Chris Prandoni

Is a Double-Dip Recession Imminent?


Posted by Chris Prandoni on Wednesday, January 13th, 2010, 4:13 PM PERMALINK


Could Democratic policies bring about a second recession? U.S. Chamber of Commerce President Tom Donohue thinks so:

“Congress, the administration and states must recognize that our weak economy simply could not sustain all the new taxes, regulations and mandates now under consideration. It’s a sure-fire recipe for a double-dip recession, or worse.”

Nowadays, every Democratic “solution” includes a new tax, regulation, or mandate. Think carbon is bad for the environment? Mandate carbon efficiency standards. Want health care reform? Tax the top 1% of the country. Blame Wall Street for the financial crisis? Support Sen. Dodd’s financial regulation bill. The common thread between all of these Democratic proposals is that they increase the cost of doing business in America. What happens when it becomes harder to do business? People stop doing business, recession ensues.

Donohue had few positive things to say about the Obama administration and the Democratic controlled Congress. The Hill reports:

“On healthcare, Donohue said the legislation under consideration by Congress would do nothing to rein in costs and was a prescription for “fiscal insolvency and an eventual government takeover of American healthcare.”

He said the House climate bill would raise energy costs and kill jobs.

Donohue also blasted the administration’s policies on trade, hitting it for not sending to Congress pending deals negotiated by the Bush administration with South Korea, Colombia and Panama.”

Liberal writer David Ignatius puts it another way, naming the current trend, “the Californization of America.” The process of drowning in debt incurred from unsustainable government programs and the destruction of a once vibrant business atmosphere. 

Quite simply, the American economy is too weak to sustain drastic Democratic proposals. Will Democrats heed warnings from leaders like Donohue and American for Tax Reform’s Grover Norquist, or will they continue their march towards insolvency?

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California Voters Look to Revisit Paycheck Protection


Posted by Chris Prandoni on Monday, January 4th, 2010, 12:43 PM PERMALINK


California, a state with one of the highest unionization rates, has often been a battleground for worker’s rights. With paycheck protection provisions failing to pass California’s 2005 ballot, unions have continued to spend member’s dues on political campaigns and initiatives without first asking permission from members. In 2005, California unions spent millions of dollars and thousands of man-hours successfully derailing paycheck protection reform.

Ron Nehring, Chairman of the California Republic Party, explains why paycheck protection is necessary to ensure fairness for workers, who must pay union dues, and for California’s budget, which is drowning under the quid pro quo system currently in place:  

"Such political power has served as a massive force in favor of the unsustainable spending that has forced cities like Vallejo, California into bankruptcy with unrealistic salaries and pension benefits for their unionized employees. 

Normally only a tiny fraction of Americans choose to donate to candidates or political causes. Yet many government employee unions enjoy the power to compel virtually all of their members into supporting the unions' advocacy, regardless of how the individual worker feels about that agenda."

A new coalition, the "Citizen Power Initiative," has revived this important cause and is currently collecting signatures to, once again, have Californian’s vote on the paycheck protection. 

John Stossel explains the why unions sound so appealing in theory but markedly different when practiced:

"That fact that American workers can vote to form a union sounds... democratic. Majority rules. Every worker's vote is equal. No powerful boss makes decisions for you.

Except it doesn't work out that way. Union bosses are eager to make decisions -- and spend members' dues -- in ways many of their members never would. Union dues are routinely used to build cozy relationships with certain favored politicians. If you disagree with the union bosses' choice, tough."

Unions have remained in power due to the disconnect many voters have between unions theoretical purpose- worker advocacy organizations- and the sad reality; unions are willing to sell out their members for political favors.

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Workers Should Direct Anger at Pension Managers, Not Students


Posted by Chris Prandoni on Tuesday, December 1st, 2009, 4:46 PM PERMALINK


With many defined benefit plans drifting towards insolvency, governments will be increasingly pressured to bailout pensions in the red. The ongoing fight in Pittsburgh between the mayor and local colleges is a harbinger of the nationwide war soon to be fought over public workers pensions.

