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Can Unions Prevent Austerity from Killing Off the Middle Class?



The AFL-CIO promises a wide-ranging and open discussion about the future of the labor movement at its convention in September.
With private-sector union representation approaching 5 percent of the labor force and public employee unions targeted by right-wing governors, the timing couldn’t be better.

Indeed, nowadays some union watchers are pronouncing the labor movement dead. Last year, union membership dropped by 400,000.
Will the convention truly mark the beginning of a turnaround for the labor federation? Let’s hope so.

“We’re going to open up our arms to people who want to join our movement,” said AFL-CIO President Richard Trumka, in an interview with C-SPAN earlier this year, pledging a new direction for labor. “Instead of saying to our community partners and the civil rights movement or the Latino movement, ‘That’s your issue and this is my issue,’ they’re going to be our issues, and we’re going to work together.”

To prepare for the September convention, the AFL-CIO has set up committees of rank-and-file members, academics, and representatives of African-American, Latino and religious organizations to chart a new course for labor.

On the AFL-CIO’s website, a rich discussion is taking place about key questions facing the labor movement: mobilization strategies, the inequality gap, community outreach, the use of social media tools, shaping the country’s political debate and building a more broad, diverse and inclusive labor movement.

Tucked away in the 2013 convention section of the website is an interesting 73-page white paper on the AFL-CIO’s economic agenda, “Prosperity Economics: Building an Economy for All.”

The paper attacks “austerity economics”–the conservative economic doctrine behind the decades-long attack on unions, working people and government–while offering a progressive alternative it calls “prosperity economics” to spark a union revival and lift the poor and middle class out of their economic malaise. The authors are Jacob S. Hacker, a political science professor at Yale University and author with Paul Pierson of the penetrating book “Winner-Take-All Politics: How Washington Made the Rich Richer—And Turned its Back on the Middle Class,” and Nate Loewentheil, a third-year Yale Law School student and editor of the 2008 book “Thinking Big: Progressive Ideas for a New Era.”

If the September convention lives up to the spirit of today’s internal debate and AFL-CIO pursues policies recommended by the white paper, it stands to be the most significant convention since the 1995, when John J. Sweeny and his backers ousted the old guard Cold War warriors.

The white paper’s first section does an excellent job of explaining the assumptions austerity economics. Its assumptions have provided the ideological justification for policies and practices that are wiping out the gains of the middle class since the New Deal more than half a century ago.

Unfortunately, millions of Americans have embraced and internalized free- market principles and meritocracy, which have allowed us to fall for anti-worker economic and political policies, which intensified during the Reagan presidency. Hence, you have millions of people voting against their economic interest.

Austerity: Economic snake oil

Austerity economics, Hacker and Loewentheil explain, is built around five myths:

• spending and deficits are our number one problem

• cutting taxes on the rich spurs prosperity

• inequality is not a problem because social mobility is high

• markets are smart, governments are dumb, and

• those at the top are the ones who create wealth and are alone responsible for their good fortune.

The assumptions collapse on their face when you look at the facts.

For years, “austerians” have used deficit hysteria to stir up opposition to “big government” and to create a bogus fear that it’s inevitable that our economy will collapse because of too generous entitlements.

But even with the increase in military spending, the costly Medicare prescription drug benefit and the massive tax cuts during the Bush administration, the deficit on average was only 1.5 percent of the GDP until the loss of revenue and stimulus that followed the economic crash of 2008. So, the ballooning of the deficit was a symptom of the bad economy rather than runaway government spending, Hacker and Loewentheil say. If anything, the government spent too little to try to stimulate the economy.

Far from spurring prosperity, the Bush tax cuts actually were followed by anemic economic growth. The richest Americans profited while the typical household ended the aughts with less income than at the beginning of the new century. The 2000s were a lost decade for most Americans.

Conservatives don’t believe inequality is problem because, they say, social mobility is high in the United States. Actually, social mobility has stagnated as inequality has risen, and the United Stated ranks lowest in terms of inequality and social mobility among rich countries.

The free-market bias of austerity economics ignores the important role government plays in supporting economic activity. It’s government—not the private sector—that has supported public education, highways, electrical grids, the Internet and scientific research.
Finally, the argument that the rich deserve their economic rewards because they are responsible for producing their wealth ignores how public policies, such as tax cuts, have helped them. As unions have declined, the wealthy have steadily accumulated a greater share of the economic pie.

