UK public sector workers walk out

About 750,000 teachers and other public sector workers in the United Kingdom today staged a 24-hour strike that shut down schools and other public services to demand that the government back off its attempt to reduce their pensions.

“This is the best supported strike we’ve ever had,” said Mark Serwotka, general secretary of the Public and Commercial Services Union (PCS). “Today we sent a clear message to the government that (we) will not tolerate these attacks on (our) hard-earned pensions rights and will fight the cuts that threaten to devastate our communities and jobs.”

Earlier in the week, Deputy Prime Minister Nick Clegg chided public sector workers for what he called their “gold-plated pensions.”

At a support rally in London, Annie Holder, a part-time tutor at Lewisham College and member of the University and College Union (UCU), explained what it means to have a gold-plated pension. “One thing that used to provide me with some comfort was the thought that, although my work is not secure or plentiful, at least I could expect some sort of pension when I retired,” Holder said.   “Not that much – about £60 week.”

Despite her meager pension, the government wants Holder and others like her to increase their pension contribution by 3 percent, wait until 67 to retire with full benefits, have their pension calculated on an average of earnings rather than on the highest wage earned, and have cost-of-living increases calculated on a new formula that lowers the amount of raises.

At the same rally, Sally Hunt, UCU’s general secretary, told the crowd that the government is demanding sacrifice from those who can’t afford it while the richest are encouraged to pile up more wealth. “The average pension of a female college lecturer is just £6,000,” Hunt said. “This is a government that has already presided over an increase in the income of the richest 1000 people by 18%. How dare they call us gold-plated. How dare they to preach to us about fairness.”

In a media statement, PCS’s Serwotka explained the impact that the proposed cuts would have on a typical government worker. A Department of Work and Pension worker now eligible for a £16,000 a year pension “will lose about £150,000 over 20 years of retirement,” Serwotka said. “The government is involved in a race to the bottom.”

The government, which has been negotiating over pensions with representatives of public sector workers, has said that it must lower public sector pensions to close the budget gap caused by the Great Recession. But Serwotka said that the people least able to pay are bearing the brunt of the proposed cuts. “This government is forcing some of the most vulnerable people in our society to pay for a crisis that was not of their making,” Serwotka said. “There is an alternative to the government’s cuts–invest in public services, grow the economy and close the £120 billion tax gap (a reference to tax money lost as a result of tax avoidance and evasion by large companies and wealthy individuals).”

The government earlier in the week suggested that rank-and-file public sector workers wouldn’t support the strike, but more than 11,000 state schools were closed or partially closed as were more than 400 academies and city technology colleges. Many lectures at universities had to be canceled because professors and instructors walked of the job.

The strike affected other public services as well. PCS reports that 140 Revenue and Customs offices were closed or partially closed as were numerous job centers operated by the Department of Work and Pensions. Court workers also walked off the job postponing trials and hearings across the country.

“Our members have voted with their feet and supported the strike,” Serwotka said. “We are in it together with public sector workers, students, and pensioners defending everything we have fought for generations.

Because of the success of this strike, unions are considering a bigger action in October. Only four unions, PCS, UCU, the National Union of Teachers, and the Association of Teachers and Lecturers participated in this strike. A strike in October would include other public sector unions such as Unison, Britain’s largest public sector union, and First Division Association, a 19,000 member union of upper level managers.

“Three quarters of a million have been out today,’ Serwotka said. “There will be four million in October.”

Lawmakers punish Cap Metro’s mismanagement by trying to cut workers pay

What do you do if you’re overseeing a public transportation authority that doesn’t control cost overruns on a commuter rail project and nearly exhausts its financial reserves? If you’re the Texas Legislature, you punish the authority by trying to cut its workers’ wages and breaking their union.

Capital Metro provides public transportation service to Austin and its outlying suburbs. In 2004, it began building a commuter rail line. The project incurred a number of setbacks that doubled its original estimated cost of $60 million. By 2008 Capital Metro had nearly exhausted its financial reserves, which led to Texas Legislature’s Sunset Commission to conduct a review of the agency. As a result of the review, the Legislature in May passed SB 650, which seeks to cut the pay of Capital Metro’s unionized workforce and break their union. Capital Metro seems more than willing to comply with the Legislature’s mandate.

