Union: Proposed Texas pension changes break promise to public employees

Members of the Texas State Employees Union CWA Local 6186 staged a mass call-in to protest the lowering of their pension and health care benefit proposed by two bills that were recently passed out of the Texas Senate State Affairs Committee and House Pension Committee.

The two bills–CSHB 1882 and CSHB 1884–increase the age at which teachers, other public school employees, state employees, and higher education employees can retire with full benefits, substantially reduce pensions for those who retire when they reach a combination of 80 years of age and service but are younger than 62 years old, raise the employee pension contribution rate, and increase the number of years used to calculate the average final salary, which will lower most people’s pension benefit.

CSHB 1884 also establishes tiered health care benefits for retirees. Only those retirees with at least 20 years of service would get full health care premium coverage. Those with less service would pay a percentage of their premium.

The bills would provide a modest cost of living raise for retirees who have been retired for at least 20 years when and if the state’s two largest pension funds–TRS for teachers, public school employees, and public higher education employees, and ERS for state employees–are deemed to be fully funded.

The two bills also increase the state’s contribution to the two pension funds.

“A cost of living increase someday, maybe for some retirees and at least some increased state contribution now are both good, but they are not worth this bill’s extreme costs that are disproportionately at the expense of current and future employees and retirees,” said Reuben Leslie, a TSEU member. “The better way would be to invest some of the state’s budget surplus to fund a sustainable system that benefits the public and those who serve it.”

In an email to members, TSEU organizing coordinator Seth Hutchinson, urged members to phone their legislators and tell them to oppose CSHB 1882 and CSHB 1884. He also said that the key to protecting pensions, health care benefits, and improving wages is to get fellow workers who aren’t union members to join TSEU and TSEU’s political action committee, COPE.

Hutchinson said that CSHB 1882 and CSHB 1884 break a promise to employees. “Up until now, current state employees believed that they enter into an agreement with the state when hired, which is that if they committed their careers to public service that the state would ensure that they receive a decent pension when they retire,” said Hutchinson. “Both these bills change all that by restructuring active state employees’ pension funds.”

Derrick Osobase, TSEU’s political director, said that since 2001, teachers and state employees have seen their benefits erode. Teachers had their pension benefit reduced in 2007; state employees had theirs reduced in 2009. In 2011, both saw their pension contributions increase. State employee health care benefits have been reduced twice, once in 2003 and again in 2010.

CSHB 1882 and CSHB 1884 both demand more sacrifices from public employees at a time when the state has a budget surplus of $8.8 billion, a surplus that does not include an estimated $11.8 billion in the state’s Rainy Day Fund.

Furthermore, both pension funds are financially sound. Both are above the 80 percent funded threshold that actuaries use to determine the financial health of a pension plan, and both have assets sufficient to pay current benefits for decades to come.

But some right-wing groups have used the fact that the pensions aren’t 100 percent funded to declare them a danger to the state’s fiscal health. Bill King, a hedge fund operator who leads the so-called Texans for Public Pension Reform, in August 2011 told the Austin American Statesman that public pensions aren’t sustainable and that the goal of his group is to eliminate them.

Reports to the Legislature, however, found that the two pension funds are sound and sustainable, and one of the reports said that eliminating them as King proposes would cost the state more money or result in reduced benefits.

The reports also found that the state’s pension plans were a good deal for the public. They provide a secure retirement for hundreds of thousands of Texans at a modest cost–about 2 percent of the state budget for 2012 and 2013.

Nevertheless, Sen. Robert Duncan, who chairs the State Affairs Committee told the Austin American Statesman that the pension cuts were needed stave off criticism from public pension opponents. He also said that accounting changes required by the Government Accounting Standards Board (GASB) also made the pension reductions necessary.

But according to TSEU, a better way to address these challenges would be for the state to increase substantially its pension funding. ERS staff estimate that the state’s current contribution to the ERS pension is about 0.046 percent of the budget. Raising the contribution to a higher percentage that would lead toward full funding would raise the ERS pension contribution percent of budget to only 0.065 percent.

Sen. Duncan also told the Statesman that the state has under funded the pension fund over the last two decades. For much of this time, the state contributed only the 6 percent minimum required by the Texas Constitution.

TSEU members are urging lawmakers to keep their promise to public employees and provide the funds needed to make up for two decades of inadequate pension funding. “Tell your legislator that it’s unfair to cut pensions when funds are available to fund it,” said Hutchinson. “They need to keep the promise made to us when we started working for the state.”

Hong Kong dockers seek international support for their strike

Dock workers in Hong Kong called for international support for their strike against Asia’s richest billionaire. The Union of Hong Kong Dockers (UHKD) and the Hong Kong Confederation of Trade Unions on April 22 urged working-class organizations and individuals to show their solidarity with the dock workers by organizing protests at businesses owned by Hutchinson Whampoa, Ltd the operator of the Port of Hong Kong’s Hutchison International Terminal.

