One Year Ago. It’s A Memory We’re Not Fond Of.

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It’s not a memory I’m fond of.

But one year ago, I remember watching news reports as the governor of my home state, Rick Snyder, emerged from police barricades after signing the so-called “right to work” bill into law in Michigan.

The whole thing was like a bad dream. Gov. Snyder had said for years that so-called “right to work” — restrictions on union dues aimed at weakening workers’ voices at the workplace — was not on his agenda. Then on December 6, 2012, he changed course, and called on the legislature to pass “right to work.”

With lightning speed, the Republican-controlled legislature went to work. There were no committee hearings, highly unusual for a major bill like this. The bill text was almost identical to an ALEC model bill, but that didn’t seem to faze the legislators.

On December 11, as more than 12,000 Michigan workers raged outside the state house, the bills for both public and private sector workers are passed despite bipartisan opposition, and Gov. Snyder had signed them into law by evening.

That was not a fun day.

After that fight, Working America pledged to continue the fight in Michigan and we have.

Will you stand with us to continue fighting into 2014?

December 11, 2012 was a rough day. But we know what it takes to win in Michigan: hold leaders accountable for their votes, mobilize a team of activists in communities across the state and support candidates that stand with working families.

The assault on my home state hasn’t stopped there. Gov. Snyder, the Republican-controlled legislature, and emergency managers like Detroit’s Kevyn Orr continue to impose a narrow, corporate-friendly agenda on Michigan without regard to the lives and livelihoods of Michigan’s working families.

With your help, we can fight back against the extreme agenda that Gov. Snyder has pushed through and make Michigan the state we all know and love again.

We’ve seen a lot of things we value come under attack in Michigan lately, but we don’t have to stand for it. With your help, Working America can make a difference in Michigan. Help us fight back now.

We really can’t do this without you.

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The Real Reason Detroit Went Bankrupt

As the story goes, the city of Detroit went bankrupt because of $18 billion in long-term debt, in large part caused by pension and health care benefitsA new report, written by Wallace Turbeville and released today from Demos, says that narrative is inflated, inaccurate and irrelevant to explaining the city’s bankruptcy.

Despite what the city’s emergency manager Kevyn Orr, who was hired by Gov. Rick Snyder (R), says, the $18 billion figure is not relevant to the city’s bankruptcy. To emerge from the bankruptcy, according to chapter 9 of U.S. bankruptcy code, Detroit only needs to address its cash flow shortage, a number that even Orr sets at only $198 million. But that number, much like the $18 billion number, is inflated because it goes with extremely aggressive assumptions for economic trends that are very unlikely to represent what really happens.

When projecting costs, governments often create several projections, often reflecting best-case scenarios, worst-case scenarios and some moderate position in between those two. Governments usually choose the moderate option in order to determine their budget projections. But Orr, Turbeville says, has chosen the worst-case scenario and isn’t at all based on a certain liability that the city will face. Furthermore, Orr includes in that total nearly $6 billion of debt from the Water and Sewage Department debt as city liability, despite the fact that this liability is based on an area much broader than the city. The department covers 3 million people in southeastern Michigan, not just the slightly more than 700,000 people who actually live in Detroit.

Turbeville notes that the city’s operating expenses have declined by 38% since the beginning of the Great Recession. During that same time, the city’s pension obligations only rose by $2 million. Health care expenses increased by 3.25%, less than the national average of 4%. The biggest proportion of increased costs for the city actually comes from debt service and financial expenses related to complex Wall Street investments that amounts to more than pension and health care increases combined. Other key components of the city’s deficit are:

  • A significant decline in revenue based, in large part, on the city’s declining population, which contributed to declines in tax revenue and property values.
  • A decline of $67 million in state revenue sharing with the city.
  • As much as $20 million annually in corporate subsidies that have provided questionable benefits to Detroit.

The report concludes:

Detroit’s bankruptcy is, at its core, a cash flow problem caused by its inability to bring in enough revenue to pay its bills. While emergency manager Kevyn Orr has focused on cutting retiree benefits and reducing the city’s long-term liabilities to address the crisis, an analysis of the city’s finances reveals that his efforts are inappropriate and, in important ways, not rooted in fact. Detroit’s bankruptcy was primarily caused by a severe decline in revenue and exacerbated by complicated Wall Street deals that put its ability to pay its expenses at greater risk. To address the city’s cash flow shortfall and get it out of bankruptcy, the emergency manager should focus on increasing revenue and extricating the city from these toxic financial deals.

Read the full report.

