Items in the news: Three examples of labor unions behaving badly

By James H. Shott

Private sector labor unions have all-time low membership, which results from the fact that workers see a relatively low value in belonging to a union. Despite the lack of necessity for their continued efforts on the part of employees, unions nevertheless continue interceding to “improve” conditions that are already good enough for the vast majority of workers, a condition which threatens the continued existence of unions and thus threatens their leaders’ political influence and high pay levels.

The total compensation of some labor leaders places them firmly among President Barack Obama’s 1 percent of people making more than the $250,000 threshold that he believes should pay higher taxes, such as: AFL-CIO President Richard Trumka – $293,750; United Food and Commercial Workers President Joseph Hansen – $361,124; National Education Association President Dennis Van Roekel – $460,060; and American Federation of State, County & Municipal Employees President Gerald McEntee – $512,489.

In our still mostly-free country, if workers want to join a union they certainly may do so. But when you look closely, you see much union activity that does more harm than good, except for the relatively few workers that gain excessive benefits that hurt the businesses they work for and, of course, union leadership and the politicians with whom they are incestuously involved.

In one example from Thanksgiving week, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union was a party in a dispute that resulted in the closing of Hostess Brands, an 85 year-old company that made Wonder Bread, Twinkies, and 28 other products.

The company had 372 separate bargaining contracts for workers, 42 multiemployer pension plans, 5,500 separate delivery routes and a vast production system.

Hostess has had financial problems for several years and had previously gotten concessions from the 12 different unions that represent its workers, but in this last round the Bakery Workers, which represents about 5,000 employees, refused concessions, even after management said if concessions were not accepted, the company would shut down.

The union claims that vulture capitalists sucked out hundreds of millions of dollars by leveraging up the company, and that management had given itself millions in pay raises while demanding worker cuts.

Actually, Ripplewood Holdings injected $150 million in three rounds of investment as the company’s troubles grew, and lost every dollar. The raises were a tiny portion of the company’s losses of nearly $500,000,000 in two years, but Ripplewood rescinded the raises and made each executive work for a dollar per year.

Hostess paid out almost $100 million in health benefits for retirees last year, but over half of it covered workers who never had worked at Hostess. You see, the Teamsters’ “multi-employer pension plan” transfers the pension obligations of a bankrupt company to surviving rivals, speeding up the collapse of troubled companies.

Union rules designed to create more union jobs forced Hostess to run separate truck fleets for delivering bread and its sweet products. Instead of one driver delivering to each of Hostess’ thousands of customers, union rules required two, one for sweets and one for bread. Union restrictions on distribution routes made it unprofitable to serve tiny outlets, yet the union barred Hostess from using non-union distributors.

Workers were asked to take an 8 percent pay cut and pay 17 percent of their health-care costs, like most other workers do, instead of zero. In return, the union would have received 25 percent ownership of Hostess plus $100 million of debt to be paid back to the unions.

Instead, the union made a decision that closed the company, and nearly 18,500 workers will lose their jobs as the company shuts 33 bakeries and 565 distribution centers, and 570 outlet stores.

And then there is the Service Employees International Union (SEIU) that was voted out at Aviation Safeguards at Los Angeles International Airport by company workers who wanted out of the SEIU. In response the union brought in 1,000 members who weren’t employees of the company to block entrances to the airport, inconveniencing hundreds of innocent travelers.

“We petitioned to leave the SEIU almost a year ago, and the contract ended,” Frederick McNeil of Aviation Safeguards said. “And now they’re bringing in outsiders to block travelers who are just trying to get home for the holidays. It’s ridiculous.”

The United Food and Commercial Workers organized Black Friday protests against Wal-Mart, and the National Labor Relations Board refused to respond in a timely manner to a Nov. 17 Wal-Mart petition to prohibit the protest, saying the request would be dealt with the week after Thanksgiving.

Relatively few Wal-Mart employees participated, and one protester carried a sign that said: “I’m getting paid $5.50 an hour by the union to protest Wal-Mart paying $9.50 an hour.”

