LaborPains.org

Last Wednesday Hostess Brands Inc., maker of sweet snacks including Twinkies, Ho Hos and Ding Dongs, filed for Chapter 11 bankruptcy protection to settle its unsecured debts, primarily weighed down by its heavily unionized workforce.

Debts beholden for ingredients like flour, sweeteners and cocoa pale in comparison to the exorbitant amounts owed to union health and pension funds. The top unsecured creditor on the list is the Bakery & Confectionery Union & Industry International Pension Fund, owed $944.16 million. In fact, 16 of the top 40 unsecured claims belong to union benefit funds.

Hostess operates in 48 states and has approximately 19,000 unionized employees, 7,500 of which are represented by the Teamsters Union. Furthering Hostesses problems surviving in the market, the Company has 372 separate labor agreements, while most of its competitors are not unionized.

This is not Hostess’s first time dealing with bankruptcy. In 2004, the company formerly known as Interstate Bakeries went bankrupt and re-emerged as Hostess Brands in 2009.

The campaign to educate Americans about the need for labor law reform continues today as the Center for Union Facts placed a new ad in the New York Times.

Once a workplace is unionized it is nearly impossible for employees to decertify a union. As a result, millions of unionized employees work in union shops where they have never had the opportunity to vote on whether or not they want to remain represented by that union.

The Employee Rights Act requires that every unionized workplace have a supervised secret ballot election every three years to determine whether employees want to continue to be represented by any incumbent union.

You can read more about the Employee Rights Act at www.Employee Rights Act.com or you can join our new Facebook page.

Today the Center for Union Facts launches a multi-million dollar campaign educating Americans about the need for labor law reform.

It’s been more than 50 years since Congress overhauled America’s labor laws. During the following decades we’ve witnessed a workplace revolution that has fostered innovation, opportunity, and flexibility for America’s 150 million member strong workforce. Despite this, labor union leaders continue to cling to outdated labor laws that stifle job creation and trample employee rights.

You can read more about the Employee Rights Act at www.Employee Rights Act.com or you can join our new Facebook page.

We’ve previously criticized the Economic Policy Institute (EcPI) for their misleading use of data in a series of studies on public employee compensation.

Well, they’re at it again. In a new report called, “The Teaching Penalty: An Update Through 2010,” three EcPI economists claim that public school teachers suffer a 12 percent wage penalty compared to similarly educated workers in the private sector.

But just how similar are private sector employees to their public sector counterparts?

A JOB FOR LIFE

As the chart above demonstrates, state and local public sector workers enjoy a layoff/discharge rate that’s almost three times lower than the private sector.

That’s especially true with public school teachers, most of whom receive “tenure”—a virtual guarantee of life-time employment—after only a few years on the job. Among tenured teachers—even below-average tenured teachers—the chances of losing your job are less than 2 percent nationally. In some states the firing rate is less than 1 percent.

Contrast that to the private sector, where bigger risks and bigger rewards exist. In the private sector, you’re not just promoted based on how many years you’ve worked, or how many obligatory degrees you’ve earned—you’re promoted (and paid) based on hard work and ability. If you don’t perform, you’re at risk of losing your job.

If union supporters want to see equal paychecks, they need to be willing to accept judgment systems where pay equals performance and where the risk of losing your job for failing to perform is real. (Of course, they’re not willing to accept anything of the sort).

A BETTER COMPARISON GROUP

Since comparing teachers to everyone in the private sector is broad and misleading, a more appropriate comparison would be people who do a similar job in the private sector—namely, private school teachers. The US Department of Education collects such data, and it’s available for school years as recent as 2007-08.

The chart at right (courtesy of AEI’s Mark Perry) demonstrates that private school teachers with an equivalent level of education earn considerably less than their public-sector counterparts. To take one example from Perry’s post, a public school teacher with one year or less of experience makes the same amount as a private school teacher with 25 to 29 years of experience.

In separate results available on Perry’s blog, he shows that the private-sector “penalty” holds up across education level as well.

What’s the bottom line? Our belief is that good teachers are generally underpaid for the value of their skill and their impact on society. But we’ll never get to the point where there is consensus on that idea until it is possible to remove those teachers who should not be in the classroom.

And when a research group that receives hundreds of thousands of dollars from teachers unions tells you that the teachers in those unions are underpaid—and suggests that they need to be paid more, regardless of performance—it should be taken with at least a small grain of salt.

The National Labor Relations Board’s (NLRB) legal efforts to derail The Boeing Company from opening a new production plant in South Carolina, a right-to-work state, prompted 41 Republican senators to retaliate against President Obama and his pro-union NLRB. The senators wrote in a letter to Obama last Thursday that they’d “use all procedural tools available to defeat” the confirmations of two board members unless he withdrew their nominations immediately.

Specifically, the senators vowed to oppose the nominations of the board’s Acting General Counsel Lafe Solomon and board member Craig Becker, a former attorney who has represented both the AFL-CIO and Service Workers International Union (SEIU), who we’ve written about before.

