UAW Union Dues: A Royal Mess
Bob King, President of the United Auto Workers union, said in a press conference on January 15th that the union plans to raise dues. He stated that his members will “overwhelmingly support a 25 percent dues hike.” The current dues are equivalent to 2 hours of a worker’s pay a month and the proposed increase would bring it to 2.5 hours.
King says that the dues increase would go to fatten up the union’s strike fund. A strike fund is money set aside to pay workers while they strike and are not working. Why would the union need more striking capital? Especially since according to the Detroit Bureau, King believes that “the new UAW of the 21st Century doesn’t need to threaten strikes or set up picket lines to make its point and reach a rational decision.” So if they are playing nice, why need a larger strike fund?
The strike fund has fallen as the decline in union membership has been decreasing over the last few decades. It once sat at 1 billion dollars, but now currently holds 600 million. King’s goal is for the fund to reach that 1 billion dollar mark again. King’s term as president is up in June, so talks of a new chief are in the works. Likely successor Dennis Williams was quoted saying that he “does not mind confrontation.” Confrontation in the union world amounts to one thing: striking. And we shouldn’t be surprised that Williams boasts a wonderful strike track record, leading a 5 year strike against the construction equipment company, Caterpillar.
Dues money isn’t just used for the strike fund; the money is used in other ways. According to Forbes, union dues money often goes to political activity.
“These dues often go to partisan politics that benefit officeholders and regulators—not necessarily union members. In 2008, labor unions spent $75 million in political donations, with 92 percent of it going to Democrats. In 2010, over 93 percent of union political support went to Democrats, even though 42 percent of union households voted Republican, according to exit-polling data.”
The UAW alone gave over $148,000 to re-elect President Barack Obama, and it shouldn’t come as a shock to anyone that Dennis Williams has his hand in the administration’s cookie jar, serving as an Obama campaign organizer in 2008.
So as Bob King is ready to step down from his post he will be passing his crown to a new leader, with strong Democratic ties and large strike fund at his disposal. But this larger fund comes at a cost. A dues increase is like an additional tax on workers. And in this economy it seems improbable that these workers actually “overwhelmingly” support paying more out of their pockets, and then having their money go towards politicians they may not agree with or even support.
Tennessee to Possibly See Even Larger Union Growth with the Threat of the UAW
The Tennessean reported on January 25th that in 2013, Tennessee boasts the top union growth. 31,000 union members were added in the state the largest percentage of growth seen year. The increase is due to a multitude of reasons:
“the 25 percent growth in union membership in Tennessee could be attributed to a variety of factors — increases in construction and manufacturing jobs because of the improving economy, ramped up organizing efforts and a growing sense of disparity among workers between their company’s bottom line and their own paychecks.”
If the United Auto Worker (UAW) does successfully organize in the Volkswagen facility, as chronicled by Executive Director of the Center for Worker Freedom Matt Patterson today in Fox News, this will only further strengthen union power in the region and threaten thousands of manufacturing jobs in the state.
The Volkswagen plant, located in Chattanooga Tennessee, is a major target for the UAW. Currently, the union does not have an organized presence in any foreign owned automakers plant in the south. They are viewing this plant a foot in the door, allowing them access to other plants, in others states within the region.
UAW News Roundup
The Center for Worker Freedom’s Executive Director, Matt Patterson, has a piece in Forbes today titled “Next UAW Chief an Obama Organizer.” Patterson writes about the intention of the union to elect as its next president Dennis Williams, an Obama ally.
“Williams is a former welder, but also boasts an another impressive credential on his resume, a credit indicative of the UAW’s true nature and an indication of where its loyalties and aspirations lay: Williams has a long history with Barack Obama, and was even a key member of the Obama’s organizing team for the Iowa caucuses in 2008.”
Not only is the UAW intending to elect a leader with ties to the current administration, but Patterson also unveils the deep rooted pockets of this union, which helped to re-elect President Obama.
“Barack Obama –unsurprisingly — was a beneficiary of UAW largess, receiving $148,967 from the union in the 2012 election cycle alone. After the election, UAW chief Bob King even bragged that he and his “progressive allies” had “scored a huge victory… when we re-elected President Barack Obama.”
In other recent news the UAW’s current boss Bob King, recently stated in that union members will “overwhelmingly” support a raise in dues. This dues raise may be up to 25 percent and would be the first time since 1967 that they have been raised. Struggling for membership and support, the union has to raise dues on its members just to get its message across and stay afloat. Patterson writes about the union's decline “from a membership peak of 1.5 million in 1979, the union now boasts fewer than 400,000 members.”
In other news regarding union's Democratic support, the Detroit Free Press is reporting that the King says the UAW will likely endorse Democratic candidate Mark Schauer in the Michigan governor’s race.
