Cherry-picking economics: Tax cut myths & realities

Ron Ennis, Lehigh Valley Postal Workers
Editor, Lehigh Valley Labor Council

If a rooster crows in the morning and the sun comes up, did the rooster cause the sun to rise?

Of course not.

But that kind of economic thinking has gripped the minds of some in recent decades. Hand out tax cuts and if the stock market goes up, or the employment picture brightens, or the federal deficit shrinks, well then, it was the tax cuts that caused it.

In cherry-picking economics, facts are selectively juxtaposed and edited to infer a cause and effect relationship when, in reality, there is no supporting evidence for it.

Witness the chorus of “cherry-pickers” responding to Senator Barack Obama’s suggestion that he would raise taxes on capital gains income should he become president.

“Bill Clinton, in 1997, signed legislation that dropped the capital gains tax to 20 percent….And George Bush has taken it down to 15 percent. And in each instance, when the rate dropped, revenues from the tax increased; the government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down. So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected..”

Charles Gibson, ABC News moderator, to Sen.Barack Obama at the Philadelphia Democratic presidential debate, April 16, 2008.

“There is strong evidence that the investment tax relief enacted in recent years – both the lower tax rates on capital gains and dividends – has played an important role in spurring economic growth. Any talk of raising these rates is, at best, irresponsible and, at worse, a serious threat to our country’s economy. NAM members believe it is critical that Congress make these investment tax cuts permanent.”
National Association of Manufacturers, March 13, 2008.

“…when the (capital gains) tax rate has risen over the past half century, capital gains realizations have fallen and along with them tax revenue.”
Wall Street Journal editorial April 18, 2008.

In each example, cutting taxes on investment income is seen as an elixir for all economic ills: a tax revenue booster, a stock market stimulant, or a recession vaccine. Republican presidential nominee Sen. John McCain has also embraced this notion. “I think it’s very important that we make the Bush tax cuts permanent,” he said earlier this year.

What has sparked the echo chamber against Obama is the fear that an economic era is coming to an end. The Illinois senator has signaled that, should he become president, he will reverse a near 30-year trend of deregulation and tax cuts aimed primarily at the wealthy.

Nowhere has the downward direction on tax rates been more pronounced than on stock ownership. When Ronald Reagan took office in 1981, the rate on capital gains stood at 28 percent and dividends were taxed the same as wage income – up to 50 percent. Soon afterward, he dropped the capital gains rate to 20 percent.

As a Reaganomics disciple, George Bush promoted a tax bill in 2003 that further lowered levies on both capital gains and dividends to 15 percent. But the measure, the Jobs & Growth Tax Relief Reconciliation Act (JGTRR), came under immediate criticism from Democrats and, curiously, in hindsight, Sen. McCain.

In joining the Democrats, McCain rightly pointed out that slashing taxes during war was unprecedented. Undeterred, Bush rolled over the GOP-controlled Congress to win passage of his bill as American troops stormed Baghdad. The following year, McCain said to Tim Russert on Meet the Press, “I voted against the tax cuts because of the disproportional amount that went to the wealthiest Americans. I would clearly support not extending those tax cuts in order to help address the deficit.”

The comments by the four-term Arizona senator took note that Congress omitted making Bush’s tax cut permanent and should the next Administration fail to act, a most likely scenario under Obama, the rates will rise in January 2011. Inexplicably, McCain now wants to reverse course and “make the Bush tax cuts permanent,” including those on investment income.

So, what are capital gains and dividends? And why such a fuss over a widely misunderstood part of the tax code? The answers could set the stage for a tax debate showdown between the party’s presidential nominees.

Tax brackets and rates for 2008

Single-filer Marginal* Capital gain/dividend
Income Tax rates Tax rates
$0 - $8,025 10% 0%
$8,026 - $32,550 15% 0%
$32,551 - $78,850 25% 15%
$78,851 - $164,550 28% 15%
$164,551 - $357,700 33% 15%
$357,701+ 35% 15%

Figure 1

* Wages, salaries, interest income, non-qualifying dividends, etc.

Capital gains relate to stocks, real estate and collectibles. If you purchase 100 shares of XYZ Inc. for $50 each and over a year later you sell the stock when it climbs to $60 per share, your one thousand dollar return is a capital gain. You must report that gain to the Internal Revenue Service.

