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Crackdown on Organized Labor: States Call for Wage & Benefits Cuts, Urge Laws to Curb Union Influence

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In states across the country, elected officials and right-wing pundits are calling not just for cuts to wages and benefits in the name of austerity, but even proposing laws to undermine labor unions’ influence, and in fact, their very existence. We host a roundtable discussion with New York Times labor reporter Steven Greenhouse; Michael Zweig of the Center for Study of Working Class Life; and Art Levine of the Washington Monthly. [includes rush transcript]

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This is a rush transcript. Copy may not be in its final form.

JUAN GONZALEZ: Today we look at how the recession’s squeeze on state governments will impact the nation’s unions and public sector workers nationwide. In states across the country, elected officials and right-wing pundits are calling not just for cuts to wages and benefits in the name of austerity, but even proposing laws to undermine labor unions’ influence — and, in fact, their very existence.

New census figures released Wednesday show state revenues declined by nearly 31 percent in 2009, a $1.1 trillion loss. Underperforming investments by state pension funds and declining tax revenues were cited as the primary causes for the falling revenues.

Nicholas Johnson, director of the State Fiscal Project at the Center on Budget and Policy Priorities, told the Washington Post that next year will mark, quote, “the most difficult budget year for states ever.” A recent study by the group found that 40 states have projected budget gaps totaling $113 billion for next year. Forty-six states have raised taxes and made deep cuts to close a combined budget gap of $130 billion.

In his first “State of the State address” on Wednesday, the newly inaugurated governor of New York, Andrew Cuomo, declared a fiscal crisis. Pledging to make, quote, New York “a business-friendly state,” Cuomo ruled out additional borrowing to pay down the deficit and called for a one-year freeze on public sector wages.

GOV. ANDREW CUOMO: We have to start with an emergency financial plan to stabilize our finances. We need to hold the line, and we need to institute a wage freeze in the state of New York. We need to hold the line on taxes. We need a state spending cap. And we need to close this $10 billion gap without any borrowing.

JUAN GONZALEZ: A number of other states are facing even greater threats to the public sector. The Ohio governor-elect, John Kasich, wants to ban teachers’ strikes and prevent child care and home care workers from unionizing. Kasich discussed his views on striking and binding arbitration last month.

GOV.-ELECT JOHN KASICH: We’ll come up with a series of changes, but binding arbitration is not acceptable. You are forcing increased taxes on taxpayers, with them having no say, by people who are — come from a faraway place that have no accountability to the taxpayers.

REPORTER: To just make sure I’m clear, you do not think police and fire, emergency services, should have the right to strike.

GOV. JOHN KASICH: I really don’t favor the right to strike of any public employee, OK? That’s my personal philosophy. How practical that is to implement — you know, but my personal philosophy is I don’t like public employees striking. OK? I mean, they’ve got good jobs. They’ve got high pay. They’ve got good benefits, a great retirement. What are they striking for?

AMY GOODMAN: That was Ohio Governor John Kasich.

We’re joined now by Steven Greenhouse, the labor and workplace reporter for the New York Times, the author of the book The Big Squeeze: Tough Times for the American Worker. This week he wrote a piece for the New York Times that begins, quote, “Faced with growing budget deficits and restive taxpayers, elected officials from Maine to Alabama, Ohio to Arizona, are pushing new legislation to limit the power of labor unions, particularly those representing government workers, in collective bargaining and politics.”

Welcome to Democracy Now! Why don’t you take it from there, Steven? Explain what’s happening, this attack on especially public sector unions and workers.

STEVEN GREENHOUSE: So, many states face large budget deficits, and we’re seeing two different strategies by governors and legislators. One is trying to get, you know, public sector unions to agree to wage freezes or to agree to less expensive pensions. Now, with Republicans capturing many, many state houses, many more state houses last November, we’re seeing another thing, where Republican governors — John Kasich in Ohio, Scott Walker in Wisconsin — they’re really taking aim at the unions, not just to get them to trim wages, but to really try to weaken them. And they’re trying to push through real institutional structural changes that will weaken unions long term.

Scott Walker, the new governor, new Republican governor of Wisconsin, has talked about ending the right of state employees to unionize and bargain collectively. Ten seconds of history: the National Labor Relations Act, passed in 1935, protects the right of private sector workers to unionize, and each state kind of decides on its own whether to give government workers the right to unionize. And most states in the Midwest, the Northeast, definitely do that, and many in the South and Southwest do, as well. But it’s unusual that in a labor-friendly or traditionally labor-friendly state like Wisconsin, we’re seeing the new governor wanting to basically strip government workers of collective bargaining rights.

