Postal banking could benefit millions

The US Postal Service’s Office of Inspector General (OIG) recently issued a report showing how postal banking could be expanded.

Post offices already provide limited banking services such as the sale of money orders, the most widely used alternative banking service in the US.

Expanded postal banking would make safe and affordable basic banking service available at local post offices for all postal customers, especially those living in rural and urban communities that are either not served or under served by traditional banks.

After the OIG report was released, unions representing employees of the Postal Service issued statements supporting postal banking.

“It’s a no brainer,” said Mark Dimondstein, president of the American Postal Workers Union (APWU). “The Inspector General’s report confirms that the Postal Service can act now to provide consumers with affordable financial services while strengthening the public Postal Service.”

APWU is currently negotiating a new collective bargaining agreement with the Postal Service and postal banking is one of its priority bargaining proposals.

“We look forward to the day when people can get their checks cashed by their trusted neighborhood (postal) clerk,” added Dimondstein.

A statement by the National Postal Mail Handlers Union issued in response to the OIG report said that the union supports legislation that will expand financial services at post offices.

Fredric Rolando, president of the National Association of Letter Carriers, praised the OIG’s report and said that postal banking has worked for years in other countries.

“(The OIG’s postal banking) model has been successful in many other countries and has the potential, according to the OIG, to generate at least $1.1 billion of revenue annually, which would allow the Postal Service to continue its innovative efforts,” said Rolando. “The OIG’s recommendations are a good place to start, and we urge the Postal Service to take steps to immediately pursue these opportunities to fill the unmet needs of those in under served communities.”

The OIG’s report, entitled “The Road Ahead for Postal Financial Services,” lays out four approaches for establishing postal banking.

Approach #1 would expand financial services that post offices are already authorized to provide including the sale of money orders ($21 billion in 2014), electronic money transfers, check cashing, bill paying, and postal operated ATMs.

At some point, the OIG would like to make more financial services, such as affordable interest-rate loans and savings accounts, available at post offices.

Between 1911 and 1966, the US Postal Services did offer postal savings account, but pressure from the banking industry ended this service.

Postal loans are available to postal patrons in UK at affordable interest rates.

Implementing postal lending and saving services would require legislative action.

Making these services available at post offices would be a great service to the 68 million people who live in communities under served by traditional banks.

According to the Campaign for Postal Banking, one in 13 US households doesn’t have a bank account. One in four households live in communities under served by banks.

Traditional banks have pulled up stakes in many of these communities. The banks have been replaced by the alternative financial services industry–check cashing stores, payday lenders, auto title lenders, etc.

They charge high fees and interest for the services they provide.

The average under served household, whose annual income is $25,500, spends $2,412 a year on fees and interest charged by alternative financial services companies.

Postal banking would provide an affordable alternative to the high-cost alternative financial service industry.

Postal banking would also provide easy access to financial services,

There are more than 30,000 post offices in the US, considerably more retail outlets than other large retail companies.

Many of these post offices are located in communities that have been deserted by banks. The Campaign for Postal Banking reports that 59 percent of US post offices are located in zip codes where either no bank (38 percent) or only one bank (21 percent) is located.

The OIG reports that the Postal Service has the infrastructure and the capacity to provide financial services to its customers. Expanding those services “would help the Postal Service improve the lives of millions of Americans as it fulfills its universal service obligation.” said the OIG report.

IMF researchers: weaker unions result in greater income inequality

In Texas, unions recently defeated an attempt in the state legislature to weaken public sector unions.

In Illinois, unions won another victory in the state legislature when lawmakers soundly rejected a right to work for less bill proposed by Gov. Bruce Rauner that would have weakened private sector unions.

In Missouri, unions appear to be poised to win another fight. Missouri Gov. Jay Nixon said that he will veto a right to work for less bill passed by the state’s legislature.

Successful fights like these, however, are essentially rear guard actions.

Since capital revived its war on unions in the 1980s, unions have been retreating, and now union membership in the US is at its lowest point in the last 70 years.

To one degree or another, the same thing is happening in other countries with advanced economies.

At the same time, total income in these countries has been increasing, but the share of income going to the working class has remained stagnant.

