plus their eligible family members, estimated at an additional 2.5 covered persons (per member), making the SEIU’s total membership eligible for the reinsurance tax roughly 3 million. Multiply that 3 million, by the $63 per member reinsurance fee, and the initial benefit seen by the SEIU is in the neighborhood of $189 million! Spread that over three years, assuming that the President extends it after next year’s midterm elections, and the total cost savings to the SEIU is $567 million!

It doesn’t seem fair that a President who preaches on the redistribution of wealth to the poor and middle class is, in fact, redistributing $567 million to this labor union — An organization which has historically been shown to utilize that money to force unionize hard-working Americans, and to press its socialistic political agenda at the expense of the middle class the President pretends to support. President Obama, who understands the basic tenant of Control Business, Control the Country, is fully behind the push to provide big labor with ultimate power over employees and businesses, after all it was big labor who enabled him to win a second term.

David A. Bego is the President and CEO of EMS, an industry leader in the field of environmental workplace maintenance, employing nearly 5000 workers in thirty-three states. Bego is the author of “The Devil at My Doorstep,” as well as the just released sequel, “The Devil at Our Doorstep,” based on his experiences fighting back against one of the most powerful unions in existence today.

Ideological Battles Divide Both of America's Major Political Parties

To our progressive friends, it seemed like a century of advocating for government-sponsored universal health care reached fruition when the Affordable Care Act became the law of the land. But triumph turned to tragedy when Progressivism’s signature accomplishment blew up on the launch pad. Not only did this make a shambles of our wounded president’s governing philosophy, it sent the most vulnerable Democratic officeholders scurrying for cover, leaving damage control to a few befuddled party elders.

Far-left true believers, putting their faith in hope over experience, are insisting that Obamacare’s woes were brought about by compromise, and are demanding what they wanted all along and expected to get when Obamacare ultimately went bankrupt: single-payer, nationalized health insurance. To lead the charge, they will recruit their newest champion, Elizabeth Warren, anti-banking demagogue and untiring defender of unsustainable middle class entitlements.

The populist professor recently made headlines with the extraordinary claim that Social Security is $2.7 trillion in surplus and could easily provide increased benefits. She will have no trouble doubling down on the hoary promises her fellow progressives so fervently promote. As for the math? Who cares! It’s greedy insurance companies, Republican sabotage, and the wicked one percent who are really to blame for the Obamacare fiasco. Keep your focus on the enemies of the people and all will be well.

Old-bull Democrats, determined to recreate the glory days of the 1990s, will rally around their presumptive presidential nominee, Hillary Clinton. Hillary has been doing her level best to stay out of the line of fire as the wheels come off her former rival’s presidency, leaving it to Bill to prick Obama’s balloon whenever the opportunity arises. Watch these two old hands try to triangulate their party back to the center, perhaps even reaching across the aisle to old-bull Republicans as Clinton Inc. tells an angry and frightened electorate that things will surely get better if adults are put back in charge.

Old-bull Republicans, fearing a Tea Party insurgency even more than the Clinton campaign steamroller, will seek to strike a grand bargain on … well, everything. Remember the good old days when Tip and the Gipper could deliver both guns and butter while maintaining a respectful professional rivalry. So what if this means spending the country into oblivion? Politics is the art of the possible, which makes winning elections more important than defending principles. And wouldn’t life be better if Washington insiders could get back to scratching each other’s backs without having to worry about primary challenges?

And the Tea Party? These Constitution-thumping reactionaries will remain the wild card, biding their time, picking off the weakest of the old bulls, and preparing for the moment when America is finally forced to make hard choices. That moment will come when our QE besotted fiat currency system begins to totter, threatening to take the too-big-to-fail banks down with it. Will they convince America to hit the reset button—scrapping the bankrupt entitlements and crony capitalist policies that are sucking the life out of our economy? Or will they be driven back to their survival cabins to impotently watch the country sink into permanent Eurosclerosis?

