Category Archives: Labor

Michigan Races To Bottom With Anti-Union Law

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Pay attention to what is happening in Michigan, because it will add downward even more pressure to your wages and benefits, wherever you live and work. Republicans in the Michigan legislature have rammed through anti-union “right-to-work” laws making union dues voluntary even as unions a required by law to provide services to members and non-members. They say this will make Michigan more “business-friendly” by driving down wages and benefits, thereby stealing jobs from states where working people have rights. The actual intent is to get rid of the unions altogether, and their ability to fight for the 99% in the ongoing class war with the 1%.
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How the Territorial Tax Cut Destroys Jobs

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There is a little-discussed proposal that was introduced into the “fiscal cliff” discussions by the CEOs of the “Fix the Debt” campaign. This is for a “Territorial Tax System” idea that lets multinational companies off the hook for taxes on offshore profits. This plan is particularly dangerous to American wages and jobs — YOUR wages and job — as well as any American companies that don’t export their profit centers. This threat is not limited to the blue-collar jobs that have been disappearing, it also threatens the professionals, “knowledge workers,” designers, innovators and others who contribute to corporate profits here in the US.
The Territorial Tax proposal asks for no taxes on foreign profits of American corporations. This system would encourage and practically force companies to move profit generation (innovation, intellectual property, etc.) out of the US. This gives corporations an incentive to move everything that makes them money out of the country — every profit center, every job, every factory, every designer, inventor, etc.
This plan only benefits the giant multinational corporations — and helps them kill off even more American jobs and smaller businesses. And without those wages and taxes our infrastructure, schools, police and fire protections, and everything else here will decline even more.
If executives brought these American-company profits back to America now, disbursed it to shareholders or reinvested it in their companies — and paid the taxes due — this would be at least a $1.2 trillion boost to our economy. The taxes owed to We, the People wold help pay for our schools, etc., or help pay down our debt. But instead of just doing the right thing, this Territorial Tax Dodge System will add another layer of corporate game-playing, encouraging them to report even more of their profits as being made out of the US. It also lets the ones who have dodged taxes by holding cash offshore — and away from their own shareholders — get away with it. See this Citizens for Tax Justice report on companies that have been holding cash offshore — away from our ability to tax them as well as from their own shareholders, Which Fortune 500 Companies Are Sheltering Income in Overseas Tax Havens?

A new CTJ analysis of the financial reports of the Fortune 500 companies shows that 285 of these corporations had accumulated more than $1.5 trillion in overseas profits by the end of 2011, and there is evidence that a significant portion of these profits are located in tax havens.

In particular, our analysis shows that ten corporations, representing over a sixth of the $1.5 trillion in unrepatriated profits, reveal sufficient information to show that they have paid little or no tax on their offshore profit hoards to any government. That implies that these profits have been artificially shifted out of the United States and other countries where the companies actually do business, and into foreign tax havens.

A March Bloomberg report, Cash Hoard Grows by $187 Billion in Untaxed Overseas Profits also looked into specific companies that hide profits offshore (and away from shareholders) to avoid their corporate taxes.
The Institute for Policy Studies warns about the Territorial Tax in a report, The CEO Campaign to ‘Fix’ the Debt, A Trojan Horse for Massive Corporate Tax Breaks,

The 63 Fix the Debt companies that are publicly held stand to gain as much as $134 billion in windfalls if Congress approves one of their main proposals — a “territorial tax system.” Under this system, companies would not have to pay U.S. federal income taxes on foreign earnings when they bring the profits back to the United States.

The full report continues,

A territorial system would give companies additional incentives to disguise U.S. profits as income earned in tax havens in order to avoid paying U.S. income taxes.

[. . .] S&P 500 companies as a whole have nearly $1.5 trillion parked offshore, according to Citizens for Tax Justice. While some of these profits are offshore because a U.S. multinational corporation produced a product offshore and sold it to a foreign consumer, a significant share is there for the purpose of avoiding taxes.

Here’s how it works. The U.S. corporate tax code requires U.S.-headquartered corporations to pay a tax rate of 35 percent on their profits regardless of where in the world those profits are earned. But there are two important exceptions. First, U.S. corporations are granted credits for any taxes paid to foreign governments. Second, any profits deemed permanently reinvested offshore are exempted from U.S. taxes until and unless they are returned to the United States.

The report details ways that corporations shift profits out of the country.
David Cay Johnston talked about this idea on the Ed Show in May,

Well, what it would encourage companies to do is to take all their intellectual property that they haven`t moved and anything else they can out of country, so that they earn a dollar here in the U.S. and they show it to their shareholders, and then they may magically send it to the Cayman Islands and it disappears to the IRS.

So even if they are making things here in the U.S., they`ll be able to move profits out of the country by having their intellectual property out of the country. Secondly, if they find a place that has similar rules, then you move the jobs offshore and you can still earn tax free profits.

2004 – Been There, Done That, CUT Jobs

In 2004 corporate lobbyists got the American Jobs Creation Act passed, letting multinationals bring their foreign cash back at a special low rate. We allowed corporations to bring profits back to the U.S. at a tax rate of 5.25 percent, instead of the top corporate rate of 35 percent.
After bringing the profits back from the tax havens where they had been parked, the companies involved actually cut jobs. Alain Sherter, in Sure, a “Tax Holiday” on Overseas Profits Is a Great Idea — If You Hate America, looked into what happened and wrote,

The nonpartisan Congressional Research Service found that the companies that got the biggest tax breaks following the 2004 rate cut went on to eliminate jobs over the next two years. Instead of hiring, they mostly used the repatriated funds to repurchase stock or pay dividends — and to expand outside the U.S.
But it did provide a huge incentive to do even more offshoring of profits and jobs, because this scheme worked and the money came back in a tax holiday. So of course they are proposing to do it all over again.

Sherter points out this really does benefit a very few at the expense of the rest of us, including other companies,

Repatriation holidays also favor a handful of huge corporations at the expense of other companies, especially businesses without operations around the globe. In 2004, a total of five companies reaped more than one-quarter of the benefits from the tax holiday, while 15 firms got more than 50 percent. To pay for such a cut without raising the deficit, meanwhile, the U.S. would have to increase taxes on other U.S. businesses or make even deeper cuts in already tight federal spending.

