House Republicans are proposing another enormous tax break for corporations to outsource jobs. The latest Republican outsourcing plan is very similar to the one promoted by former Gov. Mitt Romney in the 2012 presidential campaign, which President Barack Obama said would cost 800,000 jobs.
The outsourcing plan was included in a “tax reform” proposal unveiled recently by the chairman of the House Committee on Ways and Means, Rep. Dave Camp (R-Mich.).
Poll after poll shows America’s working families strongly oppose tax breaks for outsourcing that already exist under current law. This is hardly surprising, since between 1999 and 2010, U.S. corporations eliminated 1 million jobs in the United States while creating 3 million jobs overseas.
Here’s how the House Republican plan would promote even more outsourcing: it would allow outsourcers to pay almost no U.S. taxes on their overseas profits when they send jobs overseas. To be precise, outsourcers would be taxed at a rate of 1.25% on most offshore profits. Obviously, if outsourcers can pay taxes at a lower rate when they send jobs overseas, they’re going to have more of an incentive to outsource.
Here’s how Obama described this terrible idea during the 2012 campaign:
“There’s a new study out by nonpartisan economists that says Gov. Romney’s economic plan would in fact create 800,000 jobs. There’s only one problem: The jobs wouldn’t be in America. They’d be in other countries. By eliminating taxes on corporations’ foreign income, Gov. Romney’s plan would actually encourage companies to shift more of their operations to foreign tax havens, creating 800,000 jobs in those other countries.”
The technical name for this idea is a “territorial tax system.” Why is it called “territorial”? Because the United States would only tax American corporations on their profits within the “territory” of the United States, not on their profits overseas.
A “territorial tax system” is a terrible idea for lots of reasons. As Obama explained during the 2012 campaign, it would encourage job creation abroad instead of at home, lowering U.S. wages in the process and opening up opportunities for multinational corporations to avoid paying their taxes by playing accounting games to pretend their domestic profits are earned in foreign tax havens.
Camp claims several features of his plan would keep multinational corporations from avoiding their taxes. However, as Citizens for Tax Justice (CTJ) explains, “[I]t is impossible to believe they would work since his overall proposal would dramatically increase rewards for any American corporation that can make its U.S. profits appear to be earned in offshore tax havens.”
Unfortunately, the Republican outsourcing plan has not gotten all the bad press it deserves. Why not? Partly because it has been competing for attention with all the other problems with the House Republican “tax reform” proposal. For example, the proposal would increase the deficit over the long term.
In February 2014, the AFL-CIO took a strong position against a “territorial tax system,” arguing that it would increase the tax incentive for shifting jobs and profits overseas. Instead, the AFL-CIO called for the elimination of all—not just some—of the existing tax incentives for outsourcing. What does this mean in practical terms? It means taxing offshore profits no differently than domestic profits—that is, taxing both kinds of profits at the same rate and at the same time. Legislation that eliminates all tax incentives for outsourcing would generate $583 billion over 10 years, and this is the benchmark by which any international tax reform proposal should be measured.
Although prospects for the House Republican “tax reform” proposal are uncertain, the idea of a “territorial tax system” has wide support among Republicans in Congress, was recently endorsed by Sen. Marco Rubio (R-Fla.) and has attracted interest from some Democrats as well. It would be very dangerous to allow this terrible idea to pick up steam.
Reposted from AFL-CIO NOW
Tags: aflcio, Dave Camp, Jobs, Marco Rubio, Mitt Romney, outsourcing, taxes
A year ago, in one of the most shocking reversals in the state’s history, Michigan Gov. Rick Snyder signed a “right to work” bill into law behind closed doors as more than 12,000 protesters raged outside.
Right wing groups crowed, saying union restrictions in the home of the auto industry meant the labor movement was on its last legs. They talked about which states would go next.
And then, nothing.
Well, not nothing. But what anti-worker pundits said would be a domino effect was more like a cricket effect. In 2013, no state passed a “right to work” law.
