Memo to Employers: Lose the Second Yacht

Why is Pace University making it so hard for Chris Williams to get a union contract?

The U.S. House passed legislation last week that would level the playing field for employees trying to form a union—but judging by the reaction in the business community, you’d think the bill is the end of corporate freedom as we know it.

On March 1, the House voted 241–185 for the Employee Free Choice Act, which would establish stronger penalties for violation of employee rights when workers seek to form a union and during first-contract negotiations. It also would allow employees to form unions through a majority verification process, in which workers sign cards to indicate their support for a union.

In attacking the bill, Big Business has misleadingly insisted it would take away the secret ballot election process by which workers now form unions. But that argument is a red herring. First of all, Employee Free Choice Act doesn’t take away the secret ballot process. Workers will have a choice between the ballot process and majority verification.

Second, as currently run by the nation’s labor board, this management-controlled election process is anything but democratic. The long, drawn-out process gives management plenty of time to harass and intimidate workers—and let’s face it, how many people want to join a union if their employer threatens to fire them (which 25 percent of private-sector employers do, even though it is illegal)?

Former Labor Secretary Robert Reich puts it this way:

A secret ballot sounds democratic, but workplaces aren’t democracies because employers have the power to hire and fire. That's where the potential for intimidation lies. And the only way around it is to go with a simple up-or-down vote.

There are many examples of how the so-called “election process” doesn’t work. Chris Williams, an adjunct physics professor at Pace University in New Jersey, shared his story with us at the AFL-CIO. In December 2003, Williams and a majority of his co-workers signed authorization cards saying they wanted to be represented by New York State United Teachers/AFT (NYSUT/AFT). Pace University's administration then went to enormous lengths to block them from winning recognition and a contract. (A majority of workers can sign authorization cards now—but employers are not required to recognize the union. The Employee Free Choice Act would fix that.) Why would Williams, a well-educated professional, want to join a union? Says Williams:

I would starve to death if I had to rely on my wages from Pace. I'd be homeless. The average pay for an adjunct for a three-credit course is just $2,500 for a 15-week course.

While a tenured professor might earn $100,000 per year, an adjunct faculty member in the next classroom with the same qualifications would earn subsistence pay of only $15,000 for the equivalent of a full-time workload. (What was that again from the Bush administration about lack of education behind the nation’s low-wage economy? We’ll address that canard in a future post.)

The adjunct faculty then tried the election process route of the National Labor Relations Board (NLRB). First, the university tried to delay the election. Then, after the election was held in spring 2004 and the adjunct faculty voted overwhelmingly for the union, the university came up with a bizarre legal argument that hundreds of adjunct faculty members should be excluded from the bargaining unit. It actually refused to include them in negotiations with the union. The director of NLRB's Region 2 found the disputed adjunct faculty members were part of the bargaining unit, and the five-member NLRB in Washington, D.C., rejected a request by the university to have the region's decision overturned. But even now, Pace is appealing the decision to the federal appeals court. That postpones the adjunct faculty's rights even longer. So a staggering two-and-a-half years of negotiations have passed and the adjunct faculty still has no contract.

That's why Williams, who sees firsthand the flaws in the current system, supports the Employee Free Choice Act, which provides for mediation and then arbitration if managements and unions can't work out a contract in 90 days.

So, given that most businesses are not interested in running their workplaces like a democracy (“How many people want a four-week vacation? Raise your hands”), we thinketh they doth protest too much that the bill would take away this nonexistent freedom.

Business interests also say workers would be “coerced” into joining a union through the majority verification process. That presumes most workers don’t want to join a union. That presumption is wrong. In fact, some 60 million U.S. workers say they would join a union if they could, based on research conducted by Peter D. Hart Research Associates in December 2006.

Commenting on the American Chronicle, Stephen Crockett, co-host of Democratic Talk Radio, points out how employer cries of intimidation are directed in the wrong direction.

The intimidation is almost entirely on the side of the companies. Companies are in a position of power over workers. Co-workers are simply not in a similar power situation. Only the company is really in the kind of power position to intimidate workers.