Oddly enough, one solution to the Obamacare mess that could produce a stable political outcome is to give both extremes what they want—a government funded, owned, and operated national healthcare service freely accessible by the needy and a deregulated, privately insured health care delivery market where people of means can avoid the poor quality of care a public service will surely deliver. How to unwind the disastrous attempt to glue public and private systems together in an effort to disguise the underlying income redistribution will be the story of the next three years. And figuring out how to honestly pay for a new public healthcare service on top of Social Security and Medicare will force a conversation about means-testing that may eventually get the middle class off the dole, future generations off the hook, and Ponzi entitlement schemes out of bankruptcy.

About the Author:  In the 35 years since Bill Frezza graduated from MIT with degrees in electrical engineering and biology he has been a scientist, an engineer, a product manager, a salesman, a consultant, an entrepreneur, an author, a technology evangelist, and a venture capitalist. His early career on high-tech’s bleeding edge included the development of first generation electronic newspapers, home banking, home shopping, cable modems, multi-user videogames, wireless LANs, and wireless email, all of which became a success – for someone else a decade later. His 15 years as a venture capital investor working with early stage telecom, semiconductor, and biotech startups taught him humbleness, risk aversion, and the ability to identify ten fatal flaws out of five in any startup business plan. Frezza is a frequent guest on CNBC, FOX, and CBN News where he is challenged to reduce complex economic and policy issues into thirty second sound bites. More writing by Frezza can be found at BillFrezza.com. This article originally appeared in Forbes and appears here with permission from the author.

Unions and Obamacare, Part 1: Why Unions Want Exemptions

Summary: Unions are largely responsible for the passage of Obamacare, but once the program was passed, they fought to get themselves excluded from it because of the costs it would impose on them. They have already succeeded in receiving hundreds of waivers, and now they’re proposing even more extreme waivers that would cost taxpayers billions.

Leaders of labor unions provided the political muscle that got Obamacare through Congress. They furnished the troops at the grassroots level and in the nation’s capital to block efforts to repeal or reform the program. They declared that Obamacare is the law of the land and must not be altered or abridged.

Today some of those same union officials say that Obamacare is a disaster that will harm working people in general and union members in particular. Now—surprise!—they want Obamacare changed in ways to benefit their unions.

Obamacare-Oops-demonstrators

President’s promise ‘simply not true
Through the 2010 and 2012 elections, unions kept their concerns under wraps with regard to the Patient Protection and Affordable Care Act (often called the ACA or Obamacare). But in September, at the quadrennial convention of the AFL-CIO, the nation’s largest union federation, delegates were speaking openly of the need to reform or repeal the program.

Not even AFL-CIO President, Richard Trumka, one of the President’s closest allies, could quiet his members. The best he could do was to prevent passage of a resolution calling for Obamacare’s outright repeal. The convention called for reforms instead.

One union, the International Longshore and Warehouse Union (ILWU), made its position especially clear. The ILWU withdrew its membership from the AFL-CIO just weeks before the convention and accused the labor federation of caving in to administration pressure regarding Obamacare’s tax on high-cost union health plans. (ILWU also cited the federation’s position on immigration reform and a local labor dispute.)

Last April, the United Union of Roofers, Waterproofers and Allied Workers International (the Roofers’ Union) called for the “repeal or complete reform” of Obamacare, stating that the healthcare program puts union workers at a competitive disadvantage and threatens their current health plans. A month later, Joseph Hansen, the president of the United Food and Commercial Workers (UFCW), declared in an op-ed in the Washington newspaper The Hillthat the President’s key promise about Obamacare—“if you like your [current healthcare] plan, you can keep it”—is “simply not true for millions of workers.”

The President made that promise, by the way, at the previous AFL-CIO quadrennial convention, in 2009.

Unions in jeopardy
Union officials aren’t just concerned that their members will have to pay higher premiums under Obamacare or that their health plans won’t be able to compete. They believe Obamacare threatens the very existence of their unions.

At the AFL-CIO’s quadrennial convention in September, Joseph Nigro, president of the Sheet Metal, Air, Rail and Transportation Union had some frank words on what Obamacare may mean for the AFL-CIO in particular: “You allow an ACA bill to go through like this, I guarantee you by your next convention four years from now, you won’t meet a quarter of this room. We won’t be here.”