Incorrectly-named “right to work” laws put restrictions on contracts union workers can make with employers. They ban fair share clauses which require that workers pay dues to have the protection of the union. Unions are left in the position of providing services without being able to fund those services, and they starve.
“Right to work” laws have nothing to do with freedom. They are simply a tactic to defund unions and weaken the ability of workers to advocate for themselves. And it shows: states with “right to work” laws have lower wages, higher poverty rates, and more workplace injuries and fatalities than free bargaining states.
In 2013, workers didn’t stand for it.
In Missouri, where Republicans controlled supermajorities in both the state House and Senate, some legislators pursued a “paycheck deception” bill, which restricts unions’ ability to make political contributions. Missouri House Speaker Tim Jones (R-Eureka) called it a step toward a “right to work law.” Based heavily on an ALEC model bill, paycheck deception moved swiftly through Republican-lead committees.
But workers, union and non-union (including hundreds of Working America members), made their voices heard. Emails, letters, and phone calls flooded legislative offices in Jefferson City. The bill passed the Senate after an 8-hour Democratic filibuster, but House legislators were getting skittish. Bill proponents were having a hard time answering simple questions about why additional restrictions on union dues were needed. Support for the bill dwindled with each test vote.
“Paycheck deception” passed the House by a narrower than expected margin, and Speaker Jones prepared to move on to “right to work.” But Gov. Jay Nixon vetoed paycheck deception, calling it unnecessary. By the September veto session, too many moderate Republicans had abandoned the effort, and the bill died outright.
Did Republicans get the message? Absolutely not. In December special session centered around tax incentives for Boeing, a small group tried and failed to insert “right to work” language. ALEC member Rep. Eric Burlison (R-Springfield) called it “a good opportunity to begin that fight” ahead of 2014.
In Ohio, the anti-union effort has centered around gathering petitions to get “right to work” on the 2014 ballot. As we know, you need to get a certain number of signatures to get an issue on the ballot. For Ohio, that number is 385,000, and you always want extra signatures in case some are validated.
The Tea Party group Ohioans for Workplace Freedom started circulating petitions in February 2012. After 20 months, they announced they have collected 100,000 signatures.
At this rate, as Ohio bloggers at Plunderbund noted, the anti-union group would need 40 m0re months to put “right to work” on the ballot. And since they’ve already burned through $118,000 in paid petition gatherers, chances are they’d run out of money first.
Let’s compare that with 2011, when Gov. John Kasich and Republicans in the legislative rammed through the union-busting Senate Bill 5. The bill passed on March 30. On June 29, after only 3 months, We Are Ohio delivered 1.3 million signatures to the Secretary of State to get a repeal of SB 5 on the ballot. In November, SB 5 was repealed by 60 percent of voters.
What’s going on here? What the Tea Party and the anti-union forces in Ohio don’t get is that once you get past a small group of billionaires and right-wing ideologues, there is no desire to restrict collective bargaining in Ohio. None. People are looking for good jobs, affordable health care, and decent schools to send their kids.
Meanwhile, the 2011 battle over Senate Bill 5, largely ignored by the national media, still reverberates throughout the Buckeye State. Treasurer Josh Mandel, a Republican supporter of SB 5, lost a Senate bid despite more than $19 million in outside aide. Mitt Romney haplessly flip-flopped on SB 5 and consistently delivered an anti-union message, lost in Ohio in part because of union members of all political stripes voting for his opponent. And in 2013, SB 5 supporter Toledo Mayor Mike Bell was ousted, while a Tea Party-backed pension-cutting amendment was rejected in Cincinnati by a 57-point margin.
In Oregon, the story is even shorter. An Portland attorney named Jill Gibson Odell is sponsoring a “right to work” initiative in her state. Odell is excited about the “national money to be had” to assist her campaign, so she’s not even pretending “right to work” is something Oregonians themselves want. In 2013, little to no progress was made on getting the issue on the ballot, and popular Gov. John Kitzhaber said he will publicly oppose it. Meanwhile, workers in Portland got paid sick days, and a statewide sick leave ordinance is expected to pass in 2014.
