Connecticut activists urge action on retirement security

Retirement security activists in Connecticut are urging their unions to contest a decision by the state’s Retirement Commission to delay implementation of an arbiter’s decision that will allow the state’s public higher education employees to withdraw from a defined contribution 401 (k) type retirement plan and enroll in the state’s defined benefit pension plan.

In a hearing last September, an arbiter ruled in favor of the State Employee Bargaining Agent Coalition, a coalition of unions representing Connecticut’s public higher education employee, in a grievance charging that members of the Alternative Retirement Program (ARP), a defined contribution plan (for higher education employees), had been “unfairly steered as new employees into the ARP plan when a much better traditional pension plan was available.”

“They had not been given sufficient information to make informed choices nor had they been told that their decisions, once made, would be irrevocable,” writes James R. Russell on his blog, The Perfect Swindle. Russell is an activist in the Connecticut Committee for Equity in Retirement (CCER), a retirement security group that convinced the bargaining coalition to file the original grievance.

The arbiters ruling was to go into effect on December 31, when the Retirement Commission was supposed to notify ARP members that they could drop out of the plan and enroll in the Connecticut State Employees Retirement System’s defined benefit plan, which unlike ARP would guarantee them a life long pension benefit after they retire. The arbiter’s decision would allow ARP members to use money in their ARP account to purchase service credit in the State Employees Retirement System.

But the commission has dragged its feet in sending the notices. Russell says that the delay “(benefits) ING, a Dutch multinational financial giant and third-party administrator of ARP, which collects millions of dollars in fees for each year that it maintains control of these retirement savings.”

The original grievance, filed in 2009, says that management at Connecticut’s higher education institutions steered new hires into ARP with misleading and insufficient information about the plan. 

CCER says that higher education management exaggerated the potential pay out of ARP, claiming that ARP members would receive a higher pension benefit than those in the defined benefit plan, according to CCER  ARP members contribute twice as much to their plan as do members of the defined benefit plan and receive about half of what they would had they enrolled in the defined benefit plan.

The claim that ARP members would receive higher benefits was based on an inaccurate model used to estimate pension payments after retirement. The model used overly optimistic estimates of the rate of return that ARP members could expect from their retirement accounts. The market crash of 2008 caused ARP accounts to lose much of their value, value which for many will never be recovered even though the market has recovered.

CCER also has calculated and compared the benefits that an employee could expect to receive under the ARP plan and the defined benefit plan. According to these calculations, it would be extremely difficult, if not impossible, for low-paid workers in ARP to match a defined benefit pension.

Workers retiring with an annual salary of $30,000 per year would receive an annual defined benefit pension payment of $9,975. In order to buy a commercial annuity equal to this amount a male worker would need to have $178,175 in his ARP account; a female worker would need $203,571 (the commercial annuity market charges women more than men because on average women live longer,.

It would also be a challenge for  moderate-income and high-income employees to match the annual pension payment that they would receive from a defined benefit plan. A worker retiring with an annual salary of $60,000 a year would receive a defined benefit pension of $20,600 a year. To purchase a commercial annuity equal to this amount, a male would need $374,786 in his ARP account; a female would need $420,408 in her account.

The Retirement Commission justifies its foot-dragging by saying that it needs approval from IRS to allow ARP members to withdraw, but Russell points out that West Virginia school teachers were allowed to transfer out of their defined contribution plan into a defined benefit plan without approval from IRS.

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Dems return after Indiana compromise

Democratic and Republican state lawmakers in Indiana on Monday reached a compromise on anti-worker legislation, which ended the Democrats’ 36-day walkout that essentially shut down the Legislature. Democrats  negotiated the compromise from Illinois where they had been in a self-imposed exile since February 22. 

The compromise shelves right-to-work-for-less legislation and a proposal to permanently ban collective bargaining for state employees. It also scales back changes to the state’s prevailing wage law that could lower construction workers’ wages and changes to the education code that set aside tax money for private school vouchers. The compromise does not include proposed legislation that severely limits teachers’ collective bargaining rights.

“This walkout may be coming to an end, but the debate is far from over,” said Nancy Guyott, the Indiana state AFL-CIO president. “Working Hoosiers will continue to stand together.”

The events that led up to the walkout began in February after Republican lawmakers proposed a raft of anti-worker legislation, including HB 1468, a right-to-work-for-less bill aimed at weakening union power and lowering workers’ wages. After HB 1468 was scheduled for a vote in the House, Guyott told union members that “we’ve been bombarded with bill after bill that seek to destroy our way of life and take away our rights,” and she urged members to come to Indianapolis, Indiana’s state capital, for a week of demonstrations beginning on February 21.