Be aware of this Territorial Tax proposal. It is offered by the Fix the Debt CEOs, and it is entirely about reaping even more billions for the billionaires, at the expense of all of the rest of us and the country.
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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
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Help Change The Economy — Join Walmart Workers Striking On Black Friday

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You can help change the economy! Big companies use their size and the fear of losing our jobs to force us to accept no raises or even lower pay and benefits. They can use their size to force communities, states and even the federal government to lower their taxes. You can help change the economy by standing with Walmart workers next week. They have the money but we have the people.
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Breaking — Arrests At Sensata “Bainport” Camp

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Sensata is a Bain-owned company that is closing a factory in in Freeport, Il to move the jobs to China. The workers have set up a camp they call “Bainport” and workers and supporters are trying to block the Bain trucks that are moving equipment out to ship to China right now. In breaking news there were arrests made today.
Last week in the post Blocking Bain Trucks To Save Jobs In Freeport — This Is An IMPORTANT Story I wrote about the Sensata workers in Freeport who have set up a camp they call Bainport, and are asking Mitt Romney to show that he means what he is saying about cracking down on China by coming to Freeport and asking his former company not to send these jobs to China.

The Sensata workers camping at Bainport as asking Mitt Romney to come help them keep their jobs. Romney insists that he has nothing to do with Bain Capital anymore (his tax returns showed that he gets more than $400,000 a week from Bain investments).
Helping the Sensata workers would show that he means it when he says he has nothing to do with the things Bain does now, and that he will do something about the jobs being sent to China. What better opportunity to prove both than to show up and confront Bain for sending these jobs to China!

Romney, Bain And The Outsourcing Strategy

Mitt Romney and Bain “pioneered” outsourcing strategies. They invested in companies set up to help other companies send jobs to China, and they especially used offshoring in their strategies to avoid paying the taxes that enable We, the People to have good schools, roads, courts etc. The NY Times story, Offshore Tactics Helped Increase Romneys’ Wealth explained,

Some of the offshore entities enabled Bain-owned companies to sidestep certain taxes, increasing returns for Mr. Romney and other investors. Others helped Bain attract foreign investors and nonprofit institutions by insulating them from taxes, again augmenting Mr. Romney’s bottom line, since he shared in management fees based on the size of each Bain fund.

In Unraveling The Romney/Bain Tax Story I explained how it works,

The complicated story of how the 1%ers and their corporations evade democracy’s taxes is the story of our crumbling schools and infrastructure and the flow of all the gains of our economy to a very few at the top. This tax evasion is also part of the story of our deficits and debt. The tax evasion is “legal” — because the tax evaders pay the people who write the tax laws. And even as their tax evasion adds to our budget deficits and debt, the 1%ers are insisting we close the deficit by cutting Social Security, Medicare and “safety-net” programs!
[. . .] The American-based entities can buy American companies without incurring “foreign-based” obligations. Then the foreign-based entities can avoid the taxes that the American-based buyers of companies would have to pay. And the foreign-based investors can be in the foreign-based parts of the company, avoiding US tax obligations. Also American entities like pension funds can avoid US taxes they would otherwise have to pay.
To put it another way, the same company can pretend it is US-based when that is what it needs to be, and foreign-based when that is what it needs to be.

Mitt Romney is wealthy because he engaged in strategies to lay people off, sending their jobs to China and pocketing the wage differential for himself. Then his companies would force people to take wage cuts or risk losing their jobs, too, and pocking the wage difference for himself. The profits from these “enterprises” were manipulated in ways that enabled him to pay very little in taxes, so the rest of us end up not only with layoffs and lower wages, but bad schools, crumbling infrastructure and government debt.
Then later, Mitt Romney can claim that We the People are the cause of the resulting government debt and that we need “austerity” — less for We, the People in order to keep taxes low.

Arrests

Today community members supporting the Sensata workers were arrested for trying to block Bain trucks from sending the factory’s equipment to China.
Visit the Bainport blog for pictures and details.
This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
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Warn People – “Won’t Back Down” Is A Right Wing Corporate Propaganda Movie

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Get the word out. The movie Won’t Back Down is another propaganda product of the corporate/conservative machine, put in theaters to get you to support union busting and school privatization.
Over at the Center for Media and Democracy’s PR Watch, Mary Bottari writes in ‘Won’t Back Down’ Film Pushes ALEC Parent Trigger Proposal, (please go read the whole thing),

Well-funded advocates of privatizing the nation’s education system are employing a new strategy this fall to enlist support for the cause. The emotionally engaging Hollywood film “Won’t Back Down” — set for release September 28 — portrays so-called “Parent Trigger” laws as an effective mechanism for transforming underperforming public schools. But the film’s distortion of the facts prompts a closer examination of its funders and backers and a closer look at those promoting Parent Trigger as a cure for what ails the American education system.
While Parent Trigger was first promoted by a small charter school operator in California, it was taken up and launched into hyperdrive by two controversial right-wing organizations: the American Legislative Exchange Council (ALEC) and the Heartland Institute.

So why are we getting a major motion picture, widely distributed, that pushes a right-wing agenda? More on this from Mary, (again, there is much more at the link, including links embedded in what I have here) (emphasis added, for emphasis)

Philip Anschutz, Right-Wing Billionaire, Owns Production Company
“Won’t Back Down,” is a production of Walden Media, owned by billionaire investor and right-wing extremist Philip Anschutz. Anschutz participates in the Koch brothers‘ secretive political strategy summits and funds David Koch’s Americans for Prosperity group, which backed Wisconsin Governor Scott Walker’s union busting proposal and is working to defeat Barack Obama and other Democratic candidates across the country.
Anschutz bankrolls ALEC and ALEC member groups. In 2010, The Anschutz Foundation, gave ALEC $10,000 and his Union Pacific firm was an ALEC sponsor the following year. The Foundation funded three ALEC members who sat on the ALEC Education Task Force which approved the Parent Trigger Proposal: The Independence Institute, Center for Education Reform, and Pacific Research Institute.
Anschutz has also supported the National Right to Work Legal Defense Foundation, which backs legislation designed to cripple unions; the Discovery Institute, which seeks to get creation “science” accepted in public schools; and the Mission America Foundation, whose president considers homosexuality to be a “deviance.” He also owns the conservative magazine, the Weekly Standard.
Walden Media was one of the producers of the pro-charter documentary film “Waiting for ‘Superman’.” This film was criticized by Diane Ravitch as propaganda and as “a powerful weapon on behalf of those championing the ‘free market’ and privatization.”
Rupert Murdoch, Media Mogul and Owner of Education Testing Company, Distributes Film
The film is being distributed by 20th Century Fox, owned by News Corp. and media mogul Rupert Murdock. News Corp. owns Fox News, the Wall Street Journal and the New York Post. Murdoch formerly owned the British newspaper News of the World, which imploded once it was revealed that reporters hacked into the cell phones of the family of a murdered child, as well as the cell phones of the royal family, politicians and celebrities. The paper’s top editors and reporters were arrested although Murdoch himself has not been charged.
As CMD previously reported, News Corp. has been a member of both ALEC’s Education Task Force and Communications and Technology Task Force. Wall Street Journal editorial board member Stephen Moore, is an ALEC “scholar” and both the Wall Street Journal and Fox News have gone to bat for ALEC as member corporations began to flee earlier this year. What is less well known is that News Corp. owns Wireless Generation, a for-profit online education, software, and testing corporation, acquiring it in 2010 for $360 million. Wireless Generation is also an ALEC member. Apparently, Murdoch was anxious to get a piece of the nation’s education system, which he describes as a “500 billion sector in the U.S. alone that is waiting desperately to be transformed.” News Corp’s senior Vice President in charge of its education division is none other than former Chancellor of New York City Schools, Joel Klein, who promoted a corporatist model of education reform.

