Please Sign On! Letter to Congress from State Legislators and Local Elected Officials Congress Should Extend Unemployment Benefits!

Please Sign On!
Letter to Congress from State Legislators and Local Elected Officials
Congress Should Extend Unemployment Benefits!

Alert your state and local legislators and ask them to sign this letter to Congressional representatives! Congress Should Extend Unemployment Benefits! Federal extended unemployment insurance programs will expire on December 31st unless Congress takes action now. State or local elected officials can click here to activate a copy of this letter from the National Labor Caucus of State Representatives, add their personal information and send it to their member of Congress.

Thank you!

Is the Federal Government Helping to Bust Unions?

by: Mike Elk, In These Times | News Analysis

Defense contractor Honeywell pushed concessions onto striking workers—and unions say Washington supported the company behind the scenes.

For the third time in three years, defense contractor Honeywell International Inc. is deploying union-busting tactics in a government-affiliated workplace—and a federal agency is failing to stop the corporation’s behavior. This raises questions about whether Honeywell, a top contributor to the Democratic Party in the 2010 midterm election cycle, is wielding political influence to successfully weaken unions.

In 2009, Honeywell threatened to bring in federal troops to replace Honeywell contractors threatening to strike at a military facility in Jacksonville, Fla. In 2010, the company brought in scab replacement workers to operate a uranium facility in Metropolis, Ill. (The federal government later ruled that Honeywell cheated on qualification tests so that it could replace striking United Steelworkers union members.)

Now, union workers on strike at a plant in Kansas City, Mo., allege that the Department of Energy (DOE) is abdicating its responsibility under federal law by allowing Honeywell to engage in illegal bargaining while the company attempts to force a concessionary contract on an International Association of Machinists and Aerospace Workers (IAM) union local. On October 10, 840 Honeywell workers—members of IAM Local Lodge 778 and contractors at a federal facility that produces components for nuclear weapons —went on strike, alleging that Honeywell had bargained in bad faith.

Local 778 Grand Lodge Representative Steve Nickel claims that Honeywell illegally bargained in bad faith by attempting to force the union to either accept concessionary contracts or go out on strike. Nickel claims that Honeywell informed them via express mail letter of their refusal to accept the union’s proposal before the bargaining period had expired at the end of October 7, and then prepared for a strike. He says the company engaged in take-it-or-leave-it bargaining when it refused to negotiate further. (Honeywell declined to comment for this story, but an ad the company ran in the Kansas City Star on November 8 read, “Honeywell has provided a last, best and final offer” and “continues to bargain in good faith.”

“In my fifteen years filing board charges, I have never seen such a clear-cut case of a company engaged in bad faith bargaining,” Nickel says.

Local 778 filed an unfair labor practice complaint with the National Labor Relations Board immediately after union members rejected Honeywell’s final contract offer in early October. But late last week, the NLRB ruled against the union, rendering striking union members ineligible for unemployment insurance and giving Honeywell the right to permanently replace workers. Late on November 15, the NLRB ruled against the union in an initial set of board charges; thus denying the workers the right to collect unemployment while out on strike as well as giving the company the legal authority to permanently replace the workers.

As a result of the ruling, many workers on strike became discouraged and some crossed the picket line. On Sunday, November 20, union members ratified a six-year contract, which both management and the union agree is largely the same contract Honeywell initially proposed. It includes a two-tier wage system (new hires are the lower tier), the elimination of defined-pension plans for new hires and the elimination of retiree healthcare after 2017. Retiree healthcare had been a sticking point for workers at the Missouri facility, given that they work with the toxic material beryllium, which is associated with high rates of lung cancer.

Since 2009, Honeywell has been confronting unions at its facilities across the country as it tries to reduce its labor costs. The Fortune 100 company based in New Jersey has demanded that workers accept a two-tier wage system that pays new hires roughly half of what current employees are paid. Honeywell calls for the adoption of a retirement system that would pay out new employees roughly $25,000-$30,000 total over the course of their career, Nickel says. The company has also refused—in Kansas City and elsewhere—to budge from its position that union workers drop current healthcare coverage in favor of the healthcare coverage nonunion workers receive, which is a high-deductible insurance plan mixed with a healthcare savings account.

