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“Another Disservice”: The Supreme Court Would Prefer People With Disabilities Receive Care From Disgruntled, Low-Wage, High-Turnover Workers

By a 5-4 decision, the usual conservative Supreme Court majority today struck a blow against public-sector unions by ruling for the petitioners in a case called Harris v. Quinn.  Most of the press coverage focuses on the worrisome implications for collective bargaining. I have little to add in that conversation, significant as it surely is. But I am sorry to see this decision for some more specific reasons, as well.

This particular case unfolds outside my door, in Chicago. Pamela Harris is a direct care worker who sued the state of Illinois over the way it handles collective bargaining arrangements and union dues. My family has used the type of services provided through the Illinois Home Services Program under dispute. My brother-in-law Vincent—who lives with intellectual disabilities and some related health challenges caused by something called fragile X syndrome—receives services every day from unionized direct care workers, in his group home and in his workshop.

With its decision in Harris, the Supreme Court has torpedoed a practical and equitable partnership. People with disabilities could receive the in-home personal assistance they need. The men and women who perform this important work could receive a fair day’s wage for the work they do. Now that arrangement—and the well-being of both groups—is in jeopardy.

Some background on the case: In 2003, the governor of Illinois declared that direct care workers were public employees, because they received much of their pay directly from the state, through its Medicaid program. This made it possible for them to unionize and to engage in collective bargaining with the state of Illinois, which they did by electing to have the Service Employees International Union represent them. The state negotiates with SEIU over what to pay workers, much as it would for any other set of public employees. Home health care workers can choose whether or not to join the union. But even those workers who opt not to join must pay an administrative fee, since they benefit from the higher pay that SEIU negotiates on their behalf. Or at least that’s how it was before Harris and some other workers filed a lawsuit, claiming the obligation was unfair, and the Supreme Court sided with her.

Put aside, for the moment, the debate over union dues and fees. There’s no question that these collective bargaining arrangements are important—or that they’ve made a huge difference. And here’s why they are especially important here. Illinois has traditionally ranked near the very bottom in national rankings of disability services.  Not coincidentally, Illinois has also been subject to nine-figure lawsuits and consent decrees that reflect our troubled history of over-reliance on state institutions in the care of people with disabilities.

Illinois, like most other states, has a history of shamefully under-paying men and women who provide home- and community-based care.  In 2012, the national median wage of personal care aides had declined to $9.57 per hour. Ironically, direct care workers are also extremely likely to be uninsured. According to materials from the Care Campaign, an advocacy group for direct care workers, the average direct-support wage in Illinois is $9.35 per hour.

Governor Pat Quinn, to his great credit, is trying to address both of the above concerns. Rectifying them requires intricate compromises among many stakeholders. The state has an interest in high-quality, economical services that meet its legal obligations to individuals with disabilities.  Direct care workers require minimally decent wages to support themselves and their families.

Individuals with disabilities and their families have a big stake in this, too. They—we–require a stable and motivated group of direct care workers to perform important and difficult work. The alternative is to receive services from a disgruntled, low-wage high-turnover group of workers who are unlikely to provide competent and humane care. We consumers know first-hand why these issues are important. We know our great human debt to the men and women we trust so intimately to support people we love.

Direct care work will never pay particularly well. Yet the partnership under dispute provided a fair and practical mechanism through which workers could bargain for decent wages and working conditions. It’s noteworthy that many of the nation’s most prominent disability rights advocacy organizations signed an amicus brief supporting the state of Illinois in this lawsuit. Most are now very disappointed.

Now that this partnership has been overturned by the Supreme Court, our state, direct care workers, and individuals with disabilities face a difficult choice. Direct caregivers can simply be hired and supervised as traditional public employees. This would deprive individuals with disabilities of the ability to select, supervise, and hire their own caregivers.  We can also shift a cumbersome management burden onto people with disabilities and their families, while depriving direct care workers of the collective bargaining mechanisms they seek. Neither option seems particularly fair or practical for anyone involved.