The conservative machine is on it. Today, the Heritage Foundation’s “Morning Bell” is pushing the film, with Morning Bell: Hollywood Steps Up in “Won’t Back Down”,

A new movie opens in theaters today that couldn’t be more timely. The school year is hitting its stride, and the teachers union in Chicago just captured the national spotlight by strong-arming that city to meet its demands—at the expense of students and taxpayers.
… the message of Won’t Back Down is one of empowering parents. In the film, parents are attempting to “take over” the school, referring to a type of law called a parent trigger law. Seven states have a version of this law, which gives parents the power to intervene in failing schools. If a majority of parents in a school want to reform it, these laws give them options, often including converting the school into a charter school and replacing school staff.

Randi Weingarten of the American Federation of Teachers warns, (from Randi Weingarten: Right-wing agenda drives movie on education at The Cap Times),

The film features the union leader sharing a quote that anti-public education ideologues and right-wing politicians often attribute to former AFT president Albert Shanker: “When schoolchildren start paying union dues, that’s when I’ll start representing the interests of schoolchildren.” Despite the frequency with which corporate interests claim Shanker said this, a review of news reports, speeches, and interviews with Shanker’s aides and biographers, and even an analysis by the Washington Post, failed to find any person or report that could corroborate the statement.
This is not the only time the movie resorts to falsehoods and anti-union stereotypes. Viola Davis’ character tells other teachers that the new school they create cannot be unionized because the union would restrict their ability to implement reforms that help kids. This is false — unions are democratic organizations made up of individual educators, and collective bargaining is the process by which individuals come together to make things better. Many examples demonstrate that far from blocking reform efforts, unions fight for the things children need to thrive in school, like safe classrooms and smaller class sizes. And unions empower educators to win the tools and voice they need to help children.
Half of all teachers in the United States do not have collective bargaining contracts. The reality is that the states with the highest union density — states such as Maryland, Massachusetts and Minnesota — are the states that lead the nation in student achievement.

Sabrina Stevens, writing at AlterNet in Why ‘Won’t Back Down” doesn’t stack up, explains, (the whole thing is an absolute must-read!)

As a former union teacher and present union staff member, what struck me most profoundly while watching Won’t Back Down was the stark disconnect between the way people and schools were characterized in the film and the way they are in the real world.
… In my work, I’ve spent time with hundreds of teachers, mostly in high-poverty schools that get low test scores. From teaching and preparing to teach for hours on end, to providing food, care and inspiration for hurting kids, these are dedicated, hard-working people who routinely go well above and beyond in their work. (A popular joke among teachers hinges on the notion that the hours in your contract aren’t the hours you’ll actually work, but the hours for which the district will begrudgingly pay you. It’s well understood by all that it is literally impossible to get everything done in that time period.)
I personally remember lots of overstuffed rolling tote bags (an especially popular option among teachers who needed to bring work home after school ended) and reusable coffee mugs (popular among us newbies who often worked such long hours we barely saw daylight during the fall and winter months) in the school I worked in. Likewise, the school day itself was often a whirr, with teachers bouncing around among 25, 30 or more students at a time during lessons; moving in and out of meetings, planning and professional development sessions; and making calls and handling other daily logistics during “free” periods.
Yet in the movie, it is repeatedly asserted that the union contract prevents exactly this kind of work from taking place…

Please be warned about this movie, and help to let others know what is going on here.
This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
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Warning – Deceptive Anti-Labor Ballot Initiative In California (Prop 32)

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In California there is a dangerous, deceptive proposition on the ballot that promises to get “special interest” money out of our elections, and is being sold as a way to stop the flood of corporate money. But actually this proposition doesn’t stop corporate money at all — it only stops political activity by unions. If it passes this means that from now on only corporate money will fund California’s elections.
Here is how Prop 32 is being sold to the public: “Politicians take millions in campaign contributions from corporations and government unions and then vote the way those special interests tell them.”
Here is the trick: it bans use of money collected from the paychecks of union members. This pretty much means all union money is banned. But corporations do not use paycheck deductions to get the money they use! Only unions do! Then Prop 32 specifies that corporations can’t put money into elections, so here are the types of businesses that are exempted:

  • Business Super PACs set up by corporations to put money into elections
  • Independent expenditure committees set up by corporations to put money into elections
  • Companies that are not “corporations” including Limited Liability companies
  • Partnerships
  • Real estate trusts
  • Other businesses not specifically designated as “corporations” under the law’s definition.

And, to make matters even worse, Prop 32 prohibits “government contractors” from political activity. But it is worded to prohibit any government employee unions from political activity, because these unions have employment contracts with state or local governments.
While it very loosely defines corporations in a way that keeps business interests open to funding campaigns, here is how it defines unions:

“Labor union”” means any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work.

ANY organization that represents the interests of working people is banned from politics if this law passes. Think about that.

Guess Who Is Funding Prop 32

Guess who is funding this proposition? (Hint, as if you needed one: it’s the Koch Brothers, Karl Rove’s corporate front group, big corporations, and others.)
AFL-CIO: Kochs Send Millions to Silence California Workers with Prop. 32

Resources

AFL-CIO: California’s Prop. 32: How Does It Affect Union Members?
California Labor Federation page with information about Prop 32.
Stop the Special Exemptions Act
Rick Jacobs: Mitt + Koch = Prop 32 Ways to Buy CA,

The Kochs and Rove understand that if they can keep union money out of politics, they win hands down. If Prop32 passes in California, one-third of SEIUs political budget is gone, with sizeable chunks taken from the AFL-CIO and just about any other big national union you can think of.

Full text of Prop 32 here. Also at Ballotpedia.
This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
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Unions Enforce Democracy

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What is Labor Day? And why is it a national holiday?
Labor Day is our national holiday to celebrate the contribution that regular working people make to our country and our economy. It is also a holiday that celebrates the way We, the People democracy can deliver prosperity to many, instead of great wealth to just a few — when it works. Strong unions help make it work.

