Ed Crego, George Muñoz and Frank Islam: Labor’s Love Lost

“Look for the union label.” That was one of the catch phrases for the union movement in happier times. It used to be labor unions were something that many working class Americans loved. It now appears that labor unions are something that many working class Americans hate.

What is the status of labor unions as we approach Labor Day 2012? On January 27 of this year, the U.S. Bureau of Labor Statistics (BLS) released its Union Members Summary for 2011 which showed that the union membership rate for wage and salary workers was 11.8 percent with a total of 14.8 million union workers. The release highlighted that “public sector workers had a union membership rate (37.0 percent) more than five times higher than that of private-sector workers (6.9 percent).”

The BLS release observed that “In 1983, the union membership rate was 20.1 percent.” Thus, the overall decline in the membership percentage between 1983 and 2011 was almost 41 percent. That is a substantial shrinkage in those 28 years.

The more complete and revealing picture is provided by examining comparative historic data available at Unionstats.com maintained by Barry T. Hirsch and David A. McPherson. That data goes back to 1973 and shows that in the ten years between 1973 and 1983 private sector union membership went from 24.2 percent to 16.5 percent (a decline of 32 percent) and public sector union membership went from 23.0 percent to 36.7 percent (an increase of nearly 60 percent).

Public sector union membership from 1983 to 2011 has hovered in the 36 to 37+ percent range. In stark contrast, private sector union membership tumbled from the 16.5 percent of 1983 to 6.9 percent (a decline of almost 58 percent in that time frame, and a decline of over 71 percent since 1973).

These statistics are stunning but they only tell part of the story about the current status of unions in both the private and public sectors. That story is in the back stories and not in the numbers.

Undoubtedly, the highest profile union story for the past two years has been the battle between Governor Scott Walker (R) of Wisconsin and its public sector employees. The battle began when Walker introduced legislation which the Wisconsin legislature passed to significantly change the collective bargaining process and powers of the union. The union in turn led an effort to have Walker recalled. The recall election was held on June 5, 2012 and Walker easily beat his opponent, Milwaukee mayor Tom Barrett (D). Walker’s dual “union-busting” victories along with the Republican Party Platform for 2012 which endorses, as Josh Eidelson points out in his August 29 Salon blog, “the enactment of a National Right to Work Law” do not augur well for the future of unions — either public or private.

The resolution of the dispute between Caterpillar and its striking workers at its Joliet, IL plant does not augur well either. As Steven Greenhouse reports in his August 18 New York Times article, “The fight… was considered a test case in American labor relations, in part because Caterpillar was driving such a hard bargain when its business was thriving.” It was a “test” that Caterpillar won and the union lost as the workers, voting against the recommendations of their leadership, ratified a deal that gave Caterpillar almost everything that it was asking for. This included: a six-year wage freeze for employees hired before 2005, a pension freeze for the senior two \-thirds of the workforce, and a “steep increase” in the portion of the health care insurance to be paid by the workers.  read more…

via Ed Crego, George Muñoz and Frank Islam: Labor’s Love Lost.

CalPERS revises estimate of pension reform savings – State Pensions – The Sacramento Bee

In a revised estimate, CalPERS today said Gov. Jerry Brown’s pension reform plan would yield savings of $42 billion to $55 billion over 30 years.

Earlier this week, CalPERS pegged the savings at $40 billion to $60 billion.

The plan goes before the Legislature today.

CalPERS warned that its revised analysis is still rough.

“It provides estimates only, based on the limited information available to CalPERS at the time it was prepared and the short timeframe which CalPERS had with the draft legislation, and for these reasons the cost analysis is subject to change,” pension fund staffers wrote.

Much of the plan affects workers hired after Jan. 1, 2013, including more modest pensions and higher retirement agencies, and the new CalPERS analysis projects that most of the savings won’t materialize for years.

In year one, starting next July, the plan would produce maximum savings of $146 million. That includes savings to state agencies, local governments and school districts.

A decade later, the plan would generate savings of up to $1.2 billion a year.

The CalPERS projection assumes the pension plan will earn an average 7.5 percent a year on its investments – an assumption that many critics believe is too optimistic. In the latest fiscal year, the return was just 1 percent. The year before, however, CalPERS earned nearly 21 percent.

via CalPERS revises estimate of pension reform savings – State Pensions – The Sacramento Bee.

California Senate votes for ‘sweeping’ pension reform; Legislature poised to vote to reform workers comp – San Jose Mercury News

SACRAMENTO — The state Assembly today overwhelmingly approved a controversial pension reform bill as it also considered overhauling workers’ compensation as part of what’s expected to be a marathon last day of the legislative session.