As a result,  thousands of autoworkers, steelworkers, teachers, state employees, and other union members descended on Indianapolis, surrounded the capital, and marched into the capital while debate on the right-to-work-for-less bill was taking place in the House.

The strength and vigor of the demonstration gave Democratic lawmakers the courage to do the only thing they could to prevent passage of the bill. They walked out of the statehouse and traveled to Illinois to prevent a quorum.

The day after the walkout began, Indiana Gov. Mitch Daniels, who supports right-to-work-for-less, urged lawmakers to kill the bill, which they did. But Democrats stayed away to protest other anti-worker bills. Over the next 36 days, Indiana workers carried out what Jeff Harris of the state AFL-CIO called the “longest sustained protest in the history of Indiana.”

Workers showed up at the statehouse every day to picket, protest, and demonstrate their anger at the Republican anti-worker agenda. On some days, thousands of workers rallied and marched, on other days, a handful of workers were there to remind lawmakers that the anti-worker agenda wouldn’t pass without a fight.

The compromise lessens the impact of two bills, one aimed at lowering construction workers’ wages and the other at providing tax money for private school vouchers. In its original form HB 1216 would have exempted all public construction contracts under $1 million from complying with the state’s common construction requirement, which requires contractors to pay the local prevailing wage to construction workers. Prevailing wage laws prevent contractors from cutting wages so that they can under bid on construction contracts.

Currently public construction contracts under $100,000 are exempt from the common construction requirement. Under the compromise, the threshold will be raised to $250,000 in 2012 and $350,000 in 2013.

The compromise also caps the number of private school vouchers that the state can give out each year to 7,500 in 2012 and 15,000 in 2013. It also lowers the annual income for families eligible for the vouchers from $81,586 a year to $61,189.

Democrats and Republicans also agreed to scrap HB 1585, which would have permanently banned collective bargaining rights for state employees. Currently, state workers in Indiana don’t have collective bargaining rights because in 2005 Gov. Daniels by executive order decreed that the state would not continue to bargain collectively with is workers as it had done previously. That decree is still in effect, but could be overturned when a new governor takes office. Had HB 1585 passed, this option would no longer be available without new legislation.

One of the anti-worker bills not part of the compromise is SB 575, which severely limits the collective bargaining rights for teachers. If this bill is enacted, teachers would only be able to bargain for wages and some benefits. They would no longer have a voice in setting working conditions or giving input regarding performance evaluations.

In a recent statement to members, the Indiana State Teachers Association said that it is currently engaged in talks with lawmakers to amend this bill, but said that so far, “no clear consensus has been reached on the bill,” which will be heard in the House Education Committee this week.

Right-wing economic policy is about profits, not jobs

“Jobs is a funny word in the English language. It’s a way of pronouncing an unpronounceable word. I’ll spell (that unpronounceable word) . P-R-O-F-I-T-S. You are not allowed to say that word, so the way you pronounce that is jobs,” said Noam Chomsky in an interview with Democracy Now.

For decades now, right-wing politicians have said that, creating jobs is their number one priority, and in order to create jobs, they needed to cut government funding, reduce government services, and give tax breaks to businesses. But what they really mean, as Chomsky says, is that “profits are our number one priority, and in order to maximize profits we need to reduce government services and give tax breaks to businesses.” 

A recent report on the proposed Texas state budget shows just how little right-wing politicians are concerned about jobs. The state’s Legislative Budget Board reported last Thursday that the state budget proposed by leaders of the Texas House of Representatives will cost the state 335,244 jobs by 2013.

The proposed budget seeks to close the state’s projected $23 billion budget shortfall for the next two years by slashing funding for public education, health and human services, public safety, and public higher education. These cuts, according to the Legislative Budget Board, would result in 188,787 fewer public sector jobs, mainly public school teachers and other education workers, and 146,457 fewer private sector jobs. The job losses would mean a 2.3 percent decline in the number of jobs in Texas, a state where the current unemployment rate is 8.2 percent

The state’s right-wing politicians seem unconcerned about these job losses. A spokesperson for Gov. Rick Perry said that the governor “firmly believes that government doesn’t create jobs; entrepreneurs in the private sector do. However, the government has a key role to play in cultivating a favorable climate for job creation.”

This right-wing talking point has become conventional wisdom in today’s political discourse, but it doesn’t hold up to close scrutiny. During the first ten years of the 21st century when business taxes were low and regulation was lax, the private sector did an awful job of creating jobs. The Washington Post called the period between 2000 and 2009 the lost decade partly because job growth during that period was zero. That’s right, despite modest job growth between 2003 and 2007, the overall number of jobs created was zero.

