SEIU: Make somebody else pay for it

The state Assembly on Monday approved a sweeping health reform plan that could be a model for the nation - if it ever happens.

Gov. Arnold Schwarzenegger and Assembly Speaker Fabian Nuñez celebrated the "historic" deal, which culminates nearly a year's worth of negotiating that has dominated the Capitol this year. But the plan is far from reality.

Senate leader Don Perata, D-Oakland, insisted again Monday that he will not allow the Senate to vote on the plan, which would provide insurance to more than two-thirds of the state's uninsured, until after the state's independent legislative analyst examines its impact on the state's budget deficit, now estimated at $14 billion.

The plan also still must be approved by voters because it proposes a number of taxes to fund it, including a requirement on employers to either provide insurance or pay a tax on payroll that would go into a state pool, as well as a hefty cigarette tax. An election campaign is sure to be costly and contentious.

Schwarzenegger and Nuñez, however, appeared confident.

"California has taken a giant step forward today on something that many people thought could not be done," Republican Gov. Schwarzenegger told hundreds of people assembled in the grand Capitol rotunda after the vote.

"This is truly an historic effort," added Nuñez.

The plan would create a new requirement that people carry insurance or potentially face a fine. To help ease that burden, lower-income people would be eligible for free or subsidized coverage depending on their income.

To pay for the estimated $14.7-billion plan, new taxes would be levied on hospitals and tobacco, and the state would attempt to draw billions in new dollars from the federal government. Altogether it aims to cover more than 70 percent of the roughly 6.6 million Californians uninsured for all or part of the year. It also requires insurers to accept all customers regardless of per-existing medical conditions.

But as ambitious as the plan is, it may not make it further than Monday's 46-31 party-line vote. Perata - echoing a concern voiced by Assembly Republicans - says it would be a mistake to create a new health care program with the state's finances in peril. Perata is especially concerned about existing health programs potentially on the chopping block.

If Perata does not relent soon, it could doom the proposal. Supporters are already running behind schedule to meet a series of deadlines to qualify an initiative for the November ballot. Beyond that, the political dynamics could shift dramatically next year, as the budget dominates the statehouse agenda to the detriment of other issues.

Flanked by labor and business leaders, Schwarzenegger and Nuñez hoped to build momentum for the bill that Perata would have difficulty resisting. Among those on hand were Andy Stern, president of the nation's largest union of health care workers, SEIU, and Steve Burd, chief executive of Safeway.

"I'm not telling Senator Perata how to do his job," Schwarzenegger said, "but I know he will do the right thing." The governor maintains that the health care plan is "revenue neutral," meaning that it would not affect the state's general fund. But skeptics doubt that claim, given the high and fast-growing cost of health care.

Perhaps the most far-reaching part of the plan is the so-called individual mandate to carry insurance, much like drivers have to carry auto insurance. The goal is to push as many people as possible into the insurance market, lowering costs for everyone. But the governor spent months debating how to make it fair for families already struggling to get by.

They settled on a series of subsidies and tax credits. The state would provide free or heavily subsidized care to people making up to 250 percent of the poverty line - just under $52,000 for a family or four. People in that income bracket who still had to spend more than 5 percent of their income to obtain insurance would be allowed to opt out of the mandate.

In addition, those who earn between 250 and 400 percent of the poverty level - between $52,000 and $83,000 for a family of four - would be eligible for a tax credit if the cost of insurance exceeded 5.5 percent of family income.

The state would also consider case-by-case requests for an exemption to the mandate if a person or family was experiencing financial hardship.

If the proposal does make it through the Legislature and on to the ballot, it is sure to trigger a major battle. Although the governor has enlisted significant business backing for the plan, opinion is far from unanimous, and opponents are expected to spend millions to defeat it.

Blue Cross, the state's largest insurer, says the measure would bring steep premium increases to millions of people, mostly young and healthy, who buy insurance in the individual market. The company opposes the provision that would require insurance companies to accept all applicants, regardless of previous health conditions, saying premium rates have skyrocketed in other states that enacted the idea.

A $1.50 to $2 per pack cigarette tax could also draw heavy opposition from tobacco companies. And the pharmaceutical industry is against another provision that would allow the state to buy prescription drugs in bulk.

In the debate leading up to Monday's vote, Assembly Republicans gave a sample of the criticism likely to come, calling the plan a "massive tax increase on California businesses."

"We are in a budget hole," said Assemblyman Roger Niello, R-Sacramento, vice chair of the budget committee, "And the first rule when you find yourself in a hole is, stop digging."

An estimated 6.6 million people in California - about a fifth of the population - go without health coverage for all or part of the year. The number of chronically uninsured is approximately 5.1 million. The plan would extend insurance to more than 70 percent of the uninsured, supporters said; excluded would be roughly 1 million illegal immigrants, and another 500,000 low-income people who don't enroll in coverage or can't prove they are legal residents.


Teamsters v. Saginaw Tribe in Casino War skirmish

With the first union representation election at the Soaring Eagle Casino & Resort approaching rapidly, both the Teamsters union and the casino management are trying to convince hotel housekeepers to vote their way.

About 300 full-time and regular part-time people are members of the Soaring Eagle's housekeeping staff. The vote is set for Thursday, and will be conducted by the National Labor Relations Board.

