Archive for the ‘Unions’ Category

Workin’ On The Railroad…Or, Maybe Not

Tuesday, September 13th, 2022

Only 10.6% of US workers are in unions, but the 140,000 railroad freight workers are among them. The workers have been without a contract for the last three years, and are deep in negotiations for a new one with the National Carriers’ Conference Committee (NCCC), the group representing Class I railroads in the  negotiations. Like everyone else, both sides have been hit hard by the pandemic and the inflation that followed.

The workers are in twelve companies from the very large to the not so very large. Thus far, the good news is eight of the twelve have come to tentative agreement with the employers, three of them this past Sunday. The bad news is this only represents about 86,000 of the 140,000. The even worse news is if agreements for the others are not reached by 12:01 Saturday morning, 17 September, they’ll be going on strike—all of them.

According to the US Chamber of Commerce and the NCCC, “Widespread railroad disruptions could choke supplies of food and fuel, spawn transportation chaos, stoke inflation, and cause $2 billion per day in lost economic output.”

The Biden Administration appointed a presidential emergency board (PEB) in mid-July to break the impasse, and the board released its findings to interested parties in mid-August. Like Solomon, the PEB pretty much split the difference between the unions’ wage ask and the railroads’ offer. Subsequently, the President urged the parties to reach agreement speedily, because not doing so will invite congressional intervention. Now, that would be quite the opportunity for political posturing. Ladies and gentlemen, start your engines.

The tentative agreements announced Sunday include the Brotherhood of Maintenance of Way Employees Division of the International Brotherhood of Teamsters; the International Brotherhood of Boilermakers; and the International Association of Sheet Metal, Air, Rail and Transportation Workers-Mechanical Department.

“The tentative agreements … include a 24% wage increase during the five-year period from 2020 to 2024—with a 14.1% wage increase effective immediately—and five annual $1,000 lump sum payments. Portions of the wage increases and lump sum payments are retroactive—totaling more than $11,000 in immediate payments per employee—and will be paid out promptly upon ratification of the agreements by the unions’ membership,” said the NCCC.

The tentative agreement also adds an additional paid day off that can be used as a personal day, vacation day or on the employee’s birthday.

Factoring in healthcare, retirement and other benefits, employees’ total compensation would average more than $150,000 per year.

Several major Class I railroads said Friday they would begin curtailing shipments of hazardous materials and other chemicals in the event loads might be left unattended on a rail network. The unions label this “corporate extortion.”

What would a rail strike mean? Well, for starters a strike could shut down 30% of the country’s freight services and block most passenger and commuter rail services, according to the Association of American Railroads. Some 7,000 freight trains run by major rail companies including CSX, Union Pacific, BNSF, Norfolk Southern, and Kansas City Southern could be shut down, while passengers could face disruptions as well because commuter rail systems depend on tracks owned by freight railroads.

In my home state of Massachusetts, where there is a popular, heavily used commuter rail system, this could be devastating, because Boston’s MBTA subway system is in dire straights, with its Orange Line, the second highest in ridership, shut down for repairs.

This all comes in the midst of seeming union rejuvenation, as seen by efforts at Starbucks, Amazon and others. Still, as mentioned above, unions represent only 10.6% of the workforce, and the majority of those are in the public sector.

It’s prediction time, and mine is as good as anyone else’s not on the inside of negotiations. I’m betting the warring factions will reach agreement just as the clock comes close to the witching hour, disappointing politicians yearning for the next soapbox. But, as my dear father used to say, it’ll be, “One-hundred yards to the outhouse, by Willie Make-it.”

Getting From Here To There Politically

Wednesday, December 22nd, 2021

Unless you’ve been living under a very big rock at the bottom of a very deep hole at the base of a very large crater on the planet Mars, you probably know there is a very wide chasm separating the Republican and Democratic Parties with respect to domestic policy.

The Democratic Party believes the middle and lower classes have had it tucked to them since the era of Ronald Reagan and the emergence and eventual marketplace triumph of trickle down politics. They point to more than 40 years of stagnant Real Wages, the constant and dispiriting race to keep up with the cost of living in which every step means falling farther behind, and the ever-widening and maddening gulf between the haves and the have nots, the one-percenters and everyone else. Party leadership and President Biden believe something has to be done and now is the time to do it. Ergo, the Build Back Better bill (BBB) currently ricocheting around the halls of Congress.