“Some of these people can’t work until their ’60s, when they are eligible for Medicare. They wind up going on medical disability, so they need something for them and their families,” Nickel says.

Not the same old bargaining story

But there is another dimension to the Kansas City conflict that makes the struggle there more than just the now-familiar story of a corporation trying to push concessionary contract down a union’s throat. Federal contract provisions stipulate that because Honeywell operates the Kansas City facility as a contractor for the DOE’s National Nuclear Security Administration, the corporation can be reimbursed for the full cost of all wages and benefit increases that workers receive.

DOE service contract provisions similar to the federal Service Contract Act allow for the DOE to reimburse workers’ compensation. Department regulations give contract officers unilateral power to increase payment to contractors if any costs, including wages, go up (these officers can also refuse to cover such increases, if they exceed typical industry compensation packages). Increases have been routinely approved, according to the IAM, during the 12 years Honeywell has operated the Kansas City facility as the prime contractor.

So if it doesn’t ultimately bear the costs of its workers there, why is Honeywell so dead-set against the status quo when it comes to union workers’ wages, pensions and healthcare plan? The short (and counterintuitive) answer is that the company stands to profit from the strike—both financially and politically.

Before the strike began in October, Honeywell mangers had union workers over-produce nuclear weapon components in order to build up inventories, according to the IAM. Since the strike began, the company has used several hundred nonunion employees at the plant to continue some production and shipment of goods. According to Honeywell’s website, 203 shipments were sent out the week of October 31, 21 days after the strike began.

A crucial point that helps Honeywell’s bottom line is that the company’s contract with the federal government is fixed on products delivered, not labor cost. This means that if Honeywell keeps production normal at the Kansas City plant, it can claim the $7.5 million per month it would normally pay 840 striking workers as profits. The federal contract is fixed till 2013, so Honeywell could make a huge windfall profit by antagonizing workers, and inspiring them to remain on strike.

The company is in a sweet spot: Under federal labor law, it can hire replacement workers. Indeed, the company has already announced plans to hire as many as 600 scab replacement workers, at half the average union worker’s salary, as it digs in for the strike.

Behind the scenes DOE pressure?

But this struggle is about more than just corporate profits, according to union officials. By pushing for major concessions from workers, Honeywell may be currying favor with the DOE, which is looking to save money as politicians on Capitol Hill look to close the federal deficit.

In 2006, DOE attempted to implement the Directive 351.1, which “effectively forbids the negotiation of defined benefit pension,” according to the AFL-CIO Metal Trades Department. Because of strong opposition in Congress and a bitter fight between organized labor and the DOE, it was never implemented.

“The directive says that contractors will not be reimbursed for the costs of defined benefit plans for new hires, or for post-retirement health care,” and it will penalize contractors with defined pensions for current employees that cost above a certain amount, the Metal Trades departmentsays (PDF link).

Although not in effect, it has still negatively affected many employees working for DOE contractors, according to AFL-CIO. In 2010 alone, contractors in five different facilities discontinued defined-benefit pension plans out of fear that Directive 351.1 might be implemented.

But Metal Trades Department President Ronald Ault says this is about more than a corporation hedging its bets against a potential regulatory change—the DOE is quietly pushing Honeywell behind the scenes to strip pensions and retiree health coverage so the agency can trim its costs.

“Honeywell would get reimbursed for whatever wage increases [workers] want,” Ault says. But company officials “do whatever the DOE wants them to do. DOE could absolutely step in and get involved, they could direct the contract.” Instead, he says, federal officials “quietly whisper behind the scene to implement DOE 351 to cut DOE’s costs. Nobody can screw you like your friends. We had better labor relations under [Bush appointed-DOE Secretary] Sam Bodman than [President Obama’s DOE Secretary Steven] Chu.”