Hutchison Whampoa is owned by Li Ka-Shing, a billionaire, whose business empire includes retail stores, real estate, and mobile phone service.

“If possible, we hope you can organize a protest or petition to any Hutchison Whampoa-owned or invested businesses and send us pictures of the action, to shame Hutchison and to give a strong message of international solidarity to the strikers,” said Sally Choi, organizer for the Hong Kong Confederation of Trade Unions, in a message to supporters.

Members of the UHKD walked of the job on March 28 to protest low wages, the lack of safety on the job, poor working conditions, and discrimination against workers who work for employment firms that contract with Hutchison to provide so-called temporary labor at the docks.

About 2,000 dock workers and their supporters on April 22 rallied outside the Hutchison port terminals where strikers have been camping since they walked off the job. Another rally is planned for April 26 unless Hutchison Whampoa agrees to settle the issues that sparked the strike, which has interrupted services at Asia’s largest port and caused ships to be diverted to other ports.

The strikers, contract workers who number about 400, say that since 1997 their wages have declined and that they are forced to work in unsafe working conditions.

Cho Wai-kei, a striking crane operator, said that he earns about 90 Hong Kong dollars a shift less than he was earning in 1997. He also said that crane operators are forced to remain in the operating cages of their cranes for as long as 12 hours straight without a bathroom break.

“When you get into that metal cage, there’s no difference between you and a dog,” Cho said.

The dock workers are also protesting the lower pay that contract workers receive for doing the same work as those hired directly by Hutchison Whampoa.

“As for the crane drivers, the union’s only hope is that workers with the same job can earn the same wage,” said the Hong Kong Confederation of Trade Unions (HKCTU) in a recent public statement about the strike. “Why is it that despite having identical jobs, workers hired directly by the company make twice as much as those hired by subcontractors and, unlike the latter, are given time to eat, go to the bathroom and rest? Why have all subcontracted workers been stripped of these basic rights?”

According to HKCTU, contract crane operators earn between 50 percent to 150 percent less than permanent crane operators and work on average 312 hours per month  while permanent crane operators work 173 hours per month.

Hutchison Whampoa and its subcontractors have broken off negotiations with the strikers and their union, but  there is mounting political pressure for them to settle the strike. According to The Standard, strikers met with Hong Kong’s Secretary of Labor and Welfare on April 22, who subsequently issued a statement indicating that the government may try to mediate that dispute.

“The government has to be impartial and seek consensus between both parties in order to help them rebuild mutual trust,” said Matthew Cheung Kin-chung, secretary of Labor and Welfare. “So we should not comment on any remarks (that the strikers made after the meeting). It is hard to predict (when the strike will be resolved), but both sides should express sincerity and restart negotiations.”

Stanley Ho Wai-hong, a spokesperson for the dockers’ union, told The Standard that at a recent meeting, workers had agreed to adjust their demands but that the adjusted wage increase they are seeking is still in the double digits.

Ho said that the strikers are prepared to continue their strike and that more protests should be expected between now and Labor Day, which in Hong Kong is May 1.

Teachers union report exposes pension double dealing by hedge funds

The American Federation of Teachers on April 19 released a report identifying hedge fund and private equity firms and their managers who appear to be working both sides of the divide between those who want to maintain and strengthen traditional public pension plans and those who want to destroy them.

These asset managers solicit business from public pensions and at the same time contribute to and actively support groups seeking to eliminate public pensions and replace them with individual savings plans such as 401(k) plans.

Randi Weingarten, president of AFT, said that the purpose of the report is to provide information to trustees of public pension plans that they can use when deciding who will assist them in making investment decisions.

“This is about transparency—a right to know,” said Weingarten. “America’s workers and pension trustees deserve to know if the asset managers with whom they are investing their hard-earned retirement savings are also aligned with organizations advocating for the elimination of those same pension plans. With transparency and disclosure,trustees can make informed decisions about the risks their plans face.”

“I have an issue with people thinking they can play both sides,” said Jay Rehak, president of the Chicago Teachers’ Pension Fund to the Wall Street Journal. “They come to us with their hand out, and then they are stabbing us in the back.”

The report, entitled Ranking Asset Managers, lists more than 30 hedge fund and private equity firms with ties to three groups–StudentsFirst, the Show-Me Institute, and the Manhattan Institute–that advocate eliminating public pensions. It also describes the anti-public pension activity of the three named groups.

According to the report, public pension plans have been repeatedly attacked by right-wing think tanks and political committees that receive much of their funding from hedge fund and private equity managers. Some of the same asset managers actively “seek investments from the deferred wages of teachers, firefighters, and other public servants, while attacking their economic interests.”

The report also says that over the last few years, the track record of hedge fund managers has been “uneven” and quotes a passage from the New York Times DealBook blog, which notes that over the last four years, hedge funds have underperformed in relation to the market. “The average hedge fund,” reads DealBook. “gained 6.4 percent last year. . . . By comparison, the Standard & Poors 500 stock index climbed 16 percent when factoring in dividends.”

