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The Myth of the Underpaid Teacher Lives On

 Yet another “study” showing how poorly teachers are paid has surfaced.

Well, it’s a new school year and there is much tumult in the world of public education. Common Core battles, testing opt-outs, and litigation about school choice and teacher work rules dot the landscape. But with all the uncertainty, it’s comforting to know that there is one thing we can count on in late summer: a new bogus study showing that public school teachers are woefully underpaid.

This year’s entry doesn’t disappoint. “The teacher pay gap is wider than ever,” subtitled “Teachers’ pay continues to fall further behind pay of comparable workers” is a 29-page report released by the Economic Policy Institute, whose mission is “to inform and empower individuals to seek solutions that ensure broadly shared prosperity and opportunity.” If this were an honest statement, the word “opportunity” would be followed by “as long as the solutions are in sync with the union party line.” You see, EPI is nothing more than a union front group whose board includes a rogue’s gallery of Big Labor honchos: AFL-CIO’s Richard Trumka, SEIU’s Mary Kay Henry, American Federation of Teachers’ Randi Weingarten, National Education Association’s Lily Eskelsen-García, et al.

And not only do the teachers unions have strong board representation, they donate heavily to EPI. According to the latest labor department reports, 2015 saw NEA present a $250,000 gift to EPI, only to be outdone by the smaller AFT, which kicked in $300,000 to the organization.

The study itself is just what you would expect: loads of numbers that are supposed to make people think that teachers are essentially little more than impoverished serfs, valiantly slaving away for pennies. Among the report’s claims:

  • Teachers’ weekly wages are 23 percent lower than those of other college graduates.
  • For public-sector teachers, the relative wage gap (regression adjusted for education, experience, and other factors) has grown substantially since the mid-1990s: It was ‑8 percent in 1994 and grew to a record ‑17.0 percent in 2015.
  • Regardless of experience, teacher wage gap expanded for female teachers.

Needless to say, the unions solemnly wrote about the report as if it were “news,” with NEA blogger Tim Walker suggesting that all teachers get a raise. And as day follows night, the media jumped on board. The relentless and reliably-unreliable Washington Post education blogger Valerie Strauss dutifully posted the whole report with the title, “Think teachers aren’t paid enough? It’s worse than you think.The Fiscal Times sounded alarm bells with “Teacher Pay Hits Record—but Not a Good One.”

But like most similar studies, EPI’s doesn’t do an apples-to-apples comparison. It omits a few things like the simple fact that teachers work 6-7 hour days and 180 days a year, whereas the study’s “comparable workers” put in an 8-9 hour a day and work 240-250 days a year. (Yes, yes, I know teachers take work home, but so do many other professionals who don’t get summers off.) Also, unlike private-sector workers, most teachers have extensive health benefits for which they typically pay very little, if anything. Furthermore, as University of Missouri professor Michael Podgursky points out, the pension benefits for teachers, which they only pay a tiny portion of – the taxpayer getting hosed for the rest – add greatly to a teacher’s total compensation. (The EPI report actually alludes to this, but buries it on page 14; more on this in a bit.)

Perhaps the most honest and well-researched study done on teacher pay, including the time-on-the-job and benefits factors, was done in 2011 by Andrew Biggs, a resident scholar at the American Enterprise Institute, and Jason Richwine, a senior policy analyst at the Heritage Foundation. In their report, they destroy the teacher union-perpetuated myth of the under-compensated teacher. Their study, in fact, found that teachers are actually paid more than private-sector workers.

They make the case that workers who switch from non-teaching jobs to teaching jobs “receive a wage increase of roughly 9 percent, while teachers who change to non-teaching jobs see their wages decrease by approximately 3 percent.” Additionally, when retiree health coverage for teachers is included, “it is worth roughly an additional 10 percent of wages, whereas private-sector employees often do not receive this benefit at all.”

Biggs and Richwine conclude that after taking everything into account, “teachers actually receive salary and benefits that are 52 percent greater than fair market levels, equivalent to more than $120 billion overcharged to taxpayers each year.”

Back to the EPI study. On page 14 of the report, it acknowledges,

Our analysis of relative teacher pay thus far has focused entirely on the wages of teachers compared to other workers. Yet benefits such as pensions and health insurance are an increasingly important component of the total compensation package. Teachers do enjoy more attractive benefit packages than other professionals; thus, our measure of relative teacher wages overstates the teacher disadvantage in total compensation. The different natures of wages and benefits should be kept in mind, as it is only wages that may be spent or saved. Thus, the growing wage penalty is always of importance.