Doug Henwood writing in the Left Business Observer says that the  rate of job growth steadily declined during the first decade of the 21st century until it dipped into negative territory in late 2009, which caused “the share of the adult population working (to fall) back to 1983 levels.” The only other time in modern history that the rate of job growth declined, according to Henwood, was during the Depression.

The first decade was bracketed by two recessions, but even when the economy was expanding, job growth was unimpressive. During 2006, the peak of a weak economic expansion, average monthly job growth was 147,500, 53 percent below the monthly average job growth in 1999 (225,300) when the technology fueled expansion of the mid 1990s was beginning to run out of steam. The economy needs 150,000 new jobs each month to absorb new entries into the job market.

The right wing’s conventional wisdom holds that higher profits translates into more jobs, but in 2010 that didn’t prove to be the case. The US Commerce Department reports that US corporations’ profits in the fourth quarter of 2010 were up 29.3 percent over 2009, but these profits generated only an average of 60,000 new jobs in 2010. There was better news in February when the economy generated 192,000 new jobs, a welcomed but still modest figure. 

“US corporations are “sitting on over $1.5 trillion of cash right now, writes economist Robert Reich on his blog. “They won’t invest it in additional capacity or jobs because they don’t see enough customers out there with enough money in their pockets to buy what the additional capacity would produce.”

If states like Texas continue to cut public sector payrolls, there will be even fewer customers out there with enough money to buy what the private sector produces and there will be even fewer new jobs for our growing population.

Implementation of Wisconsin anti-worker law in limbo after judge’s ruling

Wisconsin Gov. Scott Walker said on Friday that  he would begin enforcing recently enacted legislation that strips Wisconsin public workers of the right to collective bargaining despite a temporary injunction issued by a judge last week that halted implementation of the legislation.

Gov. Walker made the announcement after the  Wisconsin Legislative Reference Bureau published the anti-worker bill, which, according to Gov. Walker and other Republicans, makes the law official. But Wisconsin Secretary of State Doug La Follette said that the bill is not official yet because he has not designated a publication date and the bill cannot take effect until the secretary of state directs its publication in the Wisconsin State Journal.

On Tuesday of this week Dane County Circuit Judge Maryann Sumi rebuked state officials, who ignored her ruling last week that La Follette not publish the bill until the court has a chance to determine whether the Wisconsin Senate violated the state Open Meetings law when a hearing on the bill was held without proper notice.

She told state officials at the hearing that further implementation of the bill “was enjoined” and threatened sanctions against anyone who ignores her ruling, but an assistant attorney general representing the state said in the hallway after the hearing was over that the legislation is still in effect. The state’s Justice Department later backed off that statement when a spokesman for the agency said that the decision whether to implement the bill would be left up to the state’s Department of Administration.

Judge Sumi said that the Legislature could easily resolve this problem by taking up the bill again and passing it, but Republican leaders in the Legislature expressed no interest in doing so.

Earlier last week Sumi issued a temporary restraining order that instructed the secretary of state to refrain from publishing the bill until a hearing could be held on a complaint by local officials and a Democratic lawmaker that the anti-worker bill was passed illegally.  

The director of the Legislative Reference Bureau Stephen Miller said that he published the bill within ten days of its passage as he is required to do, but that his publication of the bill did not make it official. He said that in order for the bill to become law, the secretary of state has to direct publication of it.

But an aide to Mike Huebsch, director of the Department of Administration, which is charged with implementing the bill for Gov. Walker, said that Huebsch believes that the anti-worker bill has been legally published and that his office would “begin the process of implementing (the law).” 

Writing in Forbes, columnist Rick Ungar observed that “it’s now a toss-up between Wisconsin and Michigan in the race to see which state government can do the best job of thumbing its nose at our most basic democratic principles in order to force their autocratic desires on their citizens.”

In other developments, Laborers International Union of North America Local 236 and Firefighters Local 311 both of Madison filed suit on Friday alleging that Gov. Walker’s anti-worker bill did have a financial impact on the state and thus needed a three-fifths quorum for passage.

Democratic state senators had left the state to prevent the three-fifths quorum requirement needed for Gov. Walker’s original budget repair bill. The bill that subsequently passed stripped away most of the language that would have affected the budget but kept the portion that deprived public workers of their collective bargaining rights.

 It also included language that required state employees to pay more for their health insurance and pension benefits. Those particular pieces of the bill were to become effective on Sunday.