The Republican Party and its leadership disagree. In a nutshell, they say the whole thing costs too much and will bankrupt the country.

They took a somewhat different stance when they were in power and, with no Democratic support, passed the Tax Cuts and Jobs Act of 2017, which many consider the quintessential example of trickle down economics in American history. Under this legislation the nonpartisan Congressional Budget Office (CBO) reported that individuals and pass-through entities like partnerships and S corporations would receive about $1.125 trillion in net benefits (i.e. net tax cuts offset by reduced healthcare subsidies) over 10 years, while corporations would receive around $320 billion in benefits. The CBO estimated that implementing the Act would add an estimated $2.289 trillion to the national debt over ten years (emphasis added)( “CBO-Appendix B: The Effects of the 2017 Tax Act on CBO’s Economic and Budget Projections, page 129)

Republicans, said the CBO report was hogwash. Treasury Secretary Stephen Mnuchin went so far as to say the Act would pay for itself in ten years and lower the national debt.

Unfortunately, things haven’t worked out that way. Almost every major analysis correctly predicted revenues would fall and debt would increase. Analysis of first-year results released by the Congressional Research Service (the best research service you perhaps have never heard of) in May 2019 found:

  • “a relatively small (if any) first-year effect on the economy”
  • “a feedback effect of 0.3% of GDP or less,” such that the tax cut did not pay for itself
  • “pretax profits and economic depreciation (the price of capital) grew faster than wages,” meaning shareholders benefited more than workers
  • inflation-adjusted wage growth “is smaller than overall growth in labor compensation and indicates that ordinary workers had very little growth in wage rates”
  • “the evidence does not suggest a surge in investment from abroad in 2018” as proponents of the Act had asserted it would
  • “While evidence does indicate significant repurchases of shares, either from tax cuts or repatriated revenues, relatively little was directed to paying worker bonuses”

So, with that kind of batting average it seems a bit precious for Republicans to summarily dismiss the BBB bill and line up the firing squad to kill it. On the other hand, they proclaim agreement with the “goals” of the BBB, while offering no practical applications to achieve the desired results. Just goes to show that since the founding of the country parties in the minority, no matter who they are,  have demonstrated a terrific ability to denigrate what the majority proposes without any responsibility for proposing and implementing their own solutions.

But pity the poor Democrats within the Biden Administration. They’re having to fight the war on three fronts. First, there is the inevitable and total Republican opposition; then they have to appease the Progressive wing of their own party; and they have to do all this while at the same time dealing with a certain Senator from West Virginia. Let us not forget that this is the man who fathered the CEO of Mylan Pharmaceuticals, Inc., who, with Gordon Gekko enthusiasm, in 2016 raised the price of life saving EpiPens from $100 to $600 for a two-pack. Why? Because she could. I only mention this because of the old adage about the apple and the tree.

Given Senator Manchin’s knife-through-the-heart death blow to BBB this past Sunday on Fox News, one might be forgiven for thinking that if democrats keep bringing up the bill they’ll be fulfilling Einstein’s definition of insanity.

But, hold on a minute. I suggest the erstwhile coal magnate has gone a bridge too far and given the Democrats a magnificent opportunity. After his announcement, he was almost universally excoriated for it. Even the Coal Mining Union called him out on it. Obviously, this affected him, because the next day he seemed to back off a bit. Therefore, if the democratic muck-a-mucks are magnanimous and warm-hearted and forgive him publicly for this unfortunate error in judgement―sort of welcome him home as the Prodigal Son―he may be grateful enough to work with the President and, with a couple of face-saving tweaks, produce a bill all democrats can support, maybe even a few Republicans when they see the writing on the wall.

I’ve always thought the key to success is the ability to outlast the opposition. Elihu Root said it better. He was Secretary of State and Secretary of War in the Roosevelt Administrations, Theodore’s not Franklin’s. He said, “Men do not fail; they give up trying. Failure is a necessary step toward success.” Mr. Root also won the Nobel Peace Prize in 1912.

Democrats would do well to remember Root’s words.