The city of Pittsburgh has proposed a 1% tuition tax on local university and college students to help pay for the $600 million pension-fund shortfall. The proposed tuition tax would send an estimated $16 million to city workers pensions from student’s bank accounts. The underlying logic behind the tax is flawed, “students use libraries...so let’s tax them!” proponents argue. 

This tax is neither logical nor is it fair. The $16 million raised from the new tax would do little to fix the problems inherent in defined benefit plans. At best, the additional $16 million would keep the pension fund afloat for a few extra days. More obviously, taxes discourage consumption by increasing the price of an item or activity. For example, cap-and-trade, a Democratic proposal in congress, looks to reduce carbon emissions by taxing said emissions, thus, making it more expensive to use energy. It makes no sense for a city, Pittsburgh, trying to diversify from its industrial tradition to discourage higher education via taxes.

The tax is not fair because it punishes students for poorly planned/managed pension funds, something they had nothing to do with. The tax would also differentiate between students who attend different colleges: students at Carnegie Mellon would have to pay $409 under the new tax per year of school compared to the $29 students at Community College of Allegheny County. The rhetoric used to sell the education tax is that students should be taxed for using the libraries, but then why are Carnegie Mellon students taxed at 13 times a higher rate then Community College of Allegheny County students? It is clear this is just a ploy to bailout public workers pension plans.

The sad thing is that public workers have a right to be angry; many were promised the moon in retirement benefits and now will receive little to nothing. But public workers shouldn’t take out their frustration on innocent students. Raising taxes just kicks the proverbial can (in this case pension reform) down the road at the expense of a randomly selected third party, in this case students. Real reform means transitioning from notoriously bankrupt defined benefit pension plans to liquid, tangible contribution pension plans that guarantee workers a retirement account. Workers should direct their rage at pension managers not freshman.

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Job Losses Continue Despite False Claims and Broken Promises from White House


Posted by Chris Prandoni on Monday, November 9th, 2009, 5:01 PM PERMALINK


www.workerfreedom.org

In response to October's abysmal employment numbers, the Alliance for Worker Freedom sent out the follow press release:
Click here to view AWF's press release as a PDF Document

While Obama officials tout the success of the stimulus the American economy continues to shed jobs. The Obama administration boasts that “stimulus” spending has “saved or created 650,000 jobs,” a claim that doesn’t stand up to even minimal scrutiny.

The Center for Fiscal Accountability (CFA) highlights a few instances where, at best, the Obama administration was plain wrong, and, at worst, is guilty of cooking the books. CFA links to an AP article that reports:

President Barack Obama's economic recovery program saved 935 jobs at the Southwest Georgia Community Action Council, an impressive success story for the stimulus plan. Trouble is, only 508 people work there.
(...)
About two-thirds of the 14,506 jobs claimed to be saved under one federal office, the Administration for Children and Families at Health and Human Services, actually weren't saved at all, according to a review of the latest data by The Associated Press. Instead, that figure includes more than 9,300 existing employees in hundreds of local agencies who received pay raises and benefits and whose jobs weren't saved.

While the Obama administration is busy trying to come up with 650,000 jobs it saved or created, the Alliance for Worker Freedom highlights some painfully real numbers.

  • The unemployment rate is the highest since 1983 at 10.2 percent
     
  • Male and teenage unemployment is the highest since The Great Depression
    -Unemployment rate for males is 10.7 percent
    -Teenage unemployment is 27.6 percent
     
  • Over 30,000 potential workers left the U.S. labor force in October
     
  • Labor force participation is the lowest since 1986 at only 65.1 percent
     
  • Construction industry lost 62,000 jobs
    -Heavy construction fell 13,700 as well in October
  • Manufacturing jobs lost 61,000
    -Auto-manufacturing gained 4,600 marking two months of growth
  • October saw the worst economic climate for business loans in 50 years
    -In September, loans contacted at an 11 percent annual rate
  • In the past year, business investment as fallen 19 percent
     