Most critically, the bill is about economic justice: Full-time workers in unions had median weekly earnings of $833 in 2006, compared with $642 for their nonunion counterparts, and are far more likely to have good health and retirement security. In March 2006, 80 percent of union workers in the private sector had jobs with employer-provided health insurance, compared with only 49 percent of nonunion workers. Union workers also are more likely to have retirement and short-term disability benefits.

And its here—in the dollars and cents—we find the real reason for employer opposition to the Employee Free Choice Act. The past two decades have seen an unprecedented growth in compensation only for top executives and a dramatic increase in the ratio between the compensation of executives and their employees. The average CEO made 411 times the salary of the average worker in 2005. That’s up from 42 times in 1980—a tenfold increase. Meanwhile, average worker's pay increased to about $43,000 in 2004 from about $36,000 in 1980, an 0.8 percent a year increase—about 19 percent total increase—in inflation-adjusted terms.

The average CEO of a Standard & Poor's 500 company made $13.51 million in total compensation in 2005, according to an analysis by The Corporate Library. And that's just the annual take. Seems like what CEOs really fear about the Employee Free Choice Act is that by granting their workers family-supporting wages and health care and retirement security, they might have to forgo that second yacht.

Again, Robert Reich:

America's rising economic tide has been lifting executive yachts, but leaving most working people in leaky boats. Workers need more bargaining power. They should be allowed to form a union when a majority of them wants one. As simple as that.

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Stronger Labor Laws Needed to Address U.S. Income Equality

Paul Krugman

Those on the reactionary side of the political spectrum are big proponents of equal opportunity-the outcome, whether you make a decent living, live high off the hog or suffer in poverty-is up to the individual.

In today’s U.S. economy, such reasoning is flawed, says economist Paul Krugman. Instead, the nation’s increasingly unequal distribution of wealth translates into unequal opportunity-a principle even conservatives should oppose. An array of forces-including growing imports, the falling real value of minimum wage and slower unionization-have contributed to this growing gap.

Krugman, a professor of Economics and International Affairs at Princeton University, delivered the keynote speech today at the second briefing of the Agenda for Shared Prosperity, a network of more than 50 progressive U.S. economists, policy analysts and academics sponsored by the Economic Policy Institute (EPI). Today’s event, held on Capitol Hill in Washington, D.C., featured top-name leaders spearheading the fight for workers and their families. Although they spoke on a variety of topics, their comments shared a common theme: The American dream is slipping away for many hard-working families, and one of the key ways to restore that dream is by enabling workers who want to join unions to do so.

Krugman, also a columnist for The New York Times, said a powerful union movement bolstered the middle-class economy of the post-World War II decades but, in recent years, a political climate that encourages or at best winks at corporate union-busting has meant fewer workers who want to join unions can do so.

In fact, as professor Harley Shaiken writes in one of the four reports the Agenda for Shared Prosperity released today: “The yawning gap between robust demand to join unions and anemic membership numbers reflects the fact that for many Americans joining a union has become a risky proposition. Twenty-three thousand people a year are disciplined or fired for union activity resulting in a big chill on labor’s numbers and a ‘democracy deficit’ for the entire society.” Shaiken, a professor in the Graduate School of Education and Department of Geography at the University of California, Berkeley, writes in “Unions, the Economy and Employee Free Choice”:

An effective way to address the “democracy deficit” is through the Employee Free Choice Act....It allows workers to form a union if a majority of people in a workplace sign up for one. In addition, it provides meaningful penalties for those who would violate workers’ rights and insures that if workers choose a union collective bargaining actually results. The act restores balance to a system that currently is driven by aggressive employers, anti-union consultants, coercion and fear.

Some 233 co-sponsors are backing the Employee Free Choice Act, introduced in the House earlier this month as H.R. 800, and working families and their unions are taking part in a week of action in more than 100 cities thanking lawmakers who support the bill and urging others to sign on.

In a paper analyzing polling and survey data, economist Richard Freeman from Harvard University further made the case for the need to change the nation’s labor laws that currently are tilted in favor of Big Business. In his report, “Do Workers Still Want Unions? More than Ever,” Freeman concludes that:

In 2002 the proportion of workers who said they would vote for a union rose above the proportion that said they would vote against a union for the first time in any national survey: a majority of nonunion workers now desire union representation in their workplace.