“Over the last generation, the productivity of American workers—output per hour of work—grew substantially,” Hacker and Loewentheil write. “Yet, in a sharp break with the past, wages for most workers stopped rising in tandem with productivity. The gains of economic growth instead accrued disproportionately to affluent Americans.”

Between 1973 and 2011, median compensation was 10.7 percent while productivity grew by 80.4 percent, according to the Economic Policy Institute. Perhaps more than any figure, this one captures what’s wrong with our society.

Building an Economy for All

So, what is labor’s vision of a more people-friendly economic agenda? The central idea is that prosperity is a product of all of us. The role of government is to prevent the concentration of economic and political power while promoting prosperity and our social health, guaranteeing economic security and regulating the market.

Prosperity economics rests on three pillars:

• innovation-led economic growth, grounded in job creation, public investment and board opportunity

• security for workers and their families, for the environment and for public finances, and

• a vibrant democracy.

The most immediate task is job creation.

More than 12 million Americans are out of work. Millions more are stuck in part-time jobs or have given up. The employment deficit has cost us $3.6 trillion in lost productivity since the beginning of the recession, according to the Congressional Budget Office.

The authors call for a six-year, $250 billion jobs program. Other pro-growth steps include expanding government investment in research and development, reviving the manufacturing sector, pressing the Federal Reserve Bank to encourage growth and job creation by allowing inflation to increase modestly, immigration reform, increasing the minimum wage and investing more in education.
The decline of private-sector workplace benefits—health coverage and pensions—has created a looming retirement crisis, which can be addressed by strengthening and expanding Social Security and Medicare. Providing workers with paid family and sick leave, as well as affordable child care and flexible work schedules would ensure that the younger generations have greater economic security. Underwater homeowners should be encouraged to restructure their mortgages.

To protect the environment, government should put a price on carbon emissions, promote clean forms of energy technologies and promote sustainable technologies.

Prosperity economics would turn the conservative dogma on taxes on its head. It rejects that trickle-down theory, which argues that tax cuts lead to economic growth. Instead, increased revenues would be used to stimulate the economy. A more progressive tax structure would address income inequality. The Bush tax cuts would be scrapped, and capital and labor income should be taxed at the same rate.

Hacker and Loewenthiel back the AFL-CIO’s political agenda of winning federal legislation to make it easier for unions to organize. Unfortunately, they did not dig more deeply into the issue to suggest how unions can change their internal structure and culture to allow for a dramatic shifting of their resources into organizing.

Arguably, organizing is the greatest challenge facing labor—greater even than the right-wing assault on unions. The 1 percent will continue to succeed in its campaign to wipe out the middle class unless AFL-CIO unions organize more aggressively. Barring that, our only hope will be that independent labor groups fill the vacuum. Otherwise, we’re doomed.

Democracy and Prosperity

An interesting theme underlying the AFL-CIO report—one too often overlooked in blueprints for economic reform–is its recognition that a turnaround of the economy cannot occur without strengthening our democracy.

“A strong, open, participatory democracy is the bedrock of a strong, open and dynamic economy,” Hacker and Loewenthiel write. Pulitzer Prize winning economist Joseph Stiglitz similarly makes a connection between a more fair economy and democracy. He describes how inequality and economic concentration erode not only our democratic institutions but also our commitment to democracy itself.

We tend to regard unions as “bread and butter” institutions focused on collective bargaining and achieving wage gains for their members. In reality, of course, they are vital actors in our political system, though far less powerful than their enemies claim. Apart from government, the union is the only institution able to challenge effectively the notion that our democracy ends at the factory gate.

Unions need to be strengthened to force corporations to be more accountable and to curb their excesses. Working with shareholder groups, community organizations, and pension funds, unions can fight for improvements in labor practices, push for pay-for-performance through greater transparency and disclosure requirements, and demand curbs on obscene executive compensation packages.