In addition, if XYZ Inc. pays an annual dividend, say $1.50 for each share you own, you’ll receive $150 twelve months later. This, too, will have to be reported to the IRS.
In each case, the capital gain and dividend you collect will trigger a tax.

What’s at the center of this year’s tax controversy between Obama and McCain is that the tax rate on investment income is lower than wage income. Owning and trading stocks on Wall Street is not taxed as harshly as working for a living. (See Figure #1)

Obviously, affluent tax filers have larger taxable stock portfolios and, consequently, will report a higher share of their income as capital gains and dividends. Therefore, a substantial portion of their income will be taxed at a rate – 15 percent – that is as low, if not lower, than the levy applied to the wages of most Americans.

“When governments set tax rates, they are making decisions about who will prosper and by how much,” wrote David Cay Johnston, a Pulitzer Prize winner, in his book Perfectly Legal: the covert campaign to rig our tax system to benefit the super rich – and cheat everybody else. The declining tax trend on investment income over the last three decades starkly demonstrates Washington’s longstanding generosity to the nation’s wealthiest individuals.

Putting aside the questionable morality of a tax code that favors trading equities on a stock exchange over sweat equity in the workplace, there are sound economic arguments to debunk the myths supporting cherry-picking economics.

Myth #1: The reductions in dividend and capital gains taxes benefit all taxpayers, even those in the lowest income brackets as claimed by Gibson.

Fact: While it’s true that a majority of Americans own stock, they do so in an employer-sponsored or individual retirement account. In fact, Americans have squirreled away $6.2 trillion in 401(k) plans alone.

But IRAs and 401(k) plans are already tax-advantaged and would receive little, if any, gain from a cut in taxes on investment income. Any benefit from an investment tax cut an ordinary American would receive in a taxable account would be miniscule.

That’s because the average American holding stocks has just a handful of shares in a company or mutual fund. According to the IRS, of the 92 million tax returns for individuals earning less than $50,000 in 2003 – representing 70 percent of all returns – only 15 percent filed a return with dividend income. Their average tax cut was $14. Further-more, only eight percent filed a return with capital gain income and their average tax cut was $5.

Myth #2: Capital gains and dividend tax cuts lead to long-term economic growth.

Fact: President Bush, John McCain and other tax-cut proponents argue that cutting taxes on stock gains fuels economic growth. “But they have produced no evidence,” concluded the Center on Budget & Policy Priorities last month, “to support their leap from correlation –the tax cuts coincided with improvement in the economy – to causation – the claim that the tax cuts caused the improvements.”

In fact, all evidence appears to point in the opposite direction. The Tax Policy Center found that “capital gains tax rates display no contemporaneous correlation with real GDP growth during the past 50 years.” And the Joint Committee on Taxation (JCT), after it conducted a macroeconomic analysis of the JGTRR Act shortly after its enactment, concurred that any short-term benefit was “eventually likely to be outweighed by the reduction in national savings due to increasing Federal government deficits.”

Enacting tax cut legislation without paying for it would be more likely to reduce economic growth over the long term than to increase it. Former Treasury Secretary Robert Rubin argues that capital gain tax changes have little effect on business investments and that a bigger concern for the economy is the lack of a realistic plan for reducing the growing federal deficit. Without that, investors cannot have certainty in the market or the economy.

Myth #3: When the tax is cut on capital gains and dividends, the revenue from the tax to the IRS increases.

Fact: “You cut taxes and the tax revenues increase,” said President Bush in February 2006. But this is another distortion of facts. In testimony before the House Budget Committee in 2004, then-Federal Reserve Chairman Alan Greenspan said, “It is very rare and very few economists believe that you can cut taxes and you will get the same amount of revenues” to the IRS.

Just because a cut in the capital gains tax precedes a rise in capital gains revenues doesn’t mean the tax cut caused the gain in revenues. In reality, the tax cut stimulates, at best, a short-lived increase in tax receipts by inducing stockholders to sell their shares. Dean Baker, co-director of the Center for Economic and Policy Research, recently stated that, “most of the apparent increase is likely due to timing: investors delay selling stock when they know a tax cut is imminent. After the cut takes effect,” they sell their holdings, “declare their gains and pay taxes at the lower rates.”

The Congressional Budget Office (CBO) wrote, in a letter to then-Chairman of the Senate Finance Committee Charles Grassley, “After examining the historical record, we cannot conclude that the unexplained increase (in gains realizations) is attributable to the change in the capital gains tax rates.”