Systems That Enforce “More Stuff For A Few”

History teaches of conflict between systems set up when a few people gain power and use that power to get more stuff for themselves at the expense of the rest, and the broad masses of regular people organizing themselves to overcome those power structures that get set up to enforce these “more stuff for a few” systems.
Power structures enforcing “more stuff for a few” often come with elaborate justifications to keep people from rising up and taking back power for the people. Royalty is a system where “God said my family should be in charge, so shut up and keep quiet.” The Nazis said they should be in charge because they were the übermensch, so shut up and keep quiet. Russia had the nomenklatura, so shut up and keep quiet. Today we have “job creators,” who get most of the stuff because they already have most of the stuff, so shut up and keep quiet.

“We, the People”

This country was formed when We, the People fought that battle and won. We overthrew a system that funneled the stuff to a few at the top, and enshrined in our Constitution a declaration we want this country to forever be run for the benefit of all of us, not just a few of us.
We fought to build and maintain this democratic society so that We, the People could share the benefits.

Prosperity Is The Fruit Of Democracy

Democracy offers protections. It lets us demand good wages and safety and environmental protections. We, the People got a good share of the economic pie because those are the things people say they want when they have a say. Because Americans had a say we built up a country with good schools, good infrastructure, good courts, and we made rules that said workers had to be safe, get a minimum wage, overtime, weekends… we protected the environment, we set up Social Security and Medicare and unemployment benefits to help us through hard times. We took care of each other. This made us prosperous. A share of the prosperity for the 99% was the fruit of democracy.

Unions Enforce Democracy

But it was unions that made this possible. People on their own just do not have the ability to stand up against concentrated wealth and power, no matter how right their cause. Even with our Constitution, a few were still able to use wealth and power to grab more for themselves, keeping regular people from obtaining a fair share of the pie. So people organized themselves into labor unions, and as a united group said you give us a fair share or we stop working. This was effective in industries that depended on the labor to keep production moving.
Before unions came along to enforce democracy we didn’t get the share of the prosperity that democracy promised, after unions came along we did. Before unions we had 12 (or more)-hour workdays, seven days a week. Before unions we had low pay. Before unions we had no benefits. Before unions we certainly didn’t get vacations. Before unions we could be fired for no reason. Before unions a wealthy few were able use their wealth to pay off influence legislators and keep the rules bent in their favor. Unions organized and forced changes that brought a larger share of the pie to We, the People.
Unions enforce the concept of democracy. Yes, We, the People were supposed to be in charge. Yes, the economy was supposed to be for our benefit. Why else would We, the People allow corporations to exist in the first place? But it was unions that gave people the power to enforce that idea. People organized together and demanded that We, the People get a share of the pie, and the results grew the pie. Unions are the reason we have had a middle class at all.

The Corporate/Conservative Attack On Labor

But we let the protections slip, and allowed money to have too much influence over our political system — so of course those with money used that influence to bend the system their way. Then we allowed companies to cross borders to escape the protections democracy offers — to non-democratic countries like China where workers have few rights, where pay is low, environmental protections practically non-existent. Companies locating manufacturing in places like have huge cost advantages over companies located in democracies that respect and protect the rights of citizens. This movement of manufacturing away from the borders of democracy weakened our unions, and shifted the balance of power away from We, the People.
There has been a massive corporate/conservative attack on labor and democracy over the last 3-4 decades. Billions of dollars have gone into a propaganda machine that tells us that labor unions are bad, that “labor bosses” just want things for themselves, that “union thugs” force businesses out of business, etc.
The successful attack on labor has contributed directly to this economy of massive inequality where workers don’t share in the product of the productivity they generate.
Lawrence Mishel, at the Center for Economic and Policy Research, writes in Unions, inequality, and faltering middle-class wages,

Between 1973 and 2011, the median worker’s real hourly compensation (which includes wages and benefits) rose just 10.7 percent. Most of this growth occurred in the late 1990s wage boom, and once the boom subsided by 2002 and 2003, real wages and compen­sation stagnated for most workers—college graduates and high school graduates alike. This has made the last decade a “lost decade” for wage growth.
… A major factor driving these trends has been the ongoing erosion of unionization and the declining bargaining power of unions, along with the weakened ability of unions to set norms or labor standards that raise the wages of comparable nonunion workers.
… the forthcoming The State of Working America, 12th Edition presents a detailed analysis of the impact of unionization on wages and benefits and on wage inequality. Key findings include:

  • The union wage premium—the percentage-higher wage earned by those covered by a collective bargain­ing contract—is 13.6 percent over­all (17.3 percent for men and 9.1 percent for women).
  • Unionized workers are 28.2 percent more likely to be covered by employer-provided health insurance and 53.9 percent more likely to have employer-provided pensions.
  • From 1973 to 2011, the share of the workforce represented by unions declined from 26.7 percent to 13.1 percent.
  • The decline of unions has affected middle-wage men more than any other group and explains about three-fourths of the expanded wage gap between white- and blue-collar men and over a fifth of the expanded wage gap between high school– and college-edu­cated men from 1978 to 2011.
  • An expanded analysis that includes the direct and norm-setting impact of unions shows that deunionization can explain about a third of the entire growth of wage inequality among men and around a fifth of the growth among women from 1973 to 2007.

The Social Contract

Labor Day is about honoring the social contract.
Hedrick Smith writes in, When Capitalists Cared in the NY Times,

From 1948 to 1973, the productivity of all nonfarm workers nearly doubled, as did average hourly compensation. But things changed dramatically starting in the late 1970s. Although productivity increased by 80.1 percent from 1973 to 2011, average wages rose only 4.2 percent and hourly compensation (wages plus benefits) rose only 10 percent over that time, according to government data analyzed by the Economic Policy Institute.
At the same time, corporate profits were booming. In 2006, the year before the Great Recession began, corporate profits garnered the largest share of national income since 1942, while the share going to wages and salaries sank to the lowest level since 1929. In the recession’s aftermath, corporate profits have bounced back while middle-class incomes have stagnated.
[. . .] In Germany, still a manufacturing and export powerhouse, average hourly pay has risen five times faster since 1985 than in the United States. The secret of Germany’s success, says Klaus Kleinfeld, who ran the German electrical giant Siemens before taking over the American aluminum company Alcoa in 2008, is “the social contract: the willingness of business, labor and political leaders to put aside some of their differences and make agreements in the national interests.”