The bill passed, AB 340, on a 50-8 vote, with two Republicans voting for it and two Demcrats voting against it. Of the 22 Assembly member not voting, 19 were Republicans, three were Democrats.

The Senate vote was expected to take place later this morning.

The pension reform, which Gov. Jerry Brown calls “sweeping,” caps benefits for new public employees who make more than $132,120, eliminates “spiking” and raises the retirement age for new employees. That and other fixes are estimated to save between $40 billion and $60 billion over 30 years.

“Pension reform is long overdue and we can take a bold step forward by passing it today,” Brown said in a statement.

Critics say the plan won’t come close to reining in runaway pension costs that are stressing state and local governments obligated to pay the bills.

Legislators are also tackling workers compensation reform, aimed at providing relief to workers who suffer injuries that don’t knock them out of the workforce but affect their ability to make the same wages that they’d made in their previous job.

The reform is backed by labor groups and small business groups — with large employers on the sidelines.

But applicant attorneys oppose it because it makes it more difficult to bring injury cases to the courts. The money that would go into a fund for the newly classified injured workers would be taken from a fund that goes toward higher awards.

Brown said the bill would “avert an imminent crisis where workers suffer and rates will skyrocket. That happened in 2004, but this time, we have the chance to fix a problem before it becomes a crisis. We have the chance to make the Workers’ Compensation System better — much better — for workers and cheaper for business.”

Brown hopes to use the reforms — and other cost-cutting moves he made this year — to enhance his chances to win voter approval of his tax-hike initiative, Proposition 30, in November. His proposal would raise income taxes on the wealthy and boost the sales tax by a quarter cent, raising about $6 billion a year, enough to prevent massive new cuts to schools and colleges.

Brown’s initiative leads in the polls, though by a narrow margin. A rival tax initiative for schools, Proposition 38, the measure backed by wealthy civil rights attorney Molly Munger, has lagged in the polls.

Legislators produced the pension legislation, AB 340, earlier this week, pounding out a 40-page bill with no time left to send it to the floor after months of negotiations with Brown. Republicans complained that Democrats were rushing through a bill with little scrutiny.

But the howls of outrage came from labor groups, who said that they were being thrown under the bus by Brown and Democrats.

Pension reformers say the legislation fell short of the larger need of tackling unfunded liabilities for retirees and current employees, estimated around $150 billion.

The legislation would require new and current public employees to pay at least half of the payments to their pensions, sharing the burden with their employers. It would also raise the retirement age for new employees and put in place new formulas for calculating pensions.

The state also provides retirement programs for many local city and county workers. And many cities have been forced to slash services as their pension bills have skyrocketed in recent years.

via California Senate votes for ‘sweeping’ pension reform; Legislature poised to vote to reform workers comp – San Jose Mercury News.

California Lawmakers Look to Approve Sweeping Pension Reform | Fox Business

California lawmakers were poised to pass a sweeping pension reform measure and a flurry of other bills on Friday as they prepared to break until after the fall elections.

The pension law, unveiled by Governor Jerry Brown on Tuesday after months of talks with fellow Democrats who control the legislature, would put new limits on pensions for future state and local government to save tens of billions of dollars in retirement-related spending.

Brown intends to promote those savings to help sell voters on his November measure to raise the state’s sales tax and boost income taxes on wealthy Californians. Revenue from the measure would prevent further immediate cuts in spending on education programs and bolster the state’s finances in coming years.

The tax measure has a modest lead in polls but support for tax initiatives in the California typically wanes as election day nears. Brown needs to hammer home to voters how he has tackled pressing fiscal concerns to rally them behind tax increases, analysts say.

Pension costs are one of those concerns–and not just in California. State and local governments around the country have struggled with lean revenue, requiring them to slash spending on services but at the same time honor promises to retirees.

Brown and top Democrats hailed the reforms in the legislation to be voted on Friday. The California Public Employees’ Retirement System, the largest U.S. public pension fund, said the plan could cut $40 billion to $60 billion in pension expenses for government employers over 30 years.

Public employee unions panned the agreement, complaining that Democrats who are routinely their legislative allies had sold them out by agreeing to the proposal.

But others said the changes do not go far enough, noting they do not include Brown’s proposal for “hybrid” pensions combining features of traditional pensions and 401(k)-style retirement accounts.

“I hope people acknowledge there is much, much more work to be done,” said Joe Nation, a former Democratic member of the state Assembly who now teaches public policy at Stanford University. “It’s better than moving backwards but this barely moves the ball forward.”

Nation in recent years has overseen studies warning California and its local governments face unfunded pension liabilities that stretch into the hundreds of billions of dollars.