I lack the expertise to judge the broader ramifications of this case or its legal niceties. I do know that it disserved the people my family and so many others trust every day to care for our loved ones. It disserved us, too.

 

By: Harol Pollack, The Helen Ross Professor of Social Service Administration at the University of Chicago; The New Republic, June 30, 2014

July 1, 2014 Posted by | Collective Bargaining, Supreme Court, Unions | , , , , | Leave a comment

“Don’t Buy It”: The “Paid-What-You’re-Worth” Myth

It’s often assumed that people are paid what they’re worth. According to this logic, minimum wage workers aren’t worth more than the $7.25 an hour they now receive. If they were worth more, they’d earn more. Any attempt to force employers to pay them more will only kill jobs.

According to this same logic, CEOs of big companies are worth their giant compensation packages, now averaging 300 times pay of the typical American worker. They must be worth it or they wouldn’t be paid this much. Any attempt to limit their pay is fruitless because their pay will only take some other form.

“Paid-what-you’re-worth” is a dangerous myth.

Fifty years ago, when General Motors was the largest employer in America, the typical GM worker got paid $35 an hour in today’s dollars. Today, America’s largest employer is Walmart, and the typical Walmart workers earns $8.80 an hour.

Does this mean the typical GM employee a half-century ago was worth four times what today’s typical Walmart employee is worth? Not at all. Yes, that GM worker helped produce cars rather than retail sales. But he wasn’t much better educated or even that much more productive. He often hadn’t graduated from high school. And he worked on a slow-moving assembly line. Today’s Walmart worker is surrounded by digital gadgets — mobile inventory controls, instant checkout devices, retail search engines — making him or her quite productive.

The real difference is the GM worker a half-century ago had a strong union behind him that summoned the collective bargaining power of all autoworkers to get a substantial share of company revenues for its members. And because more than a third of workers across America belonged to a labor union, the bargains those unions struck with employers raised the wages and benefits of non-unionized workers as well. Non-union firms knew they’d be unionized if they didn’t come close to matching the union contracts.

Today’s Walmart workers don’t have a union to negotiate a better deal. They’re on their own. And because fewer than 7 percent of today’s private-sector workers are unionized, non-union employers across America don’t have to match union contracts. This puts unionized firms at a competitive disadvantage. The result has been a race to the bottom.

By the same token, today’s CEOs don’t rake in 300 times the pay of average workers because they’re “worth” it. They get these humongous pay packages because they appoint the compensation committees on their boards that decide executive pay. Or their boards don’t want to be seen by investors as having hired a “second-string” CEO who’s paid less than the CEOs of their major competitors. Either way, the result has been a race to the top.

If you still believe people are paid what they’re worth, take a look at Wall Street bonuses. Last year’s average bonus was up 15 percent over the year before, to more than $164,000. It was the largest average Wall Street bonus since the 2008 financial crisis and the third highest on record, according to New York’s state comptroller. Remember, we’re talking bonuses, above and beyond salaries.

All told, the Street paid out a whopping $26.7 billion in bonuses last year.

Are Wall Street bankers really worth it? Not if you figure in the hidden subsidy flowing to the big Wall Street banks that ever since the bailout of 2008 have been considered too big to fail.

People who park their savings in these banks accept a lower interest rate on deposits or loans than they require from America’s smaller banks. That’s because smaller banks are riskier places to park money. Unlike the big banks, the smaller ones won’t be bailed out if they get into trouble.

This hidden subsidy gives Wall Street banks a competitive advantage over the smaller banks, which means Wall Street makes more money. And as their profits grow, the big banks keep getting bigger.

How large is this hidden subsidy? Two researchers, Kenichi Ueda of the International Monetary Fund and Beatrice Weder di Mauro of the University of Mainz, have calculated it’s about eight tenths of a percentage point.

This may not sound like much but multiply it by the total amount of money parked in the ten biggest Wall Street banks and you get a huge amount — roughly $83 billion a year.