“Capital Metro is now attacking us again with support from the  SB 650, which is designed to take away our federally protected rights to collective bargaining, reduce our hard-earned and fought for over the years wages, benefits, and retirement,” said Jay Wyatt, president of the Amalgamated Transit Union Local 1091, which represents Capital Metro workers.  “They are trying to push the union into agreeing to become public employees and give up all our rights or they will contract out our jobs to a contractor who would not honor our collective bargaining agreement.”

Capital Metro, a regional governmental agency, began operating the Austin area’s public transportation system in the early 1990s. It took over operation from a private contractor that had a collective bargaining contract with Local 1091. Texas law forbids public agencies from bargaining collectively with its workers, but federal law requires that collective bargaining agreements must stay in place when a public transportation system switches hands. To get around this problem, Capital Metro created a private entity, Star Tran, to operate the system and manage its workers.

The arrangement worked well until Capital Metro in 2004 launched its commuter rail project and tried to divert money that would have gone toward wages and benefits into the project. Two strikes resulted, one in in 2005, the other in 2008. Both ended in stand offs.

In the meantime, the cost of the rail project increased substantially, and the commuter line was two years late in getting started, resulting first in a Sunset review and next in the passage of SB 650.

SB 650 requires Capital Metro to abolish Star Tran and either seek bids by private contractors for the service now provided by Star Tran or manage the service by itself.

Both options are bad for Capital Metro workers. If Capital Metro takes over management of services, its workers will lose their collective bargaining rights, which union workers fear will drive down their wages. If a private contractor takes over management, the company would likely try to cut wages to boost its profits.

“This move on the part of Capital Metro will not only hurt our members and their families, it will hurt our riding public because the quality of service would be reduced.” Wyatt said.

To voice its concerns, Local 1091 called for a demonstration at the June 27 Capital Metro Board meeting at which the board was to decide between the two options. The demonstration was big and spirited. Local 1091 urged the board to reject both options.

ATU members from Dallas and San Antonio were there to show their support as were members of the Texas State Employees Union, National Nurses United, CWA Local 6132, Iron Workers Union, Workers Defense Project, Education Austin, and AFSCME.

“When the Cap Metro board meeting began, most of the crowd went on into the building, and many went in to the board room until there was no more space,” said Leslie Cunningham, a TSEU activist at the demonstration. “Security was light; they just asked the folks in the hallway to keep the noise down.”

Despite the protest, the Capital Metro board voted to seek a private contractor to operate the system, but the fight to protect wages and benefits isn’t over. “The union is committed to (taking its case to the federal government) if it becomes necessary,” said Glenda Pittman, an Austin lawyer who represents Local 1091, to the Austin American Statesman. One option would be for Local 1091 to file objections with the federal government to block Capital Metro’s requests for federal grant money.

Wyatt said that whatever action the union decides to take, it will be done to protect the interest of Capital Metro workers and the people who rely on their services. “We’re here looking out for our people, and I mean all our people,” Wyatt told KUT News. “The citizens of Austin, the people that work at Capitol Metro, the bus operators, mechanics, and the riders, everyone’s affected by what happens.”

With bi-partisan support, race to bottom shifts to New Jersey

The New York Times last week reported that recently passed legislation in New Jersey “will significantly increase costs or reduce benefits for three-quarters of a million public employees and retirees.” A typical New Jersey public worker who enrolls her family in her health care plan will now pay about $3,600 annually for her health care premium, up from about $1,000 that she paid prior to the new legislation.

In addition, the new legislation increases employee pension contributions by 2 percent over seven years, suspends cost-of-living increases for retired public workers, and prevents public workers from bargaining over health care benefits for at least the next four years.

“This is a dark today for workers’ rights as the race to the  bottom continues,” said Larry Cohen, president of the CWA, which represents 65,000 state and other public sector workers in New Jersey.

New Jersey public employees and retirees will join their counterparts in California, Wisconsin, Massachusetts, and other states who are either paying more for their benefits or have had them cut.

And it’s not just public employees who will have to figure out how to get by on less. Despite healthy profits, private employers have been busy figuring out ways to pay their workers less. Auto companies succeeded in establishing two-tier wage systems in their plants. According to the Detroit Free Press, newly hired auto workers are paid about $15 an hour, about half of what other auto workers make. At one GM plant, laid off workers were forced to accept the new-hire rate if they wanted to get their jobs back.

In Wisconsin workers at Harley Davidson, Mercury Marine, and Kohler had to accept a new two-tier wage system in their new contracts and agree to allow their companies to rely more heavily on temporary workers, who work for the new-hire rate and don’t receive the benefits that permanent workers have.