Pension costs are contributing to the financial hardship that pushed Stockton and San Bernardino, two sizeable California cities, to file for bankruptcy this year.

Tackling unfunded pension liabilities will require changes that effect the retirement benefits of current public-sector employees, not just the future employees targeted in the bill, according to Nation.

“Because we are so under water right now there just really has to be more,” Nation said.

California lawmakers must vote on the pension bill by midnight Friday, the close of the legislative session.

The legislation will require new public-sector workers to split payments to their pension accounts at least evenly with employers.

Current employees would also be responsible for half their contributions as talks phase in higher payments. Savings to the state from its employees paying more toward their pensions will be used to reduce its unfunded pension liability.

The legislation also will raise retirement ages for new employees and impose new formulas for calculating pensions. That will leave the newly hired with less generous benefits than current workers.

The legislature will also be considering a workers-compensation reform measure.

via California Lawmakers Look to Approve Sweeping Pension Reform | Fox Business.

Cop-kicking video: Second St. Paul police officer placed on leave – TwinCities.com

St. Paul police Chief Thomas Smith has placed a second officer on administrative leave, based on new information from the internal affairs investigation into a video that shows an officer kicking a man who is on the ground and using other force.

The officer, who police haven’t named, was notified Thursday afternoon, Aug. 30, of Smith’s decision, Howie Padilla, police spokesman, said Friday. He did not detail what information led to the officer’s paid leave, saying it is part of the investigation.

The video, viewed online more than 250,000 times by Friday afternoon, shows the Tuesday arrest of Eric Hightower, 30. An officer, identified by police as Jesse Zilge, is seen kicking Hightower as he is on the ground coughing. Hightower has said he was coughing because the officer had sprayed him with a chemical irritant.

Zilge and another officer, who police haven’t identified, are also seen slamming Hightower’s face into the hood of a squad car. Hightower said the officers pulled his hair, continued to spray him with the irritant after he was handcuffed, and used other force.

A friend of Hightower’s took the video and another friend posted it to YouTube on Wednesday morning. That afternoon, Smith said that he’d placed Zilge on paid administrative leave and launched an internal affairs investigation.

A police report lists Zilge as the primary reporting officer and Steven Petron as the secondary reporting officer. Petron is not the second officer on leave — he

remains on active duty.

Padilla wouldn’t say if Petron is pictured in the video, or what role he had in the arrest.

Asked whether the second officer on leave appears in the video, Padilla said, “At this time, we’re not elaborating on his identity or the identities of any of the officers in the video.”

To the question of whether other officers will be placed on leave, Padilla said, “The investigation continues. At this time, we’re not going to speculate on which direction the investigation may take us.

“The chief has asked for a thorough investigation to be done,” he said. “I think this is a sign of how serious he is taking this investigation. He has made it clear that he is looking for the answers of what happened during this arrest from start to finish.”

The Ramsey County attorney’s office charged Hightower, of St. Paul, with aggravated stalking, terroristic threats and fourth-degree criminal damage to property in the case that police were arresting him for Tuesday. He is alleged to have threatened his ex-girlfriend, including leaving a voicemail that said, “You’re about to get your mother (expletive) head blew the (expletive) off!,” according to the complaint said.

Hightower, released from jail Thursday on $35,000 bond, plans to plead not guilty, his attorney said.

via Cop-kicking video: Second St. Paul police officer placed on leave – TwinCities.com.

Glen Cove, union working to finalize contract

The terms of a union contract covering about 100 Glen Cove city employees have been set since last year — with the memorandum of agreement signed by the mayor in November and approved in a City Council vote in December — but they may not be made official until late September at the earliest.

“It’s not because we’re disagreeing on stuff, we’re agreeing on stuff. It’s just about housekeeping,” Mayor Ralph Suozzi said Wednesday, adding that the CSEA members are nevertheless working under the agreement.

“It’s been on the back burner because the council is concentrating on the garbage contract and police retirements,” he said.

Suozzi said city and local CSEA representatives are collaborating to modernize the language of the deal and make some parts more “explicit in legal terms.”

After those tweaks are made, he said, “then we’ll sign that contract.”

The major components of the retroactive agreement, covering workers from Jan. 1, 2010, until Dec. 31, 2014, are settled, Suozzi said.

They include a 10 percent salary increase over the course of five years, an upgraded dental health plan, and a revised pay scale that decreases the number of steps from 55 to 25.

Glen Cove CSEA president Marty Cook Thursday said the contract was all but finalized.

“We just have housekeeping,” he echoed. “It’s all signed, sealed and delivered.”

