Union Watch Highlights

Michigan ballot measure would enshrine unions’ right to collective bargaining in the state constitution

By James B. Kelleher, July 30, 2012, Reuters

After suffering a string of political setbacks in the U.S. industrial heartland, organized labor hopes Michigan voters will help turn the tide in a November election by supporting a state constitutional amendment for the right to unionize. The union-backed ballot proposal would make collective bargaining a constitutionally protected right and cripple efforts to pass so-called “right to work” legislation in the state. Critics say the measure, which would cover private as well as public employees, would be a “death warrant” for Michigan’s economy because it would discourage businesses from bringing new jobs to Michigan and encourage some already in the state to leave. Experts say the union push, which included a door-to-door weekend canvassing effort by delegates attending the Detroit convention of the American Federation of Teachers, is likely to increase voter turnout in the fall presidential election in a state that is too close to call. (read article)

Small businesses endorse California measure affecting union dues

By Jon Ortiz, July 30, 2012, Sacramento Bee

The National Federation of Independent Business/California, a group that represents small businesses, has endorsed Proposition 32. The ballot measure would ban union and corporations from contributing money directly to candidates. It would also eliminate payroll deductions, unions’ primary way of raising political money. The federation joins others, including former state Sen. Gloria Romero in endorsing the measure. “California’s political system isn’t working because the politicians we elect only work for the most well-funded special interests. While big corporations and labor unions always get what they want, small businesses and individual Californians find themselves on the losing end of new regulations, higher taxes and declining government services,” said John Kabateck, Executive Director, NFIB/California, in a press release. “Proposition 32 offers voters an opportunity to win back elected officials from the special interests that control them with their money and make politicians pay attention to California’s needs again. As the Voice of Small Business in California, we’re strongly urging Californians to vote Yes on Prop 32 because it cuts the powerful money tie between special interests and politicians and returns power back to the voters,” he added. (read article)

In Louisiana, unions stand in the schoolhouse door against minorities

Editorial, July 29, 2012, Wall Street Journal

In some parts of the antebellum South, it was illegal to teach blacks how to read. Are teachers unions in Louisiana trying to turn back the clock? Last week, lawyers for the Louisiana Association of Educators, one of the state’s two major teachers unions, threatened private and parochial schools with lawsuits if the schools accept students participating in a new school choice initiative that starts this year. Education reforms signed into law in April by Governor Bobby Jindal include a publicly funded voucher program that allows low-income families to send their children to private or parochial schools. (read article – subscription required)

California’s largest cities shed 10,000 government jobs

By Phillip Reese, July 29, 2012, Sacramento Bee

Cities across the state just entered their fifth consecutive fiscal year of tight budgets, layoffs and service rollbacks, with no end clearly in sight. Already since the recession began, California’s 20 largest cities have reduced their full-time workforce by 10,000, or roughly 8 percent, according to a Bee review of the cities’ comprehensive annual financial reports. The deepest staffing cuts came in Chula Vista, a city of 245,000 near San Diego that reduced its workforce, including part-timers, by more than one third. San Jose cut its workforce by 17 percent. Sacramento is near the top, too, reducing its staff by 839, or 16 percent, from 2007 to 2011. Sacramento’s police and parks departments endured the biggest cuts. (read article)

Teachers Unions Go to Bat for Sexual Predators

By Campbell Brown, July 29, 2012, Wall Street Journal

By resisting almost any change aimed at improving our public schools, teachers unions have become a ripe target for reformers across the ideological spectrum. Even Hollywood, famously sympathetic to organized labor, has turned on unions with the documentary “Waiting for ‘Superman'” (2010) and a feature film, “Won’t Back Down,” to be released later this year. But perhaps most damaging to the unions’ credibility is their position on sexual misconduct involving teachers and students in New York schools, which is even causing union members to begin to lose faith. In the last five years in New York City, 97 tenured teachers or school employees have been charged by the Department of Education with sexual misconduct. Among the charges substantiated by the city’s special commissioner of investigation—that is, found to have sufficient merit that an arbitrator’s full examination was justified—in the 2011-12 school year. (read article)