According to Ranking Asset Managers, the companies on its watch list, which will be updated regularly, have directors or executives who contribute to or sit on the boards of the three anti-pension groups.

In a recent blog post, Matt Taibbi, who writes for Rolling Stone, provides more detail on one of the hedge fund operators identified by Ranking Asset Managers. According to Taibbi, Dan Loeb, founder and CEO of Third Point Capital, is on the board of StudentsFirst New York, “one of the leading advocates pushing for states to abandon defined benefit plans–in favor of defined contribution plans, where benefits are not guaranteed.”

At the same time, Loeb currently manages assets for the Ohio Public Employees Retirement System, the New Jersey State Investment Council, and other public pension plans.

Loeb was scheduled to speak at a recent meeting of the Council of Institutional Investors, a non-profit association of public pension plans, endowments, employee benefit plans, and foundations, where he was presumably going to pitch his services to potential customers.

Loeb, however, canceled his engagement after the teachers union made public his relationship with the anti-public pension group in New York.

Labor, other activists rally for Robin Hood Tax

About 2,000 labor, social justice, and other activists on April 20 rallied in Washington DC urging Congress to pass HR 1579, the Inclusive Prosperity Act by Rep. Keith Ellison. The Inclusive Prosperity Act would establish a small tax on financial transactions that would generate billions of dollars in new revenue that could be invested in public projects that rebuild America and create millions of new jobs. The financial transaction tax is known the Robin Hood Tax.

“In the world beyond the Beltway, people are still hurting. What they care about is not the debt ceiling or the fiscal cliff or the budget deficit. What they care about is the job deficit, the health care deficit, the housing deficit, the retirement deficit,” said Jean Ross, co-president of National Nurses United. “What people don’t need is more austerity, like more cuts, to Social Security, and other programs that help people. That’s why nurses for two years have been campaigning across the country for more revenue for our cities, our communities, our patients with a tax on Wall Street speculation.”

“Americans are fed up with the austerity agenda that leaves corporations with record low tax rates,” said George Goehl, executive director, National People’s Action. “We know where the money is. It’s not in grandma’s Social Security check, it’s not in our children’s classroom, and it’s not in the pockets of working class families. It’s on Wall Street, and it’s time for President Obama and Secretary Lew to step up to the plate and support everyday Americans by supporting the Robin Hood Tax.”

The Robin Hood Tax proposed by HR 1579 would be a small sales tax on speculative financial trades–0.5 percent on stock trades and a lesser percentage on other speculative activity. While the amount of the tax is low, it has the potential to recapture a substantial amount of wealth that hard working people helped create in the first place.

University of Massachusetts-Amherst economist Robert  Pollin estimates that the Robin Hood Tax could generate as much as $300 billion a year in new revenue.

“Everyone shopping on Main Street today pays sales taxes when they buy things,” said Pollin.  “It’s time for Wall Street traders to face up to similar obligations.”

The bill targets the wealthiest financial speculators and exempts households whose gross adjusted income is $75,000 or less.

If enacted, the Robin Hood Tax would discourage excessive speculation, the primary cause of the 2008 worldwide economic collapse that cost millions of people around the world their jobs and livelihood.

“Wall Street speculation has become a house of cards, a game of  computer-driven bets on bets, far removed from real-world investments in real economic activity,” wrote Ralph Nader in a statement of support for Ellison’s bill.

“High-frequency trades are carried out at ‘blinding speeds,'” said  Wallace Turbeville, former Goldman Sachs investment banker and a senior  fellow at Demos. “To the point where 50, 60 or 70 percent are done by  ‘robo-traders.’ This does not give value to the economy, it damages it.”

An analysis of the bill prepared by Rep. Ellison says that the Robin Hood Tax would make Wall Street begin to repay its debt to working people who bailed out the bankers when their speculative trades cratered the economy.

“The global crisis cost Americans $19 trillion in lost wealth,” reads the analysis. “American citizens provided the money to stabilize the financial  sector. . . . The global financial crisis, along with wars, unabated and  unaddressed climate change, unsustainable tax cuts, and a continuing  unemployment crisis, if unaddressed, will deprive a generation of a  meaningful role in the larger economy.”

The European Commission has proposed a financial transaction tax similar to the one proposed by Ellison. Eleven European countries have committed to adopting the tax proposed by the commission–Germany, France, Italy, Spain, Belgium, Portugal, Greece, Austria, Slovakia, Slovenia, and Estonia.

On Friday, George Osborne the United Kingdom’s Chancellor of the Exchequer, announced that he would take court action to block other European countries from implementing their financial transaction tax.

Owen Tudor, spokesperson for the Robin Hood Tax campaign in the UK, called Osborne’s action hypocritical because the UK itself has a financial transaction tax called the stamp duty that generates about $13 billion a year.