Reposted from AFL-CIO NOW

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CEOs: ‘Retirement Security Is Great for Me, but Not for You’

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A new report from the Center for Effective Government and the Institute for Policy Studies shows that two groups of corporate CEOs pushing for cuts to Social Security benefits, such as the “chained” CPI, personally have massive retirement plans. They also have allowed massive deficits to grow in their employees’ pension funds. While these CEOs—members of the Business Roundtable and the Fix the Debt Coalition—sit on retirement funds most people couldn’t even dream of, they have hurt their own employees’ retirement security and are looking to do the same for people who don’t even work for them.

According to the report, more than 25% of Fix the Debt members are also members of the Business Roundtable, including more than half of the Business Roundtable’s executive council. Fix the Debt is made up of more than 135 CEOs and tries to paint itself as very dedicated to serving the public, with the goal of protecting Social Security. The Business Roundtable, which includes more than 200 CEOs, doesn’t even pretend that it cares about public interest.

Members of the Business Roundtable, the report shows, have retirement accounts more than 1,200 times greater than the median retirement savings of U.S. workers near retirement age. When they retire, the $14.5 million fund they average will give them monthly retirement payments of nearly $90,000. The average monthly payment for everyone else is about $70.

While many of the Business Roundtable CEOs don’t even offer their employees pension plans, those who do aren’t exactly managing those funds well. The report found that 10 of the CEOs who do offer pensions plans have funds that run deficits between $4.9 billion and $22.6 billion. CEOs like those in the Business Roundtable and Fix the Debt are major players in the country’s growing retirement security crisis:

Over the past several decades, chief executives have slashed retirement benefits for their employees. Traditional defined-benefit corporate pensions covered 38% of private-sector workers in the early 1990s, compared with just 18% today, according to the Bureau of Labor Statistics. The number of companies providing traditional pension plans has dropped from just over 112,000 in 1985 to 22,697 in 2013.

Read the full report.

Reposted from AFL-CIO NOW

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Warren: There IS a Retirement Crisis

Contrary to what The Washington Post and the billionaires who are trying to cut Social Security by pitting young people against seniors say, the nation does face a retirement crisis and Social Security doesn’t need to be cut. It must be—and can be—strengthened, said Sen. Elizabeth Warren (D-Mass.) in a powerful speech on the Senate floor Monday.

Just 18% of private-sector workers have traditional defined pension plans, and even with some employers providing 401(k) plans, she said that nearly half of workers lack access to those limited plans. More than 44 million workers have no retirement assistance from their employers.

With tens of millions of people more financially stressed as they approach retirement, with more and more people left out of the private retirement security system and with the economic security of our families unraveling, Social Security is rapidly becoming the only lifeline that millions of seniors have to keep their heads above water.

But instead of taking on the retirement crisis, instead of strengthening Social Security, Warren said, “some in Washington are actually fighting to cut benefits.”

So long as these problems continue to exist and so long as we are in the midst of a real and growing retirement crisis—a crisis that is shaking the foundations of what was once a vibrant and secure middle class—the absolute last thing we should be doing is talking about cutting back on Social Security.  The absolute last thing we should do in 2013— at the very moment that Social Security has become the principal lifeline for millions of our seniors—is allow the program to begin to be dismantled inch by inch.

Cutting Social Security would mean cutting benefits for the two-thirds of seniors who rely on it for the majority of their income, said Warren. It would also affect the 14 million whose Social Security benefits keep them out of poverty.

While those calling to cut Social Security hid their intentions behind the claim that their “chained” CPI proposal is just a more accurate way to calculate the cost-of-living increases for seniors, Warren said:

“Chained” CPI? It’s just a fancy way of saying cut benefits…[instead] with some modest adjustments, we can keep the system solvent for many more years—and could even increase benefits.

Warren also slammed a recent Washington Post editorial that mocked the idea of a looming retirement crisis.

No retirement crisis? Tell that to the millions of Americans who are facing retirement without a pension. Tell that to the millions of Americans who have nothing to fall back on except Social Security. There is a $6.6 trillion gap between what Americans under 65 are currently saving and what they will need to maintain their current standard of living when they hit retirement. $6.6 trillion, and that assumes Social Security benefits aren’t cut. Make no mistake: There is a crisis.

She also said the call to cut Social Security “has an uglier side.” The Post editorial and groups pushing Social Security cuts, like billionaire Peter Peterson’s “Fix the Debt” organization, are trying to drive a wedge between younger people and seniors by framing the debate as a choice between “more children in poverty versus more seniors in poverty.”

The suggestion that we have become a country where those living in poverty fight each other for a handful of crumbs tossed off the tables of the very wealthy is fundamentally wrong. This is about our values, and our values tell us that we don’t build a future by first deciding who among our most vulnerable will be left to starve.