Workers say that housekeepers and other employees have been sent by casino management to a steady string of meetings where the Teamsters are portrayed in unflattering terms. Workers say they have been bombarded with anti-union messages from management.

Teamsters organizers countered Monday with what they billed as a "debate" between union leaders and casino management. Local 486 Business Agent Ed Morin distributed a letter to Saginaw (MI) Chippewa Indian Tribal Chief Fred Cantu inviting him or a representative to appear.

But no one really expected a Tribal representative to show up for the event, which turned into a rally for the union.

"There's that fear factor over there," said Bill Black of Teamsters Joint Council 43, the umbrella organization for Michigan Teamsters local unions. "Employers will go to any length to protect that at-will (employment status of employees)."

Cantu is on record saying his primary responsibility is to protect Tribal sovereignty. The Tribe owns the Soaring Eagle and it provides about 90 percent of Tribal revenue, according to NLRB documents.

After the organizing drive began, the Tribal Council adopted an ordinance that effectively bans unions from Tribal commercial enterprises. It also has appealed the order for the election.

A letter from Soaring Eagle management to employees says the Tribe agreed to conduct the union election under NLRB supervision so the Teamsters would have no grounds for an appeal when workers reject union membership.

Union organizers said Monday that they expect some erosion of support as a result of anti-union efforts, but remain optimistic that the housekeepers will vote to organize. Morin said that would open the gate to other employee groups, such as food-service workers, dealers and others to organize.

A second union, the International Union of Security, Police and Fire Professionals of America, also has been organizing security guards and surveillance professionals. Dwayne B. Phillips, director of the union's Casino Hotel Industry Police Division, said about 200 Soaring Eagle employees would be part of that bargaining unit.

"Security has to be separate from the other unions," Phillips said.

A hearing is set for Friday on the security union's request for a representation election.

Neither union would divulge the number of people who signed cards requesting a union election. Under federal rules, a representation election can be called if as few as 30 percent of the members of a potential bargaining unit sign requests, but most organizers won't ask for an election without signatures from at least 70 percent of the potential members.

Thursday's vote will be conducted by NLRB agents, and is to take place in the Three Fires Room of the Soaring Eagle conference center.

Polls will be open from 5 to 10 a.m., and against from 3 to 8 p.m. The Teamsters say they expect the ballots will be counted immediately after the polls close at 8 p.m.


Celebs ready to cross picket lines

NBC's two late-night franchises are coming back. Will the laughs come with them?

Jay Leno and Conan O'Brien plan a Jan. 2 return with fresh episodes, ending two months of reruns brought on by the writers' strike, the network said Monday. But until the strike is settled, the hosts will be on their own.

While late night TV will forge ahead without joke writers, they won't be far from anyone's mind.

"I will make clear, on the program, my support for the writers and I'll do the best version of 'Late Night' I can under the circumstances," O'Brien said in a written statement. "Of course, my show will not be as good. In fact, in moments it may very well be terrible."

Both NBC hosts indicated it was a tortuous decision for them to come back, torn by their support for the writers and knowledge that several dozen other staff members would be laid off if the shows remained dark. Some of the late-night stars covered employees' salaries during the holiday season.

Leno said that with talks breaking down and no further negotiations scheduled, he felt it was his responsibility to get his 100 non-writing staff members back to work.

Mike Sweeney, chief of the "Late Night" staff of 14 writers, said "we all know what a difficult position Conan is in. He's been incredibly supportive of us."

Sweeney said he didn't want to comment on his boss' decision to come back without the writers. The "Tonight" show's chief writer, walking the picket line in Burbank, Calif., was similary reluctant to criticize his boss' decision.

"I'm happy that he's been able to hold out this long," said Joe Madeiros. "He's not the only one. There's a lot of pressure on late-night hosts.

The union itself offered no reaction.

The strike has left the nation's public discourse without its laugh track as the baseball steroids scandal spread, pop stars Amy Winehouse and Britney Spears continued to spiral out of control and the presidential campaign heated up in anticipation of the first votes.

NBC's announcement could make it easier for other programs like Comedy Central's "The Daily Show" or "Jimmy Kimmel Live!" on ABC to return. Also, the WGA is talking about a separate deal with David Letterman's production company so his CBS show can return with its writers.

The development could cut both ways for the union. Suspended late-night programming has been the most visible sign of the strike for the viewing public, and bringing the shows back could remove a significant piece of leverage. At the same time, the hosts could come back and pepper their network bosses with ridicule in support of the writers' cause.

That's what Johnny Carson did in 1988, when he similarly returned to the air after two months off during a writers' strike then. Carson worked without writers for three weeks, then reached a separate deal with the union to bring his staff back.

"We've been taking shots at NBC for 15 years," noted Jeff Ross, "Late Night" executive producer.

The networks have been suffering in the ratings without the live programming, giving ABC's "Nightline" its biggest boost since the days of Ted Koppel.

Both Ross and Debbie Vickers, executive producer of "Tonight," said they are beginning to contemplate how their shows will be different. It's not even clear whether Leno will open the show with a traditional monologue, Vickers said, although she noted that Carson kept that element even without his joke writers by writing his own.

But Carson was not a guild member, whereas Leno and O'Brien are. For that and other practical reasons, they may be forced to return to an old-fashioned notion of a talk show by spending more time with guests. In recent years, the late-night programs have relied much more heavily on prepared comedy bits.

"There are a lot of ways we can go with this," Ross said. "Now we have to be serious and figure it out."