Cook said he hopes the deal will be official by the end of September.

via Glen Cove, union working to finalize contract.

Kevin James: Los Angeles City Officials Were Warned of “Lost” Millions Years Ago And Did Nothing

On July 20, 2012, the Los Angeles Times reported on the growing number of cities falling victim to the “questionable financial practices” put in place by their elected officials. According to the Times, “many of the [bankrupt] cities relied on restricted funds to balance their books, obscuring their financial troubles.” The Times correctly concluded that “bad accounting practices and improper use of funds have also taken a toll” in forcing California municipalities into bankruptcy.

A few weeks later, Californians statewide were outraged to learn that $54 million in taxpayer funds had been hidden away at a time that state lawmakers are asking taxpayers for more of their hard-earned money. According to the Los Angeles Times, the money was “hidden” in parks accounts “stashed away for at least a dozen years.” Investigations are now warranted, and many are being opened. According to the Times, a state audit was added to “a growing list of probes examining state finances in the wake of an accounting scandal.”

After further investigations were opened, hundreds of millions of additional dollars were found. Californians up and down the state started asking questions about their own city’s finances and accounting practices as well, particularly because of municipal bankruptcy fears that have been sweeping the state.

In an apparent attempt to capitalize on this latest state accounting scandal, Los Angeles Controller Wendy Greuel sent out a press release on August 16, 2012 referencing the state scandal and stating that she “is currently in the process of auditing some of the highest risk special revenue funds to ensure full transparency and accountability of every dollar within these funds.”

What Controller Greuel failed to tell the public is that on August 27, 2008, four long years ago, Greuel’s predecessor Controller Laura Chick sent a letter to the Mayor and the City Council (which included Greuel) warning them that millions of dollars of taxpayer money was being “lost” in hundreds of special revenue funds. Specifically, Controller Chick wrote that “I have been critical of the over abundance of separate fund accounts because money easily gets “lost” in them, remaining unspent and thus wasted.” Here is a link to Controller Chick’s 2008 letter.

It is now clear that Controller Greuel, who has been Controller since July 1, 2009, has done nothing to find the “lost” millions from the hundreds of special revenue funds referenced in Ms. Chick’s 2008 letter — at least up until the very recent work referenced in her August 16, 2012 press release. Controller Greuel is not the only elected official that deserves blame for ignoring Controller Chick’s warnings. Councilmembers Eric Garcetti and Jan Perry are running for Mayor and Councilmember Dennis Zine is running for Controller. They were also City Councilmembers in 2008. Yet none of them are able to show that they responded in any way whatsoever to Controller Chick’s 2008 letter warning every one of them that millions of dollars of taxpayer money was being “lost” in these special revenue accounts.

Controller Chick’s warning that millions of “lost” money was floating around special revenue funds was ignored while fiscal emergencies were declared by city officials in 2009, 2010, 2011, and 2012.

Controller Chick’s 2008 letter is concerning for several obvious reasons. As a former federal prosecutor, what concerns me the most about Controller Chick’s letter is her decision to put the word “lost” in quotations marks — possibly suggesting something more sinister related to the money than merely losing millions of dollars of taxpayer money. It is clear that our elected officials waited for years to respond to Controller Chick’s mandate, if at all, and what makes matters worse is that Controller Chick’s choice to put the word “lost” in quotation marks should have sent up a red flag and resulted in urgency on the part of our elected leaders to “find” the millions of dollars in taxpayer money — especially those four members of the 2008 City Council that are now running for citywide office (Greuel, Garcetti, Perry and Zine).

Controller Chick’s 2008 letter is shocking enough. Elected officials’ failure to respond is inexcusable.

via Kevin James: Los Angeles City Officials Were Warned of “Lost” Millions Years Ago And Did Nothing.


Bay Area’s $200K Club: Analysis finds fat pensions belong to nonunion bosses

By Thomas Peele tpeele@bayareanewsgroup.com

Gov. Jerry Brown arrives on Aug. 28, 2012, before speaking on pension reform in Los Angeles. (Nick Ut/AP)

Call it the Bay Area’s $200K club.

More than 60 retired local government employees are members of the coveted group, each guaranteed pensions of more than $200,000 a year — for the rest of their lives.

But Gov. Jerry Brown wants to stop the club from growing in the future, as part of a controversial plan legislators will vote on Friday to reform California’s costly pension system.

Just who’s on the list? An analysis by this newspaper of thousands of pension records dispels one recurring myth: Union workers aren’t the ones benefiting from the fattest of the six-figure pensions guaranteed by California taxpayers. It’s the nonunion bosses.