By calling for workers’ benefits to be cut, Honeywell and its CEO David Cote—the only business leader serving on President Barack Obama’s 19-person deficit commission—improves their political image. (Given that it paid no corporate income taxes between 2008 and 2010 despite making $4.9 billion in profits, Honeywell needs to bolster its image to increase its chances of winning more federal contracts.) In the November 8 Kansas City Star ad, the company stated it “is committed to being a good steward of U.S. taxpayers’ dollars and federal assets.”

The Honeywell-DNC connection

Finally, by demanding huge concessions, Honeywell is attempting to weaken its unions, as it has done throughout the country at both federal contractor and private-sector facilities. A two-tier wage system weakens solidarity by pitting younger workers against older workers. By forcing the union to strike, Honeywell hopes to crush the union’s willingness to resist concessions again.

Union workers say the DOE could be getting involved to help out workers and bring the strike to end. “DOE sits back and acts like they are non-participants when, in fact, they control nearly every aspect of our working conditions,” says Jay Puckett, an IAM member who works at the Kansas City facility.

DOE spokeswoman Gayle Fisher said the National Nuclear Security Administration “has been an interested but neutral observer during the contract dispute. We would like to see the negotiations continue so that an agreement can be reached and everybody can get back to work and help fulfill our important mission here in Kansas City.”

The Department of Energy’s decision not to get involved raises questions about whether or not Honeywell’s outsized political influence is connected to the Department of Energy’s decision to remain neutral in the labor struggle.

Beginning in 2009, at about the same time that Honeywell began aggressively confronting unions at facilities in Florida and Illinois directly connected to federal contracts, Honeywell has sharply increased its political donations; in 2010, the company’s political action committee was the top PAC contributor to the Democratic Party.

In a sign of the company’s increasing connection to the Democratic Party, earlier this month Honeywell hired Democratic Minority Whip Steny Hoyer’s former Deputy Chief of Staff Stacey Bernards as its new vice president of government relations. CEO David Cote has also done political favors for the White House and the Democratic Party: He helped introduce the president’s stimulus package at a press conference in early 2009 and was crucial to keeping the powerful Chamber of Commerce from opposing the legislation, helping to give the Obama administration a crucial first victory.

Labor rights used to be a core value of the Democratic Party. But its growing ties to Honeywell—which has lately distinguished itself as clearly anti-union—shows that these days, the party is more interested in management.

This story was updated on Monday November 21 to note the outcome of Sunday’s IAM contract ratification vote.

Originally published at InTheseTimes.com

Paying for a Jobs Bill by Cutting Federal Jobs?

Earlier this week, Senate Republicans rolled out their proposal for financing an extension of the Social Security payroll tax cut scheduled to expire at the end of December. Disappointingly, the conservative counteroffer is to pay for this job creation measure by cutting federal employees’ jobs and wages. The “pay-for” proposed by Senate Democrats — a 3.25 percent surtax on the 1-in-500 households earning over $1 million — for an expansion of the payroll tax cut is anathema to conservatives; Senate Republicans have already filibustered a litany of job-creation proposals that would be financed by varying millionaire surtaxes. Last night, the Senate Republicans filibustered yet another such jobs package — both the proposed extension and expansion were rejected in the Senate.

The Senate Republican proposal would limit federal agencies to hiring only one replacement employee for every three full-time employees leaving the agency until employment has fallen by 10 percent. This would result in roughly 280,000 job losses — ironic, given that the purpose of the payroll tax cut is to create jobs. Someone should remind the GOP that the purpose of a pay-for is to offset the cost of a policy, not its impact.

Laying off hundreds of thousands of federal workers is terrible policy for reasons beyond causing job loss during a jobs crisis. First, it ignores the need to keep up with a growing population. These civil service jobs deemed unnecessary by Senate Republicans include one out of 10 federal judges, FBI agents, Veterans Affairs doctors, National Institutes of Health cancer researchers, food safety inspectors, and air traffic controllers, to name just a few.