The lion’s share of these gains has gone to those on the upper end of the income distribution scale–the 1 percent, or more precisely the 0.1 percent.

Mainstream economists have explained this rise of income inequality as a natural result of structural changes to the economy–for example, globalization and technological innovation.

But lately that explanation has come under closer examination.

Recently two researchers with the International Monetary Fund, Florence Jaumotte and Carolina Buitron, published an article in which they say that there is strong evidence that lower unionization is a major factor in the rise of income inequality.

Jaumotte and Buitron begin by referencing other researchers who have begun to question the role that structural changes to the economy have played in the rise of income inequality. These researchers are now focusing on the role played by institutional changes.

Jaumotte and Buitron examine the role of one institutional change–the declining power of unions–and then argue that the decline of union membership in countries with advanced economies over the last 30 years is a key reason that those at the top of the income distribution scale have seen their share of income increase while income shares for the rest of us has remained stagnant or declined.

During the same 30-year period, write Jaumotte and Buitron, “those at the top of the income distribution in advanced economies have enjoyed an increasingly larger share of total income, exacerbating inequality.”

According to the authors, strong unions play an important role in redistributing income more fairly at the point of production, and conversely, weaker unions “can increase top income shares by reducing bargaining power of workers. . . If deunionization weakens earnings of middle- and low-income workers, this necessarily increases the income share of corporate managers’ pay and shareholder returns.”

Weakened unions especially benefits those who receive their income by owning capital.

“The weakening of unions (also) reduces the bargaining power of workers relative to capital owners, increasing the share of capital income–which is more concentrated at the top than wages and salaries.”

Strong unions also play an important role in formulating government policy about how income is distributed.

“Strong unions can induce policy makers to engage in more redistribution by mobilizing workers to vote for parties that promise to redistribute income or by leading all political parties to do so,” write Jaumotte and Buitron.

Weaker unions, conversely have less influence on government policy decisions.

Another way that strong unions make income distribution more fair is by influencing corporate decisions on matters such as top executive compensation.

The authors conclude by observing that “the decline in unionization appears to be a key contributor to the rise of top income shares. This finding holds even after accounting for shifts in political power, changes in social norms regarding inequality, sectoral employment shifts (such as deindustrialization and the growing role of the financial sector), and increases in education levels.”

Los Angeles raises minimum wage to $15 an hour

Los Angeles, the second largest city in the US, on May 19 passed a city ordinance that raises the minimum wage in the city to $15 an hour.

The wage increase, which will be phased in over a five-year period, will affect more than 500,000 workers by 2017.

The City Council vote to raise the minimum wage to $15 an hour was the result of a grassroots organizing effort by labor, community, and religious groups.

The Raise the Wage Coalition organized volunteers to canvass neighborhoods, make phone calls, hold in-home meetings, and participate in rallies to support the increased minimum wage.

Earlier this month, the coalition hand delivered to the City Council more than 100,000 pledge cards signed by workers supporting the minimum wage increase.

The coalition had originally sought to increase the minimum wage to $15.25 and to require employers to provide employees with paid sick days, but the new ordinance does not include paid sick days.

Nevertheless, leaders of the coalition were proud of the success of the movement for a higher minimum wage.

“We applaud this pivotal vote that raises the wage minimum wage to $15 an hour and enforces it,” said Laphonza Butler, a co-convener of Raise the Wage and president of SEIU California. “We believe that earned sick days are an important part of any comprehensive policy and are confident that after review, Los Angeles will join cities across the country and guarantee workers much-needed sick days.”

The May 19 vote formalizes the intent of the City Council to raise the minimum wage; the city’s general counsel will now draft the ordinance that implements the raise, which the City Council must approve before the increase becomes effective.

“We are one step closer to making history in Los Angeles by adopting a comprehensive minimum wage policy that will change the lives of hundreds of thousands of hard-working Angelenos, said Rusty Hicks, the other co-convener and secretary treasurer of the Los Angeles County Federation of Labor. “The City Council’s action today creates a path for workers to succeed and gives our economy the boost it needs to grow.”

The ordinance approved by the City Council phases in the minimum wage increase. In July 2016 the city minimum wage increases from $9 an hour to $10.50 an hour.