America’s workers know that by joining unions, they can significantly improve their livelihoods, job security and future for their families. As Tom Kochan and Beth Shulman note, millions of America’s working families fail to have the necessary means for basic self-sufficiency—and it looks no better for the next generation. In their report, “A New Social Contract: Restoring Dignity and Balance to the Economy,” they write:

In 2000, the average high-school educated workers age 25–29 started out earning about $5,000 less real income and could expect slower growth in earnings than those who entered the labor force in 1970. Workers with some college started about $3,500 behind their 1970 counterparts.

Kochan is co-director of the Institute for Work and Employment Research at the Massachusetts Institute of Technology and Shulman authored The Betrayal of Work: How Low-Wage Jobs Fail 30 Million Americans and Their Families. They find the decline in middle-class living standards, the elimination of institutions that support a growing middle class and the dramatic increase in income equality experienced in recent years is not the result of some invisible hand.

It is the direct result of policy choices that have undermined the bargaining power of every-day Americans. Instead of instituting policies in this global economy to ensure a broadly shared prosperity, we have made choices that benefit the few.

The implicit social contract that governed work for many years—the norm that hard work, loyalty, and good performance will be rewarded with fair and increasing wages, dignity, and security—has broken down and been replaced by a norm in which employers give primacy to stock price and short term gains at the expense of America’s workers.

As a result, the American Dream is slipping away from millions of Americans and their families. A majority of Amer­icans now worry their children will not be able to improve on the standard of living they experienced growing up. If this is not the legacy we want to leave the next generation, then we need to start now to put in place forward-looking policies and labor market institutions to build a new social contract tailored to today’s workforce, families, and economy.

Throughout the year, the Agenda for Shared Prosperity will address the economic issues facing working families and offer solutions through reports on jobs, the economy, health care and more. In January, the Agenda for Shared Prosperity launch highlighted economist Jeff Faux’s “Globalization that Works for Working Americans” and Jacob Hacker’s “Health Care for America: A Proposal for Guaranteed, Affordable Health Care for All Americans Building on Medicare and Employment-Based Insurance.” In setting out a course of action for coming years, the Agenda for Shared Prosperity seeks to steer a stronger course for the nation’s economy—which some opinion-makers in the Democratic Party deny is headed in the wrong direction. As economist Tom Palley writes this week on TomPaine.com:

This denial was recently on display in a report, "The New Rules Economy," issued by Third Way, an influential new Democrat think tank in Washington. The report denies America’s working families have been shortchanged. In doing so, it misrepresents economic reality, undercuts working families and gives comfort to supporters of corporate excess. That makes the Third Way the wrong way.

Palley goes on to point out how such groups as the Third Way deny that family income has stagnated and that there is no problem with excessive CEO pay, the massive trade deficit or household debt.

In another TomPaine article, Palley offers a “memo” to presidential contenders in which he suggests a road map for progressive Democrats to reverse the laissez-faire extremism of the past 30 years. Read it here.

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America's Workers: Boxed In

Committee hearings on Capitol Hill focusing on the abuse of taxpayer funds, Iraq re-construction process and wrangling in the Senate over non-binding resolutions on Bush’s Iraq war have understandably taken center stage in recent media coverage. But there’s another set of congressional hearings under way equally as important for America’s workers.

Rep. George Miller, head of the House Committee on Education and Labor, on Jan. 23 launched hearings on Strengthening America's Middle Class: Finding Economic Solutions to Help America's Families.

The committee is considering three main items:

• Creating a competitive economy that includes good new jobs that pay well.
• Restoring workers' rights—including their freedom to bargain for better wages and benefits.
• Making health care more affordable and accessible.
  

Or, as AFL-CIO Secretary-Treasurer Richard Trumka summarized when the hearings reconvened Feb. 7:

Why, in the richest country in the world, is it so difficult for so many families to make a living by working?

It’s safe to say that in the Republican-controlled Congress of recent years, this committee—which under Republicans was renamed the Committee on Education and Economic Opportunities, in a deliberate slap at unions—never considered the growing economic distress of the middle class.

When hearings opened Jan. 23, William Spriggs, an economics professor at Howard University in Washington, D.C., told committee members the economic recovery, which began six years ago, has not benefited working families. Instead it has meant more money for the rich while working people and the poor have seen their standard of living stall or drop.