If you lower the tax rate on capital gains without lowering the levies on ordinary wage income, you encourage people to express their income through capital gains. Many tax shelters are designed to do exactly this. Capital gains tax revenue may rise, temporarily, in part because people are shifting their income from a high-tax category into a low-tax one, resulting in a net revenue loss for the government.

According to the CBO, the JCT and even Bush’s own Office of Management and Budget, the revenue loss is substantial. All project that making the JGTRR provisions permanent would cost about $100 billion over the next ten years.

With Senators Obama and McCain on opposite sides of the tax issue, voters will do more than elect the next Oval Office occupant. They will also pronounce their verdict on the economic myths that have prevailed for the last 30 years.

Ritter seeks 187th seat: Teacher’s union president in tough race

Ron Ennis, Lehigh Valley Postal Workers
Editor, Lehigh Valley Labor Council

Teaching in the public schools has grown increasingly demanding since passage of the No Child Left Behind Act. John Ritter knows that as well as anyone. A teacher for 30 years, he has seen how the profession has changed.

But Ritter, a Parkland High School English teacher, is taking on a tougher challenge: he is the Democratic candidate for the 187th state legislative district, a district that has never voted for a Democrat since its creation in 1980 and has a large GOP voter registration margin.

In his statement to the PA AFL-CIO, the 57-year-old union president wrote, “I have devoted my life to teaching. Running for public office had never been an interest in the past.

“Nevertheless, as I personally saw the impact of government decisions on the lives of people close to me, I felt I had to get involved.

“For example, a family I’ve known for years has had to face the devastating effects of fighting a son’s life-threatening cancer without health insurance. Down the road from where I live, Wal-Mart is likely to build a supercenter on an already congested Route 309 against the wishes of most of the community.

“In addition, powerful forces are working to dismantle public education, which has always been and remains the gateway to pursuing the American Dream. Families, neighborhoods and entire communities in my district seem powerless against these forces.

“Government should be about ensuring life, liberty and the pursuit of happiness; lately it seems more interested in power and greed. The only people I intend to be accountable to are my neighbors and the communities of the 187th district I hope to serve.”

Ritter’s opponent is Chris Day, a Republican from Heidelberg Township.

The 187th district includes part of Lehigh County (Lynn, Heidelberg, Lowhill, Weisenberg, North Whitehall town-ships, part of Upper Macungie township and the borough of Fogelsville) and part of Berks County (Richmond, Long-swamp and Maxatawny townships and the boroughs of Topton and Kutztown).

The age issue: Senators Obama, McCain and the 25-year age difference

Gregg Potter, CWA #13500
President, Lehigh Valley Labor Council

“We have always known that heedless self-interest was bad morals; we know now that it is bad economics.”
Franklin Delano Roosevelt

When John McCain showed up May 17 as a surprise guest on “Saturday Night Live,” he pitched himself this way: “I ask you, what should we be looking for in our next president? Certainly, someone who is very, very old…It’s about being able to look your children in the eye—or, in my case, my children, grandchildren, great-grandchildren, great-great-grandchildren, the youngest of whom are nearing retirement. I have the courage, the wisdom, the experience, and most importantly, the oldness necessary. The oldness it takes to protect America…”

What this glib statement really means is that the McCain people are deathly afraid of voters in November who will balk at electing the OLDEST president in American history. This is precisely why they booked Sen. McBush on a youth-oriented, hip show. The message shows that McBush is “young at heart”. In this fashion, he attempts to defuse the age issue by attacking it front and center.

Sen. McBush does in fact look very old on camera. With the popularity of high definition TV sets, it is more and more difficult to hide some of the facial flaws, no matter how miniscule they may be.

Both Senators Clinton and Obama have faced, perhaps, the most grueling primary in history, yet both of them look remarkably fresh and ready for battle. They will need to be, because the Republicans will be ready to throw everything at them in order to take the focus away from McCain’s weaknesses, both real and perceived.

Certainly, having the Republicans nominate a senior citizen is not new. Ronald Reagan was 69 when he was elected in 1980. And Sen. Bob Dole was 73, the oldest first-time presidential nominee in history, when he ran in 1996.