“This isn’t about defending British interests against Europe,” said Tudor to the Guardian. “It’s about defending one rather rich square mile (London’s financial district) against the wishes of people in Britain and across Europe. Not content with letting our banks off scot-free, Osborne now wants to prevent European countries from making financial sectors pay to repair the damage done by the financial crisis.”

Metropolitan organizing strategy seeks to build union power for adjunct faculty

Higher education institutions across the US are relying more on a contingent workforce of instructors; these adjunct instructors work for low pay, have few benefits, and even less job security.

Organizing adjunct instructors to win better pay and working conditions was the topic of a recent symposium in Boston sponsored by SEIU. The symposium, attended by about 100 adjunct faculty from 20 colleges in the Boston metropolitan area, kicked off a regional organizing drive called Adjunct Action to help adjunct faculty organize and win collective bargaining rights.

According to Maria Maisto, founder of the New Faculty Majority, an adjunct faculty advocacy organization, the poor working conditions that adjunct faculty labor under affects the quality of education that students are receiving. “Faculty working conditions are student learning conditions,” said Maisto, speaking at the symposium. “If faculty working conditions continue to decline, both they and students suffer.”

Today low-paid, contingent instructors do most of the teaching at America’s institutions of higher education. According to the Coalition on the Academic Workforce (CAW), “75.5 percent of (higher education) instructional staff members (are) employed in contingent positions either as part-time or adjunct faculty members, full-time non-tenure-track faculty members, or graduate student teaching assistants.”

For the most part, institutions of higher education devote few resources to supporting these faculty members.

In 2009 at American University in Washington DC, about 50 percent of the instructional faculty were adjunct instructors, but only 4 percent of the university’s instructional budget was devoted to these faculty members. Adjunct instructors, subsequently voted in 2011 to unionize and joined SEIU Local 500.

A national survey whose results were released last year by CAW found that in 2010 median pay per three-hour course taught by adjunct instructors was $2,700 and ranged from $2,235 at two-year colleges to a high of $3,400 at four-year doctoral or research universities.

The survey also found that while adjuncts are often considered temporary workers and are thus denied the full benefits of permanent employees, most consider themselves long-term employees who are committed to the teaching profession. Of those surveyed, 80 percent had taught for three years or more; half had taught for six or more years. More than three-quarters said that they would accept a tenure track position if available.

Those attending the symposium discussed these and other problems facing adjunct faculty. They also agreed that collective action and unionization are key to overcoming these problems.

Adjunct Action is part of a new organizing model aimed at adjunct faculty that SEIU refers to as its metropolitan organizing strategy. The idea is to get community groups involved in the organizing effort and to make the organizing campaign a region-wide effort rather trying to organize one campus at a time.

“We need an approach that is bigger than any one institution,” said Wayne Langley, director of SEIU Local 615’s higher education division to the Chronicle of Higher Education. “If we continue to fight institution by institution, we will not win.”

As union density builds at the different campuses in the region and contracts are won, there will be more pressure on other campuses to agree to better pay and benefits in order to keep their adjuncts from jumping to campuses with union contracts.

SEIU has had some success with this approach in Washington DC, where Local 500 has contracts with American University, George Washington University, and Montgomery College, a public institution in the Maryland suburbs close to Washington. Adjunct faculty at Georgetown University will be voting in a union representation election in May.

Anne McLeer, Local 500 director of research and communications told the Chronicle of Higher Education that at some point the local would like to negotiate a common contract that raises pay, improves benefits, and increases job security at campuses throughout the Washington DC metropolitan area.

In Boston and Washington, the SEIU effort is mainly aimed at private institutions because most of the public universities and colleges have already been unionized.

SEIU has decided not to organize the universities and colleges in the Virginia suburbs of Washington DC because Virginia is a right-to-work-for-less state.

Boston seems like the natural place for SEIU to expand its metropolitan organizing strategy because of its high concentration of private universities and colleges.

Some of these universities are quite expensive yet rely heavily on a low-paid, instructional staff to do much of the teaching.

“When a university is asking $50,000 in tuition from students, one wonders where the money is going and why it’s not going into instruction, ” said Deborah Schwartz,
an adjunct professor of English at Boston College. “There’s a systemic problem when the majority of students who walk into their first year English class are taught by adjunct faculty.”

Walmart, other US retailers decide not compensate victims of Bangladesh garment factory fire

European retailers on April 15 met with Bangladesh union leaders, staff from the Clean Clothes Campaign, and representatives of IndustriALL Global Union in Geneva Switzerland to discuss details of how much the retailers will pay into a compensation fund for the victims of last November’s fire at the Tazreen Designs garment factory in Dhaka, Bangladesh that killed 112 workers and injured scores more.

US retailers including Walmart, which was Tazreen’s biggest customer, were absent from the discussions. Bloomberg reports that Walmart and Sears, another Tazreen customer, are not planning to contribute to the compensation fund.

