Category Archives: Labor Unions

Viewpoint: Boss Can’t Be Janus Fix

Source: Chris Brooks, Labor Notes, July 25, 2018

In the wake of the Supreme Court’s Janus decision, a new approach to financing unions called “direct reimbursement” is gaining traction with Democratic politicians, academics, and even the New York Times editorial board.

It boils down to this: rather than public sector workers paying dues, their government employer would pay an equivalent amount directly to the union.

Proponents claim this approach will neutralize the impact of the Janus decision and shore up union budgets.

The idea has legs. New York’s most senior Democratic Assemblyman Richard Gottfried is sponsoring a bill to allow public sector unions to negotiate this scheme into their contracts. Hawaii is entertaining a version too.

Backed into a corner and fearful for the future, some unions might jump at this quick fix. It’s a big mistake.

Trump Launches War on Federal Unions

Source: Jim Campana, Labor Notes, July 26, 2018

Federal employees are at war with a presidential administration that’s bent on busting their unions. They rallied around the country July 25, their day in court as federal unions sue to halt three anti-union executive orders. …. AFGE, the Treasury Employees (NTEU), and other federal unions have filed suit in federal district court against the three executive orders that Trump signed on May 25, a Friday afternoon that will live in infamy.

Present consequences of unfunded pension liabilities and ways forward

Source: Jeffrey Cheng and David Wessel, Brookings Institution, July 16, 2018

Note: This paper will be presented at the 2018 Municipal Finance Conference on July 16 & 17, 2018.

State governments with large unfunded pension liabilities are paying more to borrow from capital markets than are other states, according to Chuck Boyer of the University of Chicago Booth School of Business.

In the paper, “Public pensions, political economy and state government borrowing costs,” to be presented at the 2018 Municipal Finance Conference at Brookings this week, Boyer argues that markets view states with large pension deficits as riskier investments. His evidence suggests that states are already paying for municipal government’s unfunded pension liabilities in the form of higher borrowing costs. He asks two questions: 1) how are state governments’ borrowing costs affected by unfunded pension obligations? and 2) do states with political constraints face higher borrowing costs?

Boyer constructs a panel dataset using each state’s Comprehensive Annual Financial Reports for the period 2005 to 2016. He focuses on balance sheet variables—revenues, expenses, assets, and liabilities—to capture a state’s financial health and credit default swap (CDS) spreads – the premium paid to protect buyers from an issuer defaulting – to measure borrowing cost. The author reasons that CDS reflects market sentiments better than market yields because CDS are more liquid, and because they are standardized, whereas market yields may be affected by additional features of a particular bond.

Related:
Public pensions, political economy and state government borrowing costs
Source: Chuck Boyer, University of Chicago Booth School of Business, current draft: July 11, 2018

I find that public pension funding status has a robust and statistically significant relationship with state borrowing costs, as measured by credit default swap spreads. A one standard deviation increase in the net pension liability to GDP ratio is related to an 18 basis point increase in CDS spreads. This effect is most pronounced among states with constitutional protection for pension liabilities, suggesting the markets perceive these legal protections as material. I also find suggestive evidence that states with more powerful unions pay higher borrowing costs. Results are robust to using spreads from the underlying bonds themselves. These findings highlight the fact that states are already paying for potential future pension problems through higher borrowing costs.

Related: presentation slides

When Needed Public Pension Reforms Fail or Appear to Be Legally Impossible, What Then? Are Unbalanced Budgets, Deficits and Government Collapse the Only Answer?
Source: James E. Spiotto, Chapman Strategic Advisors, May 30, 2018

The problem of underfunded public pensions confronts a number of states and local governments in the United States. In the past, numerous public employers in the United States have agreed to pension benefits that now appear challenging to afford given current revenues and the increased cost of providing governmental services. Further, this challenge has been exacerbated by past failures to set aside sufficient moneys to meet the pension benefits obligations incurred to date. All of this is occurring on the heels of the Great Recession of 2007, followed by an anemic recovery, and at a time many states and local governments are faced with an aging infrastructure that must be attended to and increased demands for basic public services (sanitation, water, streets, schools, food inspection, fire department, police, ambulance, health and transportation) that must be met. Because the public pension underfunding problem pits the requirement of meeting pension obligations against the need to provide for essential public services, all citizens have an interest in the fair and equitable solution to the dilemma.