  • New hires have fallen 17 percent in the past year
     
  • The U.S. has lost at least 2.8 million jobs since President Barack Obama signed the “stimulus” package into law on Feb. 17

 

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Union Cost Increases in Dem. Healthcare Bill Raises Hospital Costs by $27 Billion


Posted by Chris Prandoni on Monday, November 9th, 2009, 4:55 PM PERMALINK


The following was originally posted at www.workerfreedom.org

On Saturday, the House passed H.R. 3962, a health care bill which includes a public option. The Alliance for Worker Freedom sent out the following press release to highlight some of the lesser known effects government-run health care can have on unionzation rates, and costs.

Click here to view AWF's press release as a PDF Document


A lot has been made of Pelosi’s recently passed H.R. 3962 health care bill, legislation which intends to provide coverage to all Americans. While the bill does give more Americans coverage, it does so in the most ineffective way possible- by further muddling up the health care system with a government program, a public option. Through a slew of accounting gimmicks, collecting taxes for three years before the public option begins and by claiming to cut billions of dollars in found waste, fraud, and abuse that just aren't there, Democrat’s claim that their pet project, a public option, is deficit neutral.

While it is universally accepted that H.R. 3962 does nothing to curb the increasing cost of health care for Americans and that it will increase the deficit by untold amounts, there is still a myriad of consequences that are often overlooked by pundits and politicians.

One such consequence rarely, if ever, discussed is the effect government-run health care will have on unionization rates in the U.S. Currently, public sector unionization rates are about five times that of private sector workers, 37 and 8 percent, respectfully. Under Obama-Reid-Pelosi healthcare legislation, all healthcare workers become quasi-government employees as they will be paid from a federally funded insurance plan. Thus, a federally funded insurance program facilitates unionization which increases the overall costs of health care- unionized workers receive inflated wages and retirement packages.

If all this seems abstract, just look north to Canada, a country with a single-payer system. Under the Canadian government-run health care system 63% of health care workers are unionized, compared to only 12 percent of U.S. health care workers.

James Sherk of the Heritage Foundation writes that “the greater unionization would raise the cost of hospital coverage by approximately $27 billion in 2013 and by $192 billion in the 2013-2018 period.” Collective bargaining agreements are notoriously generous and force employers, in this case hospitals, to raise their price of goods or services (medical treatment). The more health care workers become unionized, the more expensive health care becomes.

The scary thing is that increased unionization is only one consequence of H.R. 3962, a 2000 page bill. Who knows how far the ripple effect will extend from the public option bombshell. It is impossible to predict all the effects that such sweeping legislation will have on America.

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SEIU President Andy Stern Visits White House More Than Any Other Person - Why?


Posted by Chris Prandoni on Thursday, November 5th, 2009, 9:45 AM PERMALINK


The following was originally posted at www.workerfreedom.org.

The White House released an incomplete list of visitors who met with President Obama and top White House officials. Predictably, Andy Stern, President of the Service Employees International Union, stopped by the White House more than any other visitor. The Wall Street Journal Reports:

“Andrew Stern visited the White House 22 times between Inauguration Day and July 31, meeting with President Barack Obama seven times and leading all visitors recorded during that period.”

In light of this news, the Alliance for Worker Freedom sent out the following press release.

Click here to view AWF's press release as a PDF or "read more" to continue.

An interesting story to keep an eye on is which labor unions President Obama and his White House show preference to, the two major unions being the Service Employees International Union (SEIU) and the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO). Judging by the number of visits, it appears that the Obama administration favors SEIU meeting with Andy Stern 22 times and Richard Trumka of the AFL-CIO a mere seven.