From then until 2020, the minimum wage increases every year until it reaches $15 an hour. After 2020, the minimum wage increases as the cost of living increases.

Most employers are covered by this schedule, but businesses employing 25 or fewer workers will have an extra year to comply.

A study of the impact of raising the minimum wage commissioned by Los Angeles Mayor Eric Garcetti estimates that about 567,000 workers – or 37 percent of workers covered by the policy – will receive a pay raise by 2017 increasing aggregate earnings by $1.8 billion.

Business groups opposing the wage increase warned that an increased minimum wage would result in fewer jobs for low-wage workers.

But the study said that extensive research shows that increasing the minimum wage increases the buying power of low-wage workers, stimulating the local economy and creating more jobs.

A higher minimum wage will also reduce turnover and increase productivity, which should help to hold down price increases that may result after wages increase.

There is concern that some low-wage businesses may relocate to suburbs of Los Angeles to avoid paying a living wage, which is why the Raise the Wage campaign is being expanded beyond the boundaries of city of Los Angeles.

The coalition is already asking the Los Angeles County Commissioners to consider an ordinance that will raise the minimum wage in unincorporated areas of the county to $15 an hour.

It also is organizing campaigns to raise the minimum wage in nearby suburbs such as Santa Monica, West Hollywood, and Pasadena.

Anggie Godoy, a McDonald’s worker and activist in the Raise the Wage campaign told the Guardian that she plans to help in the campaign to extend the minimum increase beyond the boundaries of the city of Los Angeles.

“Just like they were here for me, I’ll be there for them,” said Godoy to the Guardian.

OSHA: DuPont deadly gas leak was preventable

The US Occupational Safety and Health Administration (OSHA) has cited DuPont for eleven safety violations that caused or contributed to the deaths of four workers in November at the company’s chemical plant in La Porte, Texas.

In a media release about the results of its investigation into the cause of the workers’ death, OSHA said that the deaths could have been and should have been prevented.

“”Four people lost their lives and their families lost loved ones because DuPont did not have proper safety procedures in place,” said Assistant Secretary of Labor for Occupational Safety and Health Dr. David Michaels. “Had the company assessed the dangers involved, or trained their employees on what to do if the ventilation system stopped working, they might have had a chance.”

DuPont has been fined $99,000 for its negligence.

The workers were killed by a deadly vapor of methyl mercaptan that escaped after it had leaked from its storage vessel into pipes. It was then unknowingly released into a venting system as workers were performing maintenance.

Among other things, OSHA cited DuPont for not correcting equipment deficiencies, failing to train employees about respiratory hazards such as methyl mercaptan, failing to train workers in the proper method for responding to a chemical leak, and failing to require the use of respiratory equipment that could have saved the workers’ lives.

Methyl mercaptan is a deadly chemical used in the manufacture of pesticides. It can paralyze the respiratory system which then leads to death.

Three of the workers were killed while trying to rescue the first worker overcome by methyl mercaptan.

An earlier investigation of the deadly vapor release in La Porte  by the US Chemical Safety Board (CSB) found a number of safety problems at the DuPont plant.

“The release (of methyl mercaptan) occurred through a valve that was opened as part of a routine effort to drain liquid from the vent system in order to relieve pressure inside,” said former CSB Chairman Rafael Moure Eraso while testifying before a congressional committee in February. “We found that this vent system had a history of periodic issues with unwanted liquid build-up, and the valve in question was typically drained directly into the work area inside the building, rather than into a closed system.

“In addition, our investigators have found that the building’s ventilation fans were not in service, and that the company did not effectively implement good safety practices requiring personnel to wear appropriate personal protective equipment (PPE) that was present at the facility.”

Moure Eraso also cited the lack of safety culture at Du Pont and gave two examples:

One occurred in January 2010 when a faulty hose at a DuPont plant in Belle, West Virginia caused phosgene gas to leak killing one worker. The other happened later in 2010 at the DuPont plant in Buffalo, New York when a welding spark ignited leaking gas and caused an explosion that sent hot metal shards flying through the plant. Fortunately, no one was killed.