If Letterman's Worldwide Pants production company strikes a separate deal, it raises the prospect of a Letterman show with its writers competing for a prolonged period against Leno without writers. It could give Letterman a competitive edge in a time slot where Leno has dominated in the ratings for the past decade.

A similar imbalance is possible an hour later: Worldwide Pants owns Craig Ferguson's CBS talk show that airs directly opposite O'Brien.

"It certainly isn't our first choice to go against them with writers," Vickers said. "But this is beyond our control."

With Kimmel's show ultimately controlled by the Walt Disney Co. and Comedy Central's "The Daily Show" and "The Colbert Report" by Viacom, it's far less likely they would strike separate deals with writers.

Both the NBC show executives said that many potential guests privately expressed a reluctance to cross picket lines to appear. But as the strike has continued, that opposition is melting, they said. Neither of the programs has announced any bookings for their returns.

On Monday, the writers guild said it would meet with the Directors Guild of America to discuss new media and DGA studies on the issue. The directors guild has said it could begin its own contract talks with the alliance as early as January, which could increase pressure on the writers to reach a deal.


Why do unions with racist legacy shun Obama?

Barack Obama's appeal among Democrats is undeniable. He's near the top of every poll and he packs rooms wherever he goes. But a vital piece of the Democratic power establishment isn't showing him any love: labor unions.

With the Iowa caucuses just over two weeks away, the Illinois senator is the only top-tier Democratic candidate who has not been endorsed by a national union.

Such endorsements are prized because of the manpower, money and attention they can garner for candidates in the early voting states such as Iowa and Nevada. For example, the political arm of the American Federation of State, County and Municipal Employees, which has endorsed New York Sen. Hillary Rodham Clinton, spent $250,000 to air television ads in Iowa urging her victory.

And Clinton has nine other well-heeled national unions in her camp, while former North Carolina Sen. John Edwards has four national union endorsements.

Obama, meanwhile, has had to make do with city chapters like the Correction Officers' Benevolent Association of New York City and Illinois state chapters of the American Federation of Teachers, AFSCME and the Service Employees International Union. Other state chapters of the service employees union behind Obama include those in Indiana, Wisconsin, Missouri and Kansas.

His politics aren't the problem, analysts and supporters say.

Tom Balanoff, president of the SEIU Illinois State Council, said Obama's voting record is sound, with votes against trade deals like the Central America Free Trade Agreement and support for issues such as the Employee Free Choice Act. "We know that he's the real thing," Balanoff said.

Obama himself touts a longtime union record. "I've been consistent. You can't say that about the other two major candidates," Obama told a regional convention of the United Auto Workers in Iowa. "When a candidate says he opposes right-to-work laws or trade rules that hurt workers today, ask him where he's been before. Because America needs a president who will fight for you when it's hard, and not when it's politically convenient."

But even supporters like Balanoff said that Obama's relatively short time in the national spotlight may be working against him. While labor officials in the Midwest have known Obama for years, he's only been a U.S. senator since January 2005.

Obama "hasn't had the exposure that Hillary Clinton has — everybody knows Hillary — and John Edwards, who has run for president and run for vice president and has done a lot of work with unions," Balanoff said.

Added Paul Clark, head of the department of labor studies and employment relations at Penn State University: "Compared to the other candidates, he's a latecomer. Clinton and Edwards have a much longer relationship with the unions. ... I just think he had a lot of ground to make up."

The lack of major union endorsements early in the race may not be crucial to winning the Democratic nominations. Only one major union endorsed the 2004 Democratic nominee, Sen. John Kerry, D-Mass., before the primaries and caucuses — the International Association of Fire Fighters.

Despite supporting other candidates in the nominations battle, organized labor coalesced behind Kerry in his unsuccessful race against President Bush. Unions are expected to support whoever wins the 2008 Democratic nomination.

Robert Bruno, a professor at the Institute of Labor and Industrial Relations at the University of Illinois at Chicago, said Obama may be a victim of his desire to be a "transformative politician" — someone who appeals to people in all demographics.

Obama's been trying "to avoid the claim he's just like any other politician, so he doesn't come off as a real advocate," Bruno said. "But I think the labor movement wants an advocate, because you're talking significant resources and investment."

Organized labor put more than $60 million into the 2004 national elections, a figure that likely will be eclipsed by the end of the 2008 elections.

The fact that he's black has nothing to do with Obama's lack of union endorsements, said Richard Hurd, professor of labor studies at Cornell University. Almost 80 percent of union members in the United States are white.

"Forty years ago, a totally different story. Twenty years ago, a mixed bag. Today, I don't there's any chance it has anything to do with it," Hurd said.

In fact, Hurd thinks race could help Obama. Almost 15 percent of black workers are union members, compared with almost 12 percent of white workers and 10 percent of Hispanic workers.

"Unions actually have more success organizing blacks and Latinos than they do white people," Hurd said. "That would be something that would tempt them into endorsing Obama, because most unions have a very high priority on recruiting new members. So I think if race came into play here, it would be in Obama's favor rather than against him."


FedEx out-lobbies Teamsters

In a victory for FedEx, the 2,206-page omnibus spending bill passed by the House Monday does not contain language to change the jurisdiction of labor agreements that involve FedEx Express.

