LaborPains.org

Last week we discussed the dire situation of several states’ pension funds. But while many states are headed for stormy waters, today brought two very positive developments that indicate labor unions’ stranglehold on state governments may be loosening.

First from Pennsylvania:

Three of the largest state employee unions wanted to remove one of the more pressing issues that Gov.-elect Tom Corbett will find on his doorstep when he walks into office on Jan. 18. They sought a one-year extension to their labor contracts that expire June 30.

Leaders of the American Federation of State, County and Municipal Employees Council 13, Pennsylvania Social Services Union Local 668 and United Food and Commercial Workers approached outgoing Gov. Ed Rendell as well as members of Corbett’s transition team about the idea.

While Rendell saw advantages for his successor to not have to deal with labor negotiations right off the bat as he did when he first was elected in 2003, the incoming governor showed no interest when the two discussed the matter last week.

This was a desperate attempt by the unions to head off Corbett, who has promised to cut state spending and not raise taxes. Corbett, a fiscal conservative, will be far more likely to crack down on organized labor than Rendell. Thus the unions need Rendell to solve their problems — and quickly. Kudos to him for turning them down.

Meanwhile Indiana may join the ranks of right-to-work states:

Republicans in the Indiana House have filed bills that would prevent workers from being required to pay union dues, an issue considered so divisive that Gov. Mitch Daniels would prefer to avoid it.

The so-called right-to-work legislation could move forward anyway since Republicans have full control of the General Assembly after winning a House majority in last month’s election. The bills would prohibit companies from making union dues or membership a requirement of employment.

Daniels is understandably nervous about spending lots of political capital on what’s sure to be an acrimonious battle against the unions. (One Indiana Democrat is already claiming that right-to-work laws discriminate against women and minorities.) If the bill does pass, it would make Indiana the 23rd right-to-work state.

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It’s being called a “one-sided report” by the AFSCME. The AFL-CIO says it “could have been written by anti-worker, anti-union New Jersey Gov. Chris Christie.” As far as we’re concerned, those are fantastic reviews. The report in question is a 60 Minutes piece from Sunday that broke through the union spin and told the truth about how public-sector unions are helping bankrupt states across the nation via pensions plans and more.

The video is a little long, but a must-see. Click here to watch.

The AFL-CIO links to a blog post by left-wing watchdog Media Matters that attacks 60 Minutes for never mentioning the words “tax cuts” in regards to New Jersey’s pension woes. (Because we all know what a low-tax haven New Jersey is.) The post quotes a New York Times article mentioning that tax cuts enacted in New Jersey in 1995 diverted money from the state pension fund.

But as is also stated in the Times article, New Jersey more recently raised pension benefits 9 percent and lowered the retirement age to 55. These giveaways were so absurd that the Securities and Exchange Commission later charged New Jersey with fraud for falsely claiming it had the resources to fund its generous pensions. (Pensions were later curbed a bit when it became evident a crisis was looming.) Oddly, these details never made it into the Media Matters report.

Also overlooked by the left: New Jersey has the highest tax burden in the nation. And yet the state’s pension system was so unsustainable that even those tax rates couldn’t prop it up. New Jersey’s pension system is underfunded by more than $170 billion, or 44 percent of New Jersey’s gross state product, according to the Mercatus Center. How exactly are state taxes supposed to fill such a massive gap?

Media Matters concludes by accusing 60 Minutes of having a “conservative framing.” But there’s nothing conservative about it. The fact is that the pro-union, big-government position on pensions is such blatant political spin that it’s not worth reporting.

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Here we go again. The traditional attempt by Democrats to reach out to organized labor after ignoring their policy advice:

The administration is making an “all hands on deck” effort to contact party activists angry over the accord, Jared Bernstein, Vice President Joe Biden’s chief economic adviser, said last night before the U.S. House passed the $858 billion bill. Bernstein has made telephone calls and met with activists to defend a deal with Republicans that continues lower tax rates for all Americans, including top earners.

And the usual disgruntled grumbling as the unions play hard-to-get:

“The president is trying to build consensus among labor leaders for his compromise tax policy,” said Amy B. Dean, a former official with the AFL-CIO labor federation. The administration has “no problem reaching out to the labor movement when they need labor to be part of their electoral coalition. But they quickly forget that labor has a role to play in their governing coalition.”

Like in any wacky sitcom, these two will eventually realize that they need each other and reconcile before the credits roll. The Obama Administration needs organized labor for money and organized labor needs Democrats to enact policies so they can survive. Andy Stern once wondered, “Was I a leader of workers or an ATM machine?” The answer is the latter, but it’s all the unions have left.

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Earlier this year, the Service Employees International Union organized with other labor groups in favor of Arkansas Lieutenant Governor Bill Halter. Halter was challenging Democratic Sen.  Blanche Lincoln in her primary. The SEIU was giddy at the thought of taking out Lincoln because she refused to bow down and kiss organized labor’s…er…because she wasn’t “progressive” enough.

Lincoln beat Halter in a run-off election and went on to lose resoundingly to Republican John Boozman in November. All this apparently sparked a rare round of soul-searching among SEIU bigwigs:

Khalid Pitts, director of strategic communications for the SEIU, said Monday the union might have gotten a better bang for its buck supporting candidates other than Bill Halter, who lost his bid to wrest the Arkansas Democratic Senate nomination from Lincoln.

“In retrospect, we were probably the wrong messenger,” Pitts said. “The message was right,” he added, asserting that Lincoln, who lost the general election last month to Republican Rep. John Boozman, repeatedly opposed organized labor’s priorities. Still, the SEIU has sparse membership in Arkansas and its support may have played into Lincoln’s hands, Pitts conceded, by “allow(ing) Sen. Lincoln to say that there were special interests – and she called it ‘Washington interests’ – who were coming into her state.”