Recall that the Street paid out $26.7 billion in bonuses last year. You don’t have to be a rocket scientist or even a Wall Street banker to see that the hidden subsidy the Wall Street banks enjoy because they’re  too big to fail is about three times what Wall Street paid out in bonuses.

Without the subsidy, no bonus pool.

By the way, the lion’s share of that subsidy ($64 billion a year) goes to the top five banks — JPMorgan, Bank of America, Citigroup, Wells Fargo. and Goldman Sachs. This amount just about equals these banks’ typical annual profits. In other words, take away the subsidy and not only does the bonus pool disappear, but so do all the profits.

The reason Wall Street bankers got fat paychecks plus a total of $26.7 billion in bonuses last year wasn’t because they worked so much harder or were so much more clever or insightful than most other Americans. They cleaned up because they happen to work in institutions — big Wall Street banks — that hold a privileged place in the American political economy.

And why, exactly, do these institutions continue to have such privileges? Why hasn’t Congress used the antitrust laws to cut them down to size so they’re not too big to fail, or at least taxed away their hidden subsidy (which, after all, results from their taxpayer-financed bailout)?

Perhaps it’s because Wall Street also accounts for a large proportion of campaign donations to major candidates for Congress and the presidency of both parties.

America’s low-wage workers don’t have privileged positions. They work very hard — many holding down two or more jobs. But they can’t afford to make major campaign contributions and they have no political clout.

According to the Institute for Policy Studies, the $26.7 billion of bonuses Wall Street banks paid out last year would be enough to more than double the pay of every one of America’s 1,085,000 full-time minimum wage workers.

The remainder of the $83 billion of hidden subsidy going to those same banks would almost be enough to double what the government now provides low-wage workers in the form of wage subsidies under the Earned Income Tax Credit.

But I don’t expect Congress to make these sorts of adjustments any time soon.

The “paid-what-your-worth” argument is fundamentally misleading because it ignores power, overlooks institutions, and disregards politics. As such, it lures the unsuspecting into thinking nothing whatever should be done to change what people are paid, because nothing can be done.

Don’t buy it.

 

By: Robert Reich, The Robert Reich Blog, March 13, 2014

March 15, 2014 Posted by | Big Banks, Unions, Wall Street | , , , , , , | 2 Comments

“An Outsized Voice”: There’s A Big Difference Between Union Money And Koch Money

For dozens of readers, our editorial this morning on the Democratic criticism of the Koch brothers left out something crucial: the big financial muscle of unions in backing liberal politcians.

“As the editors of The Times must know, unions in America far outspend the Kochs in their funding for Democratic candidates,” wrote Yitzhak Klein of Jerusalem wrote in the comments section. “What Harry Reid is doing is cheap demagoguery. Also this editorial.”

Mr. Klein, like many other commenters (some of whom are prominent) has his figures wrong. As the Washington Post and the Center for Responsive Politics recently reported, unions poured about $400 million into the 2012 elections. That almost matched the $407 million raised and spent by the Koch network in that same election cycle.

But think about what those numbers mean. Two brothers, aided by a small and shadowy group of similarly wealthy donors, spent more than millions of union members. The fortunes of just a few people have allowed them an outsized voice, and they are openly trying to use it to turn control of the Senate to Republicans.

The Koch group Americans for Prosperity has also joined the right-wing drive to reduce union rights and membership around the country, with the goal — made explicit at last week’s Conservative Political Action Conference — of muzzling the voice of union members in politics.

The Times has long deplored the vast amount of cash that is polluting politics, whether it comes from the right or left. (And we were critical of a Democratic donor who plans to spend $100 million this year against candidates who ignore climate change.) But for the most part, unions, unlike the Koch network, don’t try to disguise their contributions in a maze of interlocking “social welfare” groups. Their contributions on behalf of candidates or issues may be unlimited, thanks to Citizens United, but they are generally clearly marked as coming from one union or another. (They want Democrats to know which unions raised the money.)