“If unions’ role in negotiating health coverage is taken over by the government, unions lose a big chunk of their utility,” wrote Forbes health policy expert Avik Roy. Union health plans are fundamental to the success or failure of unions. Roy quoted Paul Starr, author of The Social Transformation of American Medicine, who noted that unions “derive some advantage of good will, power, or profit from serving as a financial intermediary in health care.”

Many unions make health insurance available to their membership through so-called Multi-employer Health Plans (MHPs), which were authorized in the 1947 Taft-Hartley Act and are sometimes referred to as Taft-Hartley plans. Rather than covering all workers within a given company, such plans typically cover workers in different companies, often workers in the same or related industries. By some reports, such plans cover 20 million Americans. Of the 1.3 million members in the UFCW, The Hill reports that 500,000 are covered by MHPs.

These plans must be negotiated as part of a collective bargaining agreement, and each is run by a board of trustees made up of both employer and union representatives. Such a plan has significant advantages. It allows employers, in lieu of salary, to pay for employees’ health insurance with pre-tax dollars. If the plan is self-insured, it cannot be regulated by state insurance bureaucracies. In addition, MHPs make healthcare insurance portable for their union members. Union workers can work for multiple employers within a plan without having to change their insurance each time they change jobs. According to the International Foundation of Employee Benefit Plans, MHPs are common in the “construction, arts and entertainment, retail stores, transportation, service (including lodging and health care workers), mining and communication” industries.

Union officials list several reasons why Obamacare now threatens the existence of these plans.

►First, they point out that they have to compete against small companies (50 or fewer employees) that aren’t subject to Obamacare’s employer mandate and thus aren’t required to purchase insurance for their employees. At the same time, unions are worried that employers with 50 or more employees may prefer to pay Obamacare’s fines rather than bargain for union health plans. “The concern,” says liberal health law scholar Timothy Jost, “is that employers will be less willing to collectively bargain with unions through Taft-Hartley if the employers believe their employees would be as well off or perhaps better off in the exchanges with the premium tax credits.”
Unions are now admitting that Obamacare’s employer mandate will cause people to lose their jobs. As The Hill reported:

. . . ACA includes a fine for failing to cover full-time workers but includes no such penalty for part-timers (defined as working less than 30 hours a week). As a result, many employers are either reducing hours below 30 or discontinuing part-time health coverage altogether. This is a cut in pay and benefits workers simply cannot afford. For example, a worker making $10 an hour that has his or her schedule cut by six hours a week would lose $3,100 a year in income. With millions of workers impacted, this would have a devastating effect on our economy.

You would expect, then, that unions would have greeted President Obama’s July decision to delay the implementation of the employer mandate with enthusiasm. They did not. On July 3, the AFL-CIO’s Trumka called Obama’s decision to delay the employer mandate “troubling.”

Perhaps unions are more concerned that the Obama Administration is making concessions to businesses and not to unions. The Wall Street Journal reported that James Hoffa Jr. of the Teamsters called the President’s decision “a huge accommodation for the employer community,” while union requests for special favors have been “disregarded and met with a stone wall by the White House.” In a statement the UFCW called it “a significant hand-out to employers,” but added that the decision encouraged the union to continue seeking changes from the Obama Administration, since it “appears open to changing the rules.”

►Second, Obamacare taxes high-cost healthcare plans, so-called “Cadillac” plans, by setting a limit on cost. Plans that cost more than the limit are taxed at 40% of the amount beyond the limit. Cadillac health plans often have small or no co-pays or deductibles.

Unions often enjoy Cadillac plans for reasons that go back, like so many problems connected with healthcare, to World War II. Wartime federal wage-and-price controls forced employers to give “raises” to their employees in the form of benefits like healthcare instead of in cash. Unions were happy because they could claim they obtained those benefits for their members. The government could have taxed the value of healthcare coverage as income, but instead it let employers purchase health insurance for their employees tax-free. This began a system that greatly distorted the health insurance market by linking insurance coverage to a person’s job—something that became a major problem as society changed and people stopped spending their entire careers with the same employer.

Today, because of this tax benefit for employer-provided health insurance, many unions have negotiated generous health benefits instead of higher wages. Naturally, unions dislike the idea of taxing any of those benefits. As first drafted, the Cadillac tax would have gone into effect this year, but unions successfully lobbied for a five-year delay. Instead of starting this past January, the tax won’t start until 2018.