Efforts to kill the language that put the division under the jurisdiction of the National Labor Relations Act, which was passed in a House bill that reauthorized the Federal Aviation Administration earlier this year, were successful, those familiar with the negotiations said Monday.

Sen. Lamar Alexander, R-Tenn., who was recently voted into the No. 3 spot in the GOP conference leadership, made it clear to other senators that he would oppose the omnibus bill if it contained the FedEx Express language, his press spokesman, Lee Pitts, said Monday.

Alexander, who serves on the Appropriations Committee, talked to Sens. Ted Stevens, R-Alaska, and both of Mississippi's senators, Trent Lott and Thad Cochran, about the provision. Cochran is the committee chairman. The Senate is expected to consider the omnibus bill today.

Sen. Bob Corker, R-Tenn., contacted administration officials and members of the Appropriations Committee to express his "strong opposition" to the FedEx Express language, his spokesman, Laura Lefler, said Monday evening.

Jim Berard, a spokesman for House Transportation Committee Chairman James Oberstar, D-Minn., who sought the jurisdictional change, said Oberstar did not seek to have the language placed in tonight's spending bill.

Berard also pointed out that the National Labor Relations Act language remains in the House-passed FAA reauthorization bill. The Senate bill reauthorizing the FAA does not contain the provision and will be considered early next year.

U.S. Rep. Steve Cohen, D-Tenn., said there was an effort to attach the language to the spending measure and FedEx was successful in seeing it didn't happen. Cohen serves on the Transportation Committee with Oberstar, but opposed the measure.

The bill extends funding for most of the federal government operations for another six months. It is mainly a spending bill, but contains specific policy language on a number of issues.

The significance of the change proposed by Oberstar and fought by FedEx is that it would allow non-airline FedEx Express employees to organize on a local basis, rather than on a national basis, as railroad and airline employees do under the jurisdiction of the Railway Labor Act.

FedEx CEO and founder Frederick W. Smith testified before a Senate Finance subcommittee in July that the change proposed in the House bill was not only bad public policy, but was also inserted without hearings being held on the issue.

Smith maintains that pickup and delivery functions of the FedEx Express drivers are an integral part of its air operation. That interpretation was endorsed by the 9th Circuit Court of Appeals in 1992.

The International Brotherhood of Teamsters has been trying to organize the company's drivers at the local level, where labor disputes are resolved by the National Labor Relations Board. A labor dispute at a single local could affect FedEx's overall operation and jeopardize the company's reputation for next-day deliveries.

The employees of FedEx's principal rival, United Parcel Service, are represented by the Teamsters, but that is because the company came into being as a delivery service, not an airline. Its collective-bargaining disputes are resolved under the jurisdiction of the National Labor Relations Act.


Right To Work law earns Utah #1 outlook

Utah tops the nation in a ranking of states' economic outlooks.

The rankings released Monday by the American Legislative Exchange Council used 16 state policy variables it says have "a proven impact on the migration of human and investment capital in and out of states."

The 114-page report, titled "Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index," was compiled by economist Arthur Laffer and Wall Street Journal economics writer Stephen Moore. ALEC is a nonpartisan, individual membership organization of state legislators, with more than 2,400 legislator members from all 50 states, and 86 former members serving in the U.S. Congress.

"The historical evidence is clear: States that keep spending and taxes low exhibit the best economic results, while states that follow the tax-and-spend path lag far behind," the report states.

The outlook ranking was derived from an equal-weighted average of 16 variables. Utah scored highly, in part, by having no estate or inheritance tax, having a state minimum wage that matched the federal floor of $5.85 and being a right-to-work state.

It also was in the top 10 in the components of top marginal corporate income-tax rate, personal income-tax progressivity, recent legislated tax changes and a state liability system survey.

"This ranking will help you gauge your state's future based on those 16 factors," the report said of the outlook surveys of the states. "In today's international marketplace this future outlook is critical. The competition for capital and labor is more intense than ever. However, companies looking to invest in the United States face some of the highest tax rates in the industrialized world. The ALEC-Laffer State Economic Competitiveness Index will be extremely valuable for states hoping to attract global investment and to lure domestic and local ventures."

In a prepared statement, ALEC's national chairman, Arkansas State Sen. Steve Faris, said states are competing directly with each other for human capital and business investment.

"State governments that think they can attract jobs and people, and grow their economies, by taxing their citizens at a higher rate than their neighbors are sadly mistaken," he said, adding that the state rankings could be used as a tool to help legislators improve.

Utah was 20th in a ranking of economic performance, which the report described as a state's performance among three variables that are "all highly influenced by state policy." The three criteria used in that ranking were:

• Personal income per capita cumulative growth from 1996 to 2006. Utah's was 49 percent, 31st ranked.

• Absolute domestic migration, 1997 to 2006. Utah's was a negative 33,558 during that period, putting Utah 34th.

• Non-farm payroll employment growth from 1996 to 2006. Utah's was 26 percent, or fifth among states.

Texas, Florida and Arizona led the economic performance rankings. At the bottom were Michigan, Ohio and Illinois. The individual rankings for Utah in the outlook survey are:

• Top marginal personal income tax rate: 5.35 percent, 21st-ranked.

• Top marginal corporate income tax rate, 5 percent, ninth.

• Personal income tax progressivity (change in tax liability per $1,000 net income), zero, second-ranked.

• Property tax burden (per $1,000 of personal income): $27.30, 13th.