A recent poll by the non-partisan Pew Research Center brought out some startling results that are sure to reverberate in the Republican camp. 50 percent of registered voters say they’re less likely to support a candidate in his 70’s. That’s higher than the share of voters who would be less likely to support a Muslim (48%), or a gay (46%), or a Mormon (32%). Although this particular poll didn’t mention McCain by name, the Pew Research Center did so in a separate survey, which found that 19 percent of “Republicans deemed him too old for the job.”

In the end, McCain’s biological age in 2008 is far less important than his metaphorical age. That is the center of his challenge this fall. Reagan won a landslide re-election in 1984, despite concern about his age, because his “Morning in America” image was perceived as fresher than Walter Mondale’s old-school liberal politics. Conversely, Dole played “old” in 1996, not necessarily because he appeared grumpy and fell off of a stage in front of the cameras, but because his message seemed so stale in comparison to Bill Clinton and the incumbent’s talk of “building a bridge to the 21st century.”

Already, we are seeing the chess-like moves to frame a candidate’s message and to discount the political body punches received. Of note, former White House Press Secretary, Scott McClellan published what could be a punishing book further exposing the Bush Administration, yet was somewhat bypassed by some of the “national dailies” in favor of covering the antics of ministers Jeremiah Wright and Michael Pfleger. No less a political expert than Sen. Dole ripped into McClellan’s book. “McClellan possibly had some valid points in his new book charging that Bush made a phony case for the war with Iraq,” said Dole, but “if all these awful things were happening….(he) should have spoken up publicly like a man, or quit (his) cushy high profile job.”

A true telling point of a candidate trying to distance himself from an unpopular incumbent was the behavior of Sen. McCain recently. On May 31, 2008 McCain traveled to his home state of Arizona for a much needed fund raising effort. Rather than be seen publicly with President Bush, the “maverick” Senator chose to have the event at the posh home of a supporter bereft of any reporters.

One other weak point that will be targeted by the media and political detractors will be McCain’s history of skin cancer, specifically Melanoma. You can bet that the American public will be inundated with a plethora of stage IV Melanoma survivors who can attest to Sen. McCain’s, otherwise supposed favorable health. Stay tuned!!

News Item: Some Corporate boards adopting new severance policy for executives.

Beleaguered Qwest Communications shareholders won greater control over some executive severance agreements recently. They also approved a slate of directors for the board and an independent auditor during the Qwest Communications Intl. annual board meeting. Retirees from Qwest have not received an increase in their pensions since 1996 and a request was sent to the board asking for one, which was denied.

Under the measure that did pass, shareholder approval will be required for severance agreements with a total value exceeding 2.99 times the sum of an executive’s base salary plus target bonus. The motion passed with an amazing 54% of the vote!

Last year, Verizon’s board of directors won a huge victory in tying executive pay directly to performance of stock prices. The defeat was huge for Verizon stockholders as this action set a precedent that reverberated throughout board rooms across the country.

Alcatel-Lucent is applying similar pressures to CEO Patricia Russo according to a list of resolutions posted on the group’s website. CEO Russo must ensure that the group meets “at least 90 percent of the performance target in respect of revenues of the group or 75 percent of the performance target in respect of operating profit.”

Perhaps the most important resolution passed mandates that for Russo to qualify fully for her severance benefits, totaling two years’ pay, bonuses and stock option rights, Russo would have to ensure Alcatel’s sales and profits reach a minimum level.

These are groundbreaking developments and hopefully more corporations will adopt these business practices as board members become more and more disenchanted with corporate excess.

Nurses Union, IBEW Give Support to Obama

by Seth Michaels, Jun 26, 2008

http://blog.aflcio.org/2008/06/26/nurses-union-ibew-endorse-obama

Two unions, the California Nurses Association/National Nurses Organizing Committee (CNA/NNOC) and the Electrical Workers (IBEW), have endorsed Sen. Barack Obama (D-Ill.) for president.

The 725,000-member IBEW offered an endorsement today, and IBEW President Edwin Hill committed to “an all-out push” to get members involved in the election.

The issues are clear. We as a people face difficult choices on health care, energy policy and building jobs and opportunity in a world increasingly bound by economic and environmental issues. Barack Obama offers positive leadership to navigate our way into the future instead of continuing the failures of the past.

The 80,000 member CNA/NNOC offered its endorsement after a vote of its 35-member board. Melinda Markowitz, RN, says the endorsement is based on the “stark difference” between Obama and likely Republican presidential nominee John McCain on the issues of health care and workers’ rights.