Unions enforce democracy. Our system is not perfect, it does not by itself sufficiently protect our We, the People system from the constant efforts of some people to gain power – so they can get all the stuff for themselves at the expense of everyone else. It is a fact of human nature proven by history that this happens. Without unions as an added kicker to help us enforce the promise of our We, the People constitution, those who have wealth and power are able to use that wealth and power to take control and grab all the stuff for themselves. We are seeing this happen again, right before our eyes.
This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
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Early Bain-Ization – How A Few Got Rich Illegally Suppressing Unions

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A look at one of Bain Capital’s first deals shows a get-rich-quick-at-everyone-else’s-expense pattern forming: borrow heavily, gut assets, cut wages, cut safety, crush unions, restructure for tax avoidance and sell with a sweetheart, insider deal. That pattern foreshadowed what happened to our jobs, communities, industries, economy and country since the early 1980s. An already-wealthy few got fantastically rich(er) and the rest of us paid the price.

A Financial Times Investigation

In FT investigation: Romney’s take-off the Financial Times (FT) investigated the $5 million buyout of Key Airlines, a “formative” deal from Mitt Romney’s company Bain Capital’s early years.
At the time Mitt Romney was at the consultant firm Bain & Company, and heard that Key Airlines was looking to be bought. Key Airlines had a $10 million per year government contract to shuttle pilots and support workers between Las Vegas and “Area 52,” where they were working on the then-secret F-117A stealth fighter. Romney formed Bain Capital in part to buy the airline. T. Coleman Andrews III, a former White House official recruited to Bain by Romney led the buyout for Bain and chaired its board of directors.
The Financial Times investigation showed how the purchase of Key Airlines helped establish the company’s method of doing business. They bought the company by borrowing all the money needed, 100% debt-financed, meaning Romney and Bain put up no money — and very little risk — of their own. They “restructured” the company; according to FT, “Bain also reshaped Key Airlines, turning it from a profitable, taxpaying company with a $13m balance sheet and its own aircraft, into an operating company with a $2m balance sheet and a holding company from which it sold assets separately.”
When the pilots tried to start a union, the company unlawfully suppressed the effort with what a federal judge called “blatant, grievous, wilful, deliberate and repeated violations.”

No-Risk Leveraged Purchase

One of the ways private-equity companies make money is by borrowing using the purchased company’s assets as collateral, and passing some or all of the borrowed money to themselves. Romney and Bain purchased Key Airlines by securing a $5 million loan with $2.5 million worth of aircraft owned by the company, and a $2 million guarantee of their own. In other words, they borrowed money to buy the company by promising the lender they would put up the company’s assets as collateral. (The company had a $10 million per year government contract.)
The bank lent the money with part of it personally guaranteed after satisfying themselves that the investors were worth enough money. In other words, they could finance a debt-only deal because they were already rich.

Restructuring To Avoid Taxes

When purchased, Key Airlines was making money and paying taxes. By borrowing, the company incurred debt servicing costs, which are deductible against taxes. The company also restructured in ways that cut taxes. According to FT, “Bain also reshaped Key Airlines, turning it from a profitable, taxpaying company with a $13m balance sheet and its own aircraft, into an operating company with a $2m balance sheet and a holding company from which it sold assets separately.”

Crushing The Union

Private equity companies cut costs. If you are not rich and have to work for a living, you are one of those “costs” that has to be cut. Your pay or your job are in the way of someone making a whole lot of money. Another “cost” to cut is the work environment. Worker safety can cost money, so it is one more thing that is in the way of someone making a whole lot of money. Providing a good, reliable product is another “cost” that is in the way of someone making a whole lot of money, and in an airline that “cost” is safe, well-maintained airplanes.
In 1985 a majority of Key’s pilots tried to form a union. According to FT, “the pilots cited safety concerns; management said that the pilots were unhappy because of their low pay.”
Bain was getting ready to sell the airline, and the worst thing that could happen to them would be a union, which could demand fair pay, worker safety and better maintenance and air safety procedures. Crushing the union — keeping pay low, and being able to ignore pleas for safer conditions for workers and passengers — would mean the Bain investors would make a lot of money. So they crushed the union.
According to FT,

There followed an unlawful attempt by Mr Andrews and Key management, in the words of District Court judge Roger Foley, “to stamp out any cockpit crew members’ union before it could come into being”.
In January 1986, Mr Andrews and Olen Rae Goodwin, interim president of the union, met in the Key Airlines trailer at Nellis. The court ruled that Mr Andrews had then “threatened [Mr] Goodwin’s job and he threatened to leave Key, and that the management team would also leave. He threatened to sell Key”.

A court later found that Key’s management had illegally suppressed the union, and awarded $500,000 in punitive damages.
Labor bosses: When asked about this recently Romney had this to say,

“President Obama continues to put the interests of labour bosses ahead of the interests of Americans looking for work. By contrast, Governor Romney has grown companies and created jobs, in the private sector and as governor of Massachusetts, and will get America working again,” said Michele Davis, a spokeswoman.

Please click through to the original Financial Times story for more.
“Blatant, grievous, wilful, deliberate and repeated violations”: Another FT story, Romney link to union suppression ruling explains further,

“The anti-union activities in this case are not merely unfair labour practices as Key argues, but blatant, grievous, wilful, deliberate and repeated violations of the Railway Labour Act,” Roger Foley, federal judge for the District of Nevada, wrote in 1992, in a case brought by two Key pilots.

That’s how a federal judge worded it. (Note how a case that started in 85 takes till 92 to get a ruling.) This is what the airline had done:

According to the court ruling, Key held coercive meetings with pilots; said management would leave and the company lose contracts; and told pilots that salaries, bonuses and benefits could be frozen. Federal labour law forbids an airline “to interfere in any way with the organisation of its employees”.

Sold For A Lot

The once-profitable company was struggling, losing money, had only $2 million in assets — down from $13 million when Bain bought it — and had just avoided (illegally suppressed) unionization. But Bain was able to sell part of it to Presidential Airways– a company in which Bain was also an investor, with Andrews on its Board — for $18 million. They sold other parts of the company for further profit. The Bain partners got rich(er).
According to FT

In the final analysis, it is hard to say whether Bain Capital was good or bad for Key Airlines.
The operating company had higher sales, was more focused, more efficient and employed more people by the time that Bain sold out.
On the other hand, it was also more fragile, with only one line of business, net losses and a weak balance sheet.

