How today’s unions help working people: Giving workers the power to improve their jobs and unrig the economy

Source: Josh Bivens, Lora Engdahl, Elise Gould, Teresa Kroeger, Celine McNicholas, Lawrence Mishel, Zane Mokhiber, Heidi Shierholz, Marni von Wilpert, Ben Zipperer, and Valerie Wilson, Econiomic Policy institute, August 24, 2017

From the introduction:
Americans have always joined together—whether in parent teacher associations or local community organizations—to solve problems and make changes that improve their lives and their communities. Through unions, people join together to strive for improvements at the place where they spend a large portion of their waking hours: work.

The freedom of workers to join together in unions and negotiate with employers (in a process known as collective bargaining) is widely recognized as a fundamental human right across the globe. In the United States, this right is protected by the U.S. Constitution and U.S. law and is supported by a majority of Americans.

Over 16 million working women and men in the United States are exercising this right—these 16 million workers are represented by unions. Overall, more than one in nine U.S. workers are represented by unions. This representation makes organized labor one of the largest institutions in America.

By providing data on union coverage, activities, and impacts, this report helps explain how unions fit into the economy today; how they affect workers, communities, occupations and industries, and the country at large; and why collective bargaining is essential for a fair and prosperous economy and a vibrant democracy. It also describes how decades of anti-union campaigns and policies have made it much harder for working people to use their collective voice to sustain their standard of living…..
Press release

Investment Return Volatility and the Pennsylvania Public School Employees’ Retirement System

Source: Yimeng Yin and Donald J. Boyd, Nelson A. Rockefeller Institute of Government, Pension Simulation Project Policy Brief, August 2017

The Rockefeller Institute of Government released a report that examines the potential implications of investment return volatility for the Pennsylvania Public School Employees’ Retirement System (PSERS) using the Institute’s state-of-the-art Pension Simulation Model. It also examines the implications of a recent reform that created a hybrid pension plan for new employees. PSERS was selected for study as part of the Rockefeller Institute of Government’s ongoing analysis of risks related to public pension systems.

PSERS is a defined benefit retirement plan for public school employees of the Commonwealth of Pennsylvania. The state and individual school districts are participating employers. As of June 30, 2016, PSERS had over 257,000 active members and approximately 225,000 retirees and other beneficiaries who receive over $476 million in pension and health care benefits each month. PSERS has an uncommon approach to funding under which some employees share partially in the plan’s investment risk, in certain circumstances.

PSERS is deeply underfunded and faces greater challenges than other pension funds we have examined recently. At the end of the 2016 fiscal year, it had a market-value funded ratio of 50 percent and an unfunded liability of approximately $50 billion.

PSERS currently uses a 7.25 percent earnings assumption. Recently it has fallen short of this assumption: its one-year, three-year, five-year, and ten-year annualized rates of return were 1.29 percent, 6.24 percent, 6.01 percent, and 4.94 percent, respectively, for periods ending on June 30, 2016.

In an effort to improve the overall fiscal health of the fund and reduce risks to employers, Pennsylvania lawmakers recently changed the retirement benefit structure available to new state employees. New members of PSERS hired on or after July 1, 2019, will be offered three options for retirement benefits: two hybrid benefit options that include a defined contribution component in addition to a defined benefit component, and a pure defined contribution option. The defined benefit options will provide lower benefits than the current defined benefit plan for existing workers.

The reform is intended to shift part of the funding risk, which is almost entirely borne by the state and school districts under the current defined benefit structure, to new employees…..

The Cure Worse than the Disease: Expelling Freeloaders in an Open-Shop State

Source: Chris Brooks, New Labor Forum, August 24, 2017

…..Right-to-work laws create two interlocking problems for labor unions. First, unions are legally required to represent all workers in a bargaining unit that the union has been certified to represent. In open shops, the “duty of fair representation” requires unions to expend resources on nonmembers who are covered by the union contract. This is known as the free-rider problem. Union activists often refer to workers who opt out of paying for the benefits of unionization as “freeloaders.” This leads to the second problem created by right-to-work laws: They undermine solidarity on the job by pitting workers who pay their fair share to support the union against workers who do not. This is the divide-and-conquer problem. In my use of these terms, the free-rider problem is institutional — the union has to expend resources protecting and fighting on behalf of workers who are not members and do not pay dues. The divide-and-conquer problem is interpersonal — when workers can opt out of supporting the union, this results in union and nonunion workers developing adversarial attitudes and behaviors toward one another, diminishing their unity on the job and their capacity for collective action.