What do you think?

Sisyphus Must Have Felt Like This

Wednesday, September 16th, 2020

The COVID-19 boulder, full of facts, lies, information, misinformation, disinformation, and just plain delusional thinking keeps rolling back down the mountain. Try as we might, it’s certainly difficult to make sense of COVID-19. But we keep trying, anyway. As in:

Unions during COVID-19

I have written previously about the perplexing case of union participation in America. In 1960, about a third of hourly workers belonged to unions. In January of this year, the BLS reported that number had dropped to 10.3%. Yet, in the same press release, the BLS reports:

Nonunion workers had median weekly earnings that were 81 percent of earnings for workers who were union members ($892 versus $1,095).

Right now we won’t get into why this puzzling paradox exists, except to say we now have another log to throw on the pyre.

A new study authored by researchers at George Washington University, the University of Pennsylvania Perelman School of Medicine and the Boston University School of Medicine, published in Health Affairs, found that having a unionized workforce at a nursing home greatly reduces the likelihood that residents or staff will die from COVID-19. From the study’s Abstract:

Health care worker unions were associated with a 1.29 percentage point mortality reduction, which represents a 30% relative decrease in the COVID-19 mortality rate compared to facilities without health care worker unions.

The study analyzed data from more than 300 nursing homes in New York from March 1 through May 31. The authors conclude the unionized health care workers in the nursing homes were able to negotiate for more PPE, higher pay, and better working conditions.

During the pandemic, New York has suffered nearly 7,000 nursing home deaths, more than any other state except New Jersey.

My take on this? If you have loved ones who may be headed for a nursing home, it might be a good idea to ask if the staff is unionized.

Avoiding medical care during COVID-19

Since early in COVID-19, we’ve known that many people, fearful of the disease, have put off getting routine, or, in some cases, emergency medical care. What we have not known is what demographic groups are doing that and to what degree. Now, the CDC has put a full stop period to that issue.

In its 11 September weekly Morbidity and Mortality Report, the CDC published a comprehensive analysis concluding 40.9% of U.S. adults delayed or avoided medical care as of June 30. This includes urgent or emergency care (12%) and routine care (32%). Regarding what population segments are doing this, the study had this to say:

The estimated prevalence of urgent or emergency care avoidance was significantly higher among the following groups: unpaid caregivers for adults versus non-caregivers (adjusted prevalence ratio [aPR] = 2.9); persons with two or more selected underlying medical conditions† versus those without those conditions (aPR = 1.9); persons with health insurance versus those without health insurance (aPR = 1.8); non-Hispanic Black (Black) adults (aPR = 1.6) and Hispanic or Latino (Hispanic) adults (aPR = 1.5) versus non-Hispanic White (White) adults; young adults aged 18–24 years versus adults aged 25–44 years (aPR = 1.5); and persons with disabilities§ versus those without disabilities (aPR = 1.3).*

So, Mary, taking care of her aged mother at home, foregoes either emergency or routine care at nearly three times the rate of Sarah, her next door neighbor who is not burdened with an aged relative, because she doesn’t want to bring COVID-19 home to Mom. Even more troubling is that people with two or more co-morbidities forego care at nearly two times the rate of people without such underlying conditions.

The CDC’s paper advises that, “… urgent efforts are warranted to ensure delivery of services that, if deferred, could result in patient harm.”

Enough said.

*By way of example for the statistically challenged, an adjusted prevalence ratio of 2 means that the prevalence of cases among a study group is 2 times higher than among the control subjects. It’s calculated through a series of regression analyses. There. Now you know.

U. S. life expectancy

COVID-19 has sucked all the air out of any national attempt at healthcare reform, while revealing in sharp detail the foundational flaws in the current system. Eventually, however, America is going to have to confront this issue in a meaningful manner. Healthcare cost in America is still twice the average of all 37 member countries of the Organization for Economic Cooperation and Development (OECD), and Americans still have poorer health and lower life expectancy than the average of the member countries (78.7 versus 79.5)

In its latest Health At A Glance publication, the OECD updated its life expectancy data, as shown here:

There are many cracks in our healthcare house that Jack built. Ignoring them is not a strategically viable plan for improvement, improvement that all citizens deserve.

