Teamsters Local Union #174 -- Views

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API, LABOR UNIONS SIGN JOB PROMOTION AGREEMENT

Energy Current
(June 18, 2009) The American Petroleum Institute (API) and several labor unions representing many of API member company employees have created the Oil and Natural Gas Industry Labor-Management Committee, which will work to promote job retention and growth in the U.S. oil and gas industry.

JACK N. GERARD is President and Chief Executive Officer of the American Petroleum Institute. The API is the national trade association that represents all aspects of America’s Oil and Natural Gas Industry.

API President Jack N. Gerard, Mark H. Ayers, president of the AFL-CIO Building and Construction Trades Department, and United Brotherhood of Carpenters General President Douglas J. McCarron, together with the presidents of 15 unions and three industry CEOs, signed the agreement creating the committee.

In a joint announcement, Gerard and Ayers said they planned to work together through the committee to preserve and create jobs by promoting innovative and affordable access to energy that is vital to the American economy.

J. Larry Nichols, API chairman and chairman and chief executive officer of Devon Energy Corp., Marathon President and CEO Clarence P. Cazalot Jr. and ExxonMobil Senior Vice President Michael T. Dolan also participated in the signing ceremony.

The agreement is the first time that the oil and natural gas industry and its labor unions have agreed to work together formally through a labor-management committee. The committee has eight trustees, four from the oil and gas industry and four from the labor unions, who will determine the group's agenda and priorities.

The committee will attempt to identify areas of skills training needed in the construction and maintenance side of the industry, and make what it calls "a communications effort" to alert the public about the effects of legislation that would restrict exploration or hinder the processing, refining and marketing of U.S. oil and natural gas products.

The committee also plans to forge coalitions with like-minded organizations to advance public policy goals and work to address long-term challenges, such as increasing access to oil and gas resources, promoting energy security, and "rationally addressing climate change."

A major focus will be on creating jobs across the industry, including construction and permanent jobs in the upstream and downstream sectors, such as exploration and production, transportation, pipelines and refineries.

According to the API, the oil and gas industry employs more than 1.8 million American workers and supports another 4 million.

The committee includes representatives of the Building and Construction Trades Department of the AFL-CIO, which represents 13 national and international unions; the International Union of Operating Engineers, and the United Brotherhood of Carpenters and Joiners of America, as well as CEOs representing the oil and natural gas companies and the American Petroleum Institute.

Participating unions include: International Brotherhood of Teamsters; International Union of Operating Engineers; United Brotherhood of Carpenters and Joiners of America; International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers; International Association of Heat and Frost Insulators and Allied Workers; International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers; International Brotherhood of Electrical Workers; International Union of Bricklayers and Allied Craftworkers; International Union of Elevator Constructors; International Union of Painters and Allied Trades; Laborers' International Union of North America; Operative Plasterers' and Cement Masons' International Association of the United States and Canada; Sheet Metal Workers' International Association; United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada and United Union of Roofers, Waterproofers and Allied Workers.

A WSLC-Oregon AFL-CIO Viewpoint:
GREEN JOBS MUST MEAN GOOD JOBS

By JIM BENDER, President, Washington State Labor Council and
TOM CHAMBERLAIN, President, Oregon AFL-CIO

(June 15, 2009) Green jobs have been held as the panacea of the economic collapse. We continue to be told this is the industry that is going to save America's jobs and move us into the future.

But a disturbing incident between Washington and Oregon over a "green" company that grows the crystals from which solar panels are made should wake us up to what can go wrong if we don't carefully monitor the growth of this industry and ensure that "green workers" are part of the next middle class.

In 2006, the German company SolarWorld, one of the world's largest solar energy companies, purchased Royal Shell's solar division and acquired a plant in Vancouver, Washington. That operation was a unionized facility providing good, middle-class wages to the Machinist Union members employed there. SolarWorld promised there would be no layoffs for the first year of their ownership of the facility.

Not only did SolarWorld take $43 million in tax breaks to move to Oregon, bust its union and significantly cut employees' compensation — the company later sold Oregon clean-energy tax credits to Wal-Mart, which will now get millions of dollars in clean-energy tax subsidies for doing nothing.