The charge that a safety culture is lacking at DuPont may seem out of place to some because DuPont management spends a lot of time conducting safety meetings and stressing the importance of avoiding injuries that could lead to lost work time.

But Safety/News Alert reports that DuPont’s safety efforts seem to be aimed primarily at avoiding personal injuries rather than focusing on process safety issues, which can be more difficult and more expensive to address.

The Houston Chronicle reports that DuPont’s inattention to safety standards has come at the same time that DuPont is paying more attention to cutting costs.

According to the Chronicle, “the deaths in La Porte brought the total to eight fatalities at DuPont sites in the last seven years. And it all happened as the company undertook an aggressive campaign to reinvent itself, by boosting productivity, selling off assets and slashing costs.”

Postal workers fight for contract that improves customer service

During a May 14 Day of Action by the American Postal Workers Union (APWU), the union and a broad coalition of supporters called for a new collective bargaining agreement that improves customer service.

The current collective bargaining agreement expires on May 20, and the union and the US Postal Service (USPS) have been bargaining since February for a new agreement.

APWU has put forward a number of contract proposals to improve customer service, including halting post office closures, expanding post office operating hours, bringing back overnight delivery of first class mail, and expanding services available at post office.

“What we are fighting for . .  .  is good postal service, living-wage jobs, and a good contract, now!” said APWU President Mark Dimondstein at a Day of Action rally in Washington DC. “The American Postal Workers Union and all of you are fighting for the people of this country, for a vibrant public Postal Service for generations to come. That’s what the people deserve and that’s what the people should have.”

The Washington DC rally was one of 130 Day of Action events in 42 states, Puerto Rico, and the Virgin Islands.

Postal workers were joined by supporters from a number of community and labor organization who are standing with postal workers in their fight to protect and improve postal services.

“We are sending a clear signal that we are fighting a struggle and we plan to win that struggle,” said the actor Danny Glover at the Washington DC rally. “We are not just supporting postal workers. We have the chance not only to save the post office, but to change the nature of how we deal with the public.”

Glover also talked about one of the union’s contract proposal–postal banking.

The union is proposing that USPS provide basic banking services such as check cashing, bill paying, and small loan lending at post offices.

Banks have largely abandoned communities with high concentrations of low-wage workers.

Banks in these communities have been replaced by payday lenders, which charge high interest rates, and check cashing companies, which charge fees.

Postal banking would provide a banking alternative in these under served communities.

The union’s fight to expand services and protect the ones that many of us take for granted comes at a time when the Postal Service is under attack.

According to its critics, the US Postal System is in a state of crisis that demands cuts in services rather than their expansion.

But this so-called crisis is one that has been manufactured by those who want to dismantle the Postal System and privatize its most lucrative services.

It began in 2006 when Congress passed a law that required USPS to pre-fund its retiree health care benefit for the next 75 years with billions of dollars of payments over a ten-year period.

Pre-funding retiree health care, a practice that no other private company or government entity does, has siphoned away an average of $5.6 billion a year away from postal services.

Without this unique and unprecedented pre-payment requirement, USPS would have generated a $1.1 billion surplus in the first quarter of fiscal year 2015. For fiscal year 2014, the surplus would have been $1.4 billion and for fiscal year 2013, it would have been $600 million.

But instead of surpluses, pre-funding has burdened USPS with deficits, which have led to cuts in services.

In January USPS implemented a new round of cuts that among other things virtually eliminated overnight delivery of first class mail.

Previous cuts caused the closure of 140 mail processing centers and under staffing, both of which have slowed mail delivery.

Eighty-two more mail processing centers are scheduled for future closings.

Critics say that the internet has made the Postal Service irrelevant and that most of the work it does can be done better by private companies.

But USPS, which provides service to every community regardless of whether it is profitable to do so, remains an important catalyst for commerce and communication.

In 2014, USPS delivered 155 billion pieces of mail. In January 2015, letter volume increased by 7 percent and package delivery increased by 14 percent over January 2014.

USPS provides these services efficiently and effectively. A test conducted by Consumer Report in 2014 found that USPS outscored Fed Ex and UPS, its privately-owned competitors, in convenience and reliability.

USPS also was less expensive than its competitors 92 percent of the time in next-day and second-day deliveries.

