Wednesday, March 9, 2011

State of the Unions

  When Republican Terry Branstad was elected Governor for the fifth time after a 16 year hiatus, the defeated outgoing Governor Chet Culver quickly concluded negotiations with the American Federation of State, County, and Municipal Employees (AFSCME) on a new 2 year contract which included yearly raises. Branstad was elected on a platform of smaller government and understanably wants to renegotiate the raises. Equally understandably, the AFSCME is reluctant to do so. The AFSCME and its members are large political contributors with the ratio of its donations 98 to 1 in favor of Democrats, so it is no surprise that a Democratic Governor gave the union a going away present and that a Republican Governor is trying to get back some money to fund his proposed decrease in the corporate tax rate (I imagine that the ratio of donations from corporate tax payers are largely Republican).

  Branstad would also like to see the AFSCME contribute more to their health care and pension in addition to accepting less money. My youngest son Ben thinks Branstad is an idiot, but I’d hate to think an idiot could get elected Governor 5 times. Once or twice maybe, but 5 times? His decision in 1992 to sign a law allowing elected officials to collect their salary AND pension seems pretty smart now that he gets to keep his $50K pension in addition to his $130K governors salary. But since he was making $357K as the president of Des Moines University and gave that job up to run for Governor, Ben may be right after all. In any event, Branstad will get his renegotiations by threatening layoffs to the AFSCME employees and see if he can get his corporate tax cut money that way. The threat of a strike vs. layoffs should make for an interesting spring and summer of negotiations.

  Things are a lot less sane in Wisconsin. Armed with a Republican controlled legislature and what he thinks is a public mandate to balance the budget, Governor Scott Walker and the legislature are trying to vote through a measure that would deny public employee unions the right to bargain collectively for anything but raises below the level of inflation and mandate their contributions to health insurance and retirement plan, among other restrictions (Curiously, the Republican-leaning police and firefighter unions are exempted from the proposed new law). Outnumbered and without the filibuster power the minority party in the US Senate has, the 14 Wisconsin Senate Democrats have left the state to prevent the measure from becoming law, since Wisconsin requires 20 of the 33 State Senators to be present when voting on a budget bill.

  Despite numerous protests and compromise attempts, both sides are standing firm, and now many states (Ohio and Idaho, among others) are trying to write law restricting public union bargaining rights. Even Iowa is getting into the act.

  It’s easy for the politicians to blame the public servants for their own shortfalls at not being able to balance their budget, but unilaterally taking away collective bargaining rights doesn’t seem like the right way to solve their budget problems. I’m not even sure how it could be legal, but in a country where it is OK to abort an inconvenient pregnancy, but a convicted murderer cannot be executed because they may suffer for a few minutes before they die during the lethal injection process I suppose anything goes. Unions were formed almost 100 years ago to combat the employer abuses of the time and their collective bargaining rights were not won without violence and bloodshed. Unions are far from perfect, but taking away collective bargaining rights forces employees to rely on the largesse and goodwill of their employers.

  When I was a security guard in 1978 to 1979, I had the chance to join the ‘security guard union’. For 10 dollars a week, I’d get 6 paid vacation days and time and a half if I got to work on the vacation day. Since I was only making $3 an hour, I passed. I later found out that the ‘union’ was part of the security guard company. Since then, I’ve never had the chance to be in a union. If any employer I worked for decided I had to pay more for health care or there would be no 401K match or if I had to take a pay cut, my only choice was to go along or find another job. Of course, if my employer is making money from my work, I can extract more money without being tied to some pay scale, so the sword cuts both ways. I worked at the Bristol-Myers factory from 1980 to 1982 and while we had no union, we got paid whatever the factory Schering-Plough paid their union workers. I was a ‘temporary’ employee, but all the old-timers would constantly talk about what a good deal they had since they had no union dues to pay and never had to go on strike, but got union wages anyway. It was a good deal, but I know if there was no Schering-Plough union, our wages would have been a lot lower. What’s my point? My point is that everyone gains when anyone stands up for their rights, even the people that take no risks at all.

  Part of management is using getting the most work done with the least amount of resources. When I was flipping burgers, the manager called a meeting for the new employees (less than 6 months) one November and us that even though we were not due for our raise until January, because of our fine work we were all getting a boost from $2.50 an hour (minimum wage) to $2.67. We were all happy until January, when the minimum wage went from $2.50 to $2.65 and we found out that people from other stores with less skilled management got raises to $2.82. The manager at our store became the district manager with a year. There are some exceptions, but if you are waiting for management to act on your behalf when it is not in their best interests, you will be waiting a long time.

  The National Football League had negotiated an agreement with the players union to split their revenues according to an agreed on percentage. The contract is up and the team owners and players are attempting to renegotiate a new agreement. The owners are threatening to lock the players out of training camp and possibly not even have a season. This is powerful leverage since the players have very few years to make their money while the owners have their lifetimes to make theirs. When the owners negotiated their last TV deal with the networks, they accepted less money over the past few years in order to have a guaranteed 4 billion dollar payout from the networks if there wasn’t an NFL season. This was stricken down by a federal judge because the owners reduced the TV revenue they would have normally had to share with the players in order to fund a lockout of the very same players. I’m not saying the NFL players aren’t rich enough already and don’t have it pretty good. I’m saying if the owners were only paying the players $10 an hour, they’d be working on a way to only pay them $9.

  If a state, county, or city government wants to change the conditions of a negotiated agreement with their employees, they should bargain with the union and fight it out in that fashion as opposed to the heavy-handed dictatorial route like Wisconsin, Ohio, and Idaho are planning. I’d think the threat of layoffs would get the unions attention and if they can’t come to an agreement, the union can strike and everyone can find out how much the public is willing to pay for their services. Everyone grouses about how much garbage men sanitation workers make until they go on strike and the trash is piling up and no one takes it away.

  The big problem everyone has with the public service unions at the moment is really the recession. When times are good and people take higher paying private sector jobs instead of working for governments, governments have traditionally offered security, health care, and pension benefits to make up for the lower pay and lack of career paths offered. But at times like now when there are few private sector jobs, the public service pay seems good and the low-cost health care and retirement plans seem excessive, so they have become easy pickings for everyone else that now have to not only make do with less, but also pay for these civil servants' health care and retirement in addition to their now-generous looking salaries. When companies start to hire again, and in time they surely will, I expect the heavy-handed governments of 2011 to make a lot of concessions to entice the workers they wouldn’t negotiate with from leaving and to entice new workers.