Although AFL-CIO and SEIU lobby for the same legislation, EFCA, there is still a healthy rivalry between the two unions. In 2005, Stern broke SEIU away from its parent company, AFL-CIO, announcing SEIU’s disaffiliation the union, a move that left a sour taste in the mouth of the AFL-CIO. Both unions also compete for the same workers. Unions survive through recruiting new members and with unionization rates falling, the fight for new blood has only heated up.

Obama’s seemingly intimate relationship with Stern could single a renewed effort to push through the objectionable Employee Free Choice Act. There is no way of knowing, but it is safe to assume, that Obama and Stern's friendship will materialize in some form of tangible legislation or Executive Order designed to advance the interests of big labor. 

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Don't Let Labor Prevent DC Education Reform, Support Chancellor Rhee


Posted by Chris Prandoni on Thursday, October 22nd, 2009, 3:00 PM PERMALINK


The following was originally posted at www.workerfreedom.org.

The battle between Washington D.C. School Chancellor Michelle Rhee, a headstrong reformer, and D.C. teachers’ unions is heating up. Upon being hired in 2007, Rhee was given the nearly impossible task of negotiating, newly expired, teacher collective bargaining agreements. Since then, negotiations have made little progress with Rhee refusing to permit long standing union sinecures. When compared to national averages, Washington D.C. public schools fall short in EVERY education statistic. This news is not new, in fact, it is painfully accepted here. Rewarding teachers’ unions with cushy contracts while D.C.’s children fall farther and farther behind seems dissolute, at best.

The American Federation of Teachers (AFT), the parent union of the Washington Teachers’ Union (WTU), is up in arms after Rhee hired 934 teachers this summer and announced 380 job cuts this September. Rhee made such cuts in the name of the $43.99 million gap in the current budget.

“The audacity! How dare she bring in new teachers AND balance the budget! Who does this Michelle Rhee think she is?” I suspect members of the WTU whispered to each other. How ridiculous it is that DC education standards are satisfactory? And yet, it is an argument that teachers unions are making by demanding collective bargaining contracts that isolate them from any and all accountability. 

The DC Council is frustrated with the deadlock between Rhee and labor and is threatening to overturn mayoral control of DC schools, an act that would strip Rhee, a Mayor Fenty appointee, of power. On the cusp of meaningful reform, the DC council is feeling the heat from unions. Reform would mean less power for labor, concessions the AFT are unwilling to make.

Labor is determined to stop Rhee and Mayor Fenty in their tracks. And AFT, with an enormous membership, more than twice the population of Washington DC, has the resources to do so. Make no doubt about it, AFT is serious about this fight currently posting stories about Rhee on the front page of their website.

The DC Council is holding a meeting with Chancellor Rhee and Mayor Fenty on Thursday, October 29, 2009, to discuss reform efforts and gauge the mood of the public. Last week, the DC council held a similar meeting where presidents of the WTU, Teamsters Local Union No. 639, Teamster Local Union No. 730, AFSA Local 4/AFL-CIO, and a slew of other powerful union members showed up. The pro-reform movement risks being drowned out by the powerful labor lobby. It is imperative that Chancellor Rhee supporters show up in great number to next weeks DC Council meeting.

There will be a meeting before the hearing at 9am on the steps of the Wilson Building, 1350 Pennsylvania Avenue. To sign a petition showing your support, or for more information, visit www.putdckidsfirst.org.        

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Does EFCA's Workplace Access Clause Violate a Supreme Court Decision?


Posted by Chris Prandoni on Monday, October 19th, 2009, 12:05 PM PERMALINK


The Employee Free Choice Act (EFCA) continues to be one of the most divisive pieces of legislation floating around Congressional offices. Democrats claim that it is too hard for unions to organize workers. Republicans argue that unions shouldn’t receive preferential treatment and that EFCA would leave employers defenseless against union organizers. While this debate is an important one, the most basic question remains unanswered. Is it legal?

Most versions of EFCA contain workplace access language; a clause which seeks to give union organizers rights usually reserved for stakeholders in a company, workers and employers. Workplace access guarantees union representatives admission to all employer-employee meetings that pertain to unionization. Additionally, employers would be required to aid union efforts by allowing organizers to hold meetings on company property. 