Egyptian military outlaws worker actions for justice

The Egyptian government on Wednesday decreed that fighting for better pay, better working conditions, and the enforcement of the country’s existing labor laws is illegal. The decree is intended to stop a surge of worker strikes, demonstrations, and sit-ins that began before the fall of Egypt’s former dictator Hosni Mubarak and have continued despite threats from the military and pleas by self-appointed leaders of the movement that overthrew Mubarak.

Under the decree, it is a criminal offense to participate in a strike, demonstration, or sit-in that disrupts the economy. Calling for these actions or encouraging others to participate in them is punishable by up to year in prison and a fine of one-half  million Egyptian pounds ($84,060). All workers are subject to the new law regardless of whether they work in the private or public sector.

“Issuing a law to criminalize strikes now will be unfair to the revolution (for) which about 1,000 Egyptians paid their lives,” said a statement issued by the Center for Trade Union and Worker Services, which played a leading role in mobilizing workers to support the January revolution. “It is not an acceptable or useful solution to the current problems. On the contrary, it will widen the gap between the people and the authorities.”

The cabinet issued the new decree saying that the strikes, sit-ins, and demonstrations disrupting business were not necessary because the cabinet  ” is working on a new policy to deal with employment and wages.” The decree will expire when the current state of emergency is lifted. Egypt has been ruled under a state of emergency since 1981 when President Anwar Sadat was assassinated. A number of workers including postal workers, teachers, hospital employees, and police were still on strike at the time that the decree was issued.

About 6,000 teachers in the province of Qena went out on strike on March 1 demanding permanent jobs for teachers working under temporary contracts. The day after the strike began, the Ministry of Education said that temporary teachers with at least three years on the job would be offered permanent contracts if they pass an exam. The striking teachers rejected the government’s proposal and said that they would stay on strike until their demand that all teachers working under temporary and precarious conditions be given full-time, permanent status.

Many of the strikes that have taken place over two last few months have been over demands that the country’s current labor law be enforced. About 300 workers at a Samuel Tex Drapery factory went on strike for a 7 percent pay increase and to demand that the company give workers annual leave, not force them to work overtime, and not require new workers to sign a resignation form, which makes it easier for the company to fire workers and prevent them from collecting severance pay in the event of layoffs. All of these last three demands are covered by existing labor law, which for the most part is not enforced.

Even though the decree outlawing workers’ actions for justice was issued by the cabinet, the military is running the country now, and it alone has the authority to decide whether such a decree is issued. And as it turns out, the military is heavily invested in business. Members of the military high command own companies that among other things make electric appliances, bottled water, olive oil, pesticides, and optical equipment. They also own water treatment plants, hotels, nurseries, and catering business. Retired military officers also sit on the boards of directors of many Egyptian companies. Companies owned by military leaders employ tens of thousands of workers.

When asked by reporter Austin Mackell whether military leaders had links to the business elite, Egyptian journalist Ahmed Atleya replied, “They are the business elite.”

Brazilian labor demands fair trade; expresses solidarity with US workers

Union leaders in Brazil delivered a letter to President Barack Obama urging him to pursue policies of fair trade, immigration rights, and peace. The letter also expressed solidarity with public workers in the US, who have recently seen their rights curtailed by right-wing governors in the US.

Leaders from six large Brazilian labor confederations met with the President on Saturday, the first day of his two-day visit to Brazil, in Brasilia, the nation’s capital. During the meeting, the union leaders hand delivered a letter to the President expressing their concerns.

The letter said that the Brazilian labor movement was concerned about Brazil’s growing trade deficit with the US, which increased from $4.4 billion in 2009 to $7.7 billion in 2010, a 75 percent increase. The letter placed the blame for the deficit on the depreciation of the US dollar and trade barriers that keep Brazilian goods like orange juice, steel products, ethanol, and tobacco from competing with goods produced in the US. “We demand the immediate withdrawal of all trade barriers against these products,” said the letter.

The letter also expressed solidarity with US public workers who are facing attacks aimed at busting their unions and depriving them of a collective voice in matters that affect their jobs and livelihoods. “We express our solidarity with the public workers of Wisconsin and other states in their fight against attempts by state legislatures to restrict their union activities and collective bargaining rights.”

The Brazilians said that they were dismayed that  temporary state budget deficits were being used as an excuse to deprive public workers of their basic rights and suggested that rulers in other countries would follow the example being set in the US. “We demand that Convention 151 of the International Labor Organization, which the US has not ratified, be respected and upheld.” said the letter. The ILO is a UN organization, and Convention 151, among other things, guarantees the right of public employees to join and be represented by trade unions.

The union leaders urged the US to treat immigrants like the thousands of Brazilians now living in the US with respect and dignity and urged the two governments to reach an agreement that would allow Brazilians living in the US and US citizens living in Brazil to get full social security credit for the time spent working in their non-native country.