Los Angeles’ Pending Insolvency and Why We Need Prop. 32

By Jack Humphreville, July 26, 2012, City Watch LA

The inability and unwillingness of the political hierarchy of the City of Los Angeles to cope with its continuing Structural Deficit, its failing streets, its $10 billion unfunded pension liability, and its impending insolvency is proof positive why Angelenos (and Californians) must vote Yes on Proposition 32 (better known as “Stop Special Interest Money Now” or “Paycheck Protection”) on Election Day, Tuesday, November 6, 2012. The Stop Special Interest Money Act bans corporations, labor unions, public employee labor unions, and active government contractors from making campaign contributions, directly and indirectly, to any political candidate. And while Paycheck Protection prohibits any of these entities from deducting money for political purposes from an employee’s wages, it allows an employee to make voluntary contributions to any committee sponsored by his or her employer, labor union, or public labor union as long as the contributions are authorized in writing for a period not to exceed one year. But the unions that represent our City, County, and State employees and their allies are going absolutely ballistic over Paycheck Protection because these unions will not have the unilateral right to assess their individual members.  And as a result, the leadership of the public labor unions believe that their righteous voices will be “silenced,” allowing corporate special interests and those big bad Super PACs to prey upon the unsuspecting and clueless public. (read article)

Labor unions need pension wake-up call

By John Patrick Ford, July 26, 2012, San Diego Daily Transcript

It’s time for the municipal employees’ labor unions to listen to the taxpayers who pay for the pensions and health care of their members. Primary elections in San Diego and San Jose gave a resounding mandate to reform those city retirement systems. Elsewhere in the nation, dozens of insolvent cities are struggling to avoid bankruptcy. It’s no surprise to the business communities across the country. Private companies stopped providing defined benefit plans years ago. Even the heavy industries ruled by labor unions for decades have cut back on lavish employee benefits, mostly because of competition from abroad and trends toward outsourcing manufacturing and services into cheaper labor markets. Elected officials, beholden to labor union lobbyists and the working class, refuse to see these changes in pension benefits. What’s worse is the obvious disregard for the financial burden put on their governments. These politicians have limited terms in office and can pass the liability to the next generation. It’s called kicking the can down the road. (read article)

Scranton, Pennsylvania Seeks $16 Million Loan From Unions’ Pension Fund

By David Falchek, July 26, 2012, Times-Tribune

The Scranton Composite Pension Board tabled Mayor Chris Doherty’s request for a $16 million loan to the struggling city, an amount equal to more than one-third of the plan’s total assets. The pension funds are already considered “severely distressed” and precariously underfunded by state standards. Professionals advising the board urged extreme caution, scrutiny or even opposition to a loan, which would take the form of the purchase of municipal bonds for the city, payable with 8 percent interest over 10 years. The composite board represents the police, fire and nonuniform pension funds. No one from the city administration attended the meeting to answer questions, an issue for some board members who had questions. One board member, Anne Marie Stulgis, said the absence of a city representative able to field questions made her question the sincerity of the mayor’s request. The only voting member of the board to comment on the proposed loan publicly was city Controller Roseann Novembrino, who has a front-row seat to the city’s financial crisis. She said her first obligation is to prudently manage the money for current and future pensioners. She’s against the loan, even though it would help the city meet payroll. “The hardest thing for me to do is not to be able to sign the paychecks for people who have earned it,” she said. “I’m truly against what is being proposed, and it is most damaging.” (read article)

Texas Pension Reform Movement Is Brewing But Being Met With Fierce Opposition From Public Safety Unions