But then, in March 2007, SolarWorld purchased a facility in Hillsboro, Oregon. The company was lured there in part by $43 million in tax breaks and public subsidies. SolarWorld jumped at this opportunity to move its operation to a new facility. But at the same time, they adamantly rejected requests by the Machinist Union to remain neutral in any efforts to unionize the Oregon work force.

New employees at the Hillsboro facility were offered much lower pay than the unionized Washington workers, inferior benefits, no job protections and work shifts that varied between 12-hour graveyard and 12-hour day shifts.

As Labor leaders representing union members in both states, we find this entire story reprehensible. You would think that a company from Germany, a place where unions represent almost 25 percent of the population, would respect the inherent value of a well-trained, organized work force.

Instead, we see this company acting like so many of the American corporations do — scurrying over the border in search of a way to get cheaper labor while taking advantage of the taxpayers in the state, gobbling up tax breaks and lowering the standard of living at the same time.

This is not how we are going to rebuild a strong middle class through green technology. This scenario sets up the working men and women of this country for a further slide down the rung into poverty and bad working conditions. Further, the practice of states pitting themselves against each other by luring jobs across the border sets the stage for economic warfare. We can and must do better than this for American workers.

The rise of the middle class in the mid-20th century came through struggle. Working men and women had to fight for many years to be recognized and included in the prosperity of the growing nation. We need to remember that history, teach it to our children and recognize exactly how those struggles brought about protections for workers including higher pay, the eight-hour workday and a stronger voice in the workplace. Those who neglect to learn the lessons of the past are doomed to repeat the same mistakes.

What is to be said for these workers at SolarWorld who were offered the opportunity to keep their jobs if they chose to drive almost 40 miles each way to the new office, work for $5 to $6 less an hour, lose benefits and seniority, be subjected to 12-hour swing shifts and at the same time lose their voice in the workplace? Do we chalk this up to progress?

Green jobs can never help rebuild our economy if the industry is not built with respect and dignity for the workers who will be doing the heavy lifting. We cannot allow taxpayer subsidies to lure jobs from one state to another and at the same time finance anti-union activities.

Business, Government and Labor must work together to ensure that this new green economy works to provide family-wage jobs with real protections and a strong voice in the workplace. Those are the values that created the middle class in the first place — the values that made our country great.

IBT News:
TEAMSTERS FORM COMMITTEE TO REVIEW YRCW PENSION ISSUES

(June 10, 2009) Washington, D.C. — The Teamsters National Freight Industry Negotiating Committee (TNFINC) created a sub-committee this week that will, among other things, consider whether language needs to be modified in the National Master Freight Agreement (NMFA) to address YRC Worldwide (YRCW), Inc.’s recent requests to defer pension contributions.

Tyson Johnson, co-Chairman of TNFINC and Director of the Teamsters Freight Division, said it is “imperative” that YRCW makes it through the current recession.

Challenging conditions in the industry have prompted the company to make the deferral requests to help it preserve operating cash.

“It is imperative that YRCW weathers this recession,” said Tyson Johnson, co-Chairman of TNFINC and Director of the Teamsters Freight Division. “The committee will also determine whether adjustments are necessary to further our central goal of protecting the jobs and benefits of our members at YRCW and all members covered by the NMFA.”

“We are forming this committee to review the contract in efforts to help YRCW survive this recession and hopefully come out stronger than ever,” said Jim Hoffa, Teamsters General President. “Our number one priority is to protect our members and their families, and that’s our paramount concern throughout this process.”

The committee will submit its findings to TNFINC, which negotiates the NMFA. If the committee accepts these recommendations, they will be submitted to the rank-and-file membership for the members’ approval.

Teamsters News Link:
TEAMSTERS OPPOSE U.S. TRUCKING REGULATOR NOMINEE ANNE FERRO

Anne Ferro is president of the Maryland Motor Truck Association and previously headed that state's motor vehicle administration.

Bloomberg News
(June 8, 2009) The Teamsters union told President Barack Obama it opposes his nominee to be the top U.S. trucking regulator because of her support for a rule that allows truckers to drive for up to 11 consecutive hours.