So a look at Bain Capital’s early, “formative” years tell us a lot about what has happened to our country, and our jobs, and our economy. This was the beginning of a pattern of Bain-ization that swept through the economy. Good jobs were replaced with low-wage, insecure jobs. They used various schemes to avoid taxes. They suppressed unions. They gutted the assets of good companies. They cut costs (us) and cut costs (safety) and cut costs (product quality) and cut costs (customer support) and cut corners and cut We, the People out of the equation.
This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
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Pension Gimmicks Blamed On Workers

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The student loan deal is badly needed. It should have just been extended – duh! But the 1 percenters took it hostage and demanded their pound of flesh before We, the People can preserve even this little bit of what we do for ourselves. So as part of the “sweetener” for those 1 percenters there is a corporate pension giveaway in the deal that has nothing to do with student loans. It appears they are going to let companies underfund pensions — money that should be set aside for worker pensions tomorrow will instead go into 1 percenter pockets today — and are setting up for a taxpayer bailout (or just stiffing retirees) later.

Pension Calculations Are Tricky But Regulated

This is kind of tricky, so bear with me. When companies (and governments) put money into pension funds they have to calculate how much will be needed to pay the promised pensions. This involves estimating things like how long (and how many) people will live, and how much “return” (interest, stock price increases,dividends…) to expect as the money is set aside. Key point: If you expect a too-high rate of return you can set less aside now (and put it in your pocket,) but when the time comes to pay the pensions you won’t have enough.
This is supervised by government standards and regulations. They say how much of a rate of return is allowed to be used in these calculations. A higher expected-rate-of-return allowance means less has to be set aside, so more money can go into 1 percenter pockets. So there is a lot of pressure from corporations to let them get away with overestimating, and therefore putting more in their pockets today. Since this is complex, it is easier to get away with diverting promised-worker-retirement money into 1 percenter pockets.
This student loan deal apparently lets corporations claim a higher expected rate of return, thereby diverting more money today into 1 percenter pockets.

Money Into Worker Pensions Or 1 Percenter Pockets?

For a long time the government has been allowing pension funds to use a too-high estimated rate of return, with the result that many pensions are now underfunded. Money that should have gone into savings to pay worker pensions was diverted into 1 percenter pockets, either through improved corporate bottom lines in the case of companies, or through lower taxes in the case of state & local governments. (Of course, many companies shifted worker-pension promises into 1 percenter pockets using the 401K scam — you fund your own retirement, on your own, with little help, and have to know how long you’ll live, and it turns out badly every time — but that’s for another post.)
In fact, this worker-set-asides-for-later vs 1 percenter-pockets-today issue is similar to what happened with the Social Security Trust Fund. Money from workers was set aside into the fund but was used to pay for tax cuts (and massive military increases). Now 1 percenters are demanding austerity — cutbacks in the things We, the People do for each other — instead of workers getting the money back from where the money went, namely the 1 percenters.
And since this is about money for worker retirees, and retired workers don’t have big, influential PR firms while 1 percenters do, it is convenient and easy to blame workers when the promised money isn’t there for their retirement.

The Much-Hyped Public-Employee Pension Crisis

The supposed public-employee pensions crisis is partly the result of state and local governments not setting aside enough money to pay up on pension promises (because of tax cuts). It is also partly caused by Wall Street scamming on those same governments as they got into riskier investments trying to get a high enough rate of return to make good on their pension promises. But the blame is being placed on the workers themselves.
The post Discover The Network Out To Crush Our Public Workers traced just a few of the corporate-conservative think tanks (really just PR firms) promoting the idea that public-employee unions are responsible for pension shortfalls. Almost all of these organizations traced back to Wall Street firms and individuals for their governance or funding. They are engaged in a campaign to divert attention and blame the workers themselves for pension shortfalls,

These corporate/conservative organizations are very good at manipulating the media and public opinion — it is their purpose. Their “experts” are well paid and always available to talk to reporters, appear on TV and radio shows and write articles and opinion pieces for newspapers, blogs and for their network of similar organizations. Their “reports’ and “studies” reach the conclusions that fit the strategy, and are crafted to sound just right. And there are so many of them! The result is development of “conventional wisdom” about what is going on in our society. This is why that conventional wisdom more and more reflects the corporate/conservative line. And right now the corporate conservative line is that we should think that public employees and their unions are responsible for state and local budget shortfalls.

See also Understanding The Attacks On Public Employees, Ten Holiday Attacks On Public Employees and Are Public Employee Unions Strangling Us? Also, Rick Smith And Dave Johnson Counter The Attack On Public Employees.

Others See It, Too

NY Times Editorial, The Deal on Student Loans,

The pension provision is not ideal. It could mean that more companies will underfinance their pension liabilities, shortchanging employees down the road. Lawmakers have tried to address that potential shortfall by strengthening the agency that insures private pensions with more money from higher premiums.

Thus from the Competitive Enterprise Institute, usually a most unreliable source. (The check from the big corps who want to underfund pensions must have been late.) In this case it is the same gimmick but added the the highway bill…: Threat of Pension Fund Bailouts Lurks in Senate Highway Bill, “Pension Smoothing” a License to Make Up Numbers,

The bill … would amend the Employment Retirement Income Security Act (ERISA) to allow for an accounting gimmick known as “pension smoothing,” whereby pension managers spread losses out over several years, while overestimating projected investment returns.
Specifically, this provision would expand the range of allowable projection figures, starting this year at a 20 percentage point range, to 60 percentage points after 2015. This is essentially a license to make up numbers for income projections four years out from now. …
“This accounting trick will likely expose taxpayers to potential pension fund bailouts in the future. ” …
“It would further remove pension investment return projections even further from reality, by expanding the range of allowable projections so broadly as to render them meaningless.”

Making Things Worse

To get a deal that keeps student-loan interest rates low enough for more people to afford to go to college, we had to pay off the 1 percenters with this “pension-smoothing” deal. Such is the way of Washington since we shifted from a democracy (rule by the people, for the people) to a plutocracy (rule by the rich, for the rich). Or, in this case a 1 percenter kleptocracy (rule by the rich, stealing from everyone).
But make no mistake, this deal makes the country’s future pension problems even worse. It diverts even more money from promised pensions into 1 percenter pockets. The result will be clear in 10, 20 or 30 years when people are retiring and the money isn’t there. Taxpayers will be asked for ever more “austerity” to cover money that was diverted to the 1%.
This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
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Verizon Workers STILL Struggling, Turn To Board Members, Find More Greed

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What a complex web we weave, when our lives are ruled by greed. Verizon is an example of what corporate greed (the 1%) is doing to our middle class and vulnerable (the 99%). It is a highly profitable company, just gave its CEO a huge raise, but dodges its taxes (schools, roads, police, firefighters for the 99%), and to top things off is asking its workers to take cutbacks. So its workers are going over the head of the CEO, and look what they find.

Background

Verizon is a highly-profitable company. Last August (yes this has been going on a long time) I wrote in, Verizon’s Workers Strike Back At Corporate Greed — You Can Join Them!