Unfortunately, a just and effective method of resolving unaffordable public pension obligations has been elusive for some public governmental employers and employees. This is due in part to promised pension benefits costs exceeding the government’s ability to pay and the failure to fund promptly the incurred obligations. In some cases, solving the problem has been complicated by the lack of any ability to adjust or modify pension benefits to those that are sustainable and affordable to the fullest extent possible without adversely affecting the funding of essential public services. This paper will provide a review of some legal and practical obstacles that have been making needed pension reform and balancing the budget difficult, if not impossible, and will suggest possible new approaches to the problem that have not yet been tried. …..

Related: presentation slides

Behind The Campaign To Get Teachers To Leave Their Unions

Source: Anya Kamenetz, NPR, July 19, 2018

….Last month, the Supreme Court in Janus v. AFCSME dealt a major blow to public sector unions. The court ruled that these unions cannot collect money, known as agency fees, from nonmembers who are covered by collective bargaining agreements.

Organizations on both sides across the country sprang into action.

The Mackinac Center for Public Policy, based in Michigan, is running My Pay, My Say as a national campaign. The Freedom Foundation, with headquarters in Washington state, is targeting teachers in Oregon, Washington and California with the slogan, Opt Out Today.

Other groups targeting teachers and public employees in specific states include: the Commonwealth Foundation, the Yankee Institute for Public Policy, the Center of the American Experiment, the Center for Union Facts and Americans for Prosperity.

The outreach tactics include paper mail, phone calls, emails, hotlines, Facebook ads, billboards, TV advertising and even door-to-door canvassing. Organizations are using publicly available email addresses to reach their targets, as well as purchasing mailing lists. ….

…. The groups behind the opt-out campaign, which describe themselves as conservative, libertarian or free-market, share many donors in common, such as the State Policy Network, the Donors’ Fund and DonorsTrust. Many of these groups have long opposed not only agency fees, but teachers unions in general, on the grounds that they inhibit education reforms such as vouchers and charter schools.

According to an analysis of tax filings by the website Conservative Transparency, the top contributors to the Mackinac Center specifically include the Dick and Betsy DeVos Family Foundation, and the DeVos Urban Leadership Initiative (formerly the Richard and Helen DeVos Foundation). These are the family foundations of the U.S. education secretary, Betsy DeVos, and her husband’s parents. ….

Related:Trump Nominee Is Behind Anti-Union Legal Campaign
Source: Noam Scheiber, New York Times, July 18, 2018

Even before the Supreme Court struck down mandatory union fees for government workers last month, the next phase of the conservative legal campaign against public-sector unions was underway.

In March, with the decision looming, lawyers representing government workers in Washington State asked a federal court to order one of the state’s largest public-employee unions “to disgorge and refund” fees that nonmembers had already paid. Similar lawsuits were filed in California, New Jersey, New York, Pennsylvania, Minnesota and Ohio. ….

….Beyond their legal claims, the cases share another striking detail: The lead counsel in each is a conservative lawyer named Jonathan F. Mitchell.

Mr. Mitchell, 41, has a formidable résumé. He was a Supreme Court clerk to Justice Antonin Scalia; worked at the Justice Department under President George W. Bush; taught at several law schools, including Stanford; and spent more than four years as the solicitor general of Texas.

After the 2016 election, he served as a volunteer attorney on the Trump transition team, where he helped review future executive orders. In September, the president nominated him to head the Administrative Conference of the United States, a small federal agency that advises the government on improving its inner workings. His nomination awaits action by the Senate after the Judiciary Committee approved him on a party-line vote in March…..

After Janus, How to Tilt the Balance of Power Back to Workers

Source: Jessica Stites and Aaron Tang, In These Times, August 2018
This is the first of a four-part series on rebuilding labor after the Supreme Court’s Janus ruling. The second part will debut online Tuesday. You can read all four pieces, as well as an exclusive interview with Bernie Sanders on the future of the labor movement, in the August issue of In These Times magazine.

There’s a simple fix to Janus’s “free-rider” problem. …

…. The labor and employment protections that do exist have been eroded for decades, often on the Democrats’ watch. But unions and workers weary of broken promises from corporate-captured legislators may find a glimmer of hope in the current rise of progressive Democrats. To those candidates and legislators looking for strong pro-labor proposals, we invited labor experts to offer four concrete policies to bolster workers’ rights. You can find the first proposal, by Aaron Tang, below, and the rest on InTheseTimes.com over the course of the week.