Second, haphazardly cutting certain agencies’ payroll would in many cases actually increase the budget deficit. Fewer Internal Revenue Service auditors would mean less tax enforcement and revenue. (In fiscal year 2010, 22,710 full-time IRS enforcement officers brought in $58 billion — an average of over $2.5 million per employee.) Fewer Medicare fraud investigators would mean more erroneous payments and unprosecuted fraudulent claims. Fewer employees at the Security and Exchange Commission would mean less enforcement of insider trading laws and greater incidences of financial fraud. As Brad Plumber points out, the SEC lost 10 percent of its staff between 2005 and 2007, even as the financial system’s rise in complexity would have justified a larger workforce. Small wonder the agency was unable to adequately identify financial institutions at risk of collapse or uncover Bernard Madoff’s multi-billion-dollar Ponzi scheme.

The Republican proposal would also freeze federal employees’ pay through 2015, extending a two-year freeze by another three years. Based on the Congressional Budget Office’s economic projections that would mean an 8.3 percent real wage cut for all federal employees over five years. The bill also symbolically proposed barring millionaires from receiving unemployment insurance and food stamps, and, less symbolically, would raise Medicare premiums for millionaires. (These mandatory savings account for only four percent of the proposed spending cut — the real money comes at the expense of federal workers, not millionaires.)

The proposal would book “savings” for this reduction in federal payroll be downwardly revising the discretionary spending caps for the second phase of the Budget Control Act (i.e., the debt ceiling deal) by $222 billion. If Congress allows the automatic sequestration cut to be triggered for 2013, the $109 billion cut for fiscal 2013 would come from this lower spending baseline. The unbalanced, spending-cuts-only approach to deficit reduction set in place by the Budget Control Act would be made even more lopsided.

The Senate Democratic proposal would raise $265 billion for an expanded payroll tax cut, leading to accelerated GDP growth going into 2012. Employees’ payroll tax rates would fall from 4.2 percent in 2011 to 3.1 percent in 2012 (instead of reverting to 6.2 percent as scheduled) and businesses would see reduced payroll tax rates for the first $5 million in payroll and limited expansions of payroll. The Senate Republican proposal would finance a $120 billion extension of the existing two percentage point payroll tax cut, which would leave the GDP accounts unchanged relative to current budget policy, with $231 billion in spending cuts. This would create an unnecessary drag on economic growth for two reasons. First, it would cut spending by significantly more than needed to offset the cost of the tax cuts. Second, while permanent tax increases on upper-income houses have relatively little impact on near-term economic activity, government spending cuts have a very adverse impact on growth and employment during periods of depressed economic activity.

The dog and pony show that was the super committee made clear that the 112th Congress is incapable of breaching a deep ideological rift over taxation and how to address the long-term budget deficit. If Democrats and Republicans can only agree that temporarily increasing middle-class paychecks is good for a weak economy, there is a third option for Congress: it should simply pass the tax cut without any offsets. After all, Congress didn’t pay for last year’s $858 billion tax deal that extended the Bush tax cuts for high-earners (tax cuts averaging $22,000 for households making more than $200,000). So why must we now insist on paying for an extension of a significantly cheaper middle-class tax cut? The only compelling reason to negotiate a payroll tax cut pay-for is to set the precedent that the Bush-era tax cuts only get extended if fully paid for. And voters didn’t seem to like the $4.5 trillion pay-for proposed in the House Republican budget.

Follow Andrew Fieldhouse on Twitter: www.twitter.com/@EconomicPolicy

Union members ratify Ingalls Shipbuilding contract

The Associated Press

Published: Thursday, December 1, 2011 at 8:57 p.m.
Last Modified: Thursday, December 1, 2011 at 8:57 p.m.

PASCAGOULA, Miss. – Employees at Huntington Ingalls shipyard in Pascagoula on Thursday approved a three-year contract extension that affects 6,000 employees at the state’s largest private employer.