In New Jersey, Gov. Chris Christie, a Republican, justified the cost increases and pension freeze as the only way that the state could close its budget gap. But CWA while it was negotiating a new contract for state employees proposed changes that would have saved the state $200 million in health care costs and kept premiums for the coverage much lower than those enacted.

Senate President Stephen M. Sweeney, a Democrat and member of the iron workers union, and state Assembly Speaker Sheila Y. Oliver, also a Democrat, sided with Gov. Christie and mustered enough Democratic support to pass the law.

After the vote, Hettie Rosenstein, the state director of the New Jersey CWA, criticized Democrats who lined up with Republicans on the bill. “Today is a sad day for hundreds of thousands of New Jersey working families who will get a pay cut at the stroke of Gov. Christie’s pen,” Rosenstein said. “It is a downright awful day for the Democratic Party, which has abandoned the middle-class and its own core values for the sake of a political backroom deal. The party which once stood for workers’ rights has torn itself apart under the leadership of self-interested political bosses.”

When the new legislation goes into effect, a typical worker, who makes between $65,000 and $70,000 a year will see her annual take home pay reduced by about $2,600 a year if her dependents are covered by her health care plan. She can reduce her cost, but will have to settle for less coverage if she does. Her pension contribution will also increase by 1 percent and rise in phases another 1 percent over the next seven years.

Health care premiums could increase even more because public workers can no longer bargain collectively over health care benefits, which means that it will be easier to pass along health care costs to workers. Rosenstein calculates that if health care costs rise 6 percent a year and those costs are passed along to workers, premiums will increase by $1,100 a year.

“We thank those who stood up and voted “No” despite the pressure,” Cohen said.  “We will never forget them. We will also never forget those who moved New Jersey back fifty years,  stripping bargaining rights from public workers and imposing health care  cuts that will destroy living standards for hundreds of thousands of  families.”

Union charges Ikea with violating code of conduct

The International Association of Machinist charged Ikea, the giant Swedish furniture retailer, with violating it own code of conduct after the company’s US subsidiary that manufacturers furniture for Ikea stores interfered with its workers’ union organizing campaign.

Workers at the Danville, Virginia plant operated by Swedwood, a wholly owned subsidiary of Ikea, on June 20 filed a petition with the National Labor Relations Board to hold a union representation election for hourly, non-supervisory workers at the plant.

The day after the petition was filed, the company requested that 30 “Team Captains,” who perform supervisory work at the Swedwood plant, which includes disciplining workers and making recommendations regarding the hiring and firing of workers, be included in the proposed bargaining unit and be allowed to vote in the representation election.

The IAM, which is helping the Danville workers organize, called Swedwood’s request to include Team Captains in the election interference with their employees right to join a union. “There is only one reason for Swedwood to demand that Team Captains be in the union (and) that is to influence the outcome of the election,” said Bill Street, IAM’s director of its woodworking department.

According to IWAY, Ikea’s company code of conduct, Ikea supports each of its worker’s right to join or not join a union “without fear of reprisal, interference, intimidation, or harassment.”

Workers at Swedwood have been trying to organize a union for well over a year now. Their main reasons for wanting a union are low pay, too much forced overtime, and the company’s overuse of temporary workers, a practice that the company has since curtailed.

In response to its workers complaints, Swedwood hired an independent auditing company to examine its working conditions. The audit found that the company relied too heavily on forced overtime. Subsequently, Swedwood cut back its use of forced overtime.

But Street told the Los Angeles Times that while forced overtime subsided a bit after the results of the audit were released, it didn’t take long for the company to revert back to its old practices.

In a media release, IAM said that Swedwood’s decision to force Team Captains into the bargaining unit was ironic in light of the Ikea’s corporate code, which states that the company will not interfere with their workers’ right to free association. “I guess (the corporate code) doesn’t apply to the Swedwood workers who do not wish to associate with Team Captains or the Team Captains who do not wish to associate with the union,” Street said. “It will be interesting to hear how Swedwood will defend taking choice away from workers to decide who they want in their own union.”

The union also said that if Team Captains wish to join a union, the IAM would be glad to represent them as a bargaining unit separate from the company’s hourly workers.

NLRB proposes rule changes to speed up union elections

The National Labor Relations Board earlier this week proposed modest changes to the procedures for holding union representation elections. The proposed changes are, according to the NLRB, “intended to reduce unnecessary litigation, streamline pre- and post-election procedures, and facilitate the use of electronic communications and document filing.”