We’re amused that the SEIU admits that at least some of its political spending was a mistake. But that doesn’t change the fact that the mega-union spent almost $3.2 million on a fool’s errand, all of it taken directly from worker paychecks. Arkansas is a conservative southern state and 2010 was a Republican year if ever there was one. Even if Halter was the Democratic nominee, he almost certainly didn’t have a chance against Boozman.

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File this under: “Should we really be surprised?”

Anna Burger, the former number two at the Service Employees International Union (SEIU), has joined the board of directors at the Center for American Progress Action Fund.

In a statement, John Podesta, chairman of the board, said the group was “pleased” that Burger was coming on board. …

The action fund is an affiliated advocacy group of the Center for American Progress, a liberal think tank.

The Center for American Progress (CAP) is well-connected among influential Democrats and the Obama Administration. As Time magazine reported in late 2008, “Just as candidate Obama depended on CAP during the campaign for opposition research and talking points, President-elect Obama has effectively contracted out the management of his own government’s formation to [CAP President John] Podesta.”

At SEIU, Burger was a close ally of Andy Stern, who recently cast the deciding vote on the deficit commission. Looks like the old SEIU brass will continue to be influential for a long time to come.

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Yesterday, the New Jersey Education Association breathlessly announced that they were holding a press conference today to announce a bold new plan that would streamline the process required to remove teachers from classrooms. Today, they revealed their plan. No, they’re not getting rid of tenure or making it easier to fire a bad teacher. Instead, they want to take tenure cases out of the courts and hand them to arbitrators.

Pardon me for being underwhelmed.

In theory, it’s not a terrible idea. The court system is by no means the ideal place to settle disputes between bosses who want to fire incompetent employees and incompetent employees who think that they deserve to have a job for life and shouldn’t be held accountable for their failures. In practice, however, arbitration is just as complicated, time-consuming, and expensive as using the court system. Remember the infamous “rubber rooms” in New York City? They came about because of the slow nature of arbitration proceedings. From the definitive New Yorker piece on rubber rooms:

When the bill for the arbitrator is added to the cost of the city’s lawyers and court reporters and the time spent in court by the principal and the assistant principal, Mohammed’s case will probably have cost the city and the state (which pays the arbitrator) about four hundred thousand dollars.

Nor is it by any means certain that, as a result of that investment, New York taxpayers will have to stop paying Mohammed’s salary, eighty-five thousand dollars a year. Arbitrators have so far proved reluctant to dismiss teachers for incompetence. Siegel, who is serving his second one-year term as an arbitrator and is paid fourteen hundred dollars for each day he works on a hearing, estimates that he has heard “maybe fifteen” cases. “Most of my decisions are compromises, such as fines,” he said. “So it’s hard to tell who won or lost.” Has he ever terminated anyone solely for incompetence? “I don’t think so,” he said. In fact, in the past two years arbitrators have terminated only two teachers for incompetence alone, and only six others in cases where, according to the Department of Education, the main charge was incompetence.

Klein’s explanation is that “most arbitrators are not inclined to dismiss a teacher, because they have to get approved again every year by the union, and the union keeps a scorecard.” (Weingarten denies that the union keeps a scorecard.)

This is the reform that the NJEA thinks is going to make all the difference in the world? The introduction of arbitrators? Either the NJEA is stupid or they think that we’re stupid. It’s no wonder that NJ Gov. Chris Christie has been running circles around them.

Wherever there are wage freezes, there’s hysterical reaction by union leaders. And wherever there’s hysterical reaction by union leaders, there’s Richard Trumka. President Obama recently proposed a two-year pay freeze for employees of the federal government. Naturally, Trumka and his fellow labor leaders aren’t very happy.

“Today’s announcement of a two-year pay freeze for federal workers is bad for the middle class, bad for the economy and bad for business,” said AFL-CIO President Richard Trumka. “No one is served by our government participating in a ‘race to the bottom’ in wages. We need to invest in creating jobs, not undermining the ones we have. The president talked about the need for shared sacrifice, but there’s nothing shared about Wall Street and CEOs making record profits and bonuses while working people bear the brunt. It is time to get our nation back on track, but we should not do so by placing an even greater burden on the middle class.”

“This proposal to freeze federal pay is a superficial, panicked reaction to the deficit commission report,” stated AFGE National President John Gage. “This pay freeze amounts to nothing more than political public relations. This is no time for scapegoating. The American people didn’t vote to stick it to a VA nursing assistant making $28,000 a year or a border patrol agent earning $34,000 per year.

We saw similar sturm und drang among New Jersey teachers unions when Governor Chris Christie proposed a pay freeze for teachers. But if union leaders are outraged over Obama’s plan, they should take a look at what’s happened in the private sector. In the first quarter of 2010, less than 42 percent of America’s personal income came from private sector wages and salaries, down from almost 45 percent when the recession began. About 8.5 million jobs have been shredded in the economic whirlwind of the past two years. And yet, according to a USA Today analysis, the number of federal employees making $100,000 or more has jumped 5 percent since the beginning of the recession. The average salary for federal workers is currently $71,206. The average salary for their private-sector counterparts? About $40,331. And that money comes from the very private-sector taxpayers who are struggling to make ends meet.

But public sector unions need more government workers and higher salaries to boost their membership and most importantly, membership dues. Unions see their future in public sector jobs. To put it mildly, it’s a cash cow. Here’s an idea for labor leaders. Instead of crusading against a measly pay freeze, how about returning the $171.5 million that they spent on mostly failed attempts to reelect Democrats in 2010 to their members?

Image courtesy of Ferdi’s – World.