From the shredding of our public safety net, to the transfer of critically needed domestic resources for an irresponsible war, to the abandonment of environmental and labor law safeguards over the past eight years, the need for change in Washington is paramount.

We have been impressed with Sen. Obama’s efforts to broaden, enrich, and revive our democracy by bringing more Americans into our political process and giving them a sense of hope and confidence for a more just, more humane America.

This morning, the AFL-CIO endorsed Obama and launched a new website, Meet Barack Obama, to educate and mobilize union members. This fall, the AFL-CIO is carrying out an unprecedented grassroots mobilization to elect a working family-friendly Congress and president.

ATLANTIC CITY, N.J. - The National Labor Relations Board (NRLB) has confirmed an election victory at Trump Plaza Hotel and Casino and certified the UAW as the union chosen by a majority of full- and regular part-time dealers.

“I think it’s great,” said Trump Plaza Dealer Doug Migliore, of the board’s ruling. “We’ve been trying to get to the bargaining table for over a year. Now we can move forward to get a contract.”

The decision, said workers and union officials, will give an added boost to a major labor rally planned for Atlantic City on June 21, when trade unionists, community leaders, and supporters from throughout the tri-state area will demonstrate for a “Fair Deal for All Atlantic City Workers.”

“Management’s efforts to prevent workers from exercising their legal rights have failed,” said UAW President Ron Gettelfinger. “It’s way past time for them to come to the bargaining table and negotiate in good faith with the union.” Gettelfinger and AFL-CIO President John Sweeney will be among those speaking at the June 21 event.

Information on the rally is available at http://www.June21ACRally.org.

“The NLRB ruling confirms what we already knew: This was a clean campaign and a clear victory for Trump Plaza dealers,” said UAW Secretary-Treasurer Elizabeth Bunn, who directs the union’s Technical, Office and Professional (TOP) Organizing Department.

Dealers at Trump Plaza voted 2-to-1 in favor of forming a union on March 31, 2007. But the company filed objections with the board claiming expressions of support by federal, state and local elected officials during the organizing drive had tainted the representation vote. The boards May 30 ruling upheld an earlier decision by Administrative Law Judge Robert Giannasi, who dismissed all of Trump Plaza’s objections to the election and found the vote to be valid and binding.

Joe Ashton, director of UAW Region 9, which includes New Jersey, said the board’s decision has further motivated Atlantic City dealers and other casino workers. “The dealers at Trump Plaza and throughout Atlantic City are geared up and moving ahead, and we’re looking forward to a terrific event on June 21.
“We’ve won six representation votes over the last year, every major board decision, and a first-ever smoking ban to protect the health of casino workers,” said Ashton. “Casino management needs to quit the stalling and give workers and families the respect they deserve.”

Since March 2007, a majority of casino dealers, dual-rate dealers and other workers at Caesars, Trump Plaza, Bally’s and Tropicana in Atlantic City have voted in favor of UAW representation. Bargaining is under way at Caesars and Tropicana; the union at Bally’s has just been certified by the NLRB.

The UAW, one of the nation’s largest and most diverse labor unions, represents more than 8,500 gaming employees in Detroit, Atlantic City, Rhode Island, Connecticut and Indiana.

http://www.uaw.org/news/newsarticle.cfm?ArtId=487

EDITOR’S NOTE: I was visiting the Steelworkers Local 2599 in Bethlehem, Pennsylvania yesterday. As I was leaving their office, the President Jerry Green caught me in the parking lot to give me the news. I was so interested and pleased that I drove off with my cell phone on the roof. The phone is totally lost. In November, McCain will be a total loss for the Republicans. I will miss the phone.
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AFL-CIO NEWS

For Immediate Release Contact: Steve Smith: 202-637-5018

AFL-CIO Votes to Endorse Senator Barack Obama for President

Endorsement Triggers Largest Ever Mobilization of Working Families

AFL-CIO Program to Reach Union Voters Nationwide, 13 Million in 24 Priority States

http://www.MeetObama08.org

(Washington, June 26) – Calling Sen. Barack Obama a champion for working families, the top leaders of AFL-CIO unions today voted without opposition to endorse him for president of the United States, thrusting the labor federation’s largest ever grassroots mobilization effort into high gear.