Originally, the tax would have charged 40 percent of a health plan’s cost that went over $23,000 a year ($8,500 for individuals). Health Affairs calculated that those thresholds would hit one in five large employer health plans. Now, in another change, the thresholds have been raised to $10,200 a year for individuals or $27,500 a year for families.

►Third, unions complain that their employees don’t have access to the health insurance subsidies offered in the health insurance exchanges created under Obamacare. Exchanges are online insurance marketplaces where private health insurers can sell and individuals can purchase health insurance. Obamacare requires most individuals to have health insurance in the form of a plan meeting strict requirements set by the federal bureaucracy (including many things that consumers don’t want, such as maternity coverage for a 60-year-old woman or drug-addiction counseling for non-addicts).

For people who have incomes between 100% and 400% of the federal poverty line (an arbitrary line set by bureaucrats) and whose employers are not providing affordable health insurance (“affordable” as defined by bureaucrats), access to the subsidies is limited. These individuals can only take advantage of the federal health insurance subsidies if they purchase insurance through a government health insurance exchange, rather than, say, through a union.

►Finally, unions are particularly annoyed that Obamacare requires their healthcare plans to pay a tax of $63 per employee to pay for their share of the new federal reinsurance program. That reinsurance program is one of three programs in Obamacare that attempt to keep insurers from seeking out healthy individuals to the exclusion of others. These three programs (risk adjustment, risk corridors, and reinsurance) are sometimes referred to as the Three Rs.

The Three Rs are complicated, but here’s a brief explanation: Because Obamacare requires insurers to take all comers, regardless of people’s current health conditions, some insurers could end up with a high percentage of customers with serious health risks, which has the potential to put insurance companies out of business. To avoid this, Obamacare uses the Three Rs to transfer money from health plans that have fewer high-risk individuals to plans that are spending more because they have more high-risk individuals.

Of course, someone has to pay for running these transfer programs, hence the reinsurance program to shift the risk. In 2014, HHS will raise $12 billion dollars for the reinsurance program alone by taxing all health plans $63 dollars per enrolled person per year.

Waiverland
In the year after it passed, Obamacare began to ban health plans from placing lifetime and annual limits on benefits. The problem was that many of the most affordable plans, called “mini-med” plans, had benefit limits well below the new mandates. Employers and insurers were faced with either raising the plans’ benefit limits—thus making them unaffordable—or dropping the plans altogether because they violate the new law. As a result, Obamacare was poised to take affordable insurance away from millions of employees, including union members.

In an effort to save these plans, the Obama Administration created a waiver program just two months prior to the November 2010 congressional elections. Plans that received a waiver were absolved for one year from having to meet Obamacare’s new lifetime and annual limit mandates.

Soon after these waivers became available, the Wall Street Journal reported that McDonald’s was planning to apply for waivers for its employees. Later it was discovered that many unions were doing the same. The Obama Administration began granting waivers to non-union and union plans alike. Many of the unions now calling for the repeal or reform of Obamacare received these waivers. For instance, both the Roofers’ Union and the UFCW received multiple waivers.

A total of nearly 1,000 health plans have received waivers to date, and those plans cover 3.2 million mini-med enrollees, including 1.5 million union enrollees, according to federal statistics. The Administration issued so many waivers that Obamacare opponents joked about Waiverland, a vast swath of the American landscape metaphorically occupied by waivered plans.

In late 2010 and early 2011, the tally of waivers announced each month by the media generated recurring, unwanted media attention. Administration officials realized that granting yearly waivers on a monthly basis was bad from a public relations standpoint. So in 2011 the Administration required officials who wished to renew their plans’ waivers to request a single waiver that would last past the 2012 presidential election and through the end of 2013.

Come January 1, 2014, these waivers will expire. When they do, affordable mini-med plans will no longer be an option for American workers. Employers and unions will be forced to provide more expensive insurance or high-deductible alternatives to their lower-wage employees and members.