“We once again call upon Walmart and the other major companies sourcing from Tazreen to aid the families of the dead and the injured workers,” said Ineke Zeldenrust of the Clean Clothes Campaign. “Their refusal to do so indicates a shocking lack of concern for the rights and well-being of the workers who make their clothes and who, in this case, were injured or killed in the process.”

Kalpona Akter, executive director of the Bangladesh Center for Worker Solidarity said to Bloomberg that by not attending the compensation meeting, Walmart and other Western retailers are sending the wrong message. “If they’re not there, they’re totally giving the message that they are supporting these death traps and they really don’t care how many lives go to make these clothes,” said Akter.

The European retailers present at the Geneva meeting are C & A of the Netherlands, KiK of Germany, and El Corte Ingles of Spain. Piazza Italia did not attend but said that it would contribute to the compensation fund.

The retailers and the unions are still working out details of how much each company will contribute to the $5.7 million compensation fund.

“We have agreed on confirming the concrete amounts that each of these brands will contribute by the end of this month,” says Jyrki Raina general secretary of IndustriaALL  “The families and the injured have already waited far too long.”

In addition to Walmart and Sears, other Tazreen customers that did not attend the Geneva meeting are Li & Fung (Hong Kong), Teddy Smith (France), Edinborough Woolen Mills (UK), Dickies (US), and Karl Rieker (Germany).  Li & Fung has, however, agreed to pay compensation.

In January Walmart said that it was implementing a zero tolerance policy toward contractors that do not abide by its code of labor standards. The company did not reply when asked by Bloomberg for the reasons that it would not contribute to the compensation fund.

The deadly fire broke out at the Tazreen factory on November 24. About 600 people were working in the factory at the time. Workers said that fire exits in the multi-story building were locked and that the building contained a number of fire hazards including faulty wiring.

At the time of the fire, five of Tazreen’s production lines were making clothes for Walmart, but Walmart says that Tazreen was a subcontractor and that the retail giant was not aware that Tazreen was doing work for the company.

Some of the most dangerous work in the world is at the hundreds of Bangladeshi garment factories, most of which are located near Dhaka in the export processing zone controlled by the Bangladesh military.

Since 2005, more than 700 workers have died in Bangladesh garment factory fires. A report from the Clean Clothes Campaign and SOMO says that “the safety record of the Bangladesh garment industry is appalling” and that “since 2009, at least 165 workers have been killed in Bangladesh in four separate factories producing for international brands.”

Bloomberg also reports that in 2011 Walmart decided not to help pay for safety upgrades at the Bangladesh factories that make its clothes.

On April 12, Sumi Abetin, a garment worker who survived the Tazreen fire, and Akter delivered a petition signed by 112,000 consumers to Walmart headquarters in Bentonville, Arkansas. The petition urges Walmart to meet with Bangladeshi garment workers and commit to taking action to prevent more tragedies in the factories that make their garments.

Abetin and Akter are on a ten-city End Death Traps tour of the US that began April 8 and ends April 26.

Teamster unfair labor practices strike spreads

An ufair labor practices strike by Republic/Allied Waste landfill workers in Youngstown, Ohio spread to five other Republic facilities in Ohio cities on April 15. Meanwhile in McDonough, Georgia another group of Republic workers began their own unfair labor practices strike.

“I’m on strike because I’m sick of this $8 billion company breaking the law to intimidate and bully us,” said Darrell Zeh, a Youngstown landfill worker and member of Teamsters Local 377. “We’re the ones who work every day to make them all that money. I’ve picketed now in three other cities, and the support has been overwhelming. Everyone seems to be fed up with this corporation’s greed.”

Members of Teamster Local 377 who work at Republic’s Youngstown landfill have been on strike since March 27. The striking workers and the company failed to reach an agreement on a new contract in October, but negotiations continued until the company began unilaterally implementing more than 50 new work rules, which prompted the walkout.

The strike in Youngstown is the latest skirmish between Republic and the Teamsters as the company seeks to lower worker health care and pension benefits and worsen working conditions one local at a time..

More than 2,000 Republic workers across the country are currently working without contracts. In Evansville, Indiana, Republic locked out its workers for six weeks last summer in an attempt to force concessions. In Mobile, Alabama, the company forced a strike by refusing to honor a binding contract. Republic workers in Memphis, staged a three-day unfair labor practices strike in January to protest the company’s refusal to pay safety bonuses and other contract violations.

“Republic has been bullying its workers by locking them out of their jobs without pay, withholding paychecks, and demanding contract concessions — even though the company makes hundreds of millions in profits each year,” said Ken Hall, Teamsters international general secretary-treasurer.

Teamsters have relied on solidarity to resist company bullying.

After the Youngstown landfill workers went on strike, they set up a picket line at another Youngstown Republic facility not on strike. Drivers and mechanics at the facility, who also belong to Local  377, refused to cross the pickets and stayed off work for about a week until the strikers moved their pickets to another location.