What to expect in 2014? Well, as the AP reports, the main targets for “right to work” proponents are Missouri, Ohio, and Oregon, showing that these folks have learned nothing from the past year. While their efforts stall, Americans of all political persuasions are starting to support minimum wage increases, sick leave, wage theft protections, and progressive tax codes in increasing numbers.
Working America will be vigilant to mobilize against any “right to work” measure, wherever it crops up. But make no mistake: Michigan wasn’t the start of a domino effect. It was a wake up call. And outside the right-wing think tank bubble, American workers are fully awake.
Photo by detroitfreepress on Instagram
Tags: ALEC, Eric Burlison, Jay Nixon, Jobs, John Kasich, john kitzhaber, Josh Mandel, Michigan, Mike Bell, Missouri, Mitt Romney, Ohio, Oregon, Paid Sick Days, paycheck deception, Right to Work, Rights At Work, SB5, Tim Jones
The health exchanges established under the Affordable Care Act, also known as Obamacare, opened on October 1, 2013. An analysis by Bloomberg Government shows that competition among health insurance companies on the Health Exchange Marketplace is driving down premiums by as much as a third.
Rates released by the Department of Health and Human Services (HHS) show that the price of policies offered in “rating areas” with 10 or more participating insurers are between 31 percent and 35 percent lower than those for the same policies in areas with only one issuer.
A preliminary review of rates in the remaining 14 to 16 states and the District of Columbia that will run their own exchanges suggests that a similar pattern holds in most.
The pattern shows that at least for 2014 exchanges probably will live up to one of their advocates’ key claims: that the ACA can expand coverage while constraining costs.
House Republicans and the Tea Party are going to extreme lengths to delay, defund, and/or repeal Obamacare. Our question is: Why? The health insurance exchanges are, in some ways, a triumph for market-based conservative ideals.
After all, Republicans supported Obamacare…before Obama. Seriously. Lots of them.
Quick history lesson: In 1986, President Ronald Reagan signed the Emergency Medical Treatment and Active Labor Act (EMTALA), which required all hospitals participating in Medicare (pretty much all of them) to provide emergency room treatment to anyone who showed up. Policy experts began to worry about the “free rider problem,” where people wouldn’t pay for health insurance because they could just show up at the ER if they got sick (this was passed at the same time as COBRA, for those of you keeping score at home).
In 1989, Stuart Butler of the Heritage Foundation, a conservative think tank, wrote a paper called “Assuring Affordable Health Care for All Americans,” in which he proposed the “individual mandate.” That’s the idea, that ended up in Obamacare, that all Americans be required to have health insurance or pay a fine. It’s also the idea that makes the exchanges work: private insurance companies can accept the regulations and “managed competition” of the Health Insurance Marketplace because Americans are required to be customers.
During the health care debate in 1993, Republicans proposed an alternative to President Bill Clinton’s plan that included the individual mandate. Among these Republicans were Newt Gingrich, Orrin Hatch, and Chuck Grassley, who all now rail against Obamacare.
And, of course one-time Obama opponent Mitt Romney included an individual mandate in his health care plan as governor of Massachusetts. Here’s what he said in April 2006:
…we’ve come up with something that’s much closer to Republican ideals: reform the market to make the health-insurance marketplace work better. Insist on personal responsibility instead of government responsibility.
Now, since that time, Romney, Gingrich, and even Heritage’s Stuart Butler have twisted themselves into pretzels saying how different their ideas are from Obamacare, detailed here by Forbes’ Avik Roy. And yes, the Affordable Care Act is a large bill containing various components that some people like and some don’t. But the idea of private health insurance companies competing for customers in the free market is a (small-c) conservative idea, an idea supported by the Republican Party in various ways over the past 30 years.
So instead of shutting down the government and throwing tantrums, conservatives should be beaming with pride. You got Democratic President Obama and a Democratic Congress to pass one of your ideas into law. And so far, it ain’t half bad!