The importance of the Postal Service to the everyday life of the American people is one of the reasons that people like Danny Glover are joining the Grand Alliance to Save Our Public Postal Service.

“We have a Grand Alliance that is saving this national treasure that belongs to us,” said Glover referring to the Postal System. “We will make sure that it remains in our domain.”

Glover urged people to show their support for postal workers and the public Postal Service by signing and sending a postcard of support to the Postmaster General.

SYRIZA keeps anti-austerity promise by rehiring civil servants

The Greek Parliament on May 6 voted to reinstate nearly 4,000 civil servants laid off two years ago as part of the austerity measures imposed on Greece by the nation’s creditors.

SYRIZA, the leftist party that won the Greek elections in January on an anti-austerity platform and now leads the government, promised after it was elected that it would rehire those civil servants who had been laid off in violation of the country’s constitution.

Those who will be rehired include municipal police officers, public school janitors, as well as other civil servants.

The new law also reestablishes the country’s public broadcasting network and calls for the rehiring of its employees who were laid off.

Among those who will be returning to work are 32 women custodial workers who until two years worked for the Ministry of Finance.

After being laid off, the women, who became known as “the cleaning ladies,” set up a protest camp near the Ministry’s offices and vowed to maintain the camp until they were rehired.

The SYRIZA-led government said that more re-hirings and other anti-austerity measures will follow.

“This is not our last word, it’s the first step of (administrative) reforms we’re going to make that won’t be neoliberal but will have a social aspect,” said Giorgos Katrougalos, the deputy minister for administrative reform to the Financial Times.

After learning that their jobs would be restored, the cleaning ladies held a celebration at their protest camp.

“I’m very, very happy (to get) my job back,” said Irene Chantzi to the BBC at the protest camp after learning the news.

Chantzi and the other cleaning ladies were joined by some cabinet members who belong to SYRIZA, including Katrougalos, Nadia Valavani, deputy finance minister, and Nikos Voutsis, interior minister.

The cleaning ladies’ protest camp became a symbol of Greek outrage at the austerity programs imposed on the country.

Last December the cleaning ladies gained wider fame when they traveled to Strasbourg, France and confronted the European Commission about the hardships that they and their fellow countrymen had endured as part of the austerity regime demanded by banks and other Greek creditors.

Greek President Alex Tsipras congratulated the cleaning ladies on their victory and said that they had played an important role in making Europe aware of the hardships caused by the austerity measures.

“Even the Chancellor (Germany’s Chancellor Angela Merkel), in a meeting that we had and without me bringing it up, referred to how unfair what the previous government did to you was,” said Tsipras to the group. “Your fight was known abroad because it was a fair fight.”

The current Minister of Finance, Yanis Varoufakis also expressed support for the cleaning ladies and said that when the SYRIZA-led government speaks of reform it means change that will help people like the cleaning ladies not change that satisfies the desires of capital.

“We remind (creditors) that our government has a different perception of what constitutes a reform,” Mr Varoufakis said.to the Wall Street Journal.

Greece has been in negotiations with other European countries to reach an agreement on changes that Greece must make in order to receive €7.2 billion in loans that Greece needs to stabilize its economy, which crashed in 2010 when creditors demanded that their loans be repaid immediately.

The troika is demanding changes to the economy that will weaken unions, privatize more government services and resources, reduce pensions, and give the demands of creditors priority over the needs of the people.

Greece in return is demanding that it be allowed to carry out its anti-austerity proposals that were emphatically endorsed by the Greek public when in January it elected SYRIZA to lead the country.

Varoufakis and Tsipras have expressed confidence that the two sides can find some common ground that will make it possible for Greece to receive the €7.2 billion.

On May 12, Greece made a €750 million loan repayment to its creditors that the government sees as a good faith gesture that will help it secure the money it needs.

On May 11, Varoufakis met in Brussels with other European finance ministers in hopes of sealing a deal.

No agreement was reached, but Varoufakis said that some progress was made thanks to efforts by the Greek government.

“In recent weeks there has been considerable convergence, primarily due to our government’s great efforts and major concessions during the Brussels Group negotiations,” said Varoufakis at a media briefing. “Today’s Eurogroup meeting has acknowledged the strides we have made, and was conducted in a thoroughly positive atmosphere.”