Warren told the senators, “We don’t build a future for our children by cutting basic retirement benefits for their grandparents,” but instead:

We build a future for our kids by strengthening our economy, by investing in education and infrastructure and research, by rebuilding a strong and robust middle class in which every kid gets a chance and the most vulnerable have a strong safety net.

See her full speech in the video above and read the full text here.

Reposted from AFL-CIO NOW

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My Grandfather Spent 20 Years Working In A Detroit Factory

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My grandfather spent 20 years of his life working in a Detroit factory.

He worked hard for what he earned. He trusted that sacrificing some of his pay to invest it in a pension would pay off after years of hard work. So that’s what he did. He retired, and his pension allowed him to provide for himself and my grandmother.

He and his coworkers knew that the pensions that they invested in were a valuable part of their income, not just a handout from their employer.

Right now, in Detroit, Emergency Financial Manager Kevyn Orr doesn’t see pensions the same way.

A quick review: In 2011, Gov. Rick Snyder and his allies in the Republican-controlled legislature passed a bill allowing entire cities to be taken over by “emergency financial managers.” These EFMs, appointed by the governor, were allowed to completely overrule decisions made by local elected leaders.

In the 2012 election, Michigan voters decisively overrode the EFM law. Gov. Snyder and the legislature responded simply by passing another one.

In March, Snyder chose lawyer Kevyn Orr to single handedly manage the city of Detroit. From the beginning, it didn’t seem that Orr had his priorities in order. He said the city had been “dumb, lazy, happy, and rich,” while unapologetically living large in a penthouse, ordering room service, and employing an assistant at $225,000 a year.

In September, Orr proposed a sweeping wage freeze and essentially privatizing public employee pensions. Orr’s spokesperson suggested that city workers do not contribute at all to their pensions.

What Orr isn’t saying is what these workers sacrificed to protect their pensions. They accepted pay cuts, health insurance cuts and cuts to future pension benefits just to guarantee that the pensions they had worked a lifetime for would be there for them when they retired.

This is unacceptable, and we need to do better.

We can’t allow the wealthy elite like Snyder and Orr to take away hard-earned income from working families. Workers like my grandfather worked, saved, and sacrificed for years to make sure their pension would be there. It’s not a piggy bank for Orr and his rich friends to play with.

We need to send Snyder a message now and demand that he respects Detroit city workers.

Together, we can hold leaders like Gov. Snyder accountable and stand up for all working people in Michigan.

Send a message now.

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Holt Baker, Roberts Among 30 Arrested at Patriot Rally in West Virginia

AFL-CIO Executive Vice President Arlene Holt Baker and United Mine Workers President Cecil Roberts were among 30 arrested at a rally in West Virginia Tuesday while protesting Patriot Coal’s attempts to abandon its commitments to retirees, most of whom worked for Peabody Energy and Arch Coal before those companies created Patriot. Roberts and others say Patriot specifically was created to fail so the original companies could eliminate retiree health care and pension costs.

Before the arrests, Roberts headlined a group of speakers with a rousing message:

We’re standing for those afflicted with black lung. We’re standing with those who are in hospice care taking their last breath with their priests and ministers and families all around them. We’re standing with those who have cancer. We’re standing with the afflicted because the Bible tells us, ‘Honor your mother and your father.’ [...]

Holt Baker underlined the AFL-CIO’s support for miners in the Patriot fight. Of the steady rain that came down throughout the rally, she said: “That is just the tears of the righteous trying to wash away the injustice of Patriot Coal.”

Both of the state’s U.S. senators sent letters of support for the rally and the retired workers. Sen. Jay Rockefeller (D) said:

Today’s rally should remind us all of people like Shirley Inman, who left a good-paying job in Chicago for a mining job at home in West Virginia, with the promise of a lifetime pension and health care benefits. Now, after years of on-the-job injuries and a courageous fight with cancer, that promise is gone. This is an unconscionable outcome for Shirley and the thousands of miners and their families who gave of themselves to the mining industry for decades on end. It’s heartbreaking and shameful, and I won’t stand for it.

Sen. Joe Manchin (D) added:

Our miners worked their fingers to the bone every single day to provide the fuel that powers America, and these companies made a promise to them—a promise they earned and deserved.

Watch video of today’s rally at the Mine Workers’ UStream channel.

Last week, hundreds of Australian workers rallied on behalf of their U.S. brothers and sisters. The West Virginia legislature also got involved in the story, with the House of Delegates passing a resolution supporting the retirees and calling on Patriot to honor its commitments. Roberts said he was pleased with the legislature’s action. “It shows that the support for our struggle for justice is growing and broadening, and that these coal companies’ concept of ‘business as usual’ will not be tolerated in West Virginia.”

A concurrent resolution was introduced in the Senate, but didn’t emerge from committee before the legislature adjourned.