• Sales tax burden (per $1,000 of personal income): $32.61, 38th.

• Remaining tax burden (per $1,000 of personal income): $17.47, 18th.

• Estate/inheritance tax: No, first.

• Recent legislated tax changes (2005 and 2006, per $1,000 of personal income): Minus $1.91, seventh.

• Debt service as a percentage of total tax revenue: 10.3 percent, 38th.

• Public employees per 10,000 of population (full-time equivalent): 505, 10th.

• State liability system survey (tort litigation treatment, judicial impartiality, etc.): 67.7, ninth.

• State minimum wage (federal floor is $5.85): $5.85, first.

• Average worker compensation costs (per $100 of payroll): $2.06, 14th.

• Right-to-work state (optional joining or supporting of a union): Yes, first.

• Number of tax expenditure limits (with zero being the least and three being the most): One, 13th.

• Economic freedom index score (voucher, ease of private/home schooling, etc.): 1.34, 24th.

The report is available at www.alec.org.


AFL-CIO misunderstates political spending budget

This should pay for a lot of phone banks and door-hangers. The AFL-CIO announced Friday that it would spend a record $53 million in the 2008 election cycle -- all of it for grassroots mobilization. And it plans to mobilize an army of 200,000 union volunteers for precinct-walking and other get out the vote efforts. Overall, it expects to spend $200 million on the campaign.

The labor group said it intends to target Ohio, Pennsylvania, Minnesota, Michigan and Wisconsin -- core regions of the country's traditional manufacturing base.

That's a lot of effort. But the problem the labor movement has faced in recent years is a decrease in membership and a failure by its endorsed candidates to win trhe White House in 2000 and 2004. But labor victories and Democratic gains in the 2006 elections could provide a foundation for the 2008 cycle.


Birth of union activity in post-Soviet Russia greatly exaggerated

Russian employees at the Ford Motor Co. assembly plant near St. Petersburg went back to work Monday after a nearly monthlong strike, officials said.

The union and the company agreed last week to continue negotiations on wage and hours demands.

"It's neither a failure nor a victory for either side. It's just a new stage in the struggle for our interests," said Alexei Etmanov, head of the union that is seeking wage increases of more than 30% and a reduction of the night shift to 6.5 hours.

Assembly line workers currently make about 19,000 rubles ($800) a month. Ford has offered an 11% raise beginning in March. The plant, in Vsevolozhsk, produced about 60,000 cars last year, mainly the Focus model.


Wrist-slap for AFL-CIO union-dues embezzler

The former treasurer of a Tracy (CA) Unified School District employees union pleaded no contest to embezzling nearly $8,500 from the union's coffers.

Bus driver Lincy Estelle Merritt, 45, pleaded to the misdemeanor charge Dec. 10 and paid back $5,300 of the money to the California School Employees Association the same day. Merritt was ordered to perform 750 hours of community service and spend three years on probation.

The union represents the district's 500 bus drivers, custodians and support staff, and has an annual budget of roughly $10,000.

Initially charged with a felony, Merritt was accused of taking the money between March 2004 and June 2006 and using it to buy gasoline, groceries and personal items. She has worked for the district for 15 years.

While glad some of the money was returned, union members are worried Merritt still has boxes of personnel records containing sensitive information, such as Social Security numbers and birth dates, which can be used by identity thieves, said chapter President Denise Cheeseman.

Merritt's attorney has denied she has the documents. Neither Merritt nor her attorney could be reached for comment Monday.


Expert: Michigan union dues ought to be optional

In the aftermath of the remarkable concessions that the UAW recently made to GM, Chrysler and Ford, the time has come for Michigan to take a long, hard look at its labor unions. For years we have given unions a great deal of credit for the prosperity of this state and power over the men and women they represent. Too much credit and too much power it would appear.

We have now seen the limitations of unions and their ability to insulate workers from the marketplace. The question is: if workers don't always gain from union representation, is it wise to force them to pay union dues?

Generally speaking, an employer will be able to pay a worker a wage that is roughly equal to the value of the goods or services that worker creates for the company. Because cars are a lucrative business and Detroit controlled that business for so long, there was a lot of money earned on the assembly lines. The UAW deserves credit for making sure that its members got pay that matched the value of the work they did assembling those cars. But the UAW didn't make the cars or sell them. Everything that the UAW did depended on the efforts of executives, engineers, designers and the assembly workers themselves.

The UAW's glory days came in the 1950s and 1960s, when it represented nearly all the hourly workers who made nearly all the cars sold in America. UAW President Walter Reuther made the most of the opportunity: he negotiated pattern agreements that set wages and benefits throughout the industry. The companies continued to compete on design and marketing, but the UAW's workers appeared to be shielded from the pressures of competition in the market.

It was an illusion. In time, the wages, benefits and work rules drove the price of Detroit's cars higher while quality suffered. This created openings for new competitors, foreign car companies that initially imported cheap, small, reliable cars, then branched out into larger cars and eventually began building cars in the United States itself.

These companies had huge advantages over Detroit -- lower labor costs amounting to more than $1,000 per vehicle. In the end this proved too much for Detroit to overcome, leading to the dramatic concessions made by the UAW.