Anne Ferro is the wrong person to head the Federal Motor Carrier Safety Administration because of her “trucking-industry party line,” Teamsters President Jim Hoffa told Obama in a letter today.

Teamsters members include truck drivers for United Parcel Service Inc., the world's largest package delivery company, and YRC Worldwide Inc., the largest U.S. trucking company by sales.

“We cannot support a candidate who represents the Bush administration ‘status quo' rather than embracing your call for change,” Hoffa wrote in the letter, which was also signed by truck safety group officials.

Nick Shapiro, a White House spokesman, had no immediate comment.

Ferro is president of the Maryland Motor Truck Association and previously headed the state's motor vehicle administration, which licenses drivers and vehicles. The agency she was nominated yesterday to lead will help decide how the U.S. will reopen its border to Mexican trucks and is conducting a safety review of the motor-coach bus industry.

Teamsters News Link:
G.M.’S NEW OWNERS, U.S. AND LABOR, ADJUST TO ROLES

RON GETTELFINGER, United Auto Workers Chief President

Brian Fredine
BRIAN FREDLINE, UAW Local 602 President

NEW YORK TIMES
(June 2, 2009) For decades, the United Automobile Workers had a simple strategy for getting what it wanted from the carmakers — it would go on strike. The tactic proved so successful that the mere threat of a walkout often won better wages, benefits and job security.

Now, with General Motors and Chrysler in bankruptcy and the union a major shareholder in both through its retiree health fund, life has become a lot more complicated for the U.A.W.

The union, which was born of labor strife, has pledged not to go on strike against the two companies before 2015, as part of the rescue plan hammered out by the Obama administration. Whether this brokered peace helps end the antagonistic relationship between union and management could determine the future not only of G.M. and Chrysler, but also of the U.A.W. itself.

With the union's health fund set to own 17.5 percent of G.M.'s shares and 55 percent of Chrysler's, the U.A.W. will both represent workers and be an owner, a novel dual role.

“We don't run corporations. We represent people,” said Brian Fredline, president of the local representing 3,000 workers at a G.M. plant in Lansing, Mich.

Some industry experts predict that the union, far more than before, will help management increase profitability — with the goal of pushing up the automakers' stock prices. A higher share price could mean billions more for the retirees' health plan, helping to ensure ample funding for decades to come.

But other experts say the union will stick to its traditional truculence, focusing on preserving jobs rather than maximizing profits and share price. As evidence, these experts point to the union's recent, successful campaign, directed at G.M. and the Obama administration, to prevent the automaker from importing small cars from China, a move that would have increased G.M.'s profits while very likely reducing the number of domestic automobile jobs.

“I don't think the union is going to act that different,” said Harry C. Katz, dean of the Cornell University School of Industrial and Labor Relations. “I wish it would, but mostly things won't look that different.”

In fact, over the years the U.A.W. has taken two different postures toward Detroit: by turns, hard-charging adversary and strategic partner. Sometimes the union has been an unyielding bargainer, leading to strikes that have lasted for months as well as to much-derided perks, like overtime pay for union members who work less than 40 hours a week. But other times the union has worked with management to assure labor peace, raise productivity and, over the last few years, push down labor costs.

One example: when G.M. was hurting in 2005, the union agreed to establish the retiree health plan, known as a voluntary employees beneficiary association, to save the automaker $1 billion a year in health costs.

Union officials acknowledge their discomfort with the union being a major shareholder. “The reason we've received this equity stake is we're trying to help the corporation survive and fund the VEBA,” Mr. Fredline said.

The Obama administration has pushed hard to bring out the U.A.W.'s cooperative side, evidenced by the union's agreeing to a wage freeze and the no-strike clause.

But the union is likely to continue fighting future layoffs, plant closings and line speedups — there are many ways to pressure management without going on strike.

“They'll want to maximize the number of jobs for their members, and they'll use their influence for that,” said Sean McAlinden, chief economist with the Center for Automotive Research. “And there are other fears the industry has — they might want to force G.M. to only use unionized suppliers. And they could use their political influence to make it easier to organize the international automakers in the South.”