The giant telecom company Verizon, currently raking in the billions ($6 billion in profits and a $10 billion dividend on $108 billion in revenue last year), while paying no taxes, is putting the squeeze on its workers, and they are fighting back. With all those profits, the company has been consumed by greed: Now Verizon is asking for $1 billion in concessions from its workers.

Verizon’s directors recently approved a 200% increase in compensation for the CEO, to $23.1 million. But Verizon continues to demand cuts in compensation from its workers of at least $10,000 a year.

Dodging Taxes

Taxes are how our government does what it does for We, the People and our small and medium businesses. Schools, teachers, police, firefighters, courts, ports, enforcing environmental regulations, enforcing worker safety regulations, enforcing consumer-protection regulations, etc. Verizon, with all of its profits, dodges taxes. In November’s How Wealthy Companies Like Verizon Avoid Taxes,

Verizon needs to open a call center, which means a few new low-paying jobs. They get local governments bidding against each other, offering all kinds of tax breaks if only they’ll bring those jobs there. Before the bidding war these jobs will be in the economy somewhere, but local schools, police, etc. will be funded. After the bidding war the same number of jobs open up but schools, police, etc. are not funded — and the 1% are that much richer. Company after company does this. Community after community, desperate for jobs, loses. Schools, police, infrastructure go unfunded. Just who does this help? The 1%.
… [Verizon] aggressively manipulated state tax rules, demanded subsidies, and used other methods to end up with a negative federal income tax rate, and receiving state and local tax subsidies in at least 13 states. When setting up call centers, for example, they offer localities the prospect of jobs that that will be created somewhere in US, where the company would have paid taxes to fund schools and infrastructure, but get the localities bidding against each other until they end up making a profit instead of paying taxes.

Verizon’s Directors

45,000 Verizon’s workers are are still trying to get a fair contract and are now turning to Verizon’s directors, asking them to get this company to act responsibly. But looking into Verizon’s corporate governance seems to reveal the very kind of web of 1% greed that is destroying our country.
Friday Verizon’s workers launched protests aimed at members of Verizon’s Board of Directors, asking them to take responsibility and get the company to negotiate and give workers a fair deal. Joined by members of the IBEW, Jobs with Justice, Restaurant Opportunities Center (ROC), AFL-CIO and the Change to Win coalition, actions took place at nearly 300 locations across the country (300 protests, but not in the newspapers or TV news), including Chicago, Los Angeles, New York, Miami, Boston and Washington D.C., as well as in San Juan, Puerto Rico.
Targeted in these protests are directors Richard Carrión, CEO of Peurto Rico’s Banco Popular, and Clarence Otis, CEO of Darden Restaurants. Looking into Verizon’s corporate governance you find that Carrión and Otis currently are being criticized for their own business practices at their companies Banco Popular and Darden Restaurants.
Richard Carrión has been a Verizon director … not quite forever, just since 1997. He is a member of the Corporate Governance and Policy Committee and the Human Resources Committee. Carrión has also been a board member of the Federal Reserve Bank of New York since 2008. He serves on that board (sits in that web?) with Jamie Dimon of JPMorgan Chase, who is currently in the news. (Previous directors include Stephen Friedman who resigned but was not prosecuted – who is? – after it was disclosed he purchased millions of dollars of Goldman Sachs stock while serving both as a director of the bank and of the NY Fed while the Fed was bailing out AIG, which directly benefited Goldman Sachs and bolstered its stock.)
Carrión’s Banco Popular owes taxpayers more than $900 million in TARP bailout money – just one bank in the US owes more. Yet, Carrión’s own compensation has more than doubled since 2009. Meanwhile, under Carrión, the bank has controversially loaned millions of dollars to companies controlled by Carrión’s relatives – much of which has been written off as a loss to the bank.
Bloomberg, N.Y. Fed Director’s Puerto Rico Bank Loses On Nephew’s Loan,

Popular Inc. (BPOP), Puerto Rico’s largest lender, amassed record losses during the credit crisis and got a $935 million injection from U.S. taxpayers. Now a loan to a real estate venture overseen by the chief executive officer’s nephew is burning a hole in the bank’s books.
Popular loaned the money two years ago to a developer controlled by Jose Vizcarrondo, whose uncle, Richard Carrion, is the bank’s CEO … Popular said it wrote off more than half the $15.7 million.
Add that Vizcarrondo, 49, is a Popular board member who until two months ago helped set Carrion’s pay, and the saga exposes conflicts of interest and potential weaknesses in the bank’s governance…

Meanwhile, Clarence Otis has been a Verizon director since 2006 and is a member of the Audit Committee and the Human Resources Committee. Otis has been Chairman of Darden Restaurants since 2005 and CEO since 2004. Darden Restaurants is the largest company-owned and operated full-service restaurant company in the world. The Darden brand includes: Red Lobster, Olive Garden, Longhorn Steakhouse, The Capital Grille, Bahama Breeze, Seasons 52, and Eddie V’s. There are more than 1,900 Darden restaurants.
Otis is also on the Board (web?) of the Federal Reserve Bank of Atlanta.
So, what about Darden? What happens if we pull on the web a bit further? The Restaurant Opportunities Center (ROC) is an organization working to better the conditions of people who work at outfits like Darden’s. From their website,

The mission of the Restaurant Opportunities Centers United (ROC-United) is to improve wages and working conditions for the nation’s low-wage restaurant workforce. ROC-United is the only national restaurant workers’ organization in the United States. ROC-United is the only national organization in the United States dedicated exclusively to the needs of restaurant workers.

The ROC has launched a Dignity At Darden campaign, asking the chain to stop practices of discrimination and wage theft,

In December 2011, workers from the Capital Grille Restaurant stood up for dignity in their restaurant company. On January 31st, Capital Grille workers in New York, Chicago, and in the Washington, DC area filed federal litigation against Capital Grille’s parent company Darden for discrimination and wage theft (Click here to find out more about the lawsuit). On February 15th, workers from Capital Grille in Los Angeles joined the struggle. On February 28th, Miami Capital Grille workers also launched their campaign and added their claims to the litigation.

Dardens was in the news recently, when the Food Chain Workers Alliance (FCWA) released a report, The Hands That Feed Us, looking at wages and working conditions of workers across the entire food chain. A report on the FCWA report, Many Food Workers Keep Working While Sick, Survey Finds, looke at how lack of paid sick days can help spread disease,

Many well-known restaurant chains have been implicated in recent foodborne illness outbreaks. Just take a look at this list of recent Hepatitis A outbreaks tied to sick workers at restaurants like Olive Garden, Quiznos, and McDonald’s. … This spring, the New York City branch of ROC demanded that Darden, which owns Olive Garden and Red Lobster, among other chains, provide paid sick days to protect the health of consumers and employees.