In the 1920s renowned union leader Samuel Gompers was asked what organized labor wanted, and reportedly answered, “More,” a philosophy that endures today. Unions raise employee costs beyond the competitive level, increasing prices to consumers and putting negative economic pressure on businesses. If unions are to survive, they must cease being enemies of business and become partners with them, working for the mutual success of companies and their workers.

Cross-posted from Observations

Will a unionized hospital provide better care for local patients?

Commentary by James H. Shott

A recent news article focused on a possible labor union drive at Bluefield Regional Medical Center, but furnished few details. That’s because neither the hospital nor the union(s) were talking.

It is difficult to imagine that unionizing any of BRMC’s departments will help its patients, and there is evidence that unionized hospitals not infrequently have serious problems. This cloak of secrecy does nothing to answer the public’s questions about what is going on.

Labor unions are not inherently bad. They were once the major factor in balancing the employee/employer relationship at a time when workers were often treated badly. However, since government stepped in and enacted laws regulating the workplace, there isn’t much for unions to do along those lines. Instead, they now negotiate benefits for workers, like higher wages, shorter hours, and worker-friendly work rules.

Union members know how to do their jobs, but the unions to which they belong know very little about running the businesses in which they organize workers, or just aren’t concerned about it. They could be valuable partners in those businesses, contributing to the success of the organization so that everyone benefits, but they seldom are. Most often they are adversaries of management, instead. Thus when unions negotiate perks for their members, businesses must make changes to accommodate these perks that inevitably increase the company’s costs and modes of operation, making the business less efficient and less competitive against non-unionized companies.

Some of the most damaging aspects of a union workforce are the work rules unions insist on, many of which defy common sense and good management practices. Some examples:

1) A repair crew that consisted of an electrician, a plumber/pipefitter, a carpenter and a crew leader were controlled by a work rule dictating that if the crew was sent on a job that had an electrical problem, for example, only the electrician could work on it. If he needed help, for even the most basic forms of assistance not requiring specialized knowledge or training, a second repair crew had to be called in, meaning that eight people were on a job that required only one electrician and someone to assist, and perhaps a crew leader.

2) A common problem is that when layoffs become necessary work rules that determine who gets laid off and who doesn’t favor seniority. It’s not about who does the best work, but who’s had the job the longest.

3) One work rule required all members of an 18-person crew to be present before the crew could work. If one person called in sick the crew couldn’t work, but still got paid. This rule allowed – even encouraged – abuse, and crew members set up a revolving schedule to call in sick.

Private sector union membership has fallen dramatically, from 24 percent in 1973 to less than 7 percent in 2011. However, union membership in hospitals has increased by nearly one-third in the last decade. Along with the increased membership is a huge increase in hospital strikes. The Federal Mediation and Conciliation Service reports that from 2009 to 2010 hospital strikes increased by 70 percent and from 2010 to 2011 that number rose by an additional 73 percent, producing an increase in the number of strike days from less than 800 days in 2009 to more than 1,000 days last year.

What does a hospital do when caregivers walk out? It hires temporary caregivers, and these people are unfamiliar not only with current patients, some of whom are critically ill, but also hospital procedures. In the case of a California strike 23,000 hospital workers walked out. Is it possible to hire 23,000 replacement workers on short notice without at the very least a high potential for mistakes? Did all of those replacements have the same or higher skill level as the strikers?

An article by Capital Research Center’s Matthew Vadum reports: “A major 30-year study found that strikes are, in fact, deadly. Jonathan Gruber of MIT and Samuel Kleiner of Carnegie Mellon University studied strikes by New York State nurses between 1984 and 2004. After controlling for factors like patient demographics and disease severity, they found that ‘nurse’s strikes increase in-hospital mortality by 19.4 percent and 30-day readmission by 6.5 percent for patients admitted during a strike.’”