San Joaquin

County’s former superintendent of schools Frederick Wentworth and San Ramon Valley’s former Fire Chief Craig Bowen top the list, raking in more than $295,000 each. Former Santa Clara District Attorney George Kennedy is part of the club. So is Santa Clara County’s former superintendent of schools Colleen Wilcox and ex-San Jose/Evergreen Community College Chancellor Rosa Perez, both of whom left under a cloud. Former San Jose Police Chief William Lansdowne made the club, even though he’s the current police chief taking home another $200,000 a year in San Diego.

San Leandro Unified’s superintendent Christine Lim receives a $244,000 pension through the state Teacher’s Retirement System after the school board terminated her contract in


“That’s more than she ever made while she was an employee of the school district,” board member Mike Katz-Lacabe said on Thursday. “I think that’s the reason there’s a call for pension reform. When people can make more in retirement than when they were employed, that’s a problem.”

The newspaper’s analysis of four pension systems that cover Bay Area government employees showed 66 retirees receive nearly a combined $15 million a year, averaging pensions of $223,000 each. Alameda and San Mateo counties were not included in the analysis because their officials demanded to be paid for their pension data.

While the newspaper’s analysis found dozens of members of the $200K club in the Bay Area, nothing compared to the pension that Bruce Melkenhorst, a retired city administrator from the tiny Los Angeles County city of Vernon, takes home: $526,000 a year.

Brown’s reform proposal would cap the amount new government employees salaries can count toward pensions at a high of $110,100 for most workers and $132,120 for those who do not contribute to Social Security.

The caps would eventually — over a generation or more — eliminate eye-popping pensions. But the public shouldn’t look for the $200K club to

disappear for decades, said Chris Burdick, a lawyer in Marin County who specializes in pension law.

“What someone is getting now is what they are going to be for life, and that includes people still working today,” Burdick said.

The pension cap would only affect government workers hired after Jan. 1. So, people working for the government now can still join the $200K club when they retire. None of the reform proposals scheduled to be voted on Friday will change that because public employees rights to vested benefits have long been upheld by the state Supreme Court, Burdick said.

The reforms are not meant to be an instant fix, said a spokesman for Senate President Pro Tem Darrell Steinberg, D-Sacramento.

“As we go through the years, you presumably will have several thousand employees who retire and new employees who take their place,” said the spokesman, Mark Hedlund. “For every year you go through that, you have more people on different tiers with lower benefits and the (pension) cap in place.”

One member of the $200K club, retired Santa Clara County deputy district attorney Robert J. Masterson, acknowledged Thursday that his $208,000 pension is “substantial,” but he’s only been collecting it for three years. The 83-year-old retiree worked half his life for the DA but understands why the state is pushing for reforms.

“I don’t think anybody including myself thought the state’s finances would be heading over the cliff,” he said.

Critics point out that Brown’s cap proposal would only affect a tiny fraction of the hundreds of thousands of state and local government workers.

The proposed pension reforms are a “good going forward, but it’s a long-term solution when we still have short-term problems,” said Katz-Lacabe, the San Leandro school board member. “This will affect future generations.”

Lim’s final salary was not immediately available, nor were documents showing how her pension was calculated. She could not be reached for comment.

Kennedy, Santa Clara County’s former district attorney, is the one retired elected official on the list, with a pension of $223,000 based on nearly 40 years of government employment, records show.

Like Kennedy, other members of the $200K club worked for local governments for decades. Under the current system, public employees can pad their pensions by buying years of service, a practice known as “air time.” Brown’s proposals would ban the practice for new employees, but it won’t stop current employees from the controversial perk.

Burdick, the pension expert, said the practice is common and he believed people drawing high pensions like members of the $200K club were likely to have taken advantage of the perk.

“You get more out of it than you pay in,” Burdick said.

Sacto snapshot: slam-bang ‘pension reform’

As tonight’s deadline approaches for state lawmakers to ram through a public pension reform plan unveiled by Gov. Jerry Brown at the last minute during an already crazy end of the legislative session and with no review, media outlets are scrambling to make sense of it. In case you missed them, here are some selected explainers:

The Mercury News’ Daniel Borenstein dissects what’s known of the backroom compromise between the governor and Democratic lawmakers and dubs it “pension reform lite.”

The LA Times editorializes that what’s on the table is a “partial fix.”

The Merc provides a detailed piece illustrating just how few state employees will actually be affected by the plan’s pension cap provision. Hint: less than 2 percent.

A Mercury News piece today looks at the 66 former Bay Area supervisors (not rank and file union members) who’re earning $200,000 or more a year in retirement, complete with names.

via Sacto snapshot: slam-bang ‘pension reform’.