So in essence, the authors of the study come clean in this paragraph and admit that their stress on wages alone overstates the real disparity in pay. The “spent or saved” comment is especially ridiculous. Pension earnings are indeed “saved” for the future. Whatever. It’s obvious that this report is meant to tug at the heartstrings, build righteous indignation and provide local teachers unions with ammo for collective bargaining battles with school boards.

For an honest assessment of teacher pay, stick with the Biggs-Richwine study. But if one is looking for skewed and incomplete data as fodder for a splashy headline or an emotional plea, the dishonest and self-serving union-sponsored EPI report fills the bill beautifully.

Larry Sand, a former classroom teacher, is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers and the general public with reliable and balanced information about professional affiliations and positions on educational issues. The views presented here are strictly his own.

National Union Leadership Smear Teachers in Supreme Court Case

America’s most powerful union bosses are running a national smear campaign against 10 workers who fund their paychecks.

California teacher Rebecca Friedrichs and nine of her fellow educators are being vilified by executives of the country’s largest labor unions — including the National Education Association and American Federation of Teachers.

Using money taken from workers’ paychecks, union bosses are portraying Friedrichs and her peers as allies of evil corporations and white supremacists.

AFT president Randi Weingarten has called Friedrichs part of an “assault on working people.” NEA president Lily Eskelsen Garcia has accused Friedrichs of “attacking working people.”

How did Friedrichs turn these self-styled champions of teachers against her? She is challenging their ability to take mandatory fees from non-members, in a case that has made its way before the U.S. Supreme Court.

“The case was brought by billionaires and wealthy CEOs like the Koch brothers who want to rewrite the rules to only benefit them,” said AFL-CIO president Richard Trumka.

America Works Together, a coalition run by NEA, AFT, AFL-CIO, Service Employees International Union and the American Federation of State, County and Municipal Employees, is trying to convince union members that Friedrichs will ruin their lives.

“Friedrichs v. California Teachers Association is being pushed by special interests and corporate CEOs in an attempt to damage protections for hard working families and our communities,” the coalition warns.

Last week, the unions flooded their social media channels with a public relations blitz, calling the Friedrichs case an attempt by libertarian billionaires Charles and David Koch to destroy unions.

 

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America Works Together is gathering signatures for an AFT petition demonizing the Center for Individual Rights, a nonprofit giving Friedrichs legal counsel. As of Monday, fewer than 18,000 people had signed the online petition.

Relying on research from a City University of New York union, America Works Together asserts CIR “has been funded by the Koch Brothers, other right-wing one-percenters, and even white supremacists.”

CIR president Terry Pell told Watchdog.org the unions are “complaining about imagined contributions to CIR” to distract from their own massive paychecks. America Works Together failed to respond to a request for comment.

Last year AFT paid Weingarten $557,875, AFSCME paid president Lee Saunders $348,745 and AFL-CIO paid Trumka $322,131. Eskelsen Garcia was paid $345,728 as NEA vice president — outgoing NEA president Dennis Van Roekel was paid $541,632.

“Neither of the Koch Brothers or their foundations supports CIR or are supporting Friedrichs v. CTA,” Pell said.

“This is a fight on behalf of public employees like Rebecca Friedrichs and millions of other everyday public employees who are forced to fund organizations that no longer represent their interests,” he explained.

Pell was not surprised to see unions portraying the Friedrichs case as “a corporate attack on workers” in interviews, social media posts, graphics and a propaganda film titled “The Right to Unite.”

“Rebecca Friedrichs is asking the Supreme Court to do away with state laws that force individuals to pay thousands of dollars a year to a union,” Pell said. “The unions have enjoyed millions of dollars in coerced dues from unwilling employees for decades.”

F. Vincent Vernuccio, labor policy director at the free-market Mackinac Institute, told Watchdog.org the union smear campaign against Friedrichs shows labor bosses are terrified about the possibility of losing forced dues.

“It’s funny that the unions are saying Friedrichs is an attack on working people when it’s really about taking away the unions’ ability to get a worker fired,” Vernuccio said. “It is a protection of workers, not an attack on workers.”

If the Supreme Court sides with the plaintiffs, Vernuccio said, the effective result would be right-to-work for public employees in all 50 states. Twenty-five states already have right-to-work laws.

“Right-to-work simply means a union can’t get a worker fired for not paying them,” he explained. “It doesn’t affect collective bargaining in any other way — and it doesn’t affect a worker’s ability to form a union or join a union in any way.”