Union members aren’t coerced into giving political money, either, despite the claims of several commenters. Thanks to a 1988 Supreme Court case, workers have the right not to pay for a union’s political activity, and can demand that their dues be restricted to collective bargaining expenses. The union members who contributed to that $400 million pot in 2012 opted into the system.

That’s still too much money. But there’s a world of difference between a small group of tycoons writing huge checks, and a huge group of workers writing small ones.

 

By: David Firestone, Taking Note, Editor’s Blog, The New York Times, March 11, 2014

March 12, 2014 Posted by | Campaign Financing, Koch Brothers, Unions | , , , , , , , | Leave a comment

“Travesty In Chattanooga”: Republicans Making Sure Their Own People Are Kept In As Submissive A Position As Possible

I wish I could say I’ve never seen the likes of the campaign of intimidation that led to the vote against UAW representation at a Volkswagen plant in Chattanooga, Tennessee on Friday. But I did, as a child growing up in a Georgia textile company town in the early 1960s, where public schools began the year on Labor Day, the word “union” was not said out loud, and people still graphically remembered National Guardsmen being called out to break a strike at Callaway Mills back in 1935—the same year Congress enacted the National Labor Relations Act.

I’m a little rusty on my labor law, but I’m reasonably sure that any employer who issued the sorts of threats made by Republican politicians in Tennessee (including Sen. Bob Corker, Gov. Bill Haslam, and a variety of state legislators, backed by national conservative figures like Grove Norquist) against a unionization effort would have been in blatant violation of the NLRA. But that’s what makes the incident such a travesty: it wasn’t the employer fighting the union (VW by all accounts was neutral-to-positive towards unionization, which would have facilitated establishment of the kind of “work council” the company had set up at other international plants to help maintain good employer-employee relations). As Brent Snavely of the Detroit Free Press reported (probably incredulously):

The crusade by anti-union forces in Tennessee, including the state’s governor and senior senator, is as much a fight with Volkswagen management as with the UAW.

Not only are Republican legislators accusing Volkswagen of backing the UAW, some of their leaders on Monday threatened to withhold tax incentives for future expansion of the three-year-old assembly plant in Chattanooga if workers vote this week to join the UAW.

So addicted are Tennessee Republicans to the “race to the bottom” approach to economic development that they are willing to risk the good will of an existing employer in their zeal to make sure their own people are kept in as submissive a position as possible. President Obama’s reported comment during a Democratic retreat last week that the pols involved in this union-busting effort are “more concerned about German shareholders than American workers” is one way to put it; I’d say they’ve internalized the ancient despicable tendency of the southern aristocracy to favor the abasement of working people as an end in itself.

This incident is also a pretty good symptom of the radicalization of the Republican Party. It’s one thing to oppose collective bargaining rights for public employees, or to defend “right-to-work” laws that interfere with the contracting rights of employers and employees and create “freeriders” who benefit from union collective bargaining without paying dues. But now the very existence of private-sector unions, a familiar part of the American landscape for most of the last century, is under attack from Republican politicians.

I thought it was bizarre when SC Governor Nikki Haley said in her 2012 State of the State address: “We don’t have unions in South Carolina because we don’t need unions in South Carolina.” Turns out she was ahead of the curve.

 

By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, February 17, 2014

February 18, 2014 Posted by | Collective Bargaining, Unions | , , , , , , , | Leave a comment

“Preserving The Race To The Bottom”: Just How Much Do Republicans Hate Unions?

If you ask Republicans about their antipathy toward unions, they’ll say that letting workers bargain collectively reduces a company’s ability to act efficiently in the marketplace. If you knew anything about business, the market advocates will patiently explain, you’d understand that unions, with all their rules and conditions and strike threats, only make it harder for the company to make its products. Let management make decisions about things like wages and working conditions, and the result will be higher profits and more jobs, which will benefit everyone. In almost all cases, the corporation agrees; after all, union workers always earn better wages than their non-union counterparts, and they give power to the employees, which no CEO wants.