The War on Poverty: Year 50
Last week marked the 50th anniversary on President Lyndon B. Johnson’s (LBJ) war on poverty, sparking a public discussion of the efficacy of these efforts. LBJ’s state of the union speech in 1964 outlined the intent of these reforms:
“… and this year's legislative program, are designed to help each and every American citizen fulfill his basic hopes -- his hopes for a fair chance to make good; his hopes for fair play from the law; his hopes for a full-time job on full-time pay; his hopes for a decent home for his family in a decent community; his hopes for a good school for his children with good teachers; and his hopes for security when faced with sickness or unemployment or old age.”
50 years later, has LBJ vision been achieved? Even those who support the “war on poverty” efforts seem conflicted about its success, or lack thereof. Michael Gerson, for example, wrote in his January 10th column in The Washington Post that while “… The federal government has met some human needs on a vast scale; it does not know how to conquer poverty.”
Even with this admission, that the government is unable to conquer poverty, Gerson’s print version of this piece was still titled “Renew the War on Poverty.”
Well no wonder. In 1982, 15 percent of the population was below the poverty line and by 2010 those numbers had not budged at all. Gerson even admits that certain programs are kept around because they are “promising.” He writes that “Some of LBJ’s ideas, such as Head Start, still seem so promising that we keep trying to get them right, even when social science finds modest results.”
In contrast, Economist Robert Samuelson also writing for The Washington Post notes that “the largest ‘means-tested’ programs (eligibility set by low income) increased from $55 billion in 1972 to $588 billion in 2012.” The budgets for these services have increased 10-fold in 40 years, even with only “modest results.” Those modest results explained by Gerson are noted by Samuelson, who writes that “Although Head Start produces some gains for 3- and 4-year-olds, improvements dissipate quickly; one study found most disappeared by third grade”
That raises another series of questions. What do these results mean? What does it mean to be poor? What would victory look like? We all know what poverty is, but everyone defines it in a different way. Richard Thaler, Behavioral Economist at Yale, has a take on poverty in America:
“They’re poor because they don’t have enough money. But why is that they don’t have enough money? So do they lack education, do they lack will power, do they lack resources. I mean, it does sound like a dumb question, or course we know what poverty is, but actually we don’t. And it’s going to vary. So somebody on the south side of Chicago being poor may be very different than a peasant in some African village”
Just like LBJ was unable to define what a victory in Vietnam would look like, scholars are unable to know what a victory on this “war” would look like. Robert Samuelson references a study done by Bruce Meyers and James Sullivan of the University of Chicago: “Among the official poor, half have computers, 43 percent have central air conditioning and 36 percent have dishwashers.” This vague definition of “poor” paints not only a conflicting picture of what that word means in America, but makes people questions the reform set in place 50 years ago.
Barbara Ehrenreich author of the book Nickel and Dimed: On (Not) Getting By in America recently wrote in an article in The Atlantic commenting on LBJ’s war on poverty, she states that “...... there was never enough money for the fight against poverty, and Johnson found himself increasingly distracted by another and deadlier war—the one in Vietnam.”
America turned against the war in Vietnam when they became convinced, rightly or wrongly, that it was unwinnable. Maybe LBJ’s solutions were not the best way to fix poverty in America. We have spent $588 billion dollars in 2012 but have higher unemployment than we did when Johnson launched his war, and the same percentage of people still living in poverty as we did thirty years ago.
The question is: When will Americans turn against Johnson’s other war?
Unions Cave, Workers Win in Washington State
When Boeing announced the production of their new plane the 777X, many just assumed that the company would locate production in its Washington states manufacturing facilities. Therefore, it came as a shock to many that the company was contemplating looking elsewhere, having had a presence in the area for 97 years. Most shocked was the local machinists union, the International Association of Machinists and Aerospace workers (IAM751), which represents 30,000 Boeing workers in the Puget Sound area.
Boeing was looking at 23 other locations to produce this plane, including Japan. However, in the end, Boeing chose to remain in Puget Sound, finalizing a contract with IAM751 on January 3, 2014.
It was still surprising to many observers to see the union, in the words of Holman W. Jenkins of The Wall Street Journal “knuckled under, voting narrowly… to accept Boeings terms” Even more surprising just weeks earlier, November 14th 2013 the union rejected the contract overwhelmingly by 67 percent. However, just a month and a half later the union accepted the contract. What happened in six weeks?
The union’s website gave the impression that this vote was very much influenced by local politicians, including Governor Jon Inslee and the Mayor of Seattle Ed Murray, both Democrats. The Wall Street Journal is even calling this change of heart by the union “the most important business story of 2014.”