The lesson for Michigan is simple: a union cannot break the laws of economics. Bend them maybe, but not break them. A worker's wages and benefits should roughly equal the value of the goods or services he or she produces. If a union is able to push wages and benefits much higher, it only drives up costs for the company and creates opportunities for competitors. When that happens, the most likely results are shrinking companies, layoffs and eventual concessions. Unions may seek to shield their members from the stresses of economic competition, but even the strongest union cannot make competition disappear entirely.

This is a vivid illustration of how workers can actually lose with union representation. The UAW priced many workers out of jobs with irresponsibly generous benefits and job protections, and then had to give up benefits and job protections anyway.

One thing the UAW did not give up: the clause in the contract that states that all workers have to pay union dues.

For decades, Michigan has tolerated forced dues contracts. We allowed this because Michiganians were inclined to think that workers nearly always benefited from union representation. But now we know otherwise -- unions can go too far. When they do, workers only lose in the end.

Since workers do not automatically benefit from union membership, perhaps it's time we made union dues optional and let workers decide whether the union is representing them well. States that make union dues optional have been outperforming Michigan for better than 30 years.

Making dues optional will not bring back all the lost jobs, but it will attract new employers, and it might prevent another crisis caused by a union that becomes too strong for its members' own good.

- Paul Kersey is director of labor policy for the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich.


AFSCME puts members' dues into Obama attack

A large union supporting Senator Clinton's presidential bid, the American Federation of State County and Muncipal Employees, is preparing to go after Senator Obama over his health care plan.

AFSCME's political action committee has spent about $34,000 so far on an anti-Obama mailer to Iowa voters, according to a report filed today with the Federal Election Commission. "We're doing a mail piece," AFSCME People's director, Ricky Feller, told The New York Sun. The mailer will address alleged shortcomings in Mr. Obama's health care proposals. "The real focus is who's not covered," the union aide said.

Mr. Feller declined to offer up the text of the mailer yet, but said it would arrive in Iowa mailboxes in a couple of days.

AFSCME's more costly television campaign for Mrs. Clinton in Iowa is all positive and will remain so through the caucuses, Mr. Feller said. The critique of Mr. Obama's plan dovetails with similar criticism from Mrs. Clinton campaign.

Under federal law, AFSCME's independent expenditure arm cannot coordinate with her campaign. However, all are permitted to read press accounts about what everyone else is doing and to act accordingly.


Union authorizes airport strike

Union-represented restaurant and bar workers at Sacramento (CA) International Airport voted 118 to 2 late Friday in favor of authorizing a strike.

Members of Unite Here, Local 49, posted informational pickets at the airport. The union represents 180 restaurant and bar employees who work for HMS Host Corp., which has the food service contract at the Sacramento County-owned airport.

Union members want a new contract that reflects the employment market today, not June 2003, when the last contract was ratified.

The union says it will picket the airport if necessary and is prepared to strike, said Karl Neubuerger, executive vice president with the union.

HMS Host officials say they have been in discussions with the union since October. Last week, they offered dates for meetings and are waiting for confirmation.

Although union employees were working under their old contract, which expired in June 2006, HMS Host and the union extended the contract numerous times after its original termination date, Susan Goyette said.

"HMS Host remains committed to negotiating with Local 49 and we look forward to reaching mutually agreeable terms."


Hungarian strike organizers admit defeat after single day

Some tens of thousands of people took part in a strike jointly organised by the Liga Unions and the Workers Councils to protest the introduction of the multi-player health insurance system, the planned closure of less-used railway lines and new pension-calculation methods.

However, after Parliament passed the bill on transforming the health insurance system on Monday evening, the strike was called off just after one day.

The state railways MÁV and the Free Union of Railway Workers assessed the strike differently: MÁV said over 50% of the trains had been in service, while the union said rail traffic came to a standstill throughout the country. Rail passengers instead used Volán buses to reach their destination. The railway company appealed to a labour court, seeking it to establish the illegality of the strike, while the union appealed to the labour inspectorate to launch an investigation, as it said that MÁV had resorted to legally questionable methods.

Meanwhile over 10,000 health care workers and teachers went on strike for varying periods, while power plants, factories and the customer service section of Hódmezővásárhely local authority stopped work for various durations. Farmers and their supporters blocked single lanes of highways in numerous counties. Around two dozen workers went on strike at Ferihegy airport, but caused no delays in air traffic.

The Federation of Hungarian Physicians and the Democratic Union of Health Care Workers reported strikes in 21 health care institutions, which did not disrupt health care services, while 25% of the staff stopped work at the Veszprém county hospital, which is run by former health minister Jenő Rácz.


Employers seek freedom from union work rules

With the 2008 elections fast approaching, we soon will be hearing from our state and local politicians, in ever-increasing volume, how much they are doing to improve the business environment. Much of what you hear will simply take your breath away for both its predictability and its utter nonsense.

Am I being too hard on the political class? Well, maybe just a little, but you have to concede that they generally take credit for the good things that happen in the economy, while not only distancing themselves from the bad things but, in most cases, claiming that the bad economic news is a direct consequence of not adopting a particular plan or proposal advocated by that particular politician.

After a while, our body’s self-defense mechanisms simply take over and block out further discussion in order to protect our brain from serious long-term harm.

Still, as a senior executive charged with finding the best location for your company’s upcoming facility expansion, you have an obligation to examine closely the impact state and local politicians have on the region’s business climate, just as you would do your due diligence before launching operations in a foreign country.