“In so many ways¯on jobs, health care, gas prices and the war in Iraq¯our country is headed in the wrong direction,” AFL-CIO President John Sweeney said. “Barack Obama has proven from his days as an organizer, to his time in the Senate and his historic run for the presidency, that he’s leading the fight to turn around America. He’s a champion for working families who knows what it’s going to take to create an economy that works for everyone, not just Big Oil, Big Pharma, the insurance companies, the giant mortgage lenders, speculators and the very wealthy. We’re proud to stand with Sen. Obama to help our nation chart a course that will improve life for generations of working people and our children.”

In its endorsement statement, the AFL-CIO General Board cited Obama’s strong support of working families on issues such as health care reform, fair trade that will lift up workers here and around the world, retirement security and the freedom to form unions and bargain for middle-class living standards. Obama has a 98 percent voting record on working families’ issues, compared to just 16 percent for Sen. John McCain.

“Senator Barack Obama has secured the nomination of his party in a campaign that has energized millions of Americans and spoken to the hopes and dreams of people from every corner of our nation,” read the AFL-CIO General Board’s statement to endorse Obama. “His leadership can re-engage disenfranchised Americans and bring our country together.” The General Board, which includes presidents of all 56 unions in the federation as well as Executive Council members and representatives of state and local federations, trade departments and constituency groups, votes by per capita membership.

“Senator Obama has advocated a change of direction for our nation that mirrors the priorities of the labor movement,” the statement continued.

The endorsement is not only a stamp of approval; it marks the beginning of a huge, united political mobilization among working class voters. The AFL-CIO will focus on mobilizing more than 13 million union voters¯including union members, families of members, retirees and members of the AFL-CIO community affiliate Working America¯in 24 priority states, working to elect U.S. senators and representatives, as well as state and local candidates.

“We’ll work our hearts out for Barack Obama,” said AFSCME President and AFL-CIO Political Committee Chair Gerald McEntee. “Our program is going to be worker to worker and neighbor to neighbor. We’re ready to mobilize. We’re ready to rock and roll. This country and our people are ready for change.”

Today, the AFL-CIO also launched a new website that provides extensive information on Obama’s background, record and positions (www.MeetObama08.com).

The endorsement is the latest phase in a massive grassroots program to mobilize union voters. In early March, the AFL-CIO launched its national “McCain Revealed” campaign, which focuses on educating union voters about John McCain’s anti-worker record and plans. Since the campaign began, AFL-CIO volunteers have knocked on more than 60,000 doors and delivered 1.5 million worksite flyers on McCain’s economic record. Nearly a half-million mailers on McCain’s economic positions have been sent to union swing voters in key battlegrounds.

“We want to engage our members and all working people on the need for action on the issues that make a difference in our daily lives,” said International Brotherhood of Electrical Workers (IBEW) President Ed Hill. “It is time to move beyond name calling and division so that our country can take positive action on the challenges we face.”

United Steelworkers President Leo W. Gerard said, “Senator Obama’s plan to revitalize American manufacturing and his commitment to make workers the top priority in any trade agreement give our members hope that his election will lead the country in a new direction that’s long overdue, and inspire us to work as never before to secure his victory.”

Elements of the AFL-CIO grassroots mobilization:

· The AFL-CIO top-tier states in 2008 are Ohio, Pennsylvania, Michigan, Wisconsin and Minnesota.

· More than 250,000 volunteers will be activated and deployed.

· Through Labor Day, volunteers will go to 300,000 union voters’ homes, make more than 300,000 phone calls and distribute over 2 million fliers.

· In addition to the presidential election, the AFL-CIO is engaged in every viable Senate race and more than 60 House races. All told, the AFL-CIO will be engaged in more than 510 races nationwide, including state legislative elections.

· The unions of the AFL-CIO will collectively devote more than $200 million to the 2008 election.

· The 2008 grassroots mobilization is the most sophisticated program the AFL-CIO has ever run, employing cutting-edge voter communication techniques, including micro-targeting to ensure our members are receiving the information they want on the candidates and issues.

Working families are poised to play a pivotal role in this year’s elections. On Election Day, union household members will account for nearly one in four voters nationwide. The campaign in support of Sen. Obama will prove especially helpful among working class voters, which many have identified as the swing group in this election.

· In key battleground states such as Ohio, Michigan and Pennsylvania, union household voters made up between 25 and 35 percent of the total vote in 2006.

· In 2004, turnout among registered AFL-CIO union voters was as much as 19 percentage points higher than turnout among nonunion voters in key battleground states.