Get the most out of the Affordable Care Act. Sign up at WorkingAmericaHealthCare.org today.
Tags: Affordable Care Act, bill clinton, chuck grassley, Health Care, Mitt Romney, Newt Gingrich, obamacare, orrin hatch, ronald reagan
Workers at Guitar Center’s flagship Chicago store voted last week to join the Retail, Wholesale and Department Store Union (RWDSU). Earlier this summer, workers at the Manhattan Guitar Center votedoverwhelmingly to join the RWDSU.
RWDSU President Stuart Appelbaum said the Chicago vote “proves that retail workers are ready and willing to stand up and demand change.” He added:
Retail workers at Guitar Center nationwide are reaching out to the union because they understand that when they unite and stand together, their voices will be heard.
The Guitar Center chain is owned by Bain Capital and is the world’s largest musical instrument retailer with some 220 stores in the United States.
Brian Webb, a sales associate at the Chicago store, told Rolling Stone that he struggles to survive on his pay of roughly $11 an hour.
I make exactly as much as I did when I started here seven years ago. Anyone who works a hard, 40-hour week should be able to earn an honest living. This isn’t just about our store—it’s part of a larger effort to revive the middle class in this country.
Many of the company’s employees are musicians themselves. Webb plays guitar and sings in a local band called Jonny Rumble. After Guitar Center workers and the RWDSU launched a petition drive to build support for their campaign, a number of prominent musicians and members of the American Federation of Musicians of the United States and Canada (AFM) signed on, including Steve Earle, Tom Morello, Billy Bragg, Ted Leo and Kathleen Hanna.
Add your name to the petition.
Reposted from AFL-CIO NOW
Tags: aflcio, bain capital, Corporate Accountability, Mitt Romney, organizing, Rights At Work, rwdsu, ufcw
Our country needs workhorses, not showhorses. We need depth of knowledge, not empty slogans. Most importantly, we need leaders who will fight for working families all of the time, not some of the time.
Let’s get specific. We need leaders who will protect the earned benefits of Medicare and Social Security. We need to stand firm against the relentless attacks on the essential functions of government: the unprecedented filibuster abuse, the man-made paralysis of the National Labor Relations Board, and the dismantling of our hard-fought protections against the Wall Street crimes that plunged American workers into deep recession.
This isn’t abstract. American workers can’t afford anything less. And that’s why we strongly urge Massachusetts voters to support Ed Markey for U.S. Senate on June 25.
Ed Markey has represented Massachusetts in Congress for many years. He’s been in the majority and the minority. He’s served with Democrats and Republicans in the White House. Through it all, he has consistently striven to make our country cleaner, more equal, more technologically savvy, and more transparent.
The camera at the bottom of the ocean that showed the oil leaking out of the BP Deepwater Horizon rig in 2010? That was Ed Markey. The creation of an entire Congressional committee devoted to developing clean energy jobs? That was Ed, too. New requirements for airline cargo screening to keep us safe? Markey.
But the choice is even clearer when you compare Markey to his Republican opponent, private equity investor Gabriel Gomez. Gomez is selling himself as a “new kind of Republican,” but on the things that matter to working families, it’s hard to see what’s new. He supports chained CPI cuts to Social Security benefits, which he calls an “entitlement.” He wants to lower the corporate tax rate, which has only lead to more off-shoring, not less. He thinks Wall Street reform is “too tough.” Like Scott Brown before him, the majority of his donations have come from the financial services sector.
Here’s the question: Do we want more Elizabeth Warren’s in DC? Or more Mitt Romney’s?
Let’s support someone who will work for working families. Vote Ed Markey for U.S. Senate on Tuesday, June 25.
Polls are open 7am to 8pm. Find where to vote here.
Paid for by Working America, 815 16th St., NW, Washington, DC 20006 and not authorized by any candidate or candidate’s committee. Image via Ed Markey on Facebook.