The Sun Herald reports (http://bit.ly/s8v4ba) union officials said just over 1,100 members of the Pascagoula Metal Trades Council, voted on the proposal. It passed with 60 percent of the vote. More than 300 workers in the electrical union voted and it passed by 80 percent, the newspaper said.

Under the new pact, the employees will get a $1,000 bonus in lieu of a 2012 cost-of-living adjustment and three raises over the next three years. On the downside, health care premiums will increase in each year of the contract.

All other aspects of the contract – holidays, discipline policies, work hours and overtime policies, for example – will remain the same for the next three years.

The workers approved the deal because of the down economy, union officials said.

It applies to the Avondale and Gulfport yards as well Ingalls, but does not affect the Newport News yard in Virginia. All are under the parent company, Huntington Ingalls Industries.

Like Its Past, Avondale’s Future is in Shipbuilding

WASHINGTON, D.C.—A team of respected academics has concluded that Avondale’s future, like its past, is shipbuilding. In a 26-page white paper released on December 1, 2011, the Avondale Academic Research Project concedes that the Navy’s cutbacks in shipbuilding “make it unlikely that Avondale will continue as a shipbuilder for the Navy.” However, the paper notes, as the Greater New Orleans community has rallied to save its shipyard, new opportunities are opening up that could put Avondale on the cutting edge to meet an emerging demand for some 300 to 500 fuel-efficient commercial ships that would be needed to carry cargo along the newly-designated American Marine Highway.

Because of the efforts of a broad coalition of unions, clergy, small business owners and community organizations combined with elected officials, the authors noted: “money is now available for Avondale’s future, not its closing.”

The team alluded to action by Sen. Mary Landrieu and U.S. Rep. Cedric Richmond to redirect what had been a $300 million incentive to close the yard, coupled with a $214 million grant from the state of Louisiana—to transform what might have been a windfall for Avondale’s parent company to shut the yard down into a $514 million package that would provide corporate owners with a healthy financial base to “support any joint venture” at the site.

“The fact that we are now talking about Avondale’s future, and not its closing represents a major victory for the workers and Louisiana as a whole,” the paper notes.

Co-authored by Vern Baxter and Steve Striffler of the University of New Orleans, and Ted Quant and Petrice Sams-Abiodun of Loyola, the paper also relates the anxiety, frustration and uncertainty facing Avondale workers and their families as they weigh their employment options. “[T]hemes of economic ruin and relocation were repeated over and over again in interviews with the workers,” the authors said.

Among the worker views, the paper included this insight about the economic independence associated with the good jobs at Avondale:

“Avondale allowed me to support my family … pay the rent…the lights… I don’t get food stamps. I pay for my groceries. I pay my car note and insurance. I pay for school clothes. My kids get all their needs met and some of their wants. That’s what Avondale provides for my kids. My check provides us a life.”

The paper also sheds light on how corporate decisions about profit margins and tax loopholes made far away from the grit and sweat of a working shipyard, can devastate the lives of 5,000 workers directly and a network of thousands more in the greater community. Such decisions have precious little to do with the day-to-day productivity, efficiency and dedication of the rank and file workforce.

A detailed account of Avondale’s 70-year history, first as a commercial yard and only relatively recently as a builder of Navy vessels, lays out for the first time a succinct chronology of the workers’ efforts in the 1990s to organize the first union in the yard—and the dramatic changes that effort produced in reducing racial tensions, improved safety, wages, benefits and an end to favoritism that had permeated decisions in the yard.

The authors of the paper are:

  • Vern Baxter, University of New Orleans, Sociology (vbaxter@uno.edu);
  • Ted Quant, Loyola University, Twomey Center for Peace Through Justice (quant@loyno.edu);
  • Petrice Sams-Abiodun, Loyola University, Lindy Boggs National Center for Community Literacy (psabiodu@loyno.edu);
  • Steve Striffler University of New Orleans, Anthropology (sstriffl@uno.edu).