What most people probably don’t realize is that this inherently hostile relationship between management and unions isn’t something that’s inherent in capitalism. In fact, in many places where there are capitalists making lots of money, corporations work—now hold on here while I blow your mind—cooperatively with unions. One of those places is Germany, and one of the biggest German companies, Volkswagen, is right now embroiled in a union election in Tennessee that has turned into a bizarre spectacle that is showing the true colors of American conservatism. If you thought conservative were just laissez faire capitalists, seeking freedom for businesses to create prosperity, you’re dead wrong. What they actually want is something much uglier.

On Monday, our own Harold Meyerson explained the context and history driving this election, but the short version is that in its Chattanooga plant, Volkswagen wants to create a “works council” of the kind that companies in Germany use, which is a system where management and workers come together to set policies, plan strategy, and solve problems. The details of U.S. labor law require a union if such a council is going to be created, which is one reason VW has seemed supportive of the United Auto Workers organizing the plant. Although VW hasn’t come out and said they support the union, the signals they’ve sent strongly suggest that they do. “Our works councils are key to our success and productivity,” said the VW executive who runs the Chattanooga plant.

So faced with a union-friendly corporation, what have Republicans in the state done? One might expect them to say, “Every company should have the freedom to decide how to deal with its own workers; we may not be big fans of unions, but that freedom is what capitalism is all about,” or something like that. But no. The Republican governor and state legislators have begun issuing threats that there won’t be any future tax incentives for the company if the union wins the election. In other words, tax incentives are vital to bring jobs to the state—but if they’re union jobs, we don’t want them. We’d rather see our constituents unemployed than see them get jobs with union representation. So what you now have is Republicans fighting against a corporation to try to impose their vision of management-labor relations, one the corporation doesn’t want.

Then yesterday, Republican Sen. Bob Corker claimed, “I’ve had conversations today and based on those am assured that should the workers vote against the UAW, Volkswagen will announce in the coming weeks that it will manufacture its new mid-size SUV here in Chattanooga.” There are two things to understand about Corker’s statement. First, it doesn’t pass the smell test: the Chattanooga plant is the only Volkswagen factory in the world that doesn’t have a union, and the company has already made its good relationship with unions in general, and its desire for a works council there in particular, quite clear. And second, that kind of blatant attempt to intimidate workers into voting against the union when the election is going on is probably illegal, and could result in the election being halted and rescheduled.

What this issue has revealed is that while one might have thought that as far as conservatives are concerned, the creation of workplaces in which employees are given low wages and few benefits, and generally treated like crap, was merely a means to an end, the end being corporate profits and maximum freedom for business owners. But what we’re now seeing is that a powerless and beaten-down workforce isn’t a means to a larger end, and it isn’t a byproduct. It is the end in itself. It’s the goal. Here you have a highly profitable company that wants to have a more cooperative relationship with its workers, and obviously sees a union as a path to that relationship, because they know that they can work that way with unions, since they do it already all over the world. But the Republican politicians don’t care about what the corporation wants. They are so venomously opposed to collective bargaining that they’ll toss aside all their supposed ideals about economic liberty in a heartbeat.

One of the absurd arguments they’ve made is that other companies, like suppliers, won’t want to come to Tennessee if there’s a unionized auto plant there, as though it were some kind of infection others would fear they might catch. That’s ridiculous, of course—if you have a company that makes car parts, and VW wants to buy thousands and thousands of your parts, you’re damn sure going to set up shop next to their factory if that’s the best way to make money. What Republicans are really afraid of is that the union will come in to the Chattanooga plant and things will work well. If that happened, the rationale for the race to the bottom would be severely undermined. And the idea that corporations can do well by treating their employees like partners and not like enemies might indeed spread.

 

By: Paul Waldman, Contributing Editor, The American Prospect, February 13, 2014

February 14, 2014 Posted by | Collective Bargaining, Unions | , , , , , , , | Leave a comment

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