And in Ohio, Kasich is really going to war against the unions. You know, as we just saw, he wants to take away the right to bargain for child care workers and home care workers and end binding arbitration and end teachers’ right to strike. And I interviewed a professor at Ohio State, who said, “Well, if you don’t give public employees the right to strike, you absolutely should give them binding arbitration, to try to maintain some modicum of fairness in the system, because if you can’t strike and you don’t get arbitration, management could really squeeze unions very hard.”

But, you know, even more fundamentally, many people in the union movement are saying that these newly empowered Republicans are really trying to chop labor off at the knees. And they saw last November the nation’s labor unions spending tens of millions, you know, even more than $200, $300 million, trying to elect Democrats. And to the victor goes the spoils. And the Republicans are now trying to spoil life for unions by taking away their right to bargain. They’re also pushing through several — trying to push through several measures that would make it harder for unions to collect dues money to be used in politics or just to run the unions generally. And I say in my story that, really, at the state level, unions are on the defensive more than they’ve been in 20, 30, 40 years. And unions are very alarmed right now about what’s going on.

JUAN GONZALEZ: Steven, especially the attack, obviously, seems focused more on public sector unions, because basically, the private sector union movement has been essentially decimated now for over decades, and there’s really only the public sector unions have managed to maintain significant membership and influence, isn’t it? And here in New York State, for instance, you have the specter now of the head of the buildings trades union joining a so-called new Committee to Save New York that really is targeting the public sector unions. So you may have a civil war within labor itself as some of these private sector unions defect to these business-labor partnerships. Could you talk about that?

STEVEN GREENHOUSE: Yeah. So, the Wall Street Journal had an editorial yesterday saying there’s a new class war — and get this — you know, between public sector workers —- you know, well-paid public sector workers on one side and not-so-well-paid private sector workers on the other side. And, of course, people in labor will say the class war is the folks on Wall Street making a million, two million a year, trying to squeeze private sector workers, trying to squeeze public sector workers. But now we’re seeing some union members, private sector union members, especially in the construction trades, that are really starting -—

JUAN GONZALEZ: Or union leaders, you’re saying.

STEVEN GREENHOUSE: Union leaders, yeah, sorry. Union leaders. And the most notable is the head of the New Jersey state senate, Steve Sweeney, who comes out of the iron workers’ union. And he and Gary LaBarbera here in New York City, head of the construction trades, are kind of critical of public sector unions, saying that they’re earning too much, the pensions are too rich, they’re forcing taxes to be too high, they’re hurting the business climate, they’re making it — you know, they’re discouraging businesses from coming to New York and New Jersey, and that’s discouraging construction, and that’s hurting the number of jobs in the construction trades. So that’s the argument. So, I know the AFL-CIO today is having a big meeting of private sector union leaders and public sector union leaders to try to help prevent this — you know, these tensions from getting worse between, you know, private sector union leaders and public sector union leaders. And many union leaders make the argument that private sector unions have been badly weakened, and now conservatives are trying to weaken the one sector of union movement that’s really quite strong, and that’s the public sector unions.

AMY GOODMAN: We’re going to continue this discussion, but we have to break. Steven Greenhouse, reporter for the New York Times, author of the book The Big Squeeze: Tough Times for the American Worker. This is Democracy Now! Back in a minute.


AMY GOODMAN: Our guest, Steven Greenhouse, reporter for the New York Times and author of the book The Big Squeeze: Tough Times for the American Worker.

Some people have been saying unions should be eliminated entirely from the public sector. This is Steve Forbes, the billionaire magazine owner and former Republican presidential candidate. He was interviewed on the Fox Business channel.

DAVID ASMAN: I’m going to really put your feet to the fire here. Should we outlaw public sector unions?

STEVE FORBES: We should do away with them. And —


STEVE FORBES: Well, why not? I mean, look what’s happened. And this does not mean you’re taking things away. As a matter of fact, if you properly start to reserve for these pensions, people who actually get a job in the public sector know that this is pretty good security. A lot of those people are going to discover they’re not going to get the pension they were promised. They’re going to get layoffs where they thought they weren’t going to get layoffs. So they’re going to end up, “What did I get for these big promises?”

DAVID ASMAN: OK, but the question is, has the genie been let out of the bottle? Now that we have public sector unions, even though FDR had qualms about them, JFK did every —

STEVE FORBES: No, realistically, politically, they’re not going to go. But there are a lot of things you can do, David. You don’t have to ban them or anything like that. For example, dues. You have — they should have a law, making it very explicit, you have to give permission to use your dues for political purposes. They have to give better accounting. You start doing things — or you don’t have to join a union, right, to work? Boy.