Round one victory for coalition opposing fast track for TPP

A grassroots coalition of labor, environment, consumer rights, and other progressive groups won round one of the fight over fast track authority for the Trans Pacific Partnership (TPP) trade deal when a cloture motion that would have limited debate on the Hatch-Wyden-Ryan Fast Track bill failed to pass in the US Senate.

Fast track authority would prevent Congress from thoroughly reviewing the final draft of the trade deal or offering amendments to it.

Senate Majority Leader Mitch McConnell had scheduled the cloture vote on May 12. It needed 60 votes to pass, but Sen. McConnell could muster only 52 votes. Forty-five senators voted to oppose his motion.

President Obama, who supports fast track authority, began meeting with senators who voted no in an attempt to salvage the legislation, and there is still the possibility that fast track in some form could be resurrected and brought before the Senate again for a vote.

But opponents of TPP, who had been written off by Washington DC pundits, were buoyed by the outcome of the vote.

“Just a few weeks ago, all of the pundits believed that fast track and the TPP were a lock to pass: they were wrong,” said Marc Perrone, international president of United Food and Commercial Workers (UFCW). “Our 1.3 million members, the entire labor movement, progressive Democrats, and conservative Republicans have all stood up and spoke out against this disastrous trade deal. More importantly, this is what is possible when we all stand together and fight for what is right for our families, our jobs, and our nation.”

“The failure of the Senate to advance fast track legislation is not only a stinging defeat for supporters of the Trans Pacific Partnership; it makes clear that the American people will not be fooled into supporting another bad trade deal,” said Leo Gerard, president of the United Steelworkers (USW).

Labor unions played an important role in organizing grassroots opposition to fast track authority for TPP by educating their members about how similar trade deals had cost workers’ jobs and lowered their wages and by mobilizing members to demonstrate widespread opposition to TPP.

The work of the Communication Workers of America (CWA) is illustrative of the organizing and mobilizing work done by UCFW, USW, Teamsters, and several other labor unions that made the May 12 vote possible.

In November, CWA President Larry Cohen announced that defeating fast track authority for TPP would be CWA’s number one priority.

“Starting today (the day after the November elections ended), CWA activists are turning their attention to stopping the Trans Pacific Partnership, a dangerous trade deal that threatens our jobs, communities and the environment. It could potentially give big business new powers to undermine important laws and regulations created to protect us from them,” said Cohen in a message to members.

CWA subsequently mobilized its local leaders to educate and mobilize local members.

As a result, thousands of CWA members participated in efforts to oppose TPP fast track including attending town hall meetings with lawmakers, making constituent visits to lawmakers, making phone calls to lawmakers, and writing them letters and e-mails.

To make the public aware of the dangers that TPP posed for the working class, the environment, and consumer protection, CWA members hit the streets to leaflet, demonstrate, and rally against fast track for TPP.

Recognizing that labor unions alone couldn’t win the fight to stop TPP, CWA sought out alliances with environmentalists, consumer rights activists, immigrant support groups, and other progressive groups concerned about the damage that TPP could in their particular area of interest.

“Our broad coalition–workers, environmental activists, immigrant rights activists, students, public health and consumer groups and so many others–remains strongly opposed to fast track and the TPP that would be a disaster for US jobs, workers and communities,” said Cohen in a statement issued after the cloture motion failed.

The coalition opposing TPP was even broader than the one that Cohen talked about.

More than 2,000 groups signed an April 27 letter drafted by the Citizens Trade Campaign, a public interest group that has been leading the fight against TPP, urging lawmakers to reject fast track authority for TPP.

The letter concluded with these two paragraphs:

After decades of massive trade deficits, devastating job loss, downward pressure on Americans’ wages, attacks on environmental and health laws and floods of unsafe imported food under our past trade agreements, America must chart a new course on trade policy. To accomplish this, a new form of trade authority is needed that ensures that Congress and the public play a much more meaningful role in determining the contents of U.S. trade agreements.

Fast track is an abrogation of not only Congress’ constitutional authority, but of its responsibility to the American people. We oppose this bill, and urge you to do so as well.