Yet another waiver
In January, the Wall Street Journal reported that unions had been quietly lobbying the Obama Administration to request a different sort of waiver, one that would let their members receive Obamacare’s federal health insurance subsidies. It’s hard to calculate what the unions’ request would cost American taxpayers, but here’s one estimation from Avik Roy of Forbes:

If, suddenly, the 20 million people on Taft-Hartley plans were eligible for subsidies, Obamacare’s costs would skyrocket. If half of those Taft-Hartley enrollees gained $5,000 per year in tax credits along with their tax-free health benefits, we’re talking $50 billion a year in additional insurance subsidies for those individuals. That’s more than half a trillion dollars over ten years, accounting for health inflation.

After news broke that unions were seeking these waivers, House Republicans pressured the Administration to admit that such waivers would be simply illegal. The Congressional Research Service found no legal way to give Obamacare healthcare subsidies to union members under a Taft-Hartley plan.

Undeterred, UFCW officials made it known publicly in May that they were seeking waivers. In July, the administration announced its decision to delay the employer mandate (but not the individual mandate), infuriating the unions. Teamsters President James Hoffa Jr. wrote House Minority Leader Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.) on behalf of the Teamsters, UNITE-HERE, and the UFCW. “Time is running out: Congress wrote this law; we voted for you. We have a problem; you need to fix it. The unintended consequences of the ACA are severe.” Hoffa and the others declared that “perverse incentives” are “already creating nightmare scenarios.”

Republicans took notice of the controversy over whether to grant unions a waiver. In a joint statement, Sen. Orrin Hatch of Utah and House Ways and Means Chairman Dave Camp of Michigan responded:

There has been far too much special treatment for politically favored friends of Obamacare. When it comes to employers and taxpayers picking up the health care tab for labor unions—it appears that is a price that is simply too high. Perhaps even this administration recognizes that there are limits to them stretching the law to reward their friends.

But opponents of Obamacare shouldn’t fool themselves. While some unions are attacking the program, hoping for special fixes that benefit their unions, others such as the SEIU remain wholly in support. And even strong critics among union leaders are likely to stay within the fold. When Sen. Ted Cruz (R-Texas) cited union complaints, Hoffa responded that “we disagree wholeheartedly with the efforts of extreme right-wing Republicans to gut the ACA.”

“Any suggestion otherwise,” Hoffa declared, “is simply political posturing.”

John Vinci is a Virginia attorney, health care policy expert, and former staff attorney for Americans for Limited Government. This post is the first of a three-part series originally published by Labor Watch, a project of the Capitol Research Center, and is published here with permission.

Union Files Lawsuit Exploiting ObamaCare in California for Organizing Purposes

Add ObamaCare to the list of laws that California unions are exploiting for “corporate campaign” strategies to coerce labor agreements or exert pressure during labor disputes.

On September 4, 2013, the National Union of Healthcare Workers sued the California Health Benefit Exchange to boot Kaiser Permanente from the list of 12 health plans approved for participation in the exchange. Unions are abusing the California Patient Protection and Affordable Care Act, which implements the federal Patient Protection and Affordable Care Act (ObamaCare) in California and sets standards for health plans to qualify for participation in the program.

A copy of the lawsuit – National Union of Healthcare Workers v. California Health Benefit Exchange – is available on the National Union of Healthcare Workers web site. Here are excerpts from the September 9, 2013 announcement from the National Union of Healthcare Workers claiming their motivation for the lawsuit:

NUHW Sues California’s Healthcare Exchange to Protect Patients

Earlier this year, Kaiser Permanente was cited for numerous serious deficiencies by the California Department of Managed Healthcare (DMHC) in areas critical to providing effective patient care in its mental health services, including its failure to ensure clinically appropriate care to Kaiser enrollees.  In June, the DMHC took the unprecedented step of fining Kaiser $4 million, the second highest fine in the agency’s history.

Despite notifying the Exchange twice in writing regarding Kaiser’s serious deficiencies, the Exchange never replied to our concerns, and, we believe, in violation of federal and state law and its own regulations, contracted with Kaiser as a plan to be offered when Obamacare is soon implemented.

Our goal is simple: before Kaiser is allowed to enroll thousands more patients through Obamacare, it should demonstrate to the DMHC that it can take care of the millions of Kaiser patients who are already paying Kaiser for their care…I want Kaiser to provide the highest quality care possible, rather than focusing on how to increase Kaiser profits at the expense of patient care.