In his book “Winner-Take-All Politics,” Hacker argued that the corporate interests and the economic elite have over the years seized control of government institutions and the electoral process. So, “shared prosperity” can’t happen without fundamental reform. These reforms include strengthening consumer protections; enacting a national public financing law for elections; creating a national voting day; blocking disenfranchisement efforts; eliminating the 60-vote filibuster barrier to passing legislation; improving regulations on credit cards and predatory lending; replacing 401(k)s with a mandatory public-private retirement plan; placing restrictions on lobbying; reinstating the firewall between investment banking and commercial banking; strengthening community banks, and granting greater bankruptcy protection to students with college debts and homeowners with unmanageable mortgages.

“Prosperity Economics” offers a refreshing blueprint for a way out of our economic malaise, sharpening class differences and broken democracy. Is there hope? This agenda will require strengthening the loose left-leaning coalition—youths, unions, liberal churches, women, blacks, Latinos and progressive whites—that backed Obama.

The Occupy movement, the striking fast-food workers and the budding rebellion at Wal-Mart are signs of hope. Add a more militant trade union movement to the mix, we might soon witness the emergence of a lasting coalition that will finally put an end to austerity.

Lehigh Valley’s unemployment rate decreases to 8.3 percent


JUNE 2013, LEHIGH VALLEY Edition of The Union News

Lehigh Valley’s unemployment rate decreases to 8.3 percent


REGION, May 12th- According to labor data provided by the Pennsylvania Department of Labor and Industry, Center for Workforce Information and Analysis in Harrisburg, the Allentown/Bethlehem/Easton Metropolitan Statistical Area (MSA), seasonally adjusted unemployment rate is 8.3 percent, decreasing by three-tenths of a percentage point from the previous report, which was released approximately four week before. The Metropolitan Statistical Area includes Lehigh, Northampton, and Carbon Counties of Pennsylvania and Warren County, New Jersey. Twelve months ago the unemployment rate for the region was also at 8.3 percent.

There are fourteen Metropolitan Statistical Area’s in Pennsylvania and the Allentown/Bethlehem/Easton MSA has the fourth highest unemployment rate.

The Scranton/Wilkes-Barre/Hazleton MSA continues to have the highest unemployment rate in Pennsylvania at 9.6 percent. The Johnstown MSA has the second highest unemployment rate at 9.2 percent.

The State College MSA has the lowest unemployment rate in Pennsylvania at 5.9 percent. The Lebanon MSA and the Lancaster MSA are tied for the second lowest rate at 6.5 percent with the Harrisburg MSA third at 7.1 percent. The Pittsburgh MSA has the fourth lowest unemployment rate 7.3 percent.

The seasonally adjusted unemployment rate in Pennsylvania is 7.9 percent, dropping by two-tenths of a percentage point from the previous report and increasing by three-tenths of a percentage point from twelve months before.

There are 512,000 Pennsylvania residents without jobs, but that number does not include residents that have exhausted their unemployment benefits and stopped looking for work.

Pennsylvania has a seasonally adjusted workforce of 6,508,000 and 5,995,000 of them have employment.

The national seasonally adjusted unemployment rate was reported to be 7.6 percent, decreasing by one-tenth from the previous report. The national unemployment rate was down six-tenths of a percentage point from twelve months before, mostly because of a decrease in the workforce and workers that have stopped looking for work.

The Allentown/Bethlehem/Easton MSA has the third largest labor force in Pennsylvania with 437,400 civilians and 38,200 have no employment. The Philadelphia MSA has the largest labor force at 3,023,700 with 254,700 not working; and the Pittsburgh MSA has the second largest labor force at 1,257,900 with 91,300 without jobs.

Northampton County and Lehigh County have the lowest unemployment rate in the MSA at 7.8 percent. Northampton County’s rate decreased by two-tenths of a percentage point from the previous report while Lehigh County’s rate dropped six-tenths of a percentage point.

Carbon County’s unemployment rate is 9.6 percent, decreasing by seven-tenths of a percentage point from the month before.

Letter Carriers Union files labor complaint against USPS


JUNE 2013, LEHIGH VALLEY Edition of The Union News

Letter Carriers Union files labor complaint against USPS


REGION, May 18th- A Shop Steward of the National Association of Letter Carriers (NALC) Branch 274 Union filed a labor complaint with the National Labor Relations Board (NLRB) Region Four office in Philadelphia alleging the United States Postal Service (USPS) violated the National Labor Relations Act (NLRAct).