Tags: ed markey, Elizabeth Warren, gabriel gomez, Jobs, Massachusetts, Medicare, Mitt Romney, Rights At Work, Scott Brown, social security
A wealthy businessman is running on the Republican ticket for U.S. Senate in Massachusetts, but he has a problem: he thinks he should get to play by different tax rules than the rest of us.
I could be talking about Mitt Romney, who ran unsuccessfully against U.S. Senator Ted Kennedy in the Bay State’s 1994 election. Or I could be talking about what’s going on right now in 2013.
Gabriel Gomez, a private equity investor who made his fortune working with companies like upscale apparel store Lululemon, is the Republican nominee to succeed former senator and current Secretary of State John Kerry. The Massachusetts special election will be held on June 25. And he has more in common with Mitt Romney than you think.
A special rate for some
During the presidential campaign, we learned a lot about Mitt Romney’s tax rate, which was effectively 14 percent in 2011 despite making $13.7 million that year. (For context, a single person making $50,000 paid roughly 23 percent that year.) This is because much of Romney’s income came from stock dividends and investments rather than salary, which are taxed under a lower rate for “capital gains.”
President Obama proposed changing this with the “Buffett Rule,” which would ensure those making $1 million or more a year wouldn’t pay a lower rate than middle class families. Romney rejected that proposal, calling it a “gimmick,” and a 45 Republican Senators blocked the proposal for even coming up for debate.
Free money for not breaking the law
As a fellow investor, Gomez also made much of his income in the form of capital gains, allowing him to pay that lower tax rate than those of us who earn wages – but that’s not all. In 2005, he also used a special deduction to effectively pay $281,500 less in taxes for doing…nothing.
That’s right. In 2005, Gomez claimed a deduction for making “no visible changes” to the façade of his 112-year old home in Cohasset, Massachusetts. Using a federal tax loophole, Gomez claimed this as a charitable contribution to protect historic homes. So poof! An extra $281,500 in the bank.
Here’s the catch: local laws already prohibited Gomez from making changes to his historic home. In other words, Gomez saved over five times the median household income in the United States just by not doing something that was illegal.
Gomez isn’t the only one who has pulled this trick. The IRS considers it one of the “Dirty Dozen” of most common tax cheats, and the organization that Gomez made the easement to has been targeted by the Department of Justice.
There were many reasons the American people rejected a potential President Romney last year, but certainly the idea that he saw no problem with keeping special breaks for a wealthy few was one of them. Gabriel Gomez has demonstrated that he feels the same way: first by making a fortune thanks to the special capital gains tax rate, and then by exploiting a loophole to maneuver an extra $281,500 into his bank account.
We need less of this greedy maneuvering and exploitation, not more.
Tags: gabriel gomez, massachuetts, Mitt Romney, taxes
Reposted from the AFL-CIO NOW Blog
While congressional Republicans are heavily focused on cutting Social Security, Medicaid and Medicare benefits and other harmful budget cuts that threaten the 98%, a better approach is to eliminate loopholes that allow the wealthiest 2% of Americans and Wall Street to pay much less than their fair share of taxes. Focusing on loopholes keeps money in the hands of working families, which helps the economy grow without increasing hardship and economic insecurity for working people.
Many current loopholes just aren’t fair. Take, for example, what Think Progress calls the “Mitt Romney Loophole.” People like Mitt Romney who manage investment funds get paid in two ways. Part of their income is a management fee that is taxed as ordinary income, currently at a top rate of 39.6%. But fund managers also get a cut of the profits of the investments, which is taxed as a capital gain, with a top tax rate of only 20%. The typical investment manager takes a management fee of 2% and gets a 20% cut of the profits, meaning they avoid paying the normal tax rate on the vast majority of their income, something working families are not able to do. As Think Progress explains:
This loophole is one of the main reasons that Mitt Romney paid a tax rate of just 13.9 percent on income of more than $20 MILLION. Meanwhile, millions of middle-class workers pay a much higher rate on their much, much lower salaries.
Closing this loophole would not only make our tax code fairer and more progressive, it would help raise revenue to protect vital programs and leave room in the budget for investments to grow the middle class. Closing just this one loophole that often benefits the ultra-wealthy would raise $21 billion over 10 years.