Some on both the left and the right have argued that labor should deal with the free-rider problem by kicking out the freeloaders…..

…. In 2011, the newly elected Republican majority in the Tennessee legislature targeted the state’s collective bargaining law for teachers, eliminating exclusive representation and creating a negotiating process between teachers and local school boards that allowed for multiple organizations, including a “yellow” union—one that claims to represent teachers while advancing broader corporate interests — to represent teachers simultaneously at the bargaining table. Based on my experience as an organizer for the Tennessee Education Association (TEA), it is clear that jettisoning exclusive representation might have solved the free-rider problem for the union, but it exacerbated the divide-and-conquer problem. An examination of the Tennessee law—its implementation and the broader national context—reveals how the push by pro-union advocates to kick out freeloaders easily plays into the right’s strategies to diminish union power. ….

How noncompete clauses clash with US labor laws

Source: Raymond Hogler, The Conversation, August 23, 2017

Most Americans with jobs work “at-will”: Employers owe their employees nothing in the relationship and vice versa. Either party may terminate the arrangement at any time for a good or bad reason or none at all.

In keeping with that no-strings-attached spirit, employees may move on as they see fit – unless they happen to be among the nearly one in five workers bound by a contract that explicitly forbids getting hired by a competitor. These “noncompete clauses” may make sense for CEOs and other top executives who possess trade secrets but seem nonsensical when they are applied to low-wage workers such as draftsmen in the construction industry.

As a scholar of employment law and policy, I have many concerns about noncompete clauses – such as how they tend to make the relationship between workers and bosses too lopsided, suppress wages and discourage labor market mobility. In addition to tracing their legal and legislative history, I have come up with a way to limit this impediment to worker mobility.

UAW’s loss at Nissan auto plant masks genuine progress for organized labor

Source: Harley Shaiken, The Conversation, August 22, 2017

….Behind this loss there’s a glimmer of hope for labor. Decades of research on labor and globalization, particularly in manufacturing and the auto industry, lead me to believe that while the pro-union workers may have suffered a setback, the campaign is far from over. In fact, there are signs that the UAW’s organizing effort has made some lasting inroads that could lead to success down the road. …

Not Just Signing Cards

Source: Joe Richard, Jacobin, August 18, 2017

In the wake of the UAW’s loss at Nissan, it’s clear that the dominant strategies for winning a union aren’t working. ….

…. The labor movement should see this moment as a wake up call, and launch a frank discussion about what works and what doesn’t, and what kind of strategies unions should adopt if they ever hope to regrow their strength, let alone expand into regions beyond the traditional bastions of union strength. Given the crushing defeat of the Machinists at Boeing and the UAW at the Volkswagen plant in Chattanooga, TN in the past few years, there’s urgency to the discussion — particularly to organizing the solidly anti-union South. ….

Decisions, Decisions: An Update on Retirement Plan Choices for Public Employees and Employers

Source: Jennifer Brown, Matt Larrabee, National Institute on Retirement Security (NIRS) and Milliman, August 2017

From the summary:
Public employees with retirement plan choice overwhelmingly choose defined benefit pension plans over defined contribution 401(k)-type individual accounts.

Decisions, Decisions: An Update on Retirement Plan Choices for Public Employees and Employers, finds that public sector employees with retirement plan choice overwhelming choose defined benefit (DB) pension plans over 401(k)-type defined contribution (DC) individual accounts.

Among the eight states studied that offer employees such a choice, the DB pension take-up rates in 2015 were 80 percent or higher in six states. Two of the plans studied had pension take-up rates higher than 95 percent, while Florida and Michigan had take-up rates of 76 percent and 75 percent, respectively. Importantly, the research finds that even when the retirement plan default option favors a DC plan, most employees still select a DB pension plan.

For example, in Washington the default retirement plan is a combination DB/DC plan. Employees must affirmatively act to elect to participate in the DB pension plan instead, and they do. The majority of newly-hired employees – six out of every ten new hires – actively choose a pension plan.

Read the press release here.
Watch a webinar replay here.
Download a PowerPoint here.