By Gaby Loria, July 25, 2012, ABC 7 El Paso

A movement is brewing in Texas to save tax dollars by reforming public retirement plans, and it’s already being met with fierce opposition. Some of the most vocal opponents are from the public safety sector. In El Paso, firefighters and police officers participate in a pension-style defined-benefit plan when they sign onto their respective departments. Under a pension-style defined-benefit plan, retirees are promised checks until they die, and the amount is based on years of service. The city is responsible for making sure those payments are made and must make up the difference if there’s a shortfall. Chief Michael Calderazzo, chairman of the El Paso Firemen & Policemen’s Pension Fund, told ABC-7 there is concern over “talk in Texas about a group out of Houston that wants to do away with defined-benefit plans.” “What they want to do is convert everyone to a defined contribution, sort of a 401(k)-type hybrid,” he continued. Both kinds of retirement plans rely on three sources for funding: a percentage contributed from an employee’s paycheck, a percentage contributed from the employer and returns on market investments. However, in a 401(K)-style defined-contribution plan, the city is not forced to shore up the fund if it’s too low. Retirees are on their own — market conditions and individual contributions ultimately determine how much money is in their plan. (read article)

Higher Fares for New York’s Metropolitan Transportation Authority Will Go to Health Care and Pensions

By Esmé E. Deprez and Brian Chappatta, July 24, 2012, Bloomberg

When New York’s Metropolitan Transportation Authority asks riders to pay more in fares and tolls next year for the second time since 2011, the extra revenue won’t go toward maintaining its aging fleet. Instead, the $450 million in additional cash that the agency expects to net annually from the 7.5 percent boost will be swallowed by growing health-care, debt-service and pension costs. The planned increases are built into the biggest U.S. mass-transit system’s 2013 budget and four-year financial plan, which officials are set to unveil today. Such expenses are “the root cause of why I say our financial plan is fragile,” MTA Chairman Joseph Lhota told reporters last week at the agency’s headquarters in Manhattan. “We’re looking to raise about $450 million to deal with the nondiscretionary costs.” (read article)

House Appropriators Should Put A Stop To Micro-Unions

By Fred Wszolek, Jul 24, 2012, Townhall.com

Last week, the U.S. House Labor, Health and Human Services Appropriations Subcommittee voted in favor of disallowing any funding toward implementing the National Labor Relations Board’s (NLRB) flawed decision in the Specialty Healthcare case. The NLRB decision enabled the formation of micro-unions in American workplaces, which has resulted in an outcry from small businesses across the country. The FY 2013 Labor, Health and Human Services Appropriations Bill, which passed the subcommittee, now heads to the full House Appropriations Committee in the coming days. The legislation is important because it comes on the heels of a vote on an amendment defunding micro-unions in the U.S. Senate Committee on Appropriations. Unfortunately, the FY 2013 Departments of Labor, Health and Human Services, Education, and Related Agencies Appropriations Bill in the Senate still maintains funding for the Specialty Healthcare decision, which allows small unions with as few as two or three members to be formed in workplaces. The issue of micro-unions has gained more and more attention as the Retail, Wholesale and Department Store Union recently successfully petitioned to represent women’s shoes sales associates in Bergdorf Goodman’s Fifth Avenue store in New York. The micro-union is composed of only 42 of the store’s 372 sales associates. (read article)

Cities at Financial Tipping Point Tear Up Collective Bargaining Agreements to Stay Solvent

By Romy Varghese, July 24, 2012, Bloomberg

Philadelphia, which may close a quarter of its schools by 2017 to save cash, has to boost pay for firefighters even though the city’s fiscal overseer says that would “blow up the budget.” An arbitration award means the estimated $238 million cost of the wage and benefit increase through 2017 must be borne by the city where a quarter of residents live in poverty, double the state rate. The burden of personnel expenses shouldered by Philadelphia also bears down on cities across the U.S. as tax revenue fails to keep pace with labor costs. Municipal leaders now regard steps that were considered drastic, such as imposing unpaid time off and using IOUs, as reasonable options, said Gary Chaison, who teaches industrial relations at Clark University in Worcester, Massachusetts. He called it a “tipping point.” “So many cities are under financial siege that they are ready to abandon their collective-bargaining agreements even if they have emergency procedures in place like Detroit, and even if it means antagonizing completely, and probably permanently, their public-sector unions,” Chaison said. Some, such as Central Falls, Rhode Island, have used bankruptcy to break labor contracts. (read article)

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