The Unfair Labor Practice (ULP) charge was filed on May 6th, 2013 and alleges postal service management violated section 8(a), subsections (1) and (5) of the NLRAct by not providing information that was requested by Branch 274 Shop Steward Dwayne Achey, of Freemansburg.

According to the Unfair Labor Practice, which was discovered by the newspaper while reviewing ULP’s and/or petitions filed at the NLRB Region Four office, Mr. Achey alleges USPS management failed to provide the Union with information to process grievances filed in March, 2013.

The USPS office that was alleged to violate the NLRAct is located in Emmaus.

The Employer Representative identified on the ULP to be contacted is Joyce Maurer, USPS Post Master.

NALC Branch 274 office is located on North 5th Street in Allentown, according to the labor complaint.

NALC members deliver and pickup USPS mail and packages to homes and businesses throughout the nation.

The number of employees represented by Branch 274 at the USPS facility in Emmaus is 23 the ULP states.

The National Association of Letters Carriers Union and the American Postal Workers Union (APWU) represent the majority of the USPS workers with a combined membership of nearly 400,000 workers.

Rally and March for State Workers in Philadelphia


Rally and March for State Workers in Philadelphia

By John Oliver Mason

State employees, affiliated with Local 668 of Service Employees International Union (SEIU), held a rally at JFK Plaza (aka Love Park), 15th Street and JKF Boulevard in Philadelphia, on Monday, June 3, 2013.

The rally participants protested cuts in services to the handicapped and indigent proposed by Pennsylvania Governor Tom Corbett, whom the protestors called “One Term Tom.”

Christine Haftl, a participant in the rally, said, “I want to support the people who are caseworkers in the Department of Public Welfare.” Governor Corbett, she said, “is trying to slash benefits, especially Food Stamps and other benefits for poor people who are trying to survive in this economy. (There are) three people for every job that’s out there, and (Corbett) already took away the cash benefits for anyone that didn’t have dependents. There are a lot of people relying on those cash benefits, people who are fighting drug and alcohol addiction who need to go to rehab and want to get clean and become healthy and productive members of society, (also) homeless people trying to get off the street and reestablish themselves and reenter the work force…A lot of (homeless people) have kids, a lot of them are couples, a lot of them have nowhere to go at this time.”

Also, disabled people, added Haftl, “want to have jobs, they want to work, and a lot of disabled people just can’t work, and they need (cash assistance) to survive.” Meanwhile, Governor Corbett has given money to the (natural gas industry which has performed hydraulic “fracking” polluting water tables across Pennsylvania and across the country.”

Ray Martinez, a member of the staff on Local 668, said that the rally “is mainly to send a message to the governor, (who) is not being very kind to us. He’s anti-labor, anti-worker, anti-middle class, a typical Republican who cares about giving tax breaks to the major corporations, and (for) blaming all of our problems on government workers, in this case state workers. We’re in the middle of a budget battle, where he is not funding our programs, he’s cutting them by twenty percent. So our programs, which are already under funded, are now, based on this budget, are going to be (funded) below” what they are now.

Martinez added, “We represent a lot of folks who work in the social services, and folks need services. The economy is bad, people are unemployed, people need mental health counseling, and (Governor Corbett) seems to be anti all of that.”

The rally began with the chanting of such slogans as:

“Who’s got the power?
We got the power!
What kind of power?
Union power!”

“What’s disgusting?
Union busting!”

“Union yes! Corbett no!
Union busting has to go!”

Ray Martinez addressed the crowd, saying, “This is part two of what we started earlier today. We started a day of action which took part all over the state, and specifically in Philly, at all the welfare offices and some other state agencies as well. we want to send a message to the Governor…who is clearly anti-worker, anti-middle class. We have to fight this guy, we can’t sit back.”

After the rally, members marched and chanted to the entrance of the Bellevue Hotel, Broad and Walnut streets, where the governor’s Philadelphia office is located.

