Richard Trumka

Massachusetts’ Collective Bargaining Law: A Worry for the Obama Administration?

by Ivan Osorio on July 13, 2011

in Economy, Employment, Labor, Politics as Usual

It’s not easy being a governor or state legislator these days. With states facing deep budget deficits, state lawmakers around the nation are working to close their budget gaps by tackling one of the biggest costs they face: government employee compensation. As we saw in Wisconsin (and to a lesser extent in Ohio), Republican lawmakers who take on the government employee union lobby can expect an all-out backlash from it.

But it’s not just Republicans. Some Democratic state elected officials are also trying to close their own states’ budget gaps. While public employee unions have not been as vocal in their opposition to Blue Team-proposed cuts, Democrats depend on campaign support from unions in a way Republicans do not, so alienating those unions could prove costly politically — at least in theory.

That’s difficult enough, but now it appears that Massachusetts Governor Deval Patrick, a Democrat, recently had to deal with the Obama administration on this issue. The Boston Globe reported this week:

The White House took the unusual step this spring of calling Governor Deval Patrick to discuss his plan to curb the collective bargaining rights of public employees, an indication that the Obama administration may have been concerned about the potential for national political fallout.

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Trumka’s Empty Threat to Democrats

by Ivan Osorio on May 20, 2011

in Economy, Employment, Labor, Politics as Usual, Regulation

AFL-CIO President Richard Trumka is warning Democratic politicians today: Push our agenda, or we won’t support you in the 2012 election. It’s hard to imagine those Democrats quaking in their boots. As The Huffington Post’s Sam Stein notes,

The labor community — the AFL-CIO especially — has been taking steps towards greater independence from the Democratic Party as its disappointments with the Obama administration and congressional Democrats have mounted. The typical response from party insiders has been dismissive assumptions that labor has nowhere else to go.

Indeed, Trumka’s threats ring hollow. It’s not like the Obama administration hasn’t been trying to advance Big Labor’s agenda. It’s been Republican opposition in Congress that has thwarted card check legislation and the confirmation of some pro-union executive branch nominees. Yet it seems that Trumka still had to find some reason to throw a public tantrum. The HuffPo’s Stein reports:

Trumka also says in the prepared remarks that party affiliation alone won’t determine how the federation allocates its resources in 2012. If Republican lawmakers embrace parts of the AFL-CIO’s agenda, the union federation will respond in kind.

The likelihood of a rush of Republican politicians (beyond perhaps a couple of rust belt outliers) seeking union endorsements by supporting Obamacare, card check, foreign trade barriers, more spending, and higher taxes  is, to put it mildly, nil.

Today, government employees make up a majority of all union members, so it is in public sector employment where the future of organized labor will be decided. So far, the unions aren’t doing well.

At the state and local level, a growing number of Democrat elected officials are taking on public employee unions for the simple reason that their jurisdictions are broke. Facing a decision between angering either the general public through increased taxes and service cuts or their union supporters through spending cuts, many are choosing the latter.

The taxpaying public will put up with the diffuse costs they bear to pay for public sector unions’ concentrated benefits only as long they remain relatively low enough per payee. When those costs start rising and government employee compensation starts to drain resources from essential public services, public resistance will tend to rise with it.

By the same token, voters aware of their states’ and cities’ deep financial problems will likely reward elected officials who seriously address those problems. Thus, Democrats for whom losing union endorsements was once a worrying prospect may now find taxpayer ire a bigger concern.

For more on labor see here and here.

Big Labor Pension Strategy: United States of Argentina?

by Ivan Osorio on April 19, 2010

in Bailout Watch, Economy, Labor, Regulation

Service Employees International Union (SEIU) President Andrew Stern made a big splash last week, when he announced his retirement from leading what is arguably America’s most powerful union. As I noted then, Stern leaves SEIU with the union’s pensions for rank-and-file members seriously underfunded.

Yet he may have a plan to bail out those pensions — at taxpayer expense. Worse, Stern and his labor allies are working with the Obama administration to facilitate a direct government takeover of pensions. (It’s worth noting that the Obama administration includes a lot of organized labor appointees, especially from SEIU, as well as Vice President Joe Biden’s chief economic adviser, Jared Bernstein, who was previously chief economist at the labor-backed Economic Policy Institute.)

As The Washington Examiner‘s Mark Hemingway explains, one vehicle being used to push this agenda is the  White House’s Middle Class Task Force.