To quote the venerable A. E. Housman, “Terrence, this is stupid stuff.” Another example of our woebegone healthcare system.

Trump’s Nevada rally

Last night, during an ABC-TV Town Hall Meeting President Trump once again pilloried cities and states run by Democrats and blamed their leaders for any problems with the response to COVID-19.

A little contextual background is required here. On 14 April, Trump asserted “absolute authority” to control the nation’s response to the pandemic, saying, “When somebody is president of the United States, your authority is total.” He made it clear he would be in charge and the states would have to fall in line.

Two days later, he reversed himself on a call with all the governors, telling them, “I’ve gotten to know almost all of you, most of you I’ve known and some very well. You are all very capable people, I think in all cases, very capable people. And you’re going to be calling your shots.”

Since then, he has repeatedly repeated the “You’re on your own” line. The result, of course, has been that we have seen 51 different plans and approaches  with varying degrees of success.

Nevada, one of the “you’re on your own” states, is still in the midst of a tough fight against the disease with a Daily Positivity Rate of 7.1% and a Cumulative Positivity Rate of 10.2% as of 10 September.

On 24 June, Nevada Governor Steve Sisolak imposed certain restrictions, among them the requirements that all Nevada residents wear masks when in public and that no more than 50 people, socially distanced, congregate in one place.

Enter Donald Trump and his the-sky-is-the-limit indoor rally of last Sunday evening at Xtreme Manufacturing in Henderson, Nevada. Fire officials estimated the size of the crowd was 5,600 people, nearly all of whom were maskless (except for the people right behind Trump who were constantly on full TV view).

Just as we saw in Tulsa after his previous rally, we’ll probably see a spike in cases in Nevada in two to three weeks.

Beyond the nonchalant and willful endangerment to peoples’ lives, what bothers me most of all about this event is Donald Trump’s cavalier and metaphorical raising high of his two middle fingers to Nevada’s scientifically-based efforts to keep its citizens alive. After repeatedly telling the nation’s governors they should do what they think they need to do to combat COVID-19, this “law and order” president, without compunction of any kind, imperiously violates the law while telling his large crowd Nevada’s Governor Sisolak is “a hack” and “weak.”

Allow me to close with Joseph Welsh’s question to Senator Joe McCarthy on 9 June 1954: “Have you no decency, sir?”

 

A Puzzlement Before The WCRI’s Annual Conference

Tuesday, March 3rd, 2020

Thoughts and questions before heading to the Workers’ Compensation Research Institute’s (WCRI) annual conference this week in Boston.

Despite the erstwhile efforts of certain folks to put a big lid on scientific data and bury it all deep in the ground, the U.S. Bureau of Labor Statistics (BLS) continues to publish interesting and compellingly thought-provoking work. Take the paradox of union membership and earnings, for example.

Beginning of the paradox: Non-union wage and salary workers earn only 81% of what union members earn. Union workers in 2019 earned an average of $1,095 per week, as opposed to $892 for non-union workers, a difference of $203 per week, which, if you’re doing the math, is $10,556 per year.

The difference in earnings for men and women is stark: Men in unions earn an average of $1,147 per week, which contrasts with non-union earnings of $986. The difference here is $161 per week, or $8,372 per year. Unionized women, on the other hand, earn less than the men, but way more than non-unionized women: $1,018 versus $792, a difference of $226 per week, or $11,752 per year.

Clearly, union members earn significantly more than non-union workers.

So, will somebody tell me why union membership has been declining for decades? Every year, God bless ’em, the brainiacs at the BLS tell us by just how much, which is the second part of the paradox.  In January, 2020, BLS published data for 2019, which showed the union membership rate for wage and salary workers to be 10.3%, down 0.2% from 2018. Of course, our workforce is made up of both private and public sector workers, and here the public sector saves the day. The union membership rate of public-sector workers, at 33.6% is more than five times higher than the 6.2% rate for private-sector workers.

Some say the reason for declining union membership is the hefty annual dues union members have to pay. Well, the most any worker will pay in dues to the International Brotherhood of Electrical Workers for 2020 is $492; for the United Auto Workers, it’s $843.84. It doesn’t seem as if sky-high dues can be the answer.