AMY GOODMAN: Republican lawmakers in at least 10 states plan to introduce legislation that would bar private sector unions from forcing workers they represent to pay dues or fees. This is Luann Ridgeway, a Republican state senator from Missouri also speaking on Fox News recently.

STATE SEN. LUANN RIDGEWAY: In Missouri, the bill that I’m working on right now would simply say that we want to work to save jobs in Missouri and also expand our job base in Missouri, by saying that no worker should be forced to join a union. In other words, a good job should never be held ransom for the price of union dues.

What we’re trying to get to is to get Missouri on the map as a place where businesses want to be and where that they would like to locate. National-siting corporations, frankly, they’re taking a look at Missouri and saying, “Are you a right-to-work state or are you a forced-union state?” And as soon as they see that we are forced-union state, our applications, as a general rule, go on the ash heap. And the other states that are right-to-work states, where they have a freedom to join or not join a union, they’re going to the top of the list. We’re losing out. And that means our people, our workers, our jobs are losing out. And that’s just not workable.

AMY GOODMAN: That was Luann Ridgeway, Republican state senator from Missouri, speaking on Fox News.

In addition to Steven Greenhouse, reporter for the New York Times, we’re joined by Michael Zweig, professor of economics and director of the Center for Study of Working Class Life at the State University of New York, Stony Brook, author of What’s Class Got to Do with It? and The Working Class Majority: America’s Best Kept Secret. Juan?

JUAN GONZALEZ: Well, Michael, I’d like to ask you, there’s this one-two punch that Steve was describing. The right-hand punch is destroy the unions altogether. The left hand punch is, well, these pensions and these other things are too costly for us right now, so we’re not going to destroy the unions, but you’re going to have to give up a lot of this stuff. Your reaction?

MICHAEL ZWEIG: Well, you know, I think there’s some idea that this is just an inevitable matter of arithmetic. Joe Scarborough the other day on Morning Joe said, “There’s nothing ideological about this, because, look, we have liberals doing this, like Cuomo and Jerry Brown out in California; we have conservatives, like Kasich. So there’s really no ideological content to any of this attack on labor. It’s just, look, there’s no money.” And I think that that’s just completely wrong.

There is, of course, an ideological content to it, which is a long story, a long history in the United States, of capital and the corporate power resisting anything that labor needs, anything that labor wants. And in the New Deal, in the Depression, working people won a lot, and the business community never reconciled to that and has consistently attacked, first the private sector unions, because at the beginning of this story, in the '40s, ’50s, ’60s, there were no public sector unions. Public sector unions started organizing only in the 1960s. So now that the public sector is the majority of unions in this country — and the overall union membership has declined significantly, from 35 percent in the 1950s, 25 percent of workers and unions in the 1970s, and now it's 12 percent, and the majority of those are now in the public sector — the attack on anything having to do with worker rights is now focused on public sector unions.

JUAN GONZALEZ: And isn’t it true also — because I’m old enough to remember that in the old days, 20, 30 years ago, pension funds, which were supposedly holding the money for the retirees that had already been paid into a system, were largely invested in safe securities, in bonds — you know, it was usually two-thirds in bonds, one-third in the stock market. But over the years, as governments reduced their pension contributions, they encouraged these funds more and more to invest in the stock market. So, precisely when the market crashes, all these pension funds, because now they are overwhelmingly exposed to the equities market, now suddenly find — reporting historic losses now in the pension funds that now have to be made up. So you’ve got the very politicians who pushed moving these pension funds into the equities market are now having to deal with the consequences, but they want the workers to pay for it.

MICHAEL ZWEIG: But they want the workers to pay for it. And the pension funds got built up as a substitute for direct wages. So, it’s not like these pension funds were on top of what the workers were getting and just icing on the cake. It was what was the very basic condition of work, which is, when you’re finished working, you need to be able to live. You know, the old saying, “You’re too old to work, but you’re too young to die.” What happens in that period? The labor movement historically has fought for those pensions, and those pensions have been given in trade-offs against current wages. And so, what happened was that states contributed to those problems in the way you’ve described, but also they contributed because they just simply didn’t fund the pension obligations that they had, thinking that that’s somebody else’s problem — the old kick the can down the road. And here we are, and now all of a sudden it’s the workers’ fault. And it’s just an outrage.

AMY GOODMAN: What’s the danger of not having public unions represent workers?