At first glance, this appears to be a clear infringement of a company’s work-site and property laws. To authorize self-serving interest groups, no matter how noble their cause, special access to a businesses workplace violates innate property rights. However, this is not a universal belief and is one that must be tested in the court of law, and in 1992 it was. 

The Supreme Court ruled in Lechmere, Inc. v. National Labor Relations Board that non-employee union organizers were not allowed to solicit support on private property, except in the case where no reasonable alternatives exist. Translation: union organizers had no inherent right to company space.

A closer look at Lechmere, Inc. v. National Labor Relations Board illustrates the necessity for property rights and how the EFCA is a violation of said rights.  

Lechmere Inc. was a retail company that owned a store in a shopping mall and a partial stake in the mall’s parking lot. In an attempt to organize Lechmere’s employees, a retail clerk’s union placed pro-union pamphlets and handouts on mall employee’s cars. When Lechmere management learned of the retail union’s attempt to organize their employees, they forced union organizers to leave and claimed they were on company property, the parking lot. Lechmere policy was not to allow solicitation of any kind, be it charitable, malicious, or anything in between, on their property. 

Police agreed with Lechmere management and prohibited the union from distributing recruitment materials on Lechmere property, the parking lot. Instead, union organizers had to recruit members from nearby public land, a stones throw away from the parking lot. The retail clerk union saw nothing wrong with their actions and appealed to the National Labor Relations Board (NLRB). The union argued that Lechmere was violating the National Labor Relations Act (NLRA) of 1935, the most important union legislation to date.

The NLRA guarantees unions the right to organize. Section 7 states, “Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain 

collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”

To strengthen Section 7, Section 8 of the NLRA states “it shall be unfair labor practice” for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7.”

The NLRB found that Lechmere’s prohibitive actions were, in fact, a violation of Section 8 of the NLRA. Predictably, Lechmere brought the case to court suing the NLRB. Slowly, the case made its way through the judicial system when it finally reached the Supreme Court in 1992. 

In a 6-3 decision, the Supreme Court ultimately sided with Lechmere for three key reasons. The court wrote that the NLRA “confers rights only on employees, not on unions or their nonemployee organizers.” The court reaffirmed private property rights and saw the dangers in guaranteeing third parties, which may not have a company’s best interest in mind, access to company property. Furthermore, the NLRA, although guaranteeing employees the right to organize, does not require the employer to facilitate this process, simply not obstruct it.

The court continued, writing that Section 7 of the NLRA would only apply to nonemployee union organizers when “the inaccessibility of employees makes ineffective the reasonable attempts by nonemployees to communicate with them through the usual channels.” If unions had no other means to contact potential members, than workplace access legislation would be necessary to insure that Section 7 is followed.

However, the union failed to prove that there were any “unique obstacles” that prevented reasonable union access to the employees. When the NLRA was written, in the 1930s, it was feasible that a union not be able to reach employees. In the twenty-first century, it is hard to imagine a scenario in which employees are “inaccessible.”

Given the Lechmere v. NLRB ruling, it is surprising that EFCA is still being considered for law. If the Supreme Court found it illegal for unions to place pamphlets on worker’s cars, why can EFCA force companies to hand over rooms to union organizers for stump speeches? How can companies be forced to grant union reps access to company meetings?

Just like other aspects of EFCA, governmental arbitration for example, workplace access infringes on company rights and attempts to wedge unions between employers and their workers. While companies face increasing taxes and relentless demonization by politicians, EFCA now looks to strip companies of their property rights. Such a hostile environment is one that is anti-growth, polarizing, and, not to be overlooked, illegal. 
__________________________

This brief was authored by Christopher Prandoni. For more information, visit the Alliance for Worker Freedom at www.workerfreedom.org 

The Alliance for Worker Freedom (AWF) was founded in 2003 as a non-partisan organization dedicated to combating anti-worker legislation and to promote free and open markets. For more information or to arrange an interview, please contact (202) 785-0266 or email media@workerfreedom.org.