Finally, the labor leaders advocated a foreign policy of “peace, human rights, disarmament, and sovereignty of countries and peoples” and demanded an end to economic blockade of Cuba, “which imposes enormous hardship and suffering on the people of Cuba.”

The letter was signed by Artur Henrique da Silva, president of CUT, Paulo Pereira da Silva, president of Forca Sindical, Wagner Gomes, president of CTB, Ricardo Patah, president of the UGT, Jose Ramos Calixto, president of Nova Central, and Antonio Neto, president-general of CGTB.

California takes action to protect workers from lung disease; national action needed

Twelve years ago, Dr. Allen Parmet, a Kansas City physician, diagnosed several patients who worked at a microwave popcorn packaging plant with bronchiolitis obliterans, a debilitating and sometimes deadly lung disease. Three of the patients were so ill, they needed lung transplants. Dr. Parmet suspected that there may be a health hazard at the plant and reported his suspicions.

After inspecting the plant, the National Institute for Occupational Safety and Heath found that high levels of diacetyl, a chemical used in the production of food flavorings like the butter flavor in microwave popcorn, was the culprit. In all, ten workers  or former workers at the plant were found to have bronchiolitis obliterans, and 20 to 30 current or former workers were suspected of having a less serious lung disease.

NIOSH investigated more microwave popcorn plants and by 2006 found that more than 200 workers exposed to diacetyl in popcorn plants had contracted bronchiolitis obliterans; three had died. And the problem wasn’t limited to just popcorn workers.

“We’ve got cases of bronchiolitis obliterans among workers in other plants that use flavoring and in plants that make the flavorings,” NIOSH’s Dr. Kathleen Kreiss told the Baltimore Sun.  At the time about 8,000 workers in the food processing industry worked at plants that used  diacetyl and other food flavoring chemicals.

Twelve years after Dr. Parmet suspected that workers were being exposed to a toxic chemical on the job, regulations have finally been issued that regulate the use of diacetyl and other food flavoring chemicals. But the regulations protect only a fraction of the 8,000 food processing workers because they only apply to the State of California.

For years, the United Food and Commercial Workers and Teamsters have been trying to get action at the federal level to protect food processing workers. “Three workers have died and hundreds of others seriously injured,” said Jackie Nowell, UFCW Safety & Health Director in 2006. “It’s time for action. We will not let food processing workers continue to be the canaries in the coal mine while waiting for the industry to regulate itself.”

The unions urged OSHA take action to regulate or reduce the use of diacetyl, but according to the Project on Scientific Knowledge and Public Policy (SKAPP), OSHA’s response was “trivial.” In 2002, OSHA entered into an agreement establishing an alliance” with the Popcorn Board, the trade association representing microwave popcorn manufacturers.

As a result of the alliance, the board agreed to share information about health risks of diacetyl and other food flavoring chemicals with popcorn manufacturers and to inform them of steps that could be taken to reduce the risk to workers.

The information was disseminated, but there was no mechanism to ensure that companies implemented the recommendation and the disseminated information didn’t have much impact. By 2006, more than 150 lawsuits had been filed by workers with lung diseases against companies that make microwave popcorn. One worker, Francisco Herrera told the Baltimore Sun his story. He worked in a flavoring plant and became ill with  bronchiolitis obliterans in 2003. By 2006,  bronchiolitis obliterans had destroyed 70 percent of his lung capacity, and he needed a lung transplant.

In 2007, a bill requiring the US Occupational Safety and Health Administration to issue regulations regarding the safe use of diacetyl passed in the US House but was lobbied to death in the Senate by the US Chamber of Commerce.

In 2006, the UFCW and California AFL-CIO petitioned California’s Occupational Safety and Health Administration to issue regulations,  which California’s OSHA did in 2010. The regulations establish standards for diacetyl’s use, prescribes the safety gear that must be worn by workers handling the chemical, and requires companies to provide training and medical surveillance for workers.

But California’s 20 flavoring plants are only a fraction of the US’s food flavoring industry. Workers in the other 49 states have very little if any protection from diacetyl. In January, the US OSHA expanded its “National Emphasis Program,” which sets guidelines for microwave popcorn worker plants, but the guidelines don’t set permissible exposure levels and aren’t legally binding.

Five years ago, Teamster Safety and Health Director Lamont Byrd said, “The science is clear. Such illnesses and fatalities are avoidable and therefore, inexcusable. An (OSHA) Emergency Standard is necessary to prevent the suffering and death of additional workers who will get sick during the time it would take for OSHA to set a Permanent Standard.” The same hold true today.