Photo by Gage Skidmore on Flickr
Tags: Corporate Accountability, deficit, Medicare, Mitt Romney, Retirement, social security, taxes
We’re never going to be truly satisfied with how the media covers elections – but after last week’s first presidential debate things got a little out of hand.
Mitt Romney came onto the stage in Denver last week and continuously stretched the truth, changed from his previous positions, and made policy proposals that were mathematically and logistically unfeasible. Blogger Igor Volsky counted 27 myths in Romney’s 38 minutes of speaking time.
Sure, we all laughed at the “Big Bird” mention, but let’s be clear: You can’t increase the size of the military, give an enormous tax cut to the wealthy, lower the corporate tax rate, and reduce the deficit and debt by eliminating subsidies for PBS.
Yet too many commentators across the spectrum awarded a “win” to Romney. Why? He earned more “style points,” some said. He “seemed” more confident and forceful, other said. With health care coverage, jobs, and housing for millions on the line, too many people used the same standards that are applied to American Idol to address the most important decision of the decade.
All this talk of style over substance bothered Working America member Sid Washington, who wrote a letter to the Cleveland Plain Dealer titled “Stop focusing on candidates’ debate style and start focusing on who’s telling the truth.”
It never fails to amaze me how superficially our society judges winners and losers in political debates. Style and delivery have become the determining factors, while substance and truthfulness have become insignificant side issues.
When Mitt Romney criticizes the president for the size of the deficit, he fails to mention how Republicans ended negotiations on a deficit-reduction plan because they would not consider tax increases on the rich. When he talks about high unemployment rates, he does not discuss how Republicans have fought and voted against every proposal the president has put forward to increase jobs, including the American Jobs Act.
Instead of obsessing on who looked the best and who had the more forceful debating style, while telling lies and deceiving the voters, we should be focusing on who’s telling the truth on how his proposals will affect middle-class Americans.
But before we begin any debate, we must be truthful and acknowledge that the Republicans have vowed from Day One to make Barack Obama a one-term president. And for this vow, they have forsaken all others, including a vow to implement policies that benefit the American public.
Sid Washington Brook Park
Tags: Jobs, Mitt Romney, Ohio
Reposted from EmptyWheel.net – by Marcy Wheeler
Fairly early in Mitt’s speech last night he said this:
But today, four years from the excitement of the last election, for the first time, the majority of Americans now doubt that our children will have a better future.
It is not what we were promised.
It’s not just what we wanted. It’s not just what we expected.
It’s what Americans deserved.
You deserved it because during these years, you worked harder than ever before. You deserved it because when it cost more to fill up your car, you cut out movie nights and put in longer hours. Or when you lost that job that paid $22.50 an hour with benefits, you took two jobs at 9 bucks an hour and fewer benefits. You did it because your family depended on you. You did it because you’re an American and you don’t quit. You did it because it was what you had to do.
But driving home late from that second job, or standing there watching the gas pump hit 50 dollars and still going, when the realtor told you that to sell your house you’d have to take a big loss, in those moments you knew that this just wasn’t right.
But what could you do? Except work harder, do with less, try to stay optimistic. Hug your kids a little longer; maybe spend a little more time praying that tomorrow would be a better day. [my emphasis]
The passage is fundamentally important to the logic of the speech–and indeed, Mitt’s entire campaign–both because it pretends Mitt understands the struggles of average people and because it suggests Obama failed to deliver on Hope and Change.
And at the core of the passage are $9 jobs that don’t pay enough to live on.
Which is funny, because just a few hours earlier, the Founder of Staples, Thomas Stemberg, bragged about Mitt’s role in this:
The truth is Mitt was not a typical investor. He was a true partner. Where some saw an unproven new business, he saw a store that could save people money. He recognized that efficiency creates consumer value. He never looked at Staples as merely a financial investment. He saw the engine of prosperity it could become.
Today Staples employs nearly 90,000 people. It has over 2,000 stores. Over 50 distribution centers.