When Local 377 members showed up at a Republic facility is Evansville, Indiana, members of Teamsters Local 215, who remembered last summer’s lockout, refused to cross the picket.

From Evansville, the strikers moved to California where solidarity strikes at seven Republic facilities temporarily disrupted services.

The company and the Youngstown landfill workers returned to the bargaining table on April 8, but little progress has been made prompting Local 377 to send pickets today to Republic hauling yards in Youngstown, Columbus, Canton, Cleveland, and Elyria.

“When I started talking to my colleagues from other cities, we realized that Republic treats workers this way everywhere,” said Paul Auxer, a Republic driver in Columbus and Teamster Local 284 member. “We’ll be out as long as we need to be. When Round 2 comes–if it comes to that–we’ll be out here again supporting our brothers and sisters however it’s needed.”

As it negotiates new contracts with different Teamster locals, one of Republic’s common goals is to force locals to withdraw from the Teamsters Central States Pension Fund. In Youngstown and other locations, the company has proposed replacing the workers defined pension benefit administered by the Central States Pension Fund with a 401(k) plan that would cost the company less money.

Republic says that replacing the defined benefit plan with a 401(k) plan will be a better deal for the workers because the Central States Pension Fund is facing financial challenges. According to the Wall Street Journal, “investment losses and hard times for trucking companies that pay into the Central States Pension Fund have sapped the fund of money it uses to pay promised benefits.”

The Teamsters acknowledge that the pension fund is facing challenges, but steps have been taken to shore it up and withdrawing more employer contributions as Republic proposes will undermine these efforts.

Texas State Employees Union fights for the public good in higher education

Members of the Texas State Employees Union CWA Local 6186 University Caucus are urging the public to join their Fund Our Future campaign by signing their online petition at Change.org.

The campaign is aimed at making the public good rather than private interest the primary goal of higher education in the state. “For decades now private interest has driven higher education policy in Texas,” said Ted Hooker, TSEU organizer. “The result has been higher costs for students and their families at state universities, more privatization on university campuses, lower pay and less job security for front-line university employees, and a crippled higher education system that isn’t meeting the needs of the Texas public.”

At one time, Texas invested heavily in higher education. In 1986, state funding accounted for 55 percent of all funding for state higher education institutions. The result was low tuition that made a college education affordable and accessible. This investment helped the Texas economy to grow.

But in the 1990s, the Texas government began to disinvest in public higher education. By 2006, state funds provided only 35 percent of the funding for Texas’ public higher education institutions. The percentage was even lower for large campuses. State funding for the University of Texas at Austin and Texas A&M dipped below 20 percent.

To make up for this funding shortfall, Texas universities sought out more private funding and raised student tuition and fees. In 2003, the Legislature deregulated student tuition resulting in a steady and steep increase in the cost of higher education.

The Dallas Morning News reports that since 2003 students and their families are paying 55 percent more in tuition and fees at Texas’ public universities.

Reduced state funding also caused universities to seek other ways to cut budgets. Front line workers at these universities have borne the brunt of these cuts.

At one time, the state included university workers in cost-of-living pay raises given to state employees. That stopped in 2003 at the same time that tuition was being deregulated.

As a result, pay for campus workers has stagnated.

“The lowest paid state worker in Texas is a university worker,” said Anne Lewis, a senior lecturer at the University of Texas at Austin and an independent documentary film maker.

One reason that pay has stagnated is that cost-of-living raises have been replaced by so-called merit raises, which are often arbitrary and unfair.

“A few years ago, an edict went down that one-third of the department workers would get a decent raise, another one-third would get a pittance, and the final one-third would get nothing,” said Lewis. “My department figured out a way around this but many did not.  I know more than one department enforced this policy.  A worker I know has not had a raise in four years.”

“A young friend of mine who’s worked at UT for about ten years made $23,000 a year when she started, and now she makes $26,000,” said Leslie Cunningham, a TSEU activist.

In addition to seeking more state funding for higher education, TSEU’s Fund Our Future campaign is seeking to include university workers in pay raises that state employees may be getting this year.

Texas state universities are also hoping to save money by privatizing more of their services.

“UT- Austin, Texas State, the University of Texas at San Antonio, the University of Houston, Prairie View A&M and others have announced plans to follow in the footsteps of Texas A&M and privatize campus support services,” said Hooker.  “Last year, Texas A&M laid off 1,600 food service, landscaping, custodial, and maintenance workers – outsourcing their jobs to Compass Group, USA.  While many of these workers were able to secure employment with Compass, they lost their state health care and retirement benefits.”

The Fund Our Future campaign is also aimed at stopping this privatization.

“(The university workforce) should operate as a collective within the university and all contributions in service of the institution should be recognized as valuable,” reads a statement by the TSEU University Caucus. “Privatization fractures that cohesiveness by banishing vital operators from the community and sending the message that those contributions are not valuable.”