Under the rescue plan, the federal government will own 60 percent of G.M.'s stock. It might be politically difficult for the union to confront the federal government if it were managing the company. But President Obama emphasized on Monday that he wants professional managers, not the government, to run the company.

While workers often feel an initial thrill about employee ownership, after several weeks of drudgery back on the assembly line, the thrill sometimes wears off and the us-against-them attitude toward management reasserts itself.

But Christopher Mackin, president of Ownership Associates, a firm based in Cambridge, Mass., that advises businesses and workers about employee ownership, argued that the U.A.W.'s roles need not conflict.

“When you get workers to understand they are the owners of the enterprise,” he said, “they realize there are two significant bites of the apple: one is when you get paid in current compensation, and one is what you get paid for success” through profit-sharing or an employee stock ownership plan — although he noted that VEBA stock ownership differed from traditional employee ownership.

Some employee-owned companies have failed, however, because management, mindful of their employee owners, often gave in to wage demands. That, some analysts say, helped drive United Airlines into bankruptcy when it was employee-owned.

For this reason, industry experts say, the Obama administration structured the G.M. and Chrysler plans to lessen the union's voice in management. The retirees' health fund has six public-appointed trustees and five union-appointed trustees. Though the union health trust owns 55 percent of Chrysler, it will hold just one seat on the Chrysler board. And at both automakers, the health fund's shares will be nonvoting.

All this makes clear, one administration official said, that the union will not dominate and “this will not be Gettelfinger Motors.”

The U.A.W. president, Ron Gettelfinger, says he wants to sell the health fund's shares as soon as practical. The union's advisers have warned it would be unwise to tie up so much of the fund's assets long term in a single company's shares.

This, some say, could cause the U.A.W. to make nice, at least for a while. “In order to sell their shares at a good price,” said Maryann Keller, an auto industry analyst who runs her own consulting firm, “they're going to at least give the appearance of helping maximize profits.”

IBT News: 18,000 Have ‘Driven Up’:
FIRST STUDENT VICTORIES
MORE TEXAS, ILLINOIS AND MISSISSIPPI DRIVERS, MONITORS AND MECHANICS OVERWHELMINGLY CHOOSE TEAMSTERS IN INCREASINGLY SUCCESSFUL CAMPAIGN

(May 27, 2009) School bus drivers and monitors at three First Student bus yards in Houston, Texas, have voted unanimously, 40-0, in favor of representation by Teamsters Local 968. The workers united for the opportunity to negotiate fair pay, health care and to have a voice in their workplace. There are 72 workers in the bargaining unit.

School bus drivers and monitors at First Student in Rockton, Illinois voted to join Teamsters Local 325 in Rockford, Illinois on Friday, May 22, winning a strong voice in the workplace.

“The vote was really good,” said Rex Roberson, a driver. “We’d like to see some changes in terms of better pay, benefits, guaranteed hours and holidays, and we’re anxious to get started on a contract.”

The Houston workers had a great deal of support in their efforts to become Teamsters. Teamster First Student drivers from Colorado and Florida came to Houston to support the workers in their efforts, while International Union and local organizers also helped make this victory possible.

“It was pretty clear that these workers needed improvements, and we will be getting started on negotiations on a contract as soon as possible”, said Leo Correa, Secretary-Treasurer of Local 968 and President of Joint Council 58.

This is the second group of First Student workers to join the Teamsters in Texas in recent weeks. On April 29, 38 drivers and monitors in Orange, Texas, voted 27-1 to join Local 968.

ROCKTON, ILLINOIS
School bus drivers and monitors at First Student in Rockton, Illinois voted to join Teamsters Local 325 in Rockford, Illinois on Friday, May 22, winning a strong voice in the workplace.

The 123 drivers and monitors launched their campaign to organize on April 21, 2009 at a rally in support the passage of the Employee Free Choice Act at Local 325. The unit was highly motivated to organize with the union, seeking to address ongoing issues at their First Student location.

“We are very happy that we won the right for union representation,” said Shirley Steines, a monitor at the Rockton yard who has worked for First Student for three years. “We need improvements in health care, safety and work rules so they are enforced without favoritism. I hope that with the Teamsters representing us, we can finally address all these issues.”

