Labor Union Blog

Economic Report:

Falling home prices have bumped up the sales of previously owned homes for the second time in three months. Home resales increased by 2.9 percent in April while the median price for a home dropped by 15 percent. Over the entire third quarter the drop in home prices was 7.1 percent in comparison to the fourth quarter drop of 8.3 percent.

Another state is considering job cuts to fill a budget hole. Jesse Russell reports:

Seven hundred seventeen workers could lose their jobs in Tennessee as Governor Phil Bredesen seeks ways to plug a $750 million budget gap. In addition to those jobs, the governor would cut 656 vacant positions. The eliminations are projected to save the state $30 million. According to the Governor’s office, a previous proposal to slash 2,000 state workers was reduced thanks to the state receiving $4.5 billion in federal stimulus dollars. Only 70 percent of the budget hole will be plugged by the federal funds due to restrictions on the money. State workers facing layoffs will be offered a severance package that includes two years of tuition assistance.

By Doug Çunningham

SEIU’s United Healthcare Workers West is suing to stop California budget cuts it says could force people needing home health care services out of their homes and into nursing homes. The lawsuit seeks an injunction stopping the budget cuts scheduled to happen July 1st. Wednesday hundreds of home health care workers protested the cuts at the governor’s Fresno offices.

By Doug Cunningham

A GM bankruptcy is all but certain after bond debt holders refused to trade debt for GM stock. UAW workers were voting Wednesday on the tentative agreement on labor concessions reached with GM. The UAW says it won’t comment on a possible GM bankruptcy, but if GM files the union will do all in it power to protect the contractual benefits of its members – both active and retired. The UAW says the labor concessions agreement makes no changes in pension benefits. The Wall Street Journal, citing the UAW as its source, reports that the government is ready to provide “massive additional funding” to avoid a GM liquidation. As things stand now the UAW will get 17.5 percent of GM stock to be held for the union’s retiree health care trust fund. The federal government is set to emerge with as much as 70 percent of GM stock. GM has gotten $19.4 billion in federal money so far. As much as $30 billion more may be provided. David Cole of the Center For Automotive Research says if a GM bankruptcy isn’t a smooth structured one it has the potential to trigger cascading bankruptcies throughout the auto supply sector. And that could bring down Ford. Cole says it could trigger a depression. GM’s board meets this week and a bankruptcy filing could come as soon as Monday.

Andrea Buffa is the communications and policy specialist for the Labor Center at the University of California-Berkeley. This is a cross-post from California Progress Report.

The Employee Free Choice Act, legislation to reform America’s labor laws to strengthen workers’ right to choose a union, may be headed for a vote in the U.S. Senate as early as June or July. Labor unions had hoped for the legislation’s quick passage by a House and Senate controlled by the Democratic Party, but business trade associations and lobby groups have strenuously objected to the bill and have received backing from Republican legislators as well as some moderate Democrats.

The business community’s campaign against the Employee Free Choice Act has not pulled any punches—the U.S. Chamber of Commerce representative claimed that passage of the bill would amount to “Armageddon.” But recently a number of California academics have made an attempt to inject some substance into the sea of rhetoric. They have contributed essays to a new report called “Academics on Employee Free Choice: Multidisciplinary Approaches to Labor Law Reform,” in which they discuss in depth and with attention to facts and details such issues as problems with current U.S. labor law; the potential impact of labor law reform on the economy; and how unionization would impact such industries as the long-term care sector.

The report was edited by John Logan, research director at the UC Berkeley Center for Labor Research and Education, and its authors hail from UC Berkeley, UC Davis, University of Southern California, UC Irvine, UCLA, UC Santa Barbara, UC Santa Cruz, UC Riverside and Occidental College. It is introduced by Robert Reich, professor of public policy at UC Berkeley and former secretary of labor.

In his introduction, Reich writes about how the Employee Free Choice Act could benefit the U.S. economy, especially during this current economic crisis. The way to get the economy back on track, Reich argues, is to boost the purchasing power of the middle class. One major way to do this is to expand the percentage of working Americans in unions….According to the Department of Labor, workers in unions earn 30 percent higher wages—taking home $863 a week, compared with $663 for the typical nonunion worker—and are 59 percent more likely to have employer-provided health insurance than their nonunion counterparts, he says.

One essay in the report that is sure to stir some interest among opponents of the Employee Free Choice Act is called “The Business Case for Employee Free Choice.” It’s written by Paul Adler, professor of management and organization at the Marshall School of Business, University of Southern California, and Donald Palmer, associate dean and professor of management at the University of California, Davis, Graduate School of Management. They write that despite the business community’s general hostility toward labor law reform, the Employee Free Choice Act could actually be beneficial for businesses. For example, they say that because of union wages being higher than nonunion wages for comparable jobs, union firms are able to exercise greater selectivity in the workers they hire, so the firms end up with a higher-quality workforce. According to Adler and Palmer:

The higher wages lead to lower turnover, which allows the businesses to avoid huge wasteful expenses in recruiting, selecting and training people to replace departed workers. The lower turnover in turn makes it economically rational for a firm to invest in worker training, which makes the workforce more productive.

Another author, UC Irvine law professor Catherine Fisk, addresses the issue of first contract arbitration, an aspect of the Employee Free Choice Act that’s received little attention compared to the attention that’s been lavished on the bill’s majority sign-up provision. Fisk writes about the interest arbitration provision, which would provide for neutral third-party involvement to resolve bargaining disputes when there’s a failure by employers and employees who want a union to bargain a first contract. According to Fisk, the arbitration provision would fill a glaring hole in current labor law, under which nearly half of all newly certified unions fail to reach a collective bargaining agreement.