I don’t know whether WCRI, or anyone else for that matter, has studied whether there is a statistically significant difference in workers’ compensation injuries and costs between union and non-union wage and salary workers. Might be interesting to find out whether the 10.3%, in addition to earning more, has better workers’ compensation performance

Hope to see you in Boston

This Can’t Go On Forever, Right?

Monday, April 23rd, 2018

The ratio of wages to the cost of living is what the economist calls real wages; the desirability of having real wages as high as possible, consistent with high employment, is a social objective. Rises in real wages do for the most part come about in fact as a consequence of rises in productivity. In a modern economy, what has [sic] normally to be expected  is rising productivity. – J. R. Hicks: Unions, Management and the Public; New York, Harcourt, Brace, and Co., 1960

What Hicks wrote 58 years ago had been true for more than 100 years. But 13 years later, in 1973, his economic model crashed. Productivity and real wage growth, which had been so tightly bound for so many years, parted company.

The consequences have been enormous. Hourly paid workers comprise about 60 percent of wage and salary workers. In Hicks’s day, nearly a third of all  workers were unionized. In 2017, however, the union membership rate had fallen to 10.7 percent, according to the U.S. Bureau of Labor Statistics. It’s only that high because of public sector participation. The union membership rate of public sector workers (34.4 percent) is more than five times higher than that of private sector workers (6.5 percent). Ponder that for just a moment. Only 6.5% of private sector workers are unionized today. This, despite union members having median weekly earnings about 25 percent higher than earnings for nonunion workers in comparable jobs ($1,041 versus $829).

This presents us with a befuddling paradox:

  1. Since 1973, the year when hourly wages and productivity waved goodbye to each other, real wages have been essentially flat, rising about 4% in the intervening 45 years;
  2. But in the same period, the CPI has risen 586%. That’s right. What you bought for $1.00 in 1973 will cost you $5.86 as of one month ago.
  3. Yet throughout this period, union participation and membership has declined by roughly 50%, despite union membership resulting in considerably higher wages for workers.

In Massachusetts, my home state, union membership was 12.4% in 2017, but 70% of that was in the public sector. At the recent Workers’ Compensation Research Institute’s annual conference I asked Steve Tolman, President of the Massachusetts AFL-CIO, why union membership hasn’t risen like a rocket to the moon given the persistent stagnant growth of real wages. He said he thought legislatures and employers had made it increasingly more difficult to win a union campaign. So, I then asked Keynote Speaker Erica Groshen, Ph.D., former Commissioner of the U.S. Bureau of Labor Statistics, her opinion. She wasn’t sure if there was a link between lack of union membership and stagnant real wage growth and suggested more research should be done. And in yesterday’s New York Times Louis Uchitelle suggested that American manufacturers relentlessly moving manufacturing jobs offshore has led to a steady decline in union membership – you can’t be in a union if you don’t have a job. The title of Uchitelle’s piece was, “How Labor’s Decline Hurt American Manufacturing.” Could have just as easily been titled, “How American Manufacturing’s Decline Hurt Labor.”

Regardless, what we’re left with is this (as I’ve written before): The 60% of the American workforce that is paid hourly resembles a swimmer trying to catch up to a battleship; with every stroke he falls farther and farther behind.

One highly illustrative area where meager wage growth has impacted the American family can be found in the cost of health care.

In 1989, Herb Stein (father of Ben), former Chairman of President Nixon’s Council of Economic Advisors, coined Stein’s Law*, which says, “If something cannot go on forever, it will stop.”

Do you think this can go on forever? What are the societal and political consequences if we see continued flat wage growth, the accelerating decline of private-sector unions, a rising CPI and an increasingly costly health care burden for families? Do you think today’s polarized American society is capable of addressing, let alone reversing, these decades old trends? What will it take for that to happen? I wish I knew.

But here is something I do know. If employers do not begin to do their best to address these issues – wage stagnation and ever rising health care costs that come with ever increasing deductibles – then unions and people like Steve Tolman, dormant for so long, will, and they’ll come with all guns blazing.

 

* Stein’s Law appeared on Page One of the June 1989 issue of the “AEI Economist” under the headline “Problems and Not-Problems of the American Economy.”