Calling the union PR campaign against Friedrichs “strange,” Vernuccio predicted “the justices will likely uphold the Constitution and workers’ First Amendment right to not support politics they disagree with.”

A decision in Friedrichs vs. California Teachers Association is expected in the spring.

About the Author:  Jason Hart is an Ohio-based labor reporter for Watchdog.org. He previously worked as a communications director for Media Trackers Ohio. Jason had several years of experience as a web developer and analyst before starting a successful career in journalism. Jason can be reached on Twitter at @jasonahart and by email at jhart@watchdog.org. This article originally appeared in Watchdog.org and is republished here with permission.

Planned Persecution

NEA claims to be for religious freedom, but Catholics and other right-to-lifers need not apply.

“The National Education Association believes that freedom of religion is a fundamental human right. The Association also believes that choice of religion is an intensely personal decision.” These high-minded words are from NEA Resolution I-33, which was passed at its recent convention. Nothing really new here; the NEA passed other similar resolutions this year, and in fact it does so every year. There is also nothing new about the union’s raving hypocrisy on the issue.

As we learned recently via several secretly recorded videos, Planned Parenthood (PP) not only performs an ungodly number of abortions every year, but is in the dead baby body parts sales biz too. One would think that the unions, which have donated millions to PP over the years, might have shown some reticence. But they have doubled down instead. Over at AFL-CIO, Boss Trumka asserted that calls to defund PP “based on doctored undercover recordings are politically motivated and wrong.” Actually, he’s wrong. The videos weren’t “doctored” at all; they were available in their entirety on the internet. SEIU president Mary Kay Henry stood her ground and affirmed in a tweet, “Extremists stoop to new low attacking women & access to preventive care.” (Henry has a familial stake in this in that SEIU VP Kirk Adams is married to PP president Cecile Richards.)

In another case of defending evil, spreading falsehoods and/or selling ignorance, American Federation of Teachers president Randi Weingarten tweeted “More than 50% of Planned Parenthood patients are enrolled in Medicaid. Defunding @PPFA would take their coverage away. #StandWithPP” Wrong again. Defunding PP won’t take anyone’s Medicaid coverage away.

But for sheer misdirection nothing beats United Federation of Teachers president Michael Mulgrew who back in 2012 announced a $125,000 gift to PP. “As a union with a large female membership, we know the importance of the kind of health care that Planned Parenthood provides, including breast cancer screening.” Well, actually, despite what many think, PP does not perform mammograms or even possess the necessary equipment to do so. Its clinics do provide referrals, but the Susan G. Komen Foundation and the American Cancer Society readily provide them as well.

It’s important to note that UFT’s $125,000 gift (and all union largess) is comprised of dues money the union collects from its teachers regardless of their religious/moral convictions. So what can a pro-life teacher do knowing that part of his/her union dues is going to fund PP, one of whose raisons-d’être is killing (and now selling body parts of) the unborn? In non-right-to-work states, these teachers have two options. They can become agency fee payers in which case they must still pay for things like collective bargaining but don’t have to support the unions’ progressive political agenda. Or a teacher can become a religious objector and pay absolutely no money to the union, but instead pay a full dues share to a charity agreed on by the teachers union and the school district. This is a difficult status to achieve because the union just can’t bear to have what it considers a freeloader in its midst. As such, a dissenting teacher must usually seek out legal assistance and go to great lengths to prove their religiosity.

Enter Linda Misja, a high school language teacher in western Pennsylvania. Ms. Misja, a devout Roman Catholic, and her union, the Pennsylvania State Education Association (PSEA), just can’t seem to agree on a mutually acceptable charity. According to Watchdog.org’s Evan Grossman, Misja initially requested that her money to go to People Concerned for the Unborn Child, a pro-life group which is opposed to artificial contraception, in-vitro fertilization and birth control. The union, which either has a dark sense of humor or is seriously delusional, came back with an offer to send her dues money to an abortion clinic.

Misja countered with an alternative: a charity arm of the National Rifle Association which works with public schools to teach gun safety. But the union nixed this idea also on the grounds that it was “too political.” As Misja and the union duke it out, $2,000 she earned as a teacher is sitting in an escrow account.

What all this points to is that the teachers unions – PSEA is but one example – put their far left agenda above all else. The high-minded assertion about religious liberty in NEA Resolution I-33 is a canard. If the union really believed in religious freedom, it would direct PSEA, an NEA affiliate, to honor Misja’s request to have her money donated to an entity that supports her Catholic beliefs. And just as ridiculous is PSEA’s claim that donating to the NRA is “too political.” Since 1989, NEA has spent $92,972,656 on candidates, PACs, etc. while the American Federation of Teachers spent $69,757,113 during the same 26 year period. (In 2014 alone, PSEA spent $2,711,333 on politics) But Ms. Misja is laughably being denied the option to donate to the NRA because it’s “too political.”