The average self-reported hourly wage of a Staples EasyTech Associate is $8.89. The average self-reported hourly wage of a Staples Sales Associate is $8.54.
Those jobs Mitt talked about as a symbol of America’s failed promise, the ones that don’t pay a living wage? That’s what Mitt’s campaign boasted about last night as his idea of an “engine of prosperity.”
And it was an engine of prosperity, for Mitt, for Stemberg. Mitt’s worth at least $250 million. Stemberg is reportedly worth $202 million. And they got that money by running an engine of prosperity that relies on workers who are Mitt’s own example of the failure of the American dream. “This just wasn’t right,” Mitt said himself. (Not to mention that some of the steel jobs Mitt destroyed probably were $22.50 an hour jobs, with benefits.)
And look at the solution Mitt imagines for these Americans in the dead-end jobs he created. Not joining a union, the historically proven way to improve dead-end jobs. But work harder, cut back on expenses.
And, vote for Mitt Romney, the guy who destroyed those $22.50 an hour jobs and replaced them with $9 an hour ones.
The RNC spent a lot of time this week appealing to small business owners. Indeed, those small business owners are the customers whose prosperity Stemberg imagines Staples serving.
But to a large and increasing number of American people, Mitt’s actually arguing that he should be President so he can solve the problem he got phenomenally rich by causing in the first place.
Photo by Gage Skidmore on Flickr
Tags: Jobs, Mitt Romney
Reposted from the AFL-CIO NOW Blog
Although Mitt Romney continues to try and distance himself from his record of offshoring U.S. jobs overseas during his tenure at Bain Capital, a newreport by the Financial Times’ Robin Harding shows there were even more anti-worker tactics occurring under Romney’s watch at the company. Now we might understand more about why he boasted earlier this year that he’s “taken on union bosses before.”
According to the U.S. District Court and federal documents, Key Airlines, controlled by Bain Capital at the time, ran an unlawful campaign to stop the organization of a union in the 1980s. Mitt Romney was a director of the airline, according to regulatory filings, and a shareholder in the company. The Financial Times put together this report with documents from the National Mediation Board in 1986 and a 1992 judgment in the U.S. District Court for the District of Nevada.
Financial Times reports:
Key Airlines, an early investment for the private equity firm founded by a young Mitt Romney and two associates, broke the law by attempting to coerce and then dismiss two pilots who tried to organize a union. Two months after a union vote failed, Bain agreed to sell Key Airlines at a large profit in 1986.
Those two Key Airlines pilots later brought the union suppression case to court. In 1992, Roger Foley, federal judge for the District of Nevada, wrote:
The anti-union activities in this case are not merely unfair labor practices as Key argues, but blatant, grievous, willful, deliberate and repeated violations of the Railway Labor Act.
According to the Financial Times:
Key Airlines was a small charter carrier with a military contract to ferry personnel to bases in the Nevada desert. The union effort was suppressed under Bain’s ownership in 1985 and 1986, although a court judgment against the company and its management—including Bain Capital founding partner T. Coleman Andrews III—did not come until 1992. The judgment was later qualified by a subsequent court ruling in 1994, together with an agreement to settle an appeal.
Citing safety concerns in 1985, Key Airlines pilots, co-pilots and flight engineers planned to organize a union.
Financial Times reports management began to coerce the pilots after they heard a union was forming:
According to the court ruling, Key held coercive meetings with pilots; said management would leave and the company lose contracts; and told pilots that salaries, bonuses and benefits could be frozen. Federal labor law forbids an airline “to interfere in any way with the organization of its employees.”
Although outsourcer-in-chief Mitt Romney would like us to believe he invested in companies that created U.S. jobs, his record of shipping jobs overseas at Bain Capital speaks for itself.
Now, we have suppressing workers’ right to collectively bargain to the long list of anti-worker tactics Romney and Bain Capital employed.
Read more on Key Airlines here.
Tags: Jobs, Mitt Romney, outsourcing, Rights At Work