We offer these with one caveat: Legislative change won’t happen without a groundswell of worker action, rooted in the conviction that we do not shed our rights when we clock in to work. ….

Rebuilding Power in Open-Shop America: A Labor Notes Guide

Source: Labor Notes, July 2, 2018

….Janus is a serious blow—but we have good news. As plenty of unions in open-shop states and sectors can testify, it’s still possible to win campaigns and maintain high membership rates despite the legal hurdles. We talked to workers in schools, factories, buses, hospitals, oil refineries, grocery stores, post offices, and shipyards.

This guide reveals the principles and practical steps behind their successes. Here’s the punchline: the unions that build power in open-shop America will be the ones that fight hard on workplace issues their members care about, and where large numbers of rank-and-file members take on their own fights…..

Context
How We Got Here
Our Prescription
The Racist History of Right to Work
Who’s Next?
The Anti-Union Game Plan

Diagnostics
Exercise: The Open-Shop Stress Test
Quiz: Assess Your Danger Level
Jump-Starting a Weak Union from Below

Brass Tacks
1. Be Democratic
2. Fight the Boss
3. Turn Up the Heat
4. Ask People to Join
5. Count Noses
6. Don’t Go It Alone

Targeting teachers while shielding cops? The politics of punishing enemies and rewarding friends in American state collective bargaining reform agendas

Source: Magic M. Wade, Journal of Labor and Society, Vol. 21 no. 2, June 2018
(subscription required)

From the abstract:
Teachers unions are notorious figures in state politics, asserting influence over elections and education policy with their large memberships and well‐funded PACs. Nonetheless, during the Great Recession Republican‐controlled state governments repeatedly clashed with teachers unions over their members’ compensation and collective bargaining (CB) rights. Conversely, public safety officers were less frequently targeted—and in some cases explicitly shielded—from CB conflicts. Is this because teachers support Democrats, while cops support Republicans? I evaluate this proposition considering state reform patterns and union partisan campaign donations.

How Corporations Plan To Use Janus To Turn Workers Against Their Own Unions

Source: Chris Brooks, In These Times, July 2, 2018

A union buster may be coming to your door.

…..SEIU 925 is the target of an “opt-out campaign,” a new anti-union initiative by the State Policy Network (SPN), the web of billionaire-backed right-wing groups that helped fund the Janus v. AFSCME lawsuit. The Washington-based Freedom Foundation is a star member.

SPN got the Supreme Court ruling it wanted in Janus, which nationalized right-to-work conditions across the public sector. All public sector workers now have the option of receiving union benefits without paying for them. If enough workers choose to stop paying dues, union budgets and power will be greatly diminished.

SPN is now building on the Janus victory with opt-out campaigns to contact government employees in union-dense states and encourage them to drop their membership. Their targets include blue states such as California, Illinois, New York, Oregon and Washington that have resisted passing anti-union legislation. The plan is simple: Gut unions of members and money so they have less influence on state elections. Once sympathetic politicians are in office, corporate interests can pass state laws to torch what remains of organized labor.

But unions have also spent months preparing for this moment…..

How Badly Did the Supreme Court Just Damage Public Sector Unions? Take a Look at Michigan.

Source: Jordan Weissman, Slate, June 27, 2018

….Estimates vary as to how drastically right-to-work policies ultimately reduce union membership, but the consensus at this point is that they’re a drag. Michigan offers a useful illustration, in part because it passed a right to work law in 2013, meaning enough time has passed to judge its initial effects, and because the state’s largest teachers union, the Michigan Education Association, files financial and membership information with the Department of Labor. (Many purely public sector unions don’t because they aren’t required to.) According to those documents, the union has lost 18 percent of its membership since the statute was passed. Dues and membership fees have declined, meanwhile, by 28 percent. The union hasn’t collapsed, but it is significantly reduced…..

….David Crim, a spokesman for the Michigan Education Association, told me that many teachers decided to leave the union even though they supported it, because dropping their membership and not paying dues was the only way they felt they could increase their incomes at a time when educators’ wages in Michigan have been stagnant. If true, that points to how right-to-work policies can create a vicious cycle for unions: Weakening organized labor makes it harder for public sector unions to organize and bargain for better pay, encouraging more teachers to drop their memberships for the sake of their own finances…..