Interested parties have 60 days to share their written comments with the board, and a hearing on the rules will be held in Washington DC on July 18 and 19. After the comment period, the NLRB will have 75 days to issue the final rule changes.

Organized business has begun a public relations campaign depicting the proposed laws as unfair to business. US Chamber of Commerce spokesperson Michael Eastman told Bloomberg/Business Week that the proposed rules will “tilt the playing field in organized labor’s favor.”

Brian Hayes, the lone NLRB member voting against the proposed law, said that if adopted the proposed rules would shorten the wait time to 10 and 21 days between the time a union representation petition is filed and an election. The median wait time now is 38 days. In his dissent, Hayes wrote that this shortened wait time “effectively eviscerate an employer’s legitimate opportunity to express its views about collective bargaining.”

But as Larry Cohen, president of the CWA points out, businesses often conflate the right to educate with the right to intimidate, which has helped drive down the standard of living for workers in the US. “Today, we have corporations proclaiming that management ‘free speech’ rights can overrun workers’ rights every time,”  Cohen said. “The outcome: our middle class standard of living has fallen as collective bargaining rights have declined. The United States is now near the bottom, with Colombia, in bargaining and organizing coverage.  US income inequality is the worst in 100 years. The gap between wages and productivity in the US widens as workers are not able to bargain. The end result is an economic slowdown that will not end.”

When workers at 2 Sisters Food Group plant in Riverside, California decided that they wanted to represented by the United Food and Commercial Workers, the company used the extended time between the filing of the petition and the election to mount an education campaign that consisted hiring an anti-union consultant, distributing anti-union flyers, and forcing workers to attend daily anti-union meetings.

As the election grew closer, the company fired five pro-union workers and hired security guards to closely monitor the comings and goings of every worker. When the election took place, “off-shift workers,” according to a UFCW media release, “were forced to wait at a parking lot gate and then personally escorted one by one to the ballot box by the company CEO, then escorted off company grounds. The harassment, intimidation and illegal firings were too much. Workers feared for their livelihoods, and they narrowly lost their bid for a union.”

The proposed changes are hardly a panacea for eliminating anti-union abuses, but if adopted they should close some of the avenues taken by employers to string out the election. Among other things, the proposed changes would

  • allow electronic filing of election petitions,
  • speed up the time frame for pre-election hearings and for employers to produce a list of eligible voters,
  • postpone until after the election hearings on who is eligible to vote when less than 20 percent of possible voters are challenged, and
  • eliminate the 25 to 30 day period that parties have to review NLRB Regional Director decisions, a tactic often abused to extend the time between the petition filing and voting.

Unions generally welcomed the proposed rule changes. “The federal government has let big corporations abuse the legal system for too many years,” said Jim Hoffa, general president of the Teamsters. “Irresponsible corporations often delay organizing votes and retaliate against employees who want to form a union.

“In our experience, more than a third of employers fire workers who want to unionize. That’s why America has lost 10 percent of its middle-class jobs since 2000. This rule gives workers a reasonable chance to join together to restore fairness and balance.”

AFL-CIO president Richard Trumka cautioned that the proposed changes fall short of what is needed to really level the playing field between business and labor. “The proposed rule does not address many of the fundamental problems with our labor laws,” Trumka said. “But it will help bring critically needed fairness and balance to this part of the process.”

Nurses tell Wall Street: It’s time you make some sacrifices

Dressed in red tee shirts and carrying signs that read, “Heal America, Tax Wall Street,” about 1,000 members of National Nurses United and their supporters gathered on the steps of the Federal Hall across the street from the New York Stock Exchange on Wall Street to demand that financial speculators be taxed to help finance an economic recovery that can provide good-paying jobs, health care, a secure retirement, freedom from hunger, and a safe environment for all working people.

“It’s very American. Just like working people pay taxes on all of their purchases. These corporate speculators who buy and sell and buy and sell our country should pay a minimum tax on that,” RoseAnn DeMoro, NNU executive director. “A very minimum tax could amount to at least $350 billion every year that can go back to our communities and go back to jobs and go back to health care.”

The demonstration was part of NNU’s nationwide Main Street Contract for the American People’s campaign, which seeks to reshape the nation’s economic and political priorities. (In a related note, the Marquette County Labor Council, a chapter of the Michigan State AFL-CIO, last week became the first labor council in the US to endorse NNU’s Main Street Contract campaign.)