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Labor Frustrated With State of EFCA


Posted by Chris Prandoni on Tuesday, October 6th, 2009, 5:30 PM PERMALINK


Times are tough for the labor movement. Failing pensions, public disapproval, and worst of all, the Employee Free Choice Act is still tied up in the Senate. After donating $450 million to Democrats in the 2008 election cycle labor must have thought that EFCA would be a shoo-in; they even had the President on their side.

With EFCA on the back burner for many Senators, labor recruited new Democratic Senator Arlen Specter, to take up its fight. When speaking at an AFL-CIO convention, Specter reassured his crowd, “[W]e have pounded out an Employees Choice bill [EFCA] which will meet labor's objectives: that is, prompt certification, and binding arbitration, and give you the kind of support that you need and are entitled to. And I believe that before the year is up, I will join my fellow colleague Senator Bob Casey in predicting passage of an Employees Free Choice Act which will be totally satisfactory to labor."

If only to add an exclamation point, Specter implemented other Democratic Senators saying Blanche Lincoln of Arkansas and Ben Nelson of Nebraska tacitly supported his bill. After the crowds dispersed AFL-CIO head Richard Trumpa and other union heads met with Specter. The union bosses were disappointed with Specter and thought he needed to do more. The following day Harry Reid expressed the same sentiment.

Organized labor feels that they have been cheated. Labor held their end of the bargain and has no legislation to show for it. With Paul Kirk holding Senator Kennedy’s seat, Democrats again control 60 seats in the Senate. Complacency is dangerous, and although labor is backed into a corner they are still the most powerful interest group in the Democratic Party. A frustrated labor movement will need to be appeased, if not Senator Specter’s version of EFCA than something synonymous.

The Alliance for Worker Freedom knows this and is committed to keeping Americans informed. AWF released the follow press release to do just that:

Click Here to View AWF's Press Release

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Davis-Bacon Act Undermines Democrats' Stimulus Bill


Posted by Chris Prandoni on Monday, September 28th, 2009, 2:35 PM PERMALINK


While many have criticized the Democrat-passed “stimulus bill” for its expediency, or lack thereof, and its inevitable waste, inherent in massive spending, it is rare that the two deficiencies cross paths in one magnificent example of government irrationality. Democrats justified hastily passage of the recovery bill through the “we are on the precipice of a recession” fear mongering; that inaction would prove disastrous.

A recent release from the Government Accountability Office suggests that urgency is supplanted by waste in the hierarchy of stimulative requirements. Stimulus funds that were allocated to the Weatherization Assistance Program remain unspent, heaven forbid, due to questions about construction workers wages which are determined by the arcane Davis-Bacon legislation, a depression-era bill that, in practice, is a wage subsidy for workers contracted by the federal government.

Davis-Bacon makes it illegal for the federal government to award contracts to companies unless they pay wages determined by a government body, the Wage and Hour Division. The Wage and hour Division uses the imprecise method of surveying to calculative wage rates- audits have found a 100% error rate when comparing the Wage and Hour Divisions’ calculations to a statistical analysis of an areas wages. Usually, Davis-Bacon inflates wages for construction jobs raising the price tag for such projects.   

Davis-Bacon drives up costs and adds red tape. This is not new news but is counter to the Democrats' rational for the stimulus. Instead of employing workers queued up for jobs, Democrats are spending time and money calculating prevailing wages in areas where the Weatherization Assistance Program will be implemented. In the real world, contracts are awarded to companies who offer their services for the lowest price and can accomplish the given task effectively. How logical. The federal government should embrace this common methodology and throw Davis-Bacon’s unscientific wage rates out the window.     Unfortunately for Democrats, two of their favorite bills, the Stimulus, a bill predicated on speed, and Davis-Bacon, an old bureaucratic arrangement, are incompatible, with one undermining the other. 

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