“Strikes are extremely costly,” he went on to say. “Hospitals must pay replacement nurses and additional security, while losing business, as patients opt for other hospitals. Last year’s strike by 600 D.C. nurses, for example, cost the hospital $6 million.” Commenting on a strike by 12,000 Minnesota nurses, he said it cost “about $46 million for substitute nurses,” almost half of which was for a day of mandatory orientation.

Once ensconced, unions pursue their own narrow goals, while employers are often held hostage to demands that are one-sided and often excessive. In the case of a hospital, this scenario has little potential for a positive result.

At the very least we can expect a successful union drive at BRMC to increase costs, and therefore requests for rate increases.

And if the union drive is successful at BRMC, it is likely that unions will attempt to organize other regional facilities.

Cross-posted from Observations

Wisconsin recall debacle casts negative light on labor unions

 

Commentary by James H. Shott

Wisconsin’s Republican Governor Scott Walker and Lieutenant Governor Rebecca Kleefisch, and three of four Republican state senators won the election last week against a public sector labor union-fueled recall movement.

Walker and Kleefisch both won handily against Democrat opponents, 53-46 percent and 53-47 percent, respectively, approximately the same margin by which Barack Obama won the presidency in 2008.

It was a much bigger victory, however, than some news outlets would have you believe. [begin ital] The New York Times [end ital] and [begin ital] The Washington Post, [end ital] for example, said Gov. Walker “survives” recall, as if he won by a point or even a single vote. Some media called Mr. Obama’s 2008 seven-point victory a landslide, but with a seven-point victory, Gov. Walker merely “survived.” Six- or seven-point margins are solid wins, but not landslides, even when Mr. Obama is the winner.

At the root of this upheaval was Wisconsin’s adoption last year of sweeping reforms that curbed collective bargaining rights among government workers, brought the state’s pension system into line with private sector pension systems, and empowered public sector workers to choose whether or not to pay union dues. This bill was passed to save Wisconsin some $30 million in the 2011 fiscal year, helping to reduce a substantial budget deficit.

This was an exercise in union excess. The fact that Scott Walker won the General Election and did what he promised to do in the campaign is not sufficient reason to demand a recall. Given the frequency with which campaign promises are forgotten after the election, one could make a case that the Governor’s performance is reason for celebration.

And speaking of his performance, it has been pretty good.

When he took office on January 3, 2011 the labor force was 3,068,342 strong, 2,828,816 people were working, 239,526 were unemployed, and the unemployment rate was 7.8 percent, according to the Bureau of Labor Statistics (BLS).

As of April of this year, BLS numbers showed marked improvement: the labor force was about the same at 3,068,900 workers, but 2,863,590 were employed, the number of unemployed had fallen to 205,310, and the unemployment rate was 6.7 percent. Approximately 34,000 of the unemployed had found a job. Is that level of improvement in little more than a year bad, or good?

The recall election is a mechanism designed to remove officials during a term of office, but is not a method intended to undo an election because some political faction is unhappy with the results. The people at-large made their decision, and the union faction did not prevail. Barring some illegal activity by those duly elected, everybody should just take a deep breath and wait until the next election.

The ill-conceived recall cost the state millions of dollars and distracted everyone in state government from doing the work they were elected or hired to do. According to polling data, many Democrat voters recognized that the recall was a bad idea, and voted against it because they disagreed with the recall movement more than they disagreed with Gov. Walker’s performance.

This effort is a black eye on the union, conjuring up images of children stamping their feet when they don’t get their way. It epitomizes what is wrong with labor unions, particularly public sector unions: excess.

There is nothing inherently wrong with organized labor, and indeed, there were very good reasons for labor to organize in the past. However, labor law has evolved to a point where laws now mostly control the relationship between employers and employees, eliminating the abuses that were the reason for unions to have originated. Unions simply are no longer needed to protect workers from abuse, and they now focus not on a safe and fair work environment, but on pay levels that are higher than market value and special perks, all of which boost costs for employers.