While the nurses and their supporters were holding their rally on Wall Street, similar rallies were taking place at 35 locations throughout Europe and the rest of the world during the International Day of Action for a Financial Transaction Tax. As the rallies were taking place, Jose Manuel Barroso, the European Commission president, said that he would propose a Europe-wide tax on financial transactions such as the trading of stocks, bonds, derivatives, options, and other speculative activity.

Such a tax would “ensure that financial institutions make a fair and substantive contribution” to alleviating some of the problems caused by the current debt crisis, Barroso said.

Writing in Counter Punch in 2009, Dean Baker observed that a small financial transaction tax would not only raise significant amounts of revenue that could be put to good use restoring the health of the US economy, it could make the allocation of capital more efficient:

A small increase in trading costs would be a very manageable burden for those who are using financial markets to support productive economic activity. However, it would impose serious costs on those who see the financial markets as a casino in which they place their bets by the day, hour, or minute. Speculators who hope to jump into the market at 2:00 and pocket their gains by 3:00 would be subject to much greater risk if they had to pay even a modest financial transaction tax.

Similarly, the financial engineers who specialize in constructing complex financial instruments may find an FTT (financial transaction tax) to be a nuisance. An FTT could cause their derivative instruments to be taxed at several points. For example, the trade of an option on a stock would be taxed, as would the purchase of the stock itself if the option was exercised. More complex derivatives could be subject to the tax many times over, substantially reducing the potential profits from complexity.

At the nurses demonstration on Wall Street, speakers pointed out that those who caused the financial crisis that left millions unemployed, drove millions into poverty, and left many more on the brink of poverty got bailed out by the US government when their risky speculations caused markets to implode. Then they turned around and demanded sacrifice from the working class to help pay for their bailout and to protect them from future losses.

“It’s time for (Wall Street’s) shared sacrifice”, said NNU leader Deborah Burger. “(Wall Street) haven’t had any of that. They have been making billions and trillions in profit and not giving anything back to our communities.”

Miners’ new contract provides hefty raise but diverts new hires to 401(k) plan

Members of the United Mine Workers of America last week approved a new contract with the Bituminous Coal Operators Association that provides the largest pay raise for miners in the union’s 121-year history and preserves the current level of health care coverage for active miners, retirees, and their families. But the agreement also allows the operators to divert newly hired miners away from the current defined benefits pension plan and into a 401(k) plan.

“The membership saw clearly that this agreement provides a strong measure of security for themselves and their families,” said Cecil E. Roberts UMWA president. The new pact received a “yes” vote by 70 percent of the UMWA members covered by it.

Active miners will get a $1 an hour raise in July, then another $1 an hour raise in January. After that, they get a $1 an hour raise for each year of the next four years of the contract. When the contract expires in December 2016, union miners’ average pay will be about $30 per hour.

The contract also attempts to address the under funding of the miners’ current pension plan, which as a result of the 2008 financial crisis in 2010 was pronounced “seriously endangered” by the US Department of Labor’s Employee Benefits Security Administration.

Under the old contract, coal operators covered by the contract contributed $5.50 per hour worked to the miners’ defined benefits pension plan, which covers 70,000 retirees and 25,000 active UMWA members. Under the new agreement, the company will continue to contribute $5.50 per hour worked for currently employed miners. But miners hired after January 1, 2012 will be diverted into a 401(k) plan and operators will contribute only $1 an hour worked to the new hire’s 401(k).  In January 2014, that amount increases to $1.50 per hour worked.

“Putting the new miners in a 401(k) plan relieves the pressure that the (coal operators) were going to have to jack way up funding the old plan,” Jim Thompson, editor of Coal and Energy Price Reports, told the Wall Street Journal.

The Bituminous Coal Operators Association represents mainly Consol Energy of Canonsburg, Pennsylvania and its subsidiaries, but other unionized coal companies are required by law to adopt the pension language in the contract between UMWA and the association. However, they are not required to adopt other provisions.

But Roberts said that the recently approved agreement represents the industry standard for unionized coal companies and he expects the other companies to agree to similar wage and health care language.

“We will be taking this agreement to the other companies immediately, and looking for them to agree to the entire contract,” Roberts said. “Our message to them will be simple: This is the industry-wide agreement. This is the agreement our members who work at your operations overwhelmingly ratified, and we will accept no less.”