Jeff Porter, Secretary-Treasurer of Local 325, was impressed with the solidarity of the group.

“This group knew they wanted to join the Teamsters from the very start,” Porter said. “With the support of Joint Council 25 and the International, we were able to get this done for them very quickly. I live in the Rockton area and know firsthand what a valuable service they provide to our community. I look forward to negotiating their first contract.”

The workers hope that with the Teamsters in their corner, they will be able to address concerns they have in the workplace including job security, safety and respect on the job.

‘Our newest members at the First Student Rockton yard will receive the full support of Teamsters Local 325, Joint Council 25 and the International, as they continue their fight for a voice in the workplace,” said Teamsters Joint Council 25 President John Coli.

WEST POINT, MISSISSIPPI
Also, First student school bus drivers, monitors and mechanics in West Point, Mississippi, are now Teamster members, after an overwhelming 21-6 vote in favor of representation by Local 891 in Jackson. The workers united in order to secure fair pay, affordable and decent health insurance, respect and a say on the job.

“We're going to start bargaining the second week of June, and look forward to negotiating the first contract in the state of Mississippi for bus drivers,” said Willie Smith, President of Local 891 and Secretary-Treasurer of Joint Council 87.

There are 42 workers in the bargaining unit, who are now part of the more than 400 First Student workers in Mississippi who have joined Local 891 since September.

MORE THAN 18,000 NOW “DRIVE UP” TEAMSTERS
The victories are the latest in an effort to organize private school bus and transit workers across the country. Drive Up Standards is a national campaign to improve safety, service and work standards in the private school bus and transit industry. Since the campaign began in 2006, more than 18,000 drivers, monitors, aides, mechanics and attendants have become Teamsters.

Teamsters News Link:
THE EMPLOYEE FREE CHOICE ACT WILL HELP WORKERS

EXAMINER.COM

Above is the co-sponsor in the United States Senate of the Employee Free Choice Act legislation, the venerable Democratic U.S. Senator Ted Kennedy of Massachusetts.

(May 26, 2009) The Employee Free Choice Act (EFCA ) is a bill that was introduced into Congress by Senator Ted Kennedy (D-MA) and Representative George Miller (D-CA) on March 10, 2009. The intended goal of the EFCA is to eliminate the veto power employers hold over the card-signing method of obtaining majority votes needed to organize a union.

The right of employers to call for a private ballot vote was established with the 1947 Taft-Hartley Act. Therefore, under current law, the only way for a union to obtain certification from the National Labor Relations Board (NLRB) as a representative unit of employees is to hold a secret-ballot election supervised by a NLRB agent. The results of the election determine whether or not a majority of those voting certify the union. A union could be certified if the organizing employees present signed authorization cards from a majority of the employees, but only with the approval of the employer.

Since March, at organized public events in Pittsburgh, Steeltown, Johnstown, Allentown, Scranton, and Philadelphia, working families have gathered to talk about the importance of passing the EFCA in this tough economic climate. They described the harassment workers currently experience when they try to form unions and advocate for fixing the broken system. In Pennsylvania, a study by the Center for Economic and Policy Research (CEPR) found that even though unionization has been historically affiliated with the manufacturing sector, more than 77% of the workforce is in service-sector jobs, and the unionization rate in those jobs is 14.7%.

Efforts to unionize service sector employees would increase access to health insurance and raise salaries. Also, James Testerman, president of the Pennsylvania State Education Association (PSEA), claims the EFCA would give the right to unionize to nearly 200,000 teachers, support staff, and nurses.

While businesses maintain that employers will be forced into paying expensive collective bargaining costs with the formation of newly empowered additional unions, EFCA proponents claim that the added job protections will level the playing field in an economy where growth and wealth go to a select few individuals and families. EFCA does not eliminate the secret ballot or the NLRB election process. In essence, it supplies employees with the choice of forming a union via an election or by majority sign-up (card check). President Barack Obama, who was strongly supported by unions during his campaign, has indicated that he would sign the legislation if it was passed by Congress.