This contract is indicative of a shift in the balance of power between unions and companies. The bottom line for the union’s first passing on the contract had to do with the pension plan, the bread and butter for unions, which the company wanted to change to 401ks. However, with the threat of losing an industry and jobs the union had to back down from those demands, accepting instead signing bonuses totaling $15,000 over 6 years.
We have to give some credit to the IAM751 union, which finally accepted economic reality. This is something out of character for them and unions in general, even though they weren’t given much choice in the matter. The hope of many politicians is that this area is known as the premiere “aerospace” cluster in the world, just as Detroit served as the auto industry cluster in America. But this comparison between Detroit and Seattle is one that panics many, and is in the forefront of the politician’s mind.
In Detroit the United Auto Workers (UAW) drove up labor costs and killed jobs. Hurting the companies like General Motors and Chrysler that fed the city, helped kill the city in return. Detroit serves to Seattle as an example to workers, politicians, and major companies like Boeing, of what not to do.
Boeing has shown that if you put a union between a rock and a hard place, it just might make the right choice.
Everyone Hates Obamacare.....Except the UAW
A recent story in the Chattanooga Times Free Press reported on a pro-union rally in the Tennessee community, an event at which union supporters claimed: “Outside interest groups are targeting Chattanooga to try to scare or manipulate Volkswagen workers from seeking United Auto Workers representation.”
With the so-called threat of these outside groups, union supporters are under the impression that the UAW involvement in Chattanooga is only of their concern, and not the general public.
Matt Patterson, Executive Director of the Center for Worker Freedom at ATR, disagrees. In a column published today in the Chattanoogan, Mr. Patterson notes that due to the union’s political involvement in national politics, the union's business is the business of every taxpayer. Patterson writes:
The UAW is a deeply political entity, a font of manpower, money and support for countless left-wing causes, candidates, and policies, both locally and nationally, including the most economically ruinous idea to come out of Washington in a generation: Obamacare.
With the UAW’s money and endorsement helping to enact this legislation into the law, the union’s campaign to recruit new members should be at the fore front of everyone’s concern, especially TN consumers hit hard by the healthcare law. Patterson quotes a Tennessee physician who noted with the median household income of $38, 000, families in Tennessee cannot afford these drastic rise in insurance premiums driven by Obamacare.
The union and its supporters are afraid that the extent and nature of its political activity will alienate many community members and auto workers who do not have their left-wing ideology.
And rightly so
Pennsylvania Senate Bill Puts School Choice at Risk
School choice is being threatened again and this time the target is over 40,000 Pennsylvanian children. The Pennsylvania State Senate has introduced a bill, S.B. 1085, that would cut 5% of the funding for public cyber charter schools and reassign it to traditional brick-and-morter public schools.
Cyber charter schools in Pennsylvania have revolutionized the education system in Pennsylvania. Taking money from schools where students attend and arbitrarily giving it to public schools where they do not makes little sense. As a result, many families are asking for the Pennsylvania State Senators to hold off on a vote for reallocating the funding until a study on how money is spent in public cyber schools is done.
PA Families for Public Cyber Charter Schools has this to say:
“Haste makes waste: This study will help inform everyone involved in the debate, including parents. It would be irresponsible to take preliminary action before benefitting from the findings of the proposed study.”
The cyber schools amount to roughly 1% of the education budget for Pennsylvania. When a student decides to go to a cyber charter school, those students receive only 81% of the funding that they were once getting in a public school setting. Public schools are given funding preferences, despite parental choice and lack of evidence indicating money for cyber charter schools is mispent. It has been estimated that the 5% reduction would be equal to one- third of cyber teachers' salaries. The cut limits the accessibility of cyber charter schools for families across the state and puts currently enrolled students at risk.
The bill does have some positives. It fixes a “pension double dip” for cyber schools. The bill also institutes measures of accountability and oversight that make cyber schools more transparent fiscally. It also gives universities more leeway in authorizing new charter schools, weakening school districts authority to flatten their competition, creating more equality.
How Obama is Putting the "Labor" in your Labor Day
As Americans are gearing up to take one last summer holiday, the costs of travel will be something they will be painfully aware of. It’s no secret that the cost of gasoline has increased. Long gone are the days when gas was less than $2.00 a gallon, despite the fact that was only four short years ago. But who is to blame?
The Obama Administration, that’s who! This administration’s blatant negligence to reform or eliminate the Renewable Fuel Standard (RFS) requirements, set in 2005, and are the reason why it is costing you more at the pump, as well as putting American refining jobs at risk. The mandate, established eight years ago, was made with the intention that Americans demand for gas would be increasing. But such demand has not become a reality. This is due to the “new fuel-economizing technology” and has actually led to a decline in demand, making the RFS impractical, and costing you money!
So when you are filling up your tank this weekend, remember to be safe, have fun and #thanksobama. Because you are now paying almost twice as much in gas prices as you were four years ago.