Fisk writes:

What that means is that now the law allows employers to defy the law with impunity and thus deprive nearly half of all newly unionized employees of their right to bargain collectively.

To read these essays and others, download the full report here.

Profits at 10 of the country’s largest publicly traded health insurance companies rose 428 percent from 2000 to 2007, while consumers paid more for less coverage. One of the major reasons, according to a new study, is the growing lack of competition in the private health insurance industry that has led to near monopoly conditions in many markets.

The report says such conditions warrant a Justice Department investigation and, says Sen. Charles Schumer (D-N.Y.), provide compelling evidence of the need for a public health insurance plan option as part of the health care reform initiative President Obama and Congress are developing.

Schumer says the report from Health Care for America Now! (HCAN)

is the starkest evidence yet that the private health care insurance market is in bad need of some healthy competition. A public health insurance option is critical to ensure the greatest amount of choice possible for consumers.

According to the recently released HCAN report, “Premiums Soaring in Consolidated Health Insurance Market“:

In the past 13 years, more than 400 corporate mergers have involved health insurers, and a small number of companies now dominate local markets but haven’t delivered on promises of increased efficiency. According to the American Medical Association, 94 percent of insurance markets in the United States are now highly concentrated, and insurers are thriving in the anti-competitive marketplace, raking in enormous profits and paying out huge CEO salaries.

These mergers and consolidations have created a marketplace where a small number of larger companies use their power to raise premiums—an average of 87 percent over the past six years—restrict and reduce benefit packages and control and cut provider payments.

In a letter to the Department of Justice’s Anti-Trust Division, Richard Kirsch, HCAN national campaign manager, and David Balto, former policy director of the Federal Trade Commission and now senior fellow at the Center for American Progress, write:

Simply put, the private insurance companies have secured monopolies or tight oligopolies and exercised that power to put profits ahead of patients….There were no actions taken against anticompetitive conduct by health insurers in the last administration, in spite of the fact that cases by state attorneys general have secured massive fines against these insurers. A lack of antitrust enforcement has enabled insurers to acquire dominant positions in almost every metropolitan market.

They ask for an investigation of the already consummated mergers that “harm competition or create an anticompetitive market structure.” They also urge the Justice Department to conduct investigations of “anticompetitive conduct by dominant insurance companies and challenge that conduct where appropriate.”

Many dominant insurers limit the ability of providers to choose rival insurers or inform patients about more efficient and comprehensive coverage. The DOJ should investigate tools used to stifle competition such as physician gag clauses, most favored nations provisions, all-products clauses, and silent networks, which prevent providers and consumers from having the full range of competitive alternatives.

Schumer last week co-sponsored a Senate resolution urging the creation of a public health plan option and says a public health plan “is critical to ensure the greatest amount of choice possible for consumers.”

We believe that it is fully possible to create a public health insurance plan that delivers all the benefits of increased competition without relying on unfair, built-in advantages. If a level playing field exists, then private insurers will have to compete based on quality of care and pricing, instead of just competing for the healthiest consumers.

Click here for a copy of the full report.

Tell us what you think should be included in comprehensive health care reform. Take the 2009 Health Care for America Survey. The survey gives you the opportunity to make your voice heard and helps shape health care reform to meet the needs of working families.

If you sign up to join a union, you won’t face coercion or intimidation from your co-workers—or employers. Despite dire warnings by corporations against the majority sign-up process, a new study shows majority sign-up (card-check) protects workers and gives them the chance they need to form a union. It’s another critical point in favor of the Employee Free Choice Act, which would give workers across the country the choice about how to form a union and bargain for a better life.

The study, “Majority Authorizations and Union Organizing in the Public Sector: A Four-State Perspective,” written by top labor policy scholars under the direction of Robert Bruno of the University of Illinois, looks at the experience of four states (New York, New Jersey, Illinois and Oregon) where public-sector workers have the freedom to form unions through majority sign-up. If passed, the Employee Free Choice Act would give millions of workers the option of using either majority sign-up or a National Labor Relations Board election to form a union.

The study finds that since 2003, more than 34,000 public-sector workers have successfully formed unions through majority sign-up, without either coercion from their employers or their co-workers.

The study unambiguously revealed that the majority sign-up provision was used extensively without hint of union or employer abuse…contrary to business claims, in 1,073 cases of union certification and in at least 1,359 majority-authorization campaigns, there was not a single confirmed incident of union misconduct.

Workers who successfully used majority sign-up included nurses, nuclear safety policy analysts, custodians and others across a variety of job sectors.

The experience of these workers is a sharp contrast to workers trying to form unions under the broken private-sector system, where management controls the process and can interfere with impunity. In 2007 alone, nearly 30,000 workers were the victims of unfair practices or even illegal firings while trying to form unions.

Scholars at four universities participated in the study: the University of Illinois, Rutgers University, Cornell University and the University of Oregon. It’s an extension of Bruno’s earlier study that looked at majority sign-up in Illinois.

The researchers conclude:

New York, New Jersey, Illinois and Oregon have demonstrated that a majority authorization petition can genuinely determine the will of the employees to be unionized and provides a functional, largely non-adversarial and event-less process for insuring a fair work environment for everyone.

Workers need the freedom to form unions and bargain to get a fair share of the prosperity they create. It’s good for workers and it’s good for the economy. This landmark study demonstrates once again that workers—not their bosses—should get to choose how to form a union.