Tolerance is a buzzword the teachers unions use with great abandon. But when it only goes one way, it becomes dictatorial, which is a perfect word to describe many teacher union policies.

Larry Sand, a former classroom teacher, is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers and the general public with reliable and balanced information about professional affiliations and positions on educational issues. The views presented here are strictly his own.

Income Inequality Farm

Labor leaders and their friends start a new “progressive” organization … as George Orwell rolls over in his grave.

We live in strange times when a man can decide that he’s a woman and someone born freckled and blonde declares with great conviction that she is African-American. Following the trend, we have organized labor leaders telling us with straight faces that they are against “income inequality.” But the truth, of course, is that many union bosses believe they are far more equal than the people who pay their salaries.

Launched last month, The Progressive Agenda to Combat Income Equality claims that “income inequality is the crisis of our time, and we need bold, progressive solutions to address it.” The new coalition boasts a gaggle of actors (including Susan Sarandon, Danny Glover), politicos (NYC Mayor Bill de Blasio, CA Congresswoman Barbara Lee, professional agitators (Van Jones, Al Sharpton) and national union leaders. Included in the latter camp are teacher union presidents Randi Weingarten and Lily Eskelsen García, AFL-CIO boss Richard Trumka and Leo Gerard, president of the United Steelworkers.

I can’t remember when such a large contingency of limousine lefties have jumped on a bandwagon that so dramatically reveals their raving hypocrisy. For example, Susan Sarandon, who has pulled in as much as $5 million for acting in a film, is worth about $50 million according to Forbes. I wonder how much she shared with the grippes, the gaffers and the gofers who work on her films and earn pennies on the dollar compared to her.

But Sarandon has nothing on union bosses. As NRO’s Jim Geraghty points out:

  • American Federation of State, County and Municipal Employees’ international president, Gerald McEntee, had a gross salary of $1,020,751 in 2012.
  • James Callahan, president of the International Union of Operating Engineers, reported a gross salary of $352,101 in 2012.
  • Edwin Hill, international president of the International Brotherhood of Electrical Workers, made $326,253 in gross salary in 2012.

Richard Trumka is no better. In 2013, he made over $298,000 and Arlene Holt-Baker earned $368,000 as his executive vice-president. But as this graphic shows, many AFL-CIO members earn under $50,000 a year. In fact, Geraghty writes, the average union member makes $49,400 yearly, a far cry from what the union elites rake in.

And now for the teachers unions….

The ongoing “social justice” meme of the teacher union leaders is that corporate bosses are greedy swine who make too much money compared to their workers. That’s what the honchos say about others, but what do they do?

According to the National Center for Education Statistics, the average teacher pay in the U.S. is $56,383 per year. However, in his last year as NEA president, Dennis Van Roekel hauled in $541,632 – almost 10 times what a teacher makes. American Federation of Teachers president Randi Weingarten made $543,679 as reported in her union’s most recent tax filing. (It’s interesting how their salaries rise even as their unions lose thousands of members.) But corporate CEOs – allegedly the fat cats – make $178,400 yearly, just five times that of the average worker. And while there are some CEOs whose income is at a greater multiple than 5:1, that typically occurs only at the very biggest firms. As Robert Samuelson recently wrote,

Pay at the most productive companies rose much faster than average, but ‘within a given firm, wage inequality increased little,’ says University of Minnesota economist Fatih Guvenen….. There are 6 million U.S. businesses, he notes. What’s true of a few thousand huge firms doesn’t describe highly successful small and midsize companies.

In the Golden State, as per its latest tax filing, the California Teacher Association executives weren’t exactly driven by income equality. Executive director Carolyn Doggett managed to bring in over $407,000 and her assistant James Thrasher over $500,000, while President Dean Vogel garnered $277,000 in total compensation. And for the record, the average teacher in California makes $69,000 a year. Hmm. Doesn’t sound very income-equitable to me.

It’s quite clear that The Progressive Agenda to Combat Income Equality is a group that will not live by its own credo. In George Orwell’s Animal Farm, an allegory of Stalinist Russia, the pigs are in charge. Their arrogant hypocrisy is epitomized by the phrase, “All animals are equal, but some animals are more equal than others.” Were a 2015 version to be written, Sarandon, Trumka, Weingarten et al could replace the pigs.