For a hint at just how frustrated the 41 senators are, here’s a bit more of the letter sent by them to President Obama:

The Senate has been unacceptably denied the ability to exercise its constitutional duty of advice and consent in regards to the NLRB.

In light of the NLRB’s recent actions that would have a deleterious effect on job creation and economic opportunity across the country, it is time to hold the NLRB accountable.

We urge you to withdraw both Mr. Solomon’s and Mr. Becker’s nominations to their respective positions immediately.

If not, we will vigorously oppose both nominations, vote against cloture and use all procedural tools available to defeat their confirmation in the Senate. …

Is this move against Boeing what President Obama meant when he told the AFL-CIO in August 2010 that he was going to “restore some balance” to the NLRB and make it easier for workers in the aerospace industry to unionize? It certainly seems that way.

Image courtesy of: vgm8383

An inquisitive reporter in Providence, RI, recently did some digging and discovered a small fortune sitting inside the State House. That small fortune goes by the name of Stephen Iannazzi, a 25-year-old college dropout who’s apparently qualified for an $88,112 salaried position at the State House.

Iannazzi isn’t just any college dropout. As the Providence Journal’s Edward Achorn reveals, Iannazzi is the well-connected son of a labor union leader who employs the son of a state senator. Got that?

Well, here’s Achorn’s research to help you follow the money train that young Stephen Iannazzi is riding on the taxpayers’ dime:

Donald Iannazzi, the business manager for Local 1033, the Laborers International Union affiliate that employs 30-year-old lawyer Charles Ruggerio. Charles is the son of Senator Ruggerio.

While Stephen’s qualifications may be on the thin side, his family’s political connections are not.

His father Donald received an annual salary of $212,658, plus $53,212 in “other compensation,” in 2009, according to Local’s 990-filing with the IRS as an organization exempt from paying federal tax. (Senator Ruggerio enjoys a $190,246-a-year compensation package from an arm of the Laborers International Union.)

The family’s employment in state offices and the mayor of Providence’s offices fans out from there.

According to data from the U.S. Bureau of Economic Analysis, Rhode Islanders earned $42,579 per capita in 2010.  It’d be interesting to see Governor Lincoln Chaffee and state leaders justify Stephen Iannazzi’s unjustifiable salary to the people of Rhode Island who are earning a lot less than $88,000.

As the old saying goes, “It’s not who you know, it’s what labor union you’re connected to.”

It's hard to tell anti-capitalist protesters from AFL-CIO leaders these days. (Photo credit: csuspect)

The AFL-CIO is demonizing millionaire CEOs that make their money the old-fashioned way—by working hard and earning it. According to the union, more than 100,000 median wage earning workers could be supported if the nation’s top earning CEOs were, presumably, eliminated or magically decided to work for free. The AFL-CIO’s “Executive PayWatch” website states:

In 2010, Standard & Poor’s 500 Index company CEOs received, on average, $11.4 million in total compensation— a 23 percent increase in one year. Based on 299 companies’ most recent pay data for 2010, their combined total CEO pay of $3.4 billion could support 102,325 median workers’ jobs.

Taking a page from the AFL-CIO’s book of wishful thinking, bloggers at The Union News reverse-engineered the union’s argument to see what would happen if billions in union dues hadn’t been collected in 2010 and blown on “salaries and benefits of union bosses, their staffs, and their golf courses, airplanes, and other costs.” The results, though speculative, seem to shatter the glass house in which the AFL-CIO enjoys throwing its rocks:

According to the Bureau of Labor Statistics, in 2010, there were 14.7 million union Americans belonging to unions. While that only represents 11.9 percent of all wage and salary earners, there is a substantial amount of dues money flowing to unions.

If we were to use a conservative figure of $50 per month for union dues, in 2010, unions collected $735,000,000 per month in union dues from America’s unionized workers. Multiply $735,000,000 by 12 months and you get a whopping $8,820,000,000 that was collected in union dues in 2010.

Divide $8,820,000,000 by $33,227 and you’ll find that if unions did not take union dues from workers in 2010, 265,447 workers’ jobs could have been supported.

We’re guessing AFL-CIO leader Richard Trumka probably won’t be testing out The Union News’ theory to see if it holds any merit, and for obvious reasons.

TSA agent daydreaming about his future union representation. (Photo credit: TheeErin)

UPDATE (04/21/2011): The New York Times reported Wednesday that a runoff election will be held over the next two months since neither the AFGE nor NTEU received a majority of the TSA screeners’ votes. Read more.

The Federal Times reports that Wednesday TSA screeners’ online votes will be tallied to determine the winner of what’s being billed “the largest union election in the history of the federal workforce.” At stake is up to $16 million in annual union dues from 43,000 TSA employees.

Will it be the American Federation of Government Employees or the National Treasury Employees Union that takes home the grand prize? The $16 million question will be answered when the Federal Labor Relations Authority (FLRA) tallies and releases the votes sometime today.

And built-in to the election process is a chance for the losing union to appeal the election results to the FLRA, the Federal Times notes. Before the votes have been tallied, there is already some grumbling about a hundred or so ballots that might have been cast by TSA screeners who left the agency or have been promoted out of the bargaining unit.