For more details on the specifics of the Patriot story, Roberts wrote an op-ed explaining the situation and Fairness at Patriot produced the following video:

Reposted from AFL-CIO NOW

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Priorities: The Bad Choices Inside Today’s Payroll Tax Deal

This morning, President Obama signed into law a deal that extends the payroll tax holiday for the rest of the year. With the economic recovery still fragile, it’s good to keep this payroll tax cut in place to help keep a little extra money in working families’ pockets. But the flaws of today’s deal—flaws forced through by Republicans in the House, but passed with big numbers from both parties—really illustrate the cluelessness and callousness of policy-making.

Unemployment Insurance: The compromise does, indeed, renew unemployment insurance, but dramatically cuts back the number of weeks that the jobless can draw on it, to 73 weeks or even fewer in some states. The problem of long-term unemployment is still a serious one, with about 40% of the unemployed out of work for six months or more, so pulling away this lifeline is silly. In addition, the deal imposes humiliating conditions on the jobless before they can draw on the benefits they paid into. The net result will be that far too many people who depend on UI will lose it.

Pensions: One of the ways the deal pays for the UI extension—and another provision to keep Medicare payments to doctors at current levels—was to charge future federal employees more for their pensions. This pits workers against each other—pulling money away from future retirees in order to support unemployed people now. Congress’ willingness to go after these pensions is a bad sign.

Health Care: Another way that the bill is paid for is with a sizable cut to a fund meant to pay for preventative care services under the Affordable Care Act. Preventative care for those who can’t otherwise afford it helps them stay healthier and lowers their longer-term medical costs. Cutting this fund isn’t just morally loathsome; it’s economically short-sighted.

With cuts and new conditions on unemployment benefits, a major hit to the Affordable Care Act and an attack on public-sector workers, it seems like the details of this bill are a big ideological win for the hard-right Tea Party caucus of congressional Republicans. That they’d demand this kind of ransom as the price for passing the payroll tax holiday is infuriating; that so many ostensibly pro-worker members of Congress would let them is just depressing.

When President Obama first offered up the American Jobs Act, it was funded in a popular, common-sense way—with a small surcharge on income over $1 million. It also included a broader set of job-creation components, including investment in infrastructure and support to state budgets for keeping teachers and firefighters on the job. Provisions of this bill were blocked by Senate Republicans because they were not willing to exchange a tiny tax increase on millionaires for literally hundreds of thousands of jobs for working people.

Politics is about priorities. The people we talk to across the country have their priorities: they want to see the very richest pay their fair share and use that money to create jobs and support communities. In Washington—particularly among congressional Republicans—they have their priorities exactly backwards. It’s sick people, retirees and the jobless who have to sacrifice, not those who are already doing well.

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What the union meant to him

by E B—Colorado

This week I met a rather interesting man who began his career over fifty years ago in a unionized company manufacturing flooring. It was great to hear about unions from his perspective.

When he began working he would contribute twenty five cents a day to his pension which was matched by his employer. By the time he retired the amount was closer to fifty six cents an hour. Because this gentleman worked for a union he was able to support his family on a single paycheck, have access to excellent health insurance and know that he had a retirement plan that would support him in his old age. In short, because he was part of a union he was able to live the American dream.

He was excited about what we were doing and would have talked with me all day if I had been able to!

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Thirty-one years, 5 months and 24 days

by Carissa Lovelace—Virginia

As I talk to people in Manassas, Virginia it is becoming clear to me that everyone, no matter what state they live in, is deeply affected by the issues that we fight for.

Last night was an especially eye-opening experience. I was talking to a woman on her porch about our issues and after taking the clipboard she pointed directly at “secure retirement,” saying “that’s the one that I care about.”

Before I could ask why, she began to tell me the story of her 62 year old husband who had worked for an airline for 31 years, 5 months and 24 days. The airline filed bankruptcy and laid off their most tenured employees, one of which was her husband. A government pension compensation program had taken up his plan and was paying him half of what his actual pension was. He was receiving half what he expected per month for the first 2 years, which dropped by $200 the next two year and is expected to drop by an additional $1,220.00 when he turns 66!

She has taken extra work around the neighborhood, and he has taken an evening job that pays 13 dollars an hour for a different airline. They pay double their mortgage payment so that when his pension sinks lower they will hopefully own their home. She could not stress enough the depression and anxiety that this scenario was causing both of them.

They had not envisioned their lives coming to this after they worked so hard. The last thing she told me was that the CEO of the airline was guaranteed a multi-million dollar salary during the time of the bankruptcy no matter what happened in the future of the company.

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Video: You’re re-hired! Without benefits.

Erin Gill talked to a guy about jobs who was laid off after 23 years, then brought back to the same job without health care or his pension.

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