And that is particularly so in the case of public sector unions. Since government determines the labor climate and is the arbiter of labor disputes, to have a union representing government workers against the government is totally nonsensical.

The problem posed by the Wisconsin recall madness is far less the responsibility of rank and file union members, many of whom have no choice whether to join a union or not, than of union leadership – which uses political donations and pressure to gain excessive pay, benefits and special perks for members – and the politicians who were more responsive to the lure of financial support and votes than to their responsibility to the taxpayers for whom they work.

It is not the members’ fault if they have an unrealistic level of job perks, and they do feel they are treated unfairly when someone wants to take something away from them. Their position is understandable, even if their level of protest is not.

But the reality is that the level of pay and benefits of public employees places an unfair burden on the taxpayers, and has to be fixed to help restore fiscal stability to the state, and Scott Walker’s first responsibility is to all the people of Wisconsin, not the public employee union.

It is the first step in restoring balance to the realm of public employment.

Cross-posted from Observations

SEIU Forms New Political Party in North Carolina

New Political Party Forming in North Carolina
Guess Who Is Behind It
A Commentary by J. D. Longstreet

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In an article entitled: “Unions Now Starting Their Own Political Party,” Warner Todd Huston, at the Canada Free Press, says the following: “Apparently the Democrats in North Carolina aren’t sufficiently leftist enough for the Service Employees International Union (SEIU). It appears that the SEIU, one of the largest and most powerful public employees unions in the nation, don’t have their hand deep enough in the taxpayer’s pockets so it is starting its own political party in the Tar Heel State, by passing the Democrats altogether.” You may read the entire article HERE.

SEIU’s Political party is called “North Carolina First.” It is, in our opinion, a thinly veiled attempt at payback for the three Democrat Congressmen from North Carolina who voted against ObamaCare -- Heath Shuler, Larry Kissell, and my own Congressman, Mike McIntyre.

I am torn between being angry at what has the appearance of an Obama Power play, and being thankful, both at the same time. You may ask the reason for my gratitude. Well, I’ll tell you. The SEIU, with their North Carolina First Party, might very well elect three new Republicans from North Carolina to the US House! If Obama is taking this avenue to punish the NC democratic congressman, who bucked him on ObamaCare, then it may very well backfire and turn out to be a case of “cutting off one’s nose to spite one’s face!”

Tar Heels are not feeling very charitable towards the Democratic Party in NC at the moment. The scandal involving our immediate past Governor has soured a lot of democrats in the state. This power play by the SEIU, which Tar Heel voters associate with the Democratic Party, does absolutely nothing to enhance their image in the eyes of Tar Heel democrats.

North Carolina is a “right to work” state and labor unions are not looked upon very favorable in this state to begin with. And now they do THIS!

My regional newspaper reports that out of the 85,000-registered voter’s signatures they need to get on the ballot in North Carolina, at last count they had 20,000. So, they ARE well on their way. And they are working, hard, at accomplishing their goal.

On the North Carolina First website SEIU says the following: “North Carolina First is on the ground talking to voters. Right now, North Carolina First is gathering signatures to determine whether to qualify as a state party - to give working families the ability to choose a candidate that will fight for their interests - or to identify Congressional candidates who will stay accountable to the needs of working families not Washington's special interests.”
You can visit their website HERE.

SEIU plans to have a slate of candidates ready to run in the Mid-Term Election this coming November.

At “The Plum Line,” Greg Sargent’s blog, he says: “It’s also unclear what kind of cash SEIU national will put into this effort — which will also include SEANC, the state employees’ union — and what this will do to relations between labor and the national Dem establishment. But this challenge appears to be a serious experiment in reshaping the landscape of Democratic politics, and it bears watching.” Read the entire article HERE.

North Carolina politics never fails to be entertaining. The coming democrat blood-letting in the Mid-Term Election in November is shaping up to be another contest ranking right up there with mud wrestling!

J. D. Longstreet