Building Trade Unions again under attack in Harrisburg


JUNE 2013, LEHIGH VALLEY Edition of The Union News

Building Trade Unions again under attack in Harrisburg


REGION, May 9th- Legislation was voted out of committee by the Pennsylvania House Labor and Industry Committee so they may be considered by the full Pennsylvania House of Representatives that could effect labor organizations affiliated with the building and construction trade unions. The committee is chaired by Monroe County Representative Mario Scavello (Republican-176th Legislative District).

On April 16th the House Labor and Industry Committee voted two anti-prevailing wage bills out of committee that adds to the number of bill’s that have been introduced in this legislative session in the Pennsylvania General Assembly that attacks provisions of the Pennsylvania Prevailing Wage Act.

Also, Project Labor Agreements (PLA’s) are again under attack that help state building and construction union workers gain employment that is at least partially funded by taxpayer money.

A PLA is a comprehensive agreement signed between a builder and local craft unions under which a defined construction project is agreed to be completed by workers from local union halls, in return for the union’s guarantee of no strikes, a steady well trained labor supply, and general labor peace. Under a PLA, a nonunion contractor could still be hired for a project, however if they are selected, local unionized workers must be hired.

The anti-prevailing wage legislation is supported by the anti-union, pro-business members of the Pennsylvania General Assembly.

Frank Sirianni, President of the Pennsylvania Building and Construction Trades Council in Harrisburg, which is a labor federation representing labor unions that members are employed within the building and construction trade industry, stated the bills are just two of a large package of new anti-union bills that have been recently introduced and represent a bold new set of attacks on workers by this misguided anti-worker agenda.

House Bill (HB) 665 would change the definitions of “construction” and “maintenance” projects so that more public projects would be classified as “maintenance” and therefore be exempt from prevailing wage laws. “Maintenance” projects under this proposed legislation would include full replacement of guide rails, curbs, pipes, and other road equipment as well as repaving up to 3 1/2 inches of road surface, including associated milling. This would exempt a huge number of construction crews from prevailing wage protections.

HB 796 would amend the Pennsylvania Prevailing Wage Act to raise the threshold from $25,000 to $100,000 for projects that would be subject to prevailing wage laws. This bill is a transparent effort to undermine prevailing wage laws in the commonwealth.

The Keystone Research Center (KRC), a progressive economic think tank in Harrisburg, released a study that indicated prevailing wage laws help prevent the construction industry from degenerating into destructive wage and price competition, which drives skilled and experienced workers from the industry, reduces productivity, and quality, and leads to poverty-level jobs, without saving construction customers any money.

The Keystone Research Center stated claims by opponents that prevailing wage laws costs as much as 30 percent is implausible hypothetical calculations and not based on actual numbers.

In Pennsylvania labor compensation on construction projects accounts for only 24 percent of total costs on average. Also, the hypothetical calculations assume that when wages and benefits drop, everything else, including worker skill levels and productivity, remain unchanged.

Mr. Sirianni stated that if Pennsylvania policy makers want to save money of public construction, the best route would be to shift public construction to periods of higher unemployment. Pennsylvania should launch a “Buy Low” initiative by increasing the state’s bond-financed investments in schools, transportation, and infrastucture

Direct-care workers outpacing labor supply throughout nation


JUNE 2013, LEHIGH VALLEY Edition of The Union News

Direct-care workers outpacing labor supply throughout nation


REGION, May 20th- The demand for direct-care workers, particularly those employed in home and community settings, will continue to outpace supply, states the Paraprofessional Healthcare Institute (PHI), a national group that studies the direct-care industry and workforce.

According to data provided by PHI, as many as 3.3 million direct-care workers, including nursing home aides, home health aids, and personal care aides, were employed in 2010 and 1.6 million new positions are projected by 2020. The direct-care workforce is projected to be the nation’s largest occupational grouping by 2020.

Direct-care occupations will outnumber all retail sales workers as well as all teachers from kindergarten through high school.

“Pressure is building to improve the quality of diect-care jobs. The economy’s booming demand for direct-care workers, particularly home health aides and personal care aides, means that it is now essential than ever to attrack workers to these jobs by making them competitive with other occupations. This is especially true at this time when fewer women are entering the labor force,” stated PHI Policy Research Director Dorie Seavey, Ph.D.