MICHAEL ZWEIG: The danger is that the workforce is shrunk. It is — it suffers. And, for example, if you shrink what goes on in Medicare and Medicaid, which is a big-ticket item, and they want to — Governor Cuomo here in New York was talking about, we have to do something about these Medicaid expenses — cut them, cut them, cut them. Well, Medicaid is only for the poor, but if you cut those expenses for the poor, they’re still going to show up in the hospital. So, what’s going to happen is the hospital is going to have to divert resources, which would otherwise have gone to the general population, in order to deal with the poor people who are walking in, unless they’re just going to let them die on the street in front of the hospital, which we don’t want. And so, you have a situation in which if you have public sector workers stripped of their capacity to have unions and to protect themselves, their living standards will decline, the public services that people get will decline, and that’s the whole idea. This is — that’s the agenda. This is not just a matter of arithmetic.

JUAN GONZALEZ: I wanted to ask Steve about this potential battle, you were talking about, the AFL-CIO is trying to now resolve between private and public sector unions. When Andrew Cuomo was inaugurated yesterday, he also announced that he is forming a committee to reform Medicaid reimbursements, because that’s one of the huge portions of the state expenditures. And he named Dennis Rivera from SEIU and George Gresham from 1199 to that committee with the other business folks. There’s a fear there that what’s going happen is that SEIU, which is basically in New York representing private sector hospital workers, will arrange a deal with the Governor and sacrifice the public sector hospital workers, those who work in the Health and Hospitals Corporation, who represent DC 37, who are represented by AFSCME. Any sense of how this may play out in healthcare, not just between construction, trades and some of the other government workers?

STEVEN GREENHOUSE: It’s clear, Juan, that Cuomo is fairly close to 1199SEIU, and he’s kind of at war with the AFSCME government workers’ unions. And it won’t be surprising if — you know, with the heads of 1199 working with him on finding ways to trim Medicaid costs, that maybe the 1199 private sector healthcare workers will come out better than, you know, the AFSCME healthcare workers.

I wanted to say one or two things about pensions. You know, there are a lot of government workers who retire with pensions of, you know, $30,000, and it’s hard to say that that’s extravagant. But there are also public sector workers who retire with — you know, the famous stories of the California state troopers who retire with pensions of over $100,000. And, you know, some people on the left will say, “Nothing’s wrong with the pension system. Don’t touch it.” And some people on the right will say, “Everything’s wrong with the pension system. Public sector pension system is far too generous.”

And, you know, I’d gone to my high school reunion in Massapequa, Long Island, a few months ago and saw — there were all these friends of mine who were recently retired teachers of age 58. And they worked their 35 years, and they were getting pensions of like $80,000 a year. And if they live another 25 years, that’s $2 million. And I think, “Wow, $80,000 a year, that’s more than many New York Times reporters make.” And I can imagine, you know, the struggling janitors in New York who are making $25,000, $30,000 a year who say, “This teacher has a pension of $80,000 a year, and I’m busting my hump earning $25,000, $30,000 a year.” And I think, you know, there’s this tension now where, you know, I think some private sector union leaders are feeling some upset among their rank and file, say, you know, “Why should we pay higher taxes to finance these generous pensions?” So, you know, it all comes down — and I’m sure that the teachers who have pensions of $80,000 are saying, “Well, the real problem isn’t our pensions. The real problem is Wall Street, and Wall Street caused the recession. And had stock prices not plummeted and had the governors of New Jersey continued paying into the pension fund rather than skipping payments for like 10 years, you know, there wouldn’t be this crisis in pensions.” So, they’ll say, “The problem isn’t us, the unions. The problem is the Wall Street-caused recession, falling stock prices, and, you know, governors who didn’t bother to make the proper payments.” But, you know, there are lot of equities involved.

AMY GOODMAN: I wanted to bring one more person into this conversation: Art Levine, who is a contributing editor at Washington Monthly.

Art, you’ve written a piece about a secret plan to bankrupt states and bust political employee unions. Explain what it is.

ART LEVINE: Yes. Well, what I wrote about — and I credited James Pethokukis of Reuters for breaking the story in early December, but I aimed to broaden its scope — is, what it is is there was a very vital part of the original stimulus plan that was called the Build America Bonds program, and it actually subsidized states so they could issue bonds for really vital building projects. And $179 billion worth of projects, from bridges and some schools and things, were built in part by states being able to raise money for these projects. And the interest that they were paying to investors was subsidized by a federal program. That program was killed.