TSEU and several other groups of UT-Austin students and university workers are organizing opposition to a UT-Austin privatization plan authored by the private consulting company Accenture, a Bermuda-based company tha botched an attempt to privatize Texas’ health and human services.

The Fund Our Future campaign has also been conducting a grassroots mobilization effort to increase the state’s funding for higher education. In 2011, the state’s higher education budget was cut by nearly $1 billion. Fund Our Future is seeking a restoration of the funds cut and more public investment in higher education.

The campaign has had some impact, but the proposed budgets by the Senate and House doesn’t fully make up for the 2011 cuts and doesn’t provide extra funding for the expected higher enrollment.

“The online petition is another attempt to keep lawmakers focused on the need to adequately fund higher education,” Hooker said. “We’re also planning other mobilizations such as a call-in and day of action. Whatever happens during this session of the Legislature, TSEU will continue to organize and mobilize for more higher education funding. Our jobs and livelihoods depend on it. So does the future of Texas.”

Miners march for fairness at Patriot Coal

More than 7,000 people marched through the streets of Charlestown, West Virginia to protest Patriot Coal’s attempt to eliminate health care benefits for retirees and to reduce wages, benefits, and working conditions for Patriot’s union miners. Sixteen people including seven rank and file United Mine Workers of America members and UMWA President Cecil Roberts were arrested after staging a sit-in on the steps of Patriot’s headquarters.

“This is a crime,” said Roberts referring to Patriot’s actions. “We’ve been robbed, tricked and lied to. This cannot stand – and with thousands of us from all over the country marching today and keeping up this fight tomorrow, it will not stand.”

Patriot in July 2012 filed for Chapter 11 bankruptcy and is seeking permission from the court to modify its collective bargaining agreement with UMWA. The modification would allow it to eliminate health benefits for 10,700 retirees, survivors, and family members and to reduce benefits, wages, and working conditions of its union miners to levels that are closer to those of non-union miners.

Patriot in 2007 was spun off from Peabody Energy, the world’s largest private sector coal company.

UMWA has filed suit charging that the spin-off was fraudulent. According to UMWA, the spin-off was designed to set Patriot up for failure in order to shed Peabody of retiree pension and health care costs. The spin-off resulted in Patriot assuming 43 percent of Peabody’s pension and health care liabilities but only 11 percent of its productive assets.

Many of the retirees affected by Patriot’s proposal never worked for the company.

“I never worked a day for Patriot Coal,” said Shirley Inman, a retired miner. “I don’t care what the corporate name is, those executives made us a promise: We’d mine their coal, and in exchange we’d have good health care while we worked and after we retired. I kept my promise; they should keep theirs.”

On April 2, the day after the mass march in Charlestown, Patriot creditors and Patriot itself sought permission from the bankruptcy court to further investigate the spin-off to determine whether it was fraudulent.

“Patriot is a Peabody creation,” said the creditors’ lawyers in a court filing. “Peabody selected which of its mines would become Patriot’s. Peabody determined what projections would underlie Patriot’s business plan. Peabody decided which liabilities it would retain and which it would unload onto Patriot.”

UMWA has also been holding demonstrations at Peabody’s world headquarters in St. Louis, Missouri and has launched a Fairness at Patriot campaign.

Patriot’s proposed modifications would allow it to reduce labor costs, including its obligation to retirees, significantly.

Patriot is proposing that health care coverage through the National Bituminous Coal Wage Agreement be eliminated. Union miners still working for Patriot would receive health care through a less generous plan that Patriot’s non-union workers have.

For retirees, Patriot proposes setting up a Voluntary Employee Beneficiary Association, or VEBA. The company would initially fund the VEBA with a $15 million lump sum payment, well below the $71 million that the company spent on retiree health care benefits in 2012. Patriot says that the VEBA could receive as much as $300 million in future profit-sharing to sustain it.

These profits, if they do materialize, will come from cuts to wages and benefits that Patriot hopes to gain through its bankruptcy filing. According to Patriot’s proposed modification, wages for its union miners would be reduced to “the compensation level of Patriot’s more than 1,200 non-union employees who perform exactly the same jobs as the UMWA-represented miners.”

Patriot acknowledges in its court filings that its proposal if accepted “will impose a very real hardship on unionized employees and retirees.”

The problem faced by UMWA members at Patriot is a problem that has become all to common. As union membership declines, workers have less power to negotiate and maintain fair collective bargaining agreements.

A decade ago union miners were about 30 percent of the coal mining workforce. Today, union miners are about 20 percent of the workforce. When the UMWA was at the height of its power, it represented even a larger percent of miners. At that time, UMWA was able to win trend setting health care benefits for members and families.

Despite the challenges facing union members, UMWA’s march for justice at Patriot has had an impact. Nearly all of West Virginia’s political leaders have lined up in support of the miners. The West Virginia House passed a resolution urging Patriot to maintain its retiree health care benefit.