The section of the [Task Force's] report devoted to “Protecting Workers and Creating Middle-Class Jobs” reads like organized labor’s policy wish list. It pushes expensive “high road” federal contracting, plans for project labor agreements, enforcing labor standards, a “National Equal Pay Enforcement Task Force” and, most perniciously, “retirement security.”

Social Security is bankrupt and the average union pension plan only covers 62 percent of its liabilities, well below the 65 percent threshold at which the government considers the plan “endangered.” Given these facts, the Economic Policy Institute has teamed up with two of the most powerful unions in the country — the AFL-CIO and Service Employees International Union — to push something called “Retirement USA” (visit Retirement-USA.org).

Retirement USA looks like a scheme to prop up trillions of dollars worth of failing pension plans by seizing your personal savings. It would create a universal retirement plan for all Americans that centralizes all existing retirement plans — including your personal 401(k) savings and private pension plans — into the same retirement system.

Free-market advocates often accuse those on the Left of trying to turn America into France, but would follow a model even more bureaucratic and dysfunctional: Argentina, where the government of President Cristina Fernandez (pictured above) has seized pensions to pay for its profligacy. Kirchner seems to have learned little from her country’s epic economic decline during the 20th century, which was due largely to abysmal policies. For America to consider something even slightly similar today is terrifying.

For more on pensions, see here, here, and here.

Will Obama Recess-Appoint Becker?

by Ivan Osorio on February 10, 2010

in Deregulate to Stimulate, Economy, Employment, Labor, Regulation

With the nomination of former SEIU associate general counsel Craig Becker to the National Labor Relations Board (NLRB) most likely dead in the Senate, the question now turns as to whether President Barack Obama will recess-appoint him to the Board. Senate Majority Leader Harry Reid and AFL-CIO President Richard Trumka have both urged Obama to go the recess appointment route.

Organized labor went all-out for Obama during the 2008 election cycle, so union bosses are likely to put considerable pressure on Obama to recognize their efforts by moving forward on their policy goals, of which Becker’s nomination to the Board is a major one. However, Obama has other priorities, as well, mainly his stalled health care reform effort, for which he will need to spend political capital. Whether Obana is willing to spread that political capital around (to borrow his own phrase) would likely be a difficult decision for him.

Unions are so keen on Becker because of his radical anti-employer views. He has stated that employers should have no say in the unionization of their employees, and that changes to facilitate organizing could be advanced through the NLRB’s adjudicating process. The latter would allow unions to skew the law in favor of unionization, something they have tried but failed to do as the misnamed Employee Free Choice Act (EFCA) remains stuck in the Senate. With Massachusetts’ Scott Brown becoming the 41st Republican in the Senate, the chances for the Democrats getting EFCA through a filibuster look even slimmer.

Whatever happens, the defeat of cloture on Becker’s nomination is good news for free enterprise and for the economy. If recess-appointed,  Becker is almost certain to not be confirmed, so would never get to serve a full term. Therefore, whatever havoc he could cause would be limited; some cases would come before him, but others that would have, were he to serve a full term, would not. If Obama were to nominate somebody else, however friendly to organized labor, it is almost impossible to imagine somebody worse than Becker.

For more on Becker, see here.

Solis Tells AFL-CIO: “I am proud and humbled to be your humble servant…”

by Ivan Osorio on September 15, 2009

in Economy, Labor, Politics as Usual, Regulation

The AFL-CIO, at its recent convention in Pittsburgh,  had much to celebrate, including the fact that a Labor Secretary showed up to pay tribute to her biggest supporters when she campaigned for Congress. Reports Investor’s Business Daily:

Late last Friday, the White House decided to slap a 35% import tariff on Chinese tires. In doing so, the administration sided with the United Steelworkers despite the risks of a trade war with China, the largest holder of Treasuries at a time of record U.S. deficits.

That’s only the most recent example of Washington’s union friendliness.

The auto industry bailout — though painful for all parties — largely preserved unions’ generous wages and benefits at the expense of creditors and taxpayers.

Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., sent the convention videotaped hellos with effusive praise. “I look forward to working with your leadership team in the future,” Pelosi said.

Labor Secretary Hilda Solis echoed Pelosi in her speech Monday. She also called Sweeney “my good friend and colleague” and “our president.”

“I am proud and humbled to be your humble servant as labor secretary,” she told the convention. She said the department was adding 670 labor law investigators. [Emphasis added.]

Maybe those new investigators will look into abuses by union officials, as well, as employers, but such talk from a Cabinet secretary  and the Obama administration’s recent actions are not encouraging.

For more on the Obama administration’s and Congressional Democrats’ fulfillment of Big Labor’s wish list, see here.