· Working America, the community affiliate of the AFL-CIO, has expanded to 11 states and will have more than 2.5 million members nationwide by Labor Day. In Ohio alone, Working America has nearly 800,000 members.

· Union household voters across all demographics consistently cast votes for pro-working family candidates. For example, in the last presidential election among AFL-CIO members, 61 percent of white voters voted for John Kerry, while 37 percent voted for George Bush. By contrast, among nonunion voters, 41 percent of white voters cast ballots for Kerry while 58 percent voted for Bush

For interviews with AFL-CIO leaders and affiliated union presidents, please contact the AFL-CIO Media Outreach department at 202-637-5018.

July 2008, Allentown/Bethlehem/Easton edition of The Union News

Teamsters circulating petitions against Turnpike proposal

By PAUL TUCKER
theunionnewsabe@aol.com

REGION, June 11th- The International Brotherhood of Teamsters (IBT) Union wants union members to sign a petition requesting the Pennsylvania Legislature not support Governor Ed Rendell’s plan to lease the Pennsylvania Turnpike. The IBT represent employees of the roadway and fears to sell or lease the turnpike would put their members jobs in peril.

The Teamsters represent around 2,500 maintenance, supervisory and professional workers and toll takers of the Pennsylvania Turnpike. There are three local unions around the state that represent those workers. The union has represented the workers since 1971.

IBT Local 77 is headquartered in Fort Washington and represents turnpike workers throughout southeastern and northeastern Pennsylvania. Local 250 represents workers in the western part of the state including the Pittsburgh area. IBT Local 30 represents around 100 assistant foremen, accountants, engineering technicians, surveying technicians and some supervisors. Local 77 represents more than half of the workers represented by the Teamsters.

Under the plan, the state will give control of the publicly owned highway to a company formed by the partnership of Citi Infrastructure Inverstors of New York and the Spanish company Albertis. The company will receive a 75-year lease for $12.8 billion, or $200 million per year.

The Pennsylvania Conference of Teamsters is asking union members and their families to support the workers and sign a petition that will be presented to the leaders of the legislature to demonstate their opposition to the lease proposal.

The union is worried when costs start to rise and profits get squeezed, the companies could readily break existing labor contracts and pension agreements by firing older workers and replacing them with younger workers with cheaper wages and smaller benefit packages. Under Mr. Rendell’s proposal, the IBT contract would only be honored for four years.

“Lame-duck Governor Ed Rendell is attempting to lease the Pennsylvania Turnpike for 75 years to a private foreign firm that will control the amounts charged for tolls and for food and fuel on the Turnpike,” states the petition.

July 2008, Allentown/Bethlehem/Easton edition of The Union News

USW/PACE Union files ULP charge against Hygrade Metal Moulding alleging company violated NLRAct

By PAUL TUCKER
theunionnewsabe@aol.com

BETHLEHEM, June 4th- The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, filed a Unfair Labor Practice (ULP) charge with the National Labor Relations Board (NLRB) Region Four in Philadelphia against Hygrade Metal Moulding Manufacturing Corporation.

Hydrade Metal Moulding Manufacturing operates a factory on Highland Avenue in Bethlehem. The Bethlehem facility manufactures window components.

According to the ULP, obtained by the newspaper through the Freedom of Information Act, the union alleges section 8 (a), subsection (1),(3) and (5) of the National Labor Relations Act (NLRAct), was violated by the company. The complaint was filed by Donald Harper, USW/PACE SubDistrict Director in Norristown, Pennsylvania.

The union alleges “the employer has failed to reduce to writing the terms and conditions of the negotiated three year Collective Bargaining Agreement, which was effective January 1st, 2006. In addition, they have failed to sign the agreement which was negotiated,” states the Unfair Labor Practice charge.

Under NLRB rules, after receiving a charge the agency will conduct a investigation into whether there is merit in the complaint. Should, the NLRB find there is merit in a charge, the agency will scheduled a hearing on the matter.

According to the complaint, Attorney Craig Benson is the employer representative. Mr. Benson’s office is located on Third Avenue in New York.

The union charged the company with interfering, restraining and coercing employees in the exercise of the rights guaranteed in Section 7 of the NLRAct.

The union was successful in organizing around 30 employees of Hygrade Metal and negotiating a first-time labor agreement in 2007, however the company has failed to sign the contract but the employees are working under the terms and conditions of the negotiated pact.