In addition to protecting the right of workers to obtain a representative unit, labor unions would also gain considerable leverage in the collective bargaining process. The EFCA stipulates that once a union is certified, the EFCA would require the employer to commence bargaining with the union within 10 days of a union request and, if no agreement is reached within 90 days of the commencement of negotiations, either party may request that the Federal Mediation and Conciliation Service (FMCS) mediate the parties. If employers and the union fail to reach terms of a first contract within another 30 days, a government-appointed arbitrator could be empowered to set contractual terms of bargaining.

The EFCA also significantly increases penalties against employers found committing unfair labor practices (ULP) against efforts to organize unions or in violation of negotiations for initial contracts. It provides back pay to those employees who are unlawfully discharged as a result of organizing efforts or in association with legal union activities. In addition, it gives mandatory relief in a proceeding by the NLRB in determining if a ULP occurred during the union's organizing efforts or negotiations with employers.

AFL-CIO E-Network Report:
IT’S GETTING WORSE
KATE BRONFENBRENNER STUDY EXAMINED OVER 1,000 UNION-REPRESENTED CAMPAIGNS

ABOUT KATE BRONFENBRENNER

Kate Bronfenbrenner joined the extension faculty at the New York State School of Industrial and Labor Relations at Cornell University in 1993. As the Director of Labor Education Research, Kate teaches and conducts research in the areas of organizing, collective bargaining, contract administration, labor research, and leadership development for national and regional unions as well as students in the resident graduate and undergraduate programs at Cornell ILR.

Prior to coming to Cornell, Kate was an Assistant Professor and Labor Education Coordinator for the Department of Labor Studies and Industrial Relations, Penn State University, and worked for many years as an organizer and business agent with the United Woodcutters Association in Mississippi and SEIU in Boston.

Kate is the co-author and editor of several books on union strategies including “Union Organizing in the Public Sector: An Analysis of State and Local Elections,” “Organizing to Win: New Research on Union Strategies,” and “Ravenswood: The Steelworkers' Victory and the Revival of American Labor.”

Kate has also published articles and monographs on employer and union behavior in public and private sector organizing and first contract campaigns, unions and the contingent workforce, union leadership development, women in the labor movement, and labor and the global economy. Because of her expertise in contemporary labor issues and her research on union and employer behavior in certification election campaigns, Kate has been brought in to testify as an expert witness at Labor Department and Congressional hearings and is frequently quoted in the major news media.

By Marc Laitin, AFL-CIO Online Mobilization Coordinator
(May 25, 2009) Intimidation and Harassment. Threats and Surveillance. Interrogation and Retaliation. All standard tactics in the employer anti-union playbook, and during the past decade we've seen these tactics used more and more often.

In a study released this week, Kate Bronfenbrenner, director of Cornell University's School of Industrial and Labor Relations, documents this in detail — including the increase in corporate tactics to interfere with, block and delay workers' attempts to form unions, and the ineffectiveness of current labor law to protect and enforce workers' rights in the election process.

The study, "No Holds Barred: The Intensification of Employer Opposition to Organizing," examines more than 1,000 union-representation campaigns and finds that "intense and aggressive" tactics to block workers' freedom to form unions are becoming more commonplace.

Every U.S. Senator and U.S. Representative in Washington, D.C., should read this new study.

Here are a few highlights (or lowlights) of the study:

During union campaigns, bosses threatened to close plants 57%
of the time and threatened to cut wages and benefits 47% of the time.
In more than 60% of union campaigns, workers are forced to attend mandatory one-on-one sessions with supervisors and are given anti-union messages or interrogated about their support for a union.
The number of employers using 10 or more identified coercive tactics to intimidate and harass workers has doubled.
When employees actually win an election to form a union, 52% still have no contract a year later, and 37% are without a contract two years after they voted to join a union.

WANT TO READ AND LEARN MORE?

Click here to read the full Bronfenbrenner study: http://www.unionvoice.org/ct/b11v1z71iqZf/

Teamsters News Link:
RECESSION DRAINS SOCIAL SECURITY AND MEDICARE

New York Times
(May 13, 2009) Even as Congress hunted for ways to finance a major expansion of health insurance coverage, the Obama administration reported Tuesday that the financial condition of the two largest federal benefit programs, Medicare and Social Security, had deteriorated, in part because of the recession.