“State/local taxes and fees, in general, are a strong consideration in most site selection decisions,” said Mary Faye LaFaver, Mid-Atlantic director for Ernst & Young’ Business Incentives and Credits Services Practice.

For many companies contemplating a facility expansion into a new state, that “legislative” due diligence often consists of just comparing income taxes — individual and corporate — and looking at the financial incentive programs each state offers businesses as an inducement to locate there.

While those are certainly important factors, they are just the tip of the iceberg when it comes to what you should be looking at. After all, unless you are contemplating a “plug-and-play” operation, like a call center, where you can pack up and leave quickly if you decide you’ve made a mistake, the facility expansion you are planning will represent a fairly long-term investment.

For that reason, you should also be looking at not only the current situation, but also the consequences of existing rates and programs five to 10 years into the future. Here are a few basic areas you should always consider when evaluating state government’s impact on the local business climate. NOTE: click here to view state-by-state results of the 2007 Legislative Quotient to see how each of the 50 states compared in each of the following financial management categories.

General Tax Bite. Every state requires revenue in order to operate and provide essential services, and they obtain that revenue through taxes and fees. The real issue is who pays and how much.

“State and local tax is one of the top five site selection factors on virtually every project we work on,” said Ulrich Schmidt, senior manager, Strategic Relocation & Expansion Services for KPMG LLP.

There are several simple metrics, in addition to just looking at tax rates, which will give you a good feel for the overall tax climate. The first goal is to focus on which type of tax your operation in that state would be most vulnerable to.

“Income taxes are important for a headquarters location whenever there is a significant tax burden associated with sales that are allocated and apportioned to that state,” said Ed McCallum, senior principal for McCallum Sweeney Consulting, a Greenville, S.C.,-based site location firm whose list of recent headquarters clients include Boeing and Nissan. “Income taxes for individuals are very important for employee transfers and the company as well. The employee evaluates the burden and/or benefit associated with the new location. The company calculates changes in payroll that may or may not be required to make sure that the employee remains whole.”

In some cases, such as distribution facilities, the income tax rate is probably irrelevant, whereas the inventory tax rate becomes critical. In other cases, it may be property taxes or franchise taxes, or sales and excise taxes. Whatever your company’s particular tax “vulnerability” might be, it’s important to know not only the rates, but also how dependent the state government is on that particular source of revenue. That’s often a pretty good indicator of where the legislature is inclined to turn first when looking for more revenue.

Infrastructure Spending. When considering infrastructure spending, two areas to focus on are highways and education. Sure, there are others, but these are areas where states have a major funding responsibility that will impact your future work force, as well as your transportation infrastructure.

In the case of highways, they are also a prime candidate for deferred spending, where money is taken from the highway pot to spend on other budgetary priorities. The problem is not that this occurs, but rather that the more often legislatures succumb to this temptation, the easier it becomes the next time, and the next time after that.

Eventually, the effects of this neglect will build to a crisis point where the only solution will require massive amounts of tax dollars that, as a taxpaying business located in that state, will come from your corporate coffers.

Managing the Debt. Business, probably more than any other group, understands the importance, as well as the dangers, of debt. In fact, it’s hard to imagine running a business without the ability to receive or extend credit. It’s all in how you manage it.

But why should you be concerned about how a state government manages its debt? Because if you decide to locate a facility in that state, you effectively inherit responsibility for that debt, just as you would if your company bought out a competitor.

As a minimum, there are four rather simple numbers that you should look at: two near-term and two long-term.

On the near term, look at the percentage of the state budget used to service the debt (which ranges from 0.7 percent in Tennessee to 6.7 percent in Massachusetts), as well as the amount per capita needed to service the debt (which ranges from $30 in Tennessee to $437 in Massachusetts). These will give you a good feel for the debt’s impact on the current year’s budget.

To get a more long-range view of the impact of the state’s debt, look at the total debt as a percentage of total revenue for the current budget year (which ranges from 14.5 percent for Tennessee to 134.1 percent for Massachusetts), and the total debt per capita (which ranges from $599 in Tennessee to $8,750 in Massachusetts).

Spending on Itself. How much does the state spend on government administration? This is not a major factor, but it does provide another insight into how the government looks at its trust of spending the taxpayers’ money wisely.

The amounts range from Texas at 1.5 percent of the budget and $64 per capita to Delaware at 6.7 percent of budget and Alaska at $647 per capita.

Five-Year Trends. At least as important as looking at the current tax and spending numbers is to examine the trends in each tax and spending category during the past five years. That will give you a better feel for what the future will likely hold.

In this area, we looked at the five-year trends regarding the states’ reliance on corporate and individual income tax as a major source of state revenue, the tax bite per capita, how well the state has managed its debt and, lastly, how much the legislature spends on itself.

Right to Work Legislation. According to John Warden, executive vice president of The Walker Cos., an Atlanta-based real estate and site selection firm whose list of recent clients includes Columbia Sportswear, Dofasco Steel and AutoZone, right-to-work states from 1996 to 2006 experienced job growth of 14.4 percent, compared with 7.3 percent growth in non-right-to-work states. Currently, there are 22 states with right-to-work legislation.

What exactly does right-to-work mean? It simply means that union membership cannot be a required condition of employment for any worker in that state. However, it does not mean that unions are barred from organizing in that state. Still, the goal of this legislation clearly is to reduce union membership.

But why is this even an issue? After all, there is ample evidence to suggest that wage rates in non-union manufacturing plants are often higher than in neighboring union shops.