One cause of the widening gap, says Spriggs, is the failure to raise the minimum wage for 10 years. But that’s only one source of the problem. Says Spriggs:

The other source is the redistribution of corporate income, from wages to capital income. The latest data from the Bureau of Economic Analysis shows that the share of corporate-sector income going to wages is down to its lowest share in over 25 years….The latest CBO [Congressional Budget Office] figures show that almost 60 percent of capital income goes to the top 1 percent in the U.S. income distribution.

Behind the unequal distribution of the nation’s wealth is a much more fundamental change in our country’s economic policies, according to Trumka. He told the committee:

The shift in economic policies in the late 1970s from a “Keynesian consensus” to what George Soros has called “free market fundamentalism” explains much, in my view, about changing corporate behavior, the imbalance of power between workers and their employers, stagnating wages and the growing divide between productivity and wages.

Describing “free market fundamentalism” policies as a box that systematically weakens the bargaining power of America’s workers and drives the growing inequality of income and wealth in our country, Trumka continued:

On one side of the box is “globalization,” unbalanced trade agreements that force American workers into direct competition with the most impoverished and oppressed workers in the world, destroy millions of good manufacturing jobs and shift bargaining power toward employers who demand concessions under the threat of off-shoring jobs.

On the opposite side of the box are “small government” policies that privatize and de-regulate public services and provide tax cuts for corporations and the wealthy, all to “get government off our backs.”

The bottom of the box is “price stability.” Unbalanced macro-economic policies that focus exclusively on inflation and ignore the federal government’s responsibility to “maximize employment,” even out the business cycle and assure rapid economic growth.

The top of the box is “labor market flexibility,” policies that erode the minimum wage and other labor standards, fail to enforce workers’ right to organize and bargain collectively and strip workers of social protection, particularly in the areas of health care and retirement security.

Climbing out of this box won’t be easy.

Bottom line, Trumka told committee members: We need to follow three important economic values that resonate powerfully with all Americans:

• Anyone who wants to work in America should have a job.
• Anyone who works every day should not live in poverty, should have access to quality health care for themselves and their family and should be able to stop working at some point in their lives and enjoy a dignified and secure retirement.
• American workers should enjoy the fundamental freedom to associate with their fellow workers and, if they wish, organize unions at their workplace and bargain collectively for dignity at work and a fair share in the value they help create.
  

We took a step in recent days toward achieving the last goal with the introduction of the Employee Free Choice Act in the House, which I discussed here in detail last week.

And in coming weeks, we are looking forward to a robust discussion on creating policies that encourage family-supporting jobs stay in this country and developing new strategies for ensuring working families have access to quality, affordable health care. Economists in a new progressive network, the Agenda for Shared Prosperity, will publish issue papers on these and other critical topics for America’s working families.

In its debut media conference, the Agenda for Shared Prosperity, a project spearheaded by the Economic Policy Institute (EPI), highlighted a paper by EPI economist Jeff Faux on globalization and economist Jacob Hacker’s plan for health care reform. The next series of papers will be released Feb. 22 in an event that may include New York Times columnist Paul Krugman, and we’ll be back here with the details.

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America’s Workers Need the Employee Free Choice Act

If your employer tries to cut your health care and pension by 98 percent, what do you do?

As a rule, not much.

Unless you’re in a union.

When 2,800 workers at the Harley-Davidson plant in York, Pa., were faced with that appalling ultimatum last week, the members of Machinists Local 175 knew they didn’t have to keep their mouths closed and swallow whatever the employer dictated. As union members, they spoke with their feet and now are walking the picket line. The company closed the plant after the last shift Friday.

Analysts disagree on the cost of the strike for Harley. One predicts the walkout could cost $11 million a day; another estimates $3 million per day. The York plant assembles the most profitable Harley-Davidson models. Other plants in the Milwaukee area and Kansas City make parts for assembly in York.

But let’s face it. Most workers aren’t in unions. In fact, the percentage of U.S. workers in unions declined last year, from 12.5 percent in 2005 to 12 percent in 2006. Yet some 60 million workers say they would join a union if they could.