Business publications were not fooled. In reporting the lawsuit, the San Francisco Business Times observed that the National Union of Healthcare Workers “last April lost a ‘do-over’ election to represent 45,000 workers at Kaiser Permanente.”  A September 5, 2013 article in the Sacramento Business Journal about the lawsuit (Union Seeks to Block Kaiser from Health Benefit Exchange) noted that the National Union of Healthcare Workers is in “contentious contract negotiations with Kaiser.” It quoted a Kaiser representative:

The union continues to make unfounded allegations as part of their protracted labor negotiations with Kaiser Permanente, and this behavior does nothing to further the negotiations that should be taking place at the bargaining table.

Adding to the evidence that the lawsuit was not really about standards of mental health services, The Hill newspaper in Washington, D.C. reported on September 9 (in the article “AFL-CIO Convention Avoids Healthcare Union’s Protests”) that “the bitter struggle” between the union and Kaiser manifested itself at the AFL-CIO annual convention:

In a Sept. 6 letter sent to AFL-CIO President Richard Trumka, obtained by The Hill, NUHW leaders said they were “alarmed to learn that the AFL-CIO will be featuring Kaiser Permanente and its trademarked ‘Instant Recess’ during the AFL-CIO’s upcoming convention in Los Angeles, in effect holding Kaiser up as a model employer.”

“Multiple affiliates of the AFL-CIO are currently in the middle of an epic struggle at Kaiser to defend standards that workers have fought decades to establish. We again request that you and the rest of the AFL-CIO stand with us and not with this multi-billion dollar HMO,” said NUHW officials in the letter…

“This is the same employer that has been fined by the state for $4 million for patient care violations. … They are also at the bargaining table with us trying to demand the elimination of defined benefit pension plans and health plans for retirees,” Borsos said. “Hardly the kind of employer that should be honored by labor.”

It shouldn’t be a surprise that a California union has recognized the state implementation of ObamaCare as a new law ripe for exploitation. It’s part of union organizing culture in the state. A prominent law firm for labor unions has produced multiple editions of a guidebook entitled Using The California Labor Laws Offensively: Organizing Through Enforcement Of State Employment Laws.

This guidebook only limits itself to the California Labor Code, which it describes as “a potent weapon of worker advocacy.” It acknowledges that union-backed “amendments to the Labor Code during 2000-2004 substantially increased the protections California law affords workers.” Those were the years when bills signed by Governor Gray Davis became law. Governor Jerry Brown has been signing and is expected to sign another series of union-backed “protections.”

Several articles in www.UnionWatch.org have reported how unions submit extensive objections or file lawsuits under the California Environmental Quality Act (CEQA). (See the list of those CEQA articles.) By intervening in the licensing process at the California Energy Commission, unions hold up large thermal power plants with massive data requests and other antics permitted under the Warren-Alquist Act. Sometimes unions supplement their environmental actions with other actions against proposed development by exploiting local zoning laws.

Also reported in www.UnionWatch.org was the participation of unions in a lawsuit based on the California Voting Rights Act of 2001 and the potential for more mischief using this law. See “Unions Will Control Mid-Sized Cities with California Voting Rights Act.”


Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.

Obamacare’s Hidden Agenda – Unionized Medicine

It has become obvious that the SEIU has a major interest in the healthcare legislation. Although the SEIU is a major player in the public union market, it is also one of the largest unions in the private sector. Furthermore, the largest share of its private sector members are healthcare employees: nurses, hospital staff, janitors, and home healthcare workers. Is it any wonder then that President Obama’s primary piece of legislation was Obamacare? As Andy Stern, SEIU’s President at the time, was reportedly in the White House at least 22 times in the first year of Obama’s Presidency, while the main priority was passing Obamacare.

Andy Stern’s 2008 Presidential Election demand of potential presidential candidates to create universal healthcare was discussed at length! The paragraph below, from Chapter 5 in The Devil at Our Doorstep, provides the definitive basis for Obama’s healthcare initiative priority.