“Union membership levels are lower in right-to-work states, which means management can be more responsive to fast-changing market conditions, and enjoy the kind of flexibility and freedom from union work rules required to be successful,” Warden said.

As with all of the other factors, you just have to decide whether this is an important issue for your company and its operation in that particular state, and then proceed accordingly.

So remember, as we move through the coming political season listening to elected officials tell us how much they’re helping to create a world-class local business climate, don’t just take their word for it.

After all, numbers speak louder than words.


Mark non-union contractors absent

Broome County (NY) lawmakers are expected to go ahead with bids Wednesday on the $16.9 million renovation of the George Harvey Justice Building despite the protests of local non-union contractors, who asked last week for a bid-opening delay after learning the project was limited to 90 percent union workers.

No special session of the Legislature dealing with the matter has been scheduled by Chairman Mark R. Whalen, D-Binghamton, as of late Monday afternoon, county officials said.

A special meeting would allow legislators to reconsider their approval of a project labor agreement that restricts most of the work on the building to union tradesmen before Wednesday's scheduled bid opening on the project.

A state association for non-union contractors is looking at its options to stop Wednesday's bid opening, said Rebecca Meinking, president of the Empire State Chapter of the Associated Builders and Contractors Inc. Meinking would not say Monday if the association, representing local non-union contractors, would ask a court today for a stay on the bidding.

Local non-union contractors met with legislators last week to ask them to re-consider their votes Nov. 20 on the labor agreement, which they said limits their freedom to choose their own workers for the project. The agreement, devised by county officials, local trade unions and an Albany engineering firm, received near unanimous approval in November.

The agreement -- a first in Broome County -- was promoted as a way to keep the workforce local on the project by hiring from local union halls. But non-union contractors, who can bid on the project but must hire 90 percent union labor, say their own workers, most of them Broome County residents, are being hurt by their exclusion from the project.

Some legislators are also having second thoughts.

"We want to recall it," said Daniel A. Schofield, R-Endicott. Schofield said of the planned bids. Schofield said he and some other legislators are seeking clarification of the labor agreement.

Legislators have the power to rescind the bids, but only in a session of the Legislature, said Schofield a former chairman.

Whalen has the power to call for a special session, Schofield said. The Legislature meets for its regular monthly meeting the day after the bids are scheduled to be opened.


Teamster strike fails to shut Hawaii supermarket

Unionized employees who work in the meat, fish and deli departments at Times Super Markets' 12 stores on O'ahu walked off their jobs at 9 a.m. Monday morning after rejecting the company's final offer.

The 116 workers are members of Hawaii Teamsters Local 996. The union and management have been in negotiations since September, but talks stalled over medical coverage for the employees.

A Times official said all 12 O'ahu stores are open for business.


Labor-state police union keeps dues theft probe in-house

The R.I. State Police are investigating allegations that several thousand dollars have been embezzled from the police officers’ union in Charlestown.

“The complaint was filed with us last week, and it will be investigated by our Financial Crimes and Public Corruption Unit,” State Police Lt. Leroy Rose, the assistant detective commander, told Providence Business News today. “It’s very early in the investigation,” he noted.

The 18-member union represents the town’s active-duty officers who are eligible for collective bargaining. It is part of a Fraternal Order of Police lodge –Washington County Fraternal Order of Police, Lodge 40, Charlestown – that also includes retired officers; an associates’ lodge is open to non-officers, as well.

But the investigation involves only money from dues paid by active-duty officers, according to Charlestown Police Lt. Patrick J. McMahon, the union’s president. “There are no public monies, no fundraising monies, only dues monies,” he told PBN.

“All I can comment to you on is that it is currently under investigation by the R.I. State Police,” McMahon said, although he did confirm that the complaint was filed by the union itself, and on further questioning added “I’m not the suspected officer.”

He declined to reveal the identity of the suspect or suspects, saying: “The suspected individual has rights under the Law Enforcement Officers’ Bill of Rights.” And with the State Police investigation just beginning, McMahon said, “it would be inappropriate for us to comment on the amount.”

The Westerly Sun today set the amount allegedly embezzled at nearly $11,000.

“I think that’s what’s reported,” said Rose. But, he added: “We’ll have to do the appropriate forensic auditing and the review of the documents to see if there is a crime” – and if so, how much was taken and by whom.


Ships divert from strike-bound port

Container ships are avoiding the strike-bound Port of Napier (NZ) - costing the port thousands of dollars.

Port workers have been picketing since Saturday in protest of the loss of jobs. The action is expected to continue until the Maritime Union and the port meet for mediation tomorrow.

About 25 permanent and 60 casual staff employed at Hawke's Bay Stevedoring Services have been threatened with job losses after the port handed the contract to rival Mount Maunganui-based company International Stevedoring Operations.

Port chief executive Garth Cowie said container ships were avoiding the port, which could cost it "over $10,000 per ship". "And it's not just that - it's also loss of wages for our staff," he told the Dominion Post.

Two ships had bypassed the port entirely, while another stood out at sea yesterday hoping for a resolution.

Maritime Union of New Zealand spokesman Victor Billot said yesterday the strike action would continue until Wednesday when mediation talks were planned. The 120 picketers from around New Zealanders have been joined by dockers from the Maritime Union of Australia.


NW Carpenters rule Portland, Ore.

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