“Patriot doesn’t have to go down this road,” Roberts said. “We can help Patriot solve its problems, with a solution that keeps the promises made to retired miners, and provides decent pay, benefits and working conditions to active miners.  Patriot’s problems are not rooted in competition with other coal companies, they’re rooted in not having the assets to pay Peabody’s and Arch’s (another company that spun off its retiree liabilities to Patriot) bills.”

Texas State Employees Union mobilizes members for a pension increase

Members of the Texas State Employees Union CWA Local 6186 staged a mass call-in to members to the Texas House Appropriations Committee to urge them to support HB 2395, which would fully fund the pension fund for state employees and give state retirees a much needed cost-of-living pension increase, something they haven’t had since 2001.

“Unfortunately, state employee salaries have always lagged behind salaries for commensurate job duties in private industry, so we started out behind”, said TSEU member Rebecca Lutz, who worked for the Department of Health and Human Services.  “Now it has been eight years since my husband and I retired, and the price of gasoline has increased, the price of groceries have increased, utility expenses have increased, and medical expenses have increased. However, there has been no increase in our pension. As a result, our standard of living has steadily decreased, and will continue to do so, unless there is an increase to equal the cost-of-living increases.”

The Lutz’s aren’t alone in feeling the bite of higher prices. According to the US Bureau of Labor Statistics, it would take $131 today to buy what $100 bought  in 2001.

And as Lutz points out, Texas state employees salaries lag behind salaries for comparable work in the private sector and in many local government jobs; consequently, pensions for most retired state employees are at best modest and in many cases quite low.

The median monthly pension for Texas state retirees is $1,523, and for nearly one-third of these retirees, their monthly pension is $1,000 or less before taxes and insurance deductions.

Like their active employee cohorts, retirees while they were working contributed between 6 percent and 6.5 percent of their monthly salary to their pension fund.

Most retirees recognized that the pension they earned while serving the public would be modest, but they also assumed that it would be enough to provide them some degree of retirement security.

But today’s economy has changed, and those changes have made middle-class life less secure and created challenges that threaten retirement security.

For one thing, the new economy has caused more retirees to enter retirement carrying substantial amounts of debt.

For example, the cost of a higher education has increased so much that some retirees are still paying off higher education loans for their children.

“Before I was eligible for retirement I frequently worked two jobs so I could support my children.  I was in a senior level management position but as a single parent, my salary was not adequate to meet our needs and the college expenses,” said Janice Zitelman, a TSEU member who served two terms on the Texas Employee Retirement System Board of Trustees.  “Some people say that children should begin supporting themselves when they turn 18, but most know that does not provide for a good start on adult life.  While I was working two jobs my children were also working and going to school.  When I had the  opportunity to retire I took it, knowing that I would need to continue working.  The advantage was that I had income from my pension and my new employment.  Ten years after I retired, I am still trying to pay off my children’s college education and the last one graduated in 2005.”

Alice Embree, a TSEU member who worked for the Office of the Attorney General’s Child Support Division, also found herself paying off higher education loans well into her retirement.

“My husband and I have been paying a parent plus loan off, and we’re finally done six and one-half years after I retired,” said Embree.

But Embree is also facing another challenge. Her adult daughter will be returning to Texas after working in El Salvador and will be facing some medical expenses, which Embree will likely have to pay for because her daughter doesn’t have health insurance.

She’s not alone. According to the Texas Medical Association, “Texas is the uninsured capital of the United States. More than 6.3 million Texans – including 1.2 million children – lack health insurance. Texas’ uninsurance rates (is) 1.5 to 2 times the national average.” The uninsured rate for adults between 19 and 64 in Texas is 33 percent.

Retirees like Tom Herrera, a TSEU member who worked for the Department of Human Services, are also facing increased medical expenses of their own.

“When my wife and I retired in 1998, we reduced expenses by living in a small house in East Austin,” said Herrera. “The idea was to reduce expenses in order to live on a fixed income and free of debt. But I got sick and have to take medication, whose cost has increased substantially because of  higher deductibles and higher co-pays. I recently realized that the medication costs may make it difficult to replace my vehicle which now has 89,000 miles. Despite living in a zip code in which many lower income service providers live, inflation, especially higher health care expenses, has steadily become a problem.”

Opponents of public pensions say that pensions cost too much, but the state employees’ pension is a cost efficient form of employee compensation that is good for employees, retirees, and the public.

Currently, state pension contributions to the state employee pension fund are 0.046 percent of the entire state budget. Raising the state contribution rate to 10 percent of payroll would increase the share only to 0.065 percent.

In a broadcast urging all members to participate in pension increase call-in, TSEU told members, “(The passage of HB 2395) will ensure a healthy, fully funded pension fund for all current and retired state employees and bring us closer to winning a cost of living raise for all current state retirees.”