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Senior Advisor

The influence of big labor

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As Americans celebrate this Labor Day weekend, two seemingly contradictory facts about the current state of the union movement in this country stand out. First, with only 7 percent of the total, fewer employees in the private sector are union members today than ever before. Even when numbers for both the private and public sectors are combined, only 12 percent of American workers are union members. Fewer members mean less income from compulsory dues. Less money coming into union treasuries ought to result in fewer partisan campaign contributions going out.

But by borrowing millions from the same banks that labor leaders so often demonize as greedy enemies of the working man, union bosses in 2008 were able to spend record amounts on electing Democrats at all levels of government. As Service Employees International Union president Andrew Stern said, "we spent a fortune to elect Barack Obama -- $60.7 million to be exact -- and we are proud of it." Stern's union had to borrow $25 million to make payroll in 2008 and has pledged to spend millions more on behalf of Democrats in the 2010 congressional races.

 

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»  Obama and Treasury Secretary Timothy Geithner forced financially troubled General Motors and Chrysler into bankruptcy, then imposed settlements on the two corporations that granted ownership stakes of 17.5 percent and 55 percent, respectively, to the United Auto Workers Union.

No wonder unions now have their lowest public approval rating since Gallup began measuring it in 1936



Read more at the Washington Examiner: http://www.washingtonexaminer.com/opinion/The-big-clout-of-Little-Labor-705480-102105029.html#ixzz0y...
42 Replies
Veteran Advisor

Re: The influence of big labor

  Every time you post something, and especially about organized labor, you prove how much of an absolute moron that you are. Did you know that the UAW had let GM slide for quite awhile on their pension obligations, to the tune of about $21 billion, and then after their members had lost their jobs, and still had an unfunded pension, they have to accept stock in a bankrupt company as repayment?????

 

  Maybe you could relate your expertise of labor relations and collective bargaining negotiations, that you have acquired by working for your daddy your whole life. Or did you get that vast experience while renting yourself and your truck out to FS to deliver AA tanks???

 

  I have a trustee meeting coming up after Labor Day, the one of two pension plans that I am appointed to as a management trustee, maybe you could provide some advice. LOL

Veteran Advisor

Re: The influence of big labor

Just curious Tom, are the pensions you are connected to defined benefit or defined contribution?

How is the funding? Still OK?

It can be a mind numbing job to be a trustee on these plans and try to keep up with and understand the workings of said plan. Takes a special education to sort out the numbers that some administrators can/like to throw at you.

Veteran Advisor

Re: The influence of big labor

  Canuck, there are one of each. The defined benefit is the main one, and the defined contribution is a supplemental pension.

  They are funded quite well, because each and every hour worked by a member of the collective bargaining unit, is paid into the fund at the amount determined by their membership. When we negotiate wage rates/increase, let's say that we agree upon $2.00 per hour increase for X amount of time(one year, or two). Their membership decides how much and where to allocate that raise after mandatory increases in things such as health care. If they must increase their H/C amount by $1.00, then the other dollar is free to be split up among the remaining items. They could put all or part of it in either pension fund, as it's voted on by their membership. When we meet, we determine the multiplier for the given period that determines the amount of future payout. It's a somewhat complex formula, but for example the markets/ gains are terrible, we lower the multiplier for the current period, which in turn determines what the future payout is for the applicable current hours worked, and it works the other way also.

  Right now, the funds aren't doing too bad, it's just that due to the economy, the membership hours/contributions are pretty low. But, their fixed costs such as commissions and mandatory reporting are very high due to republican retribution in the last decade that was masked as "looking out for union members", and that just eats away at their funds, because it's divided among all the members equally.

Veteran Advisor

Re: Defined benefits

Thanks Tom;

Defined benefit plans are becoming quite scarce in Ontario except for maybe government plans.

They have been the downfall of many plans that looked OK for funding until markets change and numbers in the plans start to shrink but not pensioners.

There is a rule here that stops an employer from contributing if a plan is 'overcontributed'. That seems to have been a big mistake in the legislation controlling pensions as those "good" years and no contribution are not easy to make up when "bad" years come along. And bad always comes sooner or later.

Veteran Advisor

Re: The influence of big labor

2 questions...if it's only 12% of the people and the other 88% are so obviously getting screwed by them what difference should what they do make to you? You'd think you'd have a political tent so big that they'd just slink off into the distance. Or would you not be satisfied until the politics was 100% your way. It can be that way, you know,with the dissolution of the democracy. But since we;ve still got one, aren't' you troubled by the fact that you lose to these people quite frequently....or ever?

 

And regarding:

 

"Stern's union had to borrow $25 million to make payroll in 2008 and has pledged to spend millions more on behalf of Democrats in the 2010 congressional races."

 

Why would a bank borrow that kind of money to an entity with no obvious tangible assets? Or is it possible that much of the union retirement funds actually have their money invested in some manner that makes it vested and not vulnerable to the foibles and shenanigans of the financial markets, creating an environment of extreme covetousness such as exists over Social Security (privatization) funds and proposed medical savings accounts. I'd wonder if maybe the banks who borrowed the unions the money quite possibly didn't feel that they had more assurance of getting their interest paid than they would lending to some 90% possibility of failing small business set up to play out TIF and depreciation and then change colors or blow away.

Veteran Advisor

Re: Defined benefits

  You want to know what's really disgusting? The labor side of the trustees are union officials that aren't even in that pension fund, they have their own, and they aren't covered by the collective bargaining agreement. So, you have labor AND management that has absolutely no stake in the performance of the pension funds, other than fiduciary duties. A few years back, those funds were getting less than 2% returns after commissions and fees, when the average was 5-10% higher. You know what the trustees biggest concerns were? Where the meeting was going to be held at, and whether their food is good and if they serve alcohol.

  Guess what I did? I starting reporting to the covered members who actually showed up, and what the cost was of the meeting, along with how the trustees voted. I went to numerous union meetings as a guest, because the defined contribution is a multi-trade pension fund. Yea, the union reps were ticked to say the least, and tried to prevent me from showing up and speaking. The same BS happened when the annual meeting comes around, where all the applicable trades and members are in IL, but the trustees want to have the meeting in Lake Tahoe, and have the fund foot the expense for travel, meals, etc., etc. There were some ticked off people that didn't like it when I let that be known, because they though that they were entitled to it because they had to give up their free time, for which they were compensated in money, and food and drinks.

Veteran Advisor

Re: The influence of big labor

  Bruce, you and I both know it's a crock of crap, but he's too stupid to know any better. The pension funds that I deal with aren't nearly as big or heavily funded like SEIU. They are now going to banks/investment entities and soliciting the best deals in the form of board positions and proxy votes, in turn for bringing money to the banks, not borrowing. What the hell would they borrow money for, anyway???????

Senior Advisor

Re: The influence of big labor

One thing is for sure....they got good return on their investment.

Veteran Advisor

Re: The influence of big labor

  You don't even have a clue how any union is funded, or how pensions are, do you???