Demand for direct-care workers is projected to increase by 48 percent during this decade, but the main labor pool from which the workforce is drawn, women aged 25-54, is expected to grow by only 1 percent. This compares to a 14 percent increase in the number of women in this group from 1988 to 1998, PHI analysis indicates.

Personal care aides and home health aides are projected to be the fastest growing occupations in the nation between 2010 and 2012, increasing by 71 percent and 69 percent, respectively.

Personal care aides and home health aides rank third and fourth on the list of top ten occupations projected to generate the most jobs. This growth will result in home and community-based direct-care workers outnumbering facility workers by two to one by the end of the decade.

However, even with the demand for this workers, they remain among the lowest paid workers in the nation, averaging $10.59 per hour.

IBT Local 773 attempting to represent area truck drivers


JUNE 2013, LEHIGH VALLEY Edition of The Union News

IBT Local 773 attempting to represent area truck drivers


REGION, May 15th- The International Brotherhood of Teamsters (IBT) Union Local 773, Hamilton Street in Allentown, filed a petition with the National Labor Relations Board (NLRB) Region Four office in Philadelphia requesting the agency conduct a election to deternie if employees of a Breinigsville employer want the union to represent them for the purpose of collective bargaining.

The newspaper discovered the Certification Petition while reviewing labor complaints and/or petitions filed at the NLRB office.

The Union News is the only member of the media in the Lehigh Valley that reviews and publishes articles regarding the information.

Local 773 President Dennis Hower filed the petition on behalf of the union. The Employer Representative stated on the petition to be contacted is Joshua Jones. Mr. Jones position with the Employer is not identified.

According to the NLRB, the agency will conduct the election of approximately 30 eligible to vote employees of KeHE Distributors, Nestle Way, Breinigsville on May 31st. There will be two voting times held at the transportation facility.

The IBT requested that all full-time and regular part-time truck drivers employed at the company’s Breinigsville facility and its domicile in Parsippany, New Jersey, be allowed to participate in the representation election. The NLRB granted their request.

Under National Labor Relations Board rules, a labor organization must receive at least 50 percent plus one of the eligible voting employees to become their representative for the purpose of collective bargaining.

Also, the newspaper discovered Local 773 filed a labor complaint with the NLRB alleging Pratt Corrugated Logistics, Industrial Park Way, Macungie Township, management violated the National Labor Relations Act (NLRAct).

The Unfair Labor Practice (ULP) charge alleges the Employer violated the NLRAct by giving employee, Luis Hernadez, a written warning because of his support for the Union and/or in retaliation for his testimony at a agency proceeding. The alleged violation occurred on April 4th, 2013, the ULP states.

USW Union conducts annual O’Brien Legislative Dinner


JUNE 2013, LEHIGH VALLEY Edition of The Union News

USW Union conducts annual O’Brien Legislative Dinner


REGION, May 19th- The annual United Steelworkers of America (USW) Union Local 2599 Ed O’Brien Legislative Dinner was held on May 19th at the USW building on East Lehigh Street in Bethlehem.

Local 2599 is one of the largest labor organizations in the Lehigh Valley and once represented workers employed at Bethlehem Steel, the current site of the Sands Casino.

The annual dinner has been held since the 1960’s but was renamed to honor long-time USW member and officer Ed O’Brien in 2000.

Jerry Green, long-time President of Local 2599, welcomed the approximately 85 guest, which included active and retired union members, elected political officials, and political candidates.

Allentown Democratic Mayor Ed Pawlowski was guest speaker. Mr. Pawlowski is seeking another four-year term as Allentown Mayor and did not face an opponent in the recent election. His name has been mentioned for a possible run for Pennsylvania Governor in 2014.

Also attending was Keynote Speaker and former United States 17th Legislative District Congressman Tim Holden. Mr. Holden was defeated by fellow Democrat Matt Cartwright in the 2012 primary election. He served in congress from 1993 to 2013.

Mr. O’Brien was twice the Democratic party nominee for the United States House of Representatives 15th Legislative District seat. He was defeated by the Republican nominee. The seat is currently held by Republican Charlie Dent.

Mr. Green told the newspaper Ed O’Brien first joined the Union in 1964 and served in many positions both in the Lehigh Valley and with the International Union.

Ed O’Brien is now retired with his wife Shirley in Coaldale.