From FCWA, Tell Darden: Take the High Road,

Alliance member Restaurant Opportunities Centers United has launched an exciting new national campaign, Dignity at Darden. In December 2011, workers from the Capital Grille Restaurant stood up for dignity in their restaurant company. On January 31st, Capital Grille workers in New York, Chicago, and in the Washington, DC area filed federal litigation against Capital Grille’s parent company Darden for discrimination and wage theft. Employees at all of the 1,680 Darden Restaurants across America – such as Capital Grille, Red Lobster, and Olive Garden – deserve to be given equal opportunities, to be fully and fairly compensated for their efforts, and to enjoy a safe and healthy workplace. Listen to workers’ stories on the website.

Action

So Verizon’s workers are bringing attention to the conditions at Darden restaurants. With reports that workers at some Darden restaurants are not fully compensated for their work and others have been subjected to racial discrimination, Verizon workers protested these problems at Darden locations across the country as part of last week’s Day of Action.
“Mr. Otis and Mr. Carrión are each paid $230,000 per year to direct Verizon’s business,” said CWA Communications Director Candice Johnson. “It’s time for them to step up and make Verizon management recognize the contributions of front line workers who have helped the company become so successful. Leaving the workers’ contracts unresolved undermines the workforce, hurts employee morale and creates unnecessary uncertainty for the company.”

For more information, please visit www.verigreedy.com.
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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
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Corporations Aren’t The Problem

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A pro-labor column in a major newspaper? I’d better look out my window and see if pigs are flying down the street. Nope, they’re not! Hell hasn’t frozen over. And hey, monkeys aren’t even coming out of my butt!
In today’s NY Times Joe Nocera writes, in Turning Our Backs on Unions,

In the early postwar years, even the Chamber of Commerce believed that “collective bargaining is a part of the democratic process,” as its then-president noted in a statement.
But, in the late-1970s, union membership began falling off a cliff, brought on by a variety of factors, including jobs moving offshore and big labor’s unsavory reputation. Government didn’t help either:Ronald Reagan’s firing of the air traffic controllers in 1981 sent an unmistakable signal that companies could run roughshod over federal laws intended to protect unions — which they’ve done ever since.
…“Draw one line on a graph charting the decline in union membership, then superimpose a second line charting the decline in middle-class income share,” writes Noah, “and you will find that the two lines are nearly identical.” Richard Freeman, a Harvard economist, has estimated that the decline of unions explains about 20 percent of the income gap.

Nocera concludes, “…if liberals really want to reverse income inequality, they should think seriously about rejoining labor’s side.”
Ok, checking again, are monkeys really not flying out of my butt?

OK, this is for real, and people had best pay attention if we want our economy to recover. We have a consumer economy and when regular people have money in their pockets to spend on things, the economy does better. Why is this so hard to get? So why are all of the solutions to the economic downturn based on, as Atrios writes, “free money for banks” instead of helping regular people?
See Businesses do not create jobs, people do. Also, It’s the lack of demand, stupid! and Businesses hire when customers are coming in the door and The rich don’t create jobs, we do.
Again, the rich don’t create jobs, we do. And companies want customers, not tax cuts. And this means that we need strong unions pushing to get raises and benefits so working people can start walking through the doors of the businesses again, which will make them hire again, to meet that demand.

Who’s In Charge Here?

We, the People were supposed to be in charge here. The economy was supposed to be for our benefit and we were all supposed to get a slice of that pie we all baked together. But (as always throughout history) wealthy interest were able to dominate, “influence” the lawmakers and enforcers, and grab what they could get for themselves. Our system fell down because it didn’t control the ability of a few wealthy people to gain power over the rest of us.
Unions gave regular working people the power to get the share of the pie that democracy promises. Before unions came along to enforce the promise of democracy working people didn’t get their share of the prosperity that democracy promised. After unions working people did. Before unions we had 12 (or more)-hour workdays, seven days a week. Before unions we had low pay. Before unions we had no benefits. Before unions we certainly didn’t get vacations. Before unions we could be fired for no reason. Before unions a wealthy few were able use their wealth to pay off influence legislators and keep the rules bent in their favor.
Unions organized people into power blocks that forced changes that brought a larger share of the pie to We, the People. Unions are a vital part of the system of democracy because they give regular people the power to confront the wealthy.

Corporations Aren’t The problem — The Rules Are The Problem

One thing Nocera wrote: “Company managements don’t pay workers any more than they have to” — actually, I would change “don’t” to “can’t”. Companies can’t pay workers more than they have to. And they can’t provide health insurance and benefits and good working conditions and all the other things we wish they would do.
Here is what a lot of us don’t get about corporations: it isn’t the corporations that are the problem, it’s the playing field that is the problem. If one corporation can get away with paying its workers less, then they all have to. They don’t have a choice. When one company finds a competitive advantage the rest of the companies have to respond or risk being driven out of business. They really do not have a choice. One company can’t pay better than the others. We, the People have to make them all pay better. It’s called making the rules. We are supposed to be making the rules, not them. And when we are not making the rules, the system stops working.
I think this is so important to understand. To change companies we have to change and enforce the rules that companies operate under. It is up to us to tell them what to do, to lay down the playing field, and then they will compete on that field as it is defined, up to the limits of how it is defined. They have to push to those limits, and they will, they all will, it is what they are wired to do. When we fall down on the job a few can game the system and break it and end up with everything for themselves, and this is what is happening.
It isn’t just that We, the People come out better when we are the ones making the rules, it’s that the system doesn’t work at all unless we are the ones making the rules. When (the owners and managers of) companies are making the rules, the ones with the most money are able to make the rules to benefit them and only them Which is exactly what we are experiencing today.
The economy and the system just don’t work without strong unions to balance the power of the billionaires and the big corporations they hide behind.
This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
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Unions Fucking Us All Up By Requiring Actual Pay For Work

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A letter in today’s paper, about how unions are “handcuffing” us, because they won’t let cities replace paid people with volunteers. This pretty much sums up the anti-union argument, doesn’t it?
Letters to the Editor – San Jose Mercury News,

Union rules handcuff library volunteers
[A person's] attacking of volunteers …(Letters, May 28) does not surprise me, but her lack of candor does. As business agent for San Jose’s largest public service employee union, she had a vested interest in keeping librarians employed. She should have disclosed this. … While libraries have “friends” groups, members are relegated to tasks not performed by union employees because of union rules. Take restrictions off library volunteers and they may flourish, …

Oh, and they’re also fucking us all up by getting pensions and health care. In a free market no one should get pay, pensions and health care! Then we can all prosper. Or something.