Although Greenhouse suggested that Stern had “a reputation as divisive” because he “orchestrated a split with the AFL-CIO in 2005 that some analysts say has set back labor’s efforts to keep a strong voice in politics,” the reporter believed Stern’s “focus on politics” caused politicians to “court the SEIU endorsement aggressively.” An indication of Stern’s power, Greenhouse wrote, was the Democratic candidates whipping out plans for universal health care immediately after the union leader swore that the union would never endorse a candidate who didn’t have one, in addition to his demand that the candidates spend a “day in the shoes of a worker.” Like clockwork, Greenhouse reported, Senators John Edwards, Barak Obama, and Hillary Clinton did so—no wonder, as SEIU had raised $40 million for its political action committee in 2006 and had earmarked another $30 million for use in 2008. The money, the article suggested, was not only to be used in the presidential election but in state and local elections as well. “They are seen as huge players,” Edwards’ campaign manager stated. He was right, as Stern had said more than 100,000 volunteers could hit the streets in support of the candidates of choice. With this in mind, in a veiled or perhaps not-so-veiled threat, Greenhouse quoted Stern as saying, “We appreciate accountability. We just can’t elect people and walk away and think it’s going to work out.”

Flashback to this past week and the decision by the Supreme Court to uphold the constitutionality of the Affordable Care Act, not on the basis of Congressional power under the Commerce Clause, but rather under Congress’ taxing authority. It is possible that the Chief Justice knows something others were not aware of that may be a political catalyst to defeat Obama in November 2012? There is a little known or discussed provision of the Affordable Care Act may provide the smoking gun to prove fraud and coercion by the president and the SEIU.

In January of 2014 healthcare insurers will be required to pay a fee (tax) to finance Obamacare. This fee will amount to approximately $8 Billion, which is roughly 75% of the profits of all healthcare insurers combined (see p.4 of Memo regarding new health insurer annual fee (00129900)). Where are healthcare insurers going to find the funds to cover these fees? President Obama believes it is purely the redistribution of wealth, and that health care insurers will have to settle for less pay for their executives and less profit! The truth is the healthcare insurers will pass the huge fee on to its customers in the form of astronomical premium increases, which even the nonpartisan Congressional Budget Office has projected. So, instead of redistributing the wealth, the President has simply placed an inexplicable burden on the lower and middle class Americans that he claims to protect.

In order to understand the traitorous acts foisted upon the American people by this president one need only consider his past associations and commitment to the socialist agenda (Communism at the Highest Levels?, Obama and the SEIU Sittin in a Tree and Be Afraid America. Be Very Afraid!). Keeping this agenda in mind it comes as no surprise to find a provision that favors certain healthcare insurers buried deep within the Affordable Care Act Bill, under the guise of charity! Healthcare insurers set up as 501(c)(3) organizations are allowed to reduce their healthcare fees by reducing all annual premiums collected by 50%, before calculating their fee due to the government, beginning in January 2014 (see page 6 of PPACA Imposes New Annual Fee on Certain Health Insurers). This is not because the President favors one big business over another; it is simply a form of pay back to his Big Labor buddies.

In SEIU Exposed, the SEIU’s forced unionism of Kaiser healthcare employees was brought to light. The SEIU has reportedly some 44,000 members who work for Kaiser. Additionally it has been reported by SEIU members that Kaiser negotiates sweet heart contracts that benefit Kaiser and the SEIU, not the employees. Here we have President Obama, the SEIU, Kaiser and Kaiser’s employees, who are SEIU members. Kaiser, a 501(c)(3), will benefit from the reduction in fees, and the SEIU would likewise benefit, due to the stable paying membership and sweetheart deals with Kaiser, and a membership that is likely to grow with Kaiser’s economic advantage over its competitors. The redistribution of wealth from the American people, passing through Kaiser, to the SEIU (an organization dedicated to reshaping America into a socialist state), which was part of the President’s underlying agenda all along.

As we celebrate our freedoms as Americans this Independence Day, July 4, 2012, we must remember the famous quote by President Gerald Ford, “A government big enough to give you everything you want is a government big enough to take from you everything you have.”

David A. Bego is the President and CEO of EMS, an industry leader in the field of environmental workplace maintenance, employing nearly 5000 workers in thirty-three states. Bego is the author of “The Devil at My Doorstep,” as well as the just released sequel, “The Devil at Our Doorstep,” based on his experiences fighting back against one of the most powerful unions in existence today.