Larry Sand, a former classroom teacher, is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers and the general public with reliable and balanced information about professional affiliations and positions on educational issues. The views presented here are strictly his own.

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.

Obama, Teachers Unions and Tax Evasion

President Obama has talked a good education reform game, but when push comes to threats, he is above all a good union man.

On August 25th, AFL-CIO boss Richard Trumka uttered a few words that seemed to resonate with President Obama. He said, “The AFL-CIO has not yet decided if it will participate in next year’s Democratic National Convention, as labor union members ponder whether President Obama has earned their support.…” He said the major economic speech the president has planned for early next month will tell union members what they need to know about whether he will be worth supporting.”

Trumka has a history of following through on his threats. As president of the United Mine Workers in the spring of 1993, he wanted to ensure that no one would be able to find employment as a miner without paying union dues to the UMW. Accordingly, he proceeded to order more than 17,000 mine workers to walk off their jobs, and told the striking miners to “kick the sh– out of every last one” of their fellow employees and mine operators who resisted union demands. UMW thugs dutifully responded by vandalizing homes, firing gunshots into management’s offices, and cutting off the power supply to another mine, temporarily trapping 93 miners underground.

Now it’s true that Trumka didn’t threaten to “kick the sh–”out of the president, but he may as well have. Last week, when Obama gave his speech to Congress, the thuggish Trumka was part of a small group who sat with Mrs. Obama listening to the President spew out yet another stimulus plan (how’d that last one work out, Mr. President?) This time it will cost $447 billion, and like the 2009 version, will allegedly fix all our economic ails. Long on demagogic rhetoric and short on details, the president made it sound so simple, “Pass this jobs bill, and we can put people to work rebuilding America.”

Perhaps even more important to the president than AFL-CIO backing is the support of the biggest union in the country – the National Education Association. So not surprisingly he also offered more “free” money – $60 billion – to education. This money will allegedly save 280,000 jobs according to U.S. Secretary of Education Arne Duncan. Since NEA gets $168 in dues from each of its members, it’s obvious why it welcomed Obama’s proposal. But that doesn’t mean that the union was satisfied.

When NEA President Dennis Van Roekel was asked if this was enough money to make him happy, he was dubious, saying that what’s needed is “more than they are willing to spend.” That’s because there is one dollar amount – and only one — that Van Roekel thinks is enough and that number is $MORE.

Clearly the extra money will fatten union coffers, but will keeping all these extra teachers’ jobs benefit American children and their families? Some will and some won’t. Due to the political heft of NEA, we still live in a country that treats teachers as widgets – and all do an equally good job.

As usual, Obama and his teacher union pals are avoiding a couple of obvious ways to save money. It has been demonstrably shown that charter schools do as good or better job for considerably less money and that a voucher system would save even more money.

As writer RiShawn Biddle put it, “This move is really just a waste of both taxpayer’s money and time that Obama could use to rally support for the education reform efforts that have been mostly-embraced on a bipartisan level. He would be better off tossing out the education portion of this stimulus and getting back to pushing for systemic reform.”

But Mr. Obama seems intent on his new tax-and-spend program and should Congress pass it, I have a suggestion as to where we might come up with some money. The NEA, which has an annual budget of $371 million, spent more than $56.3 million in the 2007-2008 election cycle on state and federal campaigns, political parties, and ballot measures, $12.5 million ahead of the second-place group. And yet, NEA doesn’t think it should pay income tax and rarely does.

The law says you must pay income tax unless you are a tax exempt entity, and if you are accorded that status, you cannot be involved with politicking. The Landmark Legal Foundation has been on to the NEA and its tax evasion for years now, and has gained some traction. In 2006, the Wisconsin Education Association, a NEA affiliate “realized it needed to pay $171,000 in federal taxes after LLF asked if the organization had paid taxes on $430,000 it gave to the Democratic Legislative Campaign Committee. Stan Johnson, the WEAC’s president, admitted the organization should have paid taxes on the expenditures.”

If NEA ever stopped blathering about the rich not paying their “fair share” and actually started paying its own (and were dinged for past years’ payments with appropriate penalties), it would certainly help to solve the budgetary problems it claims are inhibiting our education process.

Mr. President, as a “fair share” proponent, why don’t you look into why NEA, which spends hundreds of millions on politics – almost exclusively on liberal candidates and causes – pays almost no taxes? But then again, I guess I just answered my own question.

About the author: Larry Sand is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers with reliable and balanced information about professional affiliations and positions on educational issues.