Now, that is part — and what’s happening is, among — in Republican circles, Newt Gingrich and the Weekly Standard, there’s — states currently, in general, can’t declare bankruptcy, but there’s a growing interest. And Gingrich has spoken about this in a speech, and the Weekly Standard has ballyhooed this, and there’s likely to be legislation at a federal level allowing states to declare bankruptcy. And if they did declare bankruptcy, that would give, then — under the bankruptcy court, they could rewrite all the union contracts. And it would be part of another way of going after unions.

I wanted to add one point to the earlier discussion on pensions. Yes, there are high pensions. But AFSCME points out, and I think it’s worth noting, yes, there are high pensions, but on average, their average worker gets a $19,000-a-year pension, on average, and has a salary of $43,000. Now, I also agree with the professor that some of these exorbitant things, that you ought to look at. But we need to keep this in context.

So, I think part of the issue to understand, as well, is, is that this threat to public employee unions, which is taking place at the state level legally, but also could be happening on the federal level, as well, is aimed to be a body blow to the American labor movement, which is, if that happens, it takes away the primary organizational force against corporate power and abuses in this country. And that’s the broader significance. Plus, if you depress the wages, like if Kasich gets away with lowering the wages and borrowing — preventing home care and day care workers from organizing, imagine how low that will drive down the private sector. And so, all of that sort of helps bring down a race to the bottom, of which this public sector attack is part of a broader strategy, and we could end up all, you know, in 20 years from now, like the Northern Marianas Islands, you know, what we saw with Jack Abramoff is representing, where you have just a free fire zone attacking workers’ rights.

JUAN GONZALEZ: Well, New Jersey Governor Chris Christie has been one of the harshest critics of teachers’ unions. He has called on teachers to voluntarily agree to a one-year wage freeze and to contribute a percentage of their salary to cover their health insurance. This is some of what he had to say on the issue last week.

GOV. CHRIS CHRISTIE: I asked the School Boards Association and the state teachers’ union to get together and to agree on a one-year pay freeze, that if teachers across the entire state of New Jersey, led by their unions, would agree to a one-year freeze in pay and contribute one-and-a-half percent of their salary to their health benefit costs, that the $820 million state aid that we had to cut this year because of the billion-dollar reduction in federal aid to education that we got in New Jersey would be wiped out almost entirely.

I want to believe the teachers’ union when they put all those commercials on TV and say it’s about the kids. Well, here’s the test. See, it’s easy to say it’s about the kids when people are showering four and five percent raises on you every year. It’s easy to say it’s about the kids when you’re getting 100 percent of your medical benefits paid for by the public, as is happening here in Ramsey and all over the state for the teachers’ union. When you’re getting everything you want, it’s easy to say it’s for the kids. Now we’ve reached the moment where the till is empty. And we have to see, what are they going to do? Are they going to say, “No, we want our raises. We want our health benefits fully paid for? And to hell with our colleagues who will get laid off”?

AMY GOODMAN: That was New Jersey governor Chris Christie. Michael Zweig?

MICHAEL ZWEIG: “The till is empty” is the key to this wedge of an argument, which, as we just heard, is also about just driving labor standards down so there’s no defense against corporate power. The till is not empty. There is a new campaign in the United States called the National — let me see that, I had it written down, I’m sorry.

JUAN GONZALEZ: National Priorities?

MICHAEL ZWEIG: New Priorities Network. And the people can go to. It’s 45 organizations around the country. And the point of it is — labor organizations, education, students, peace organizations — to change the priorities of the country and move the money. We don’t want to hear that there’s no money. There’s $100 billion this year going to Afghanistan and $160 billion total including Iraq. There’s lots of money. There’s money in the top echelons of the American corporate elite in their income taxes, in the stock transfer tax here in New York. There’s a lot of money, which if we had different priorities, we could redirect that money to social purposes. But the idea that the till is empty is exactly what we have to come back and say, “It is not empty. The country has tremendous wealth. We just have to have a political process and political power to redirect that. And that’s what this National Priorities network is about.

AMY GOODMAN: We’re going to have to leave it there. I want to thank you all for being with —- you have 10 seconds -—


AMY GOODMAN: — Steven Greenhouse.

STEVEN GREENHOUSE: So, unions are now pushing a new line, saying we have to engage in shared sacrifice. If you’re going to ask the unions to accept a wage freeze, well, then you have to think about raising taxes on those making more than $250,000 a year in various states. And they say, “Why only, you know, go after us?” You know, there are other sources of funding, of savings.

AMY GOODMAN: We’ll leave it there, Steven Greenhouse, but certainly continue to follow this issue, author of The Big Squeeze, New York Times labor reporter; Michael Zweig, professor at State University of New York at Stony Brook; and Art Levine, contributing editor at Washington Monthly.

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