So why don’t they? The primary reason is that our nation’s labor laws are outdated and so full of holes some employers get away with illegal actions like firing workers who express an interest in joining unions. U.S. labor laws, which date back to the 1930s, are skewed in favor of corporate giants who spend big bucks to harass and intimidate workers. And their techniques work—after all, how many people want to lose their jobs? (Although, as I noted, it’s illegal to fire workers for forming unions, management does it anyway, counting on the fact that it often takes years for a worker’s appeal to wind its way through the regional and national labor boards and even the courts.)



Workers represented by unions earn, on average, 30 percent more than nonunion workers: $833 in median earnings a week compared with $642. Some 80 percent of union members have employer-provided health insurance, compared with 49 percent of nonunion workers.

And as for those pensions, 68 percent of union members have guaranteed (defined-benefit) pensions—and only 14 percent of nonunion workers.

I noted here last week how the nation’s middle class—and increasingly, professional and technical workers—worry about their economic future as jobs become less stable or more difficult to attain and the quality of work life slides downhill. A growing number of professionals find their middle-class life threatened by economic forces that, without a union voice at work, they can’t control.

Yet when they try to form unions, the deck is stacked against them. Why is Harley- Davidson willing to lose millions of dollars in profits instead of trying to negotiate a contract that doesn’t decimate pension and health benefits?

AFL-CIO Organizing Director Stewart Acuff puts it this way:

[There is a] direct correlation between 25 years of stagnant, flat-lined wages and the assault on unions. Forty-seven million of us are without health care and 40 million with inadequate health care, [and] 20 percent more of us [live] in poverty now than when this decade started.

A few years ago, we in the union movement began pushing for a bill called the Employee Free Choice Act that would level the playing field for workers and help rebuild America’s middle class and restore the freedom of workers to choose a union. It would restore workers’ freedom to choose a union by:

• Establishing stronger penalties for violation of employee rights when workers seek to form a union and during first-contract negotiations.
• Providing mediation and arbitration for first-contract disputes.
• Allowing employees to form unions by signing cards authorizing union representation.
  

Even in the unpleasant 109th Congress, we got 215 co-sponsors in the House and 44 in the Senate. But with a new, worker-friendly Congress, we now have 231 House co-sponsors—and the bill, H.R. 800, was introduced Monday night.

The last time legislation to change U.S. labor laws was introduced was in the late 1970s, and it didn’t get very far.

We have a list of the House co-sponsors here. Check it to see if your lawmakers have signed on. E-mail them and ask them to support the bill, H.R. 800.

The Employee Free Choice Act isn’t just about unions. It’s about raising the standard of living for all of us in this nation. By leveling the playing field for workers seeking to form unions, the Employee Free Choice Act will improve the wages, working conditions and job security for workers who want to sign on. By ensuring that workers who want to join unions don’t experience employer harassment, the Employee Free Choice Act can replicate the experience of workers like Asela Espiritu, a registered nurse at Kaiser Permanente who didn’t have to endure harassment and intimidation to win a voice on the job through her union.

Espiritu works at the Kaiser Permanente Medical Center-Orange County in Anaheim, Calif., which was the only hospital—out of Kaiser’s 13 hospitals in Southern California—in which the workers didn’t have a union.

She and her co-workers formed a union in 2000 with United Nurses Associations of California/Union of Health Care Professionals-AFSCME at Kaiser under their company’s national neutrality and majority sign-up agreement. Requiring employers to follow a code of conduct in union campaigns and allowing more workers to use the majority sign-up process are both part of the Employee Free Choice Act.

The employees formed a union quickly—three months after they had started their organizing effort. Under the current National Labor Relations Board process, it can literally take years for workers who want to join a union to do so. Says Espiritu:

The 2000 negotiations gave us a lot of power and the voice to speak up on behalf of our patients. It’s not perfect, but we are on the road to solving the issues that affect the rank and file day in and day out. We have stability, and we have become a very desirable workplace.

Everyone wants to work here now. Nurses say, ‘I want to be a nurse at Kaiser.’ Our vacancy rate is at an all-time low. We are the highest-paid nurses in the county. It’s not just about the benefits either; it’s about the nurse-to-patient ratio we were able to get through Kaiser and the union working together.

We stand a good chance to get the Employee Free Choice Act passed in the House. The harder part will come in the Senate. But we’re making progress getting co-sponsors there as well, and when we get a firm list, you’ll see it here.

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