As a result, the administration said, the Medicare fund that pays hospital bills for older Americans is expected to run out of money in 2017, two years sooner than projected last year. The Social Security trust fund will be exhausted in 2037, four years earlier than predicted, it said.

Spending on Social Security and Medicare totaled more than $1 trillion last year, accounting for more than one-third of the federal budget.

The fragility of the two programs is a concern not just for current beneficiaries, but also for future retirees, taxpayers and politicians. Lawmakers say they would never allow Medicare's trust fund to run out of money. But beneficiaries could be required to pay higher premiums, co-payments and deductibles to help cover the costs.

The projected date of insolvency, a widely used measure of the benefit programs' financial health, shows the immense difficulties Mr. Obama and Congress will face in trying to shore them up while also extending health coverage to millions of Americans.

The Labor secretary, Hilda Solis, noted that 5.7 million jobs had been lost since the recession began in December 2007. With fewer people working, the government collects less in payroll taxes, a major source of financing for Medicare and Social Security.

U.S. Treasury Department Secretary Timothy Geithner said the only way to keep Medicare solvent was to “control runaway growth in both public and private health care expenditures.”

A resumption of economic growth is not expected to close the financing gap. The trustees' bleak projections already assume that the economy will begin to recover late this year.

The Treasury secretary, Timothy Geithner, said the only way to keep Medicare solvent was to “control runaway growth in both public and private health care expenditures.” And he said Mr. Obama intended to do that as part of his plan to guarantee access to health insurance for all Americans.

But if cost controls do not produce the expected savings, Congress is likely to find it difficult to preserve benefits without increasing taxes.

Just hours before the trustees of Medicare and Social Security issued their annual report, suggesting that the nation could not afford the programs it had, the Senate Finance Committee finished a hearing on how to pay for the expansion of health insurance coverage that Mr. Obama seeks.

Mr. Obama has said he does not want to finance expanded health coverage with more deficit spending. Rather, he says, Congress must find ways to offset the costs, so they do not add to the deficit over the next decade.

Federal deficits and debt are soaring because of the recession and federal efforts to shore up banks and other industries while trying to revive the economy with a huge infusion of federal spending.

“The financial outlook for the hospital insurance trust fund is significantly less favorable than projected in last year's annual report,” the Medicare trustees said. “Actual payroll tax income in 2008 and projected future amounts are significantly lower than previously projected, due to lower levels of average wages and fewer covered workers.”

In coming years, the trustees said, Medicare spending will increase faster than either workers' earnings or the economy over all.

The trustees predicted that, for the first time in more than three decades, Social Security recipients would not receive any increase in their benefits next year or in 2011. In 2012, they predicted, the cost-of-living adjustment will be 1.4 percent.

The updates are calculated under a statutory formula and reflect changes in the Consumer Price Index, which was unusually high last year because of energy prices.

If there is no cost-of-living adjustment for Social Security, about three-fourths of Medicare beneficiaries will not see any change in their basic premiums for Part B, which covers doctors' services. The monthly premium, now $96.40, is usually deducted from Social Security checks, the main source of income for more than half of older Americans.
The trustees said that one-fourth of Medicare beneficiaries would face sharply higher premiums: about $104 next year and $120 in 2011. This group includes new Medicare beneficiaries and those with higher incomes (over about $85,000 a year for individuals and $170,000 for couples).
Seventy-five percent of beneficiaries will not pay any increase, so the remaining 25 percent have to pay more to keep the trust fund at the same level, Medicare officials said.
The aging of baby boomers will strain both Medicare and Social Security, but Medicare's financial problems are more urgent.
The trustees predict a 30 percent increase in the number of Medicare beneficiaries in the coming decade, to 58.8 million in 2018, from 45.2 million last year.
But the projected increase in health costs and the use of medical care is a more significant factor in the growth of Medicare. The trustees predict that average Medicare spending per beneficiary will increase more than 50 percent, to $17,000 in 2018, from $11,000 last year.

Representative Pete Stark, the California Democrat who is chairman of the Ways and Means Subcommittee on Health, said the Medicare report “underscores the urgent need for health reform.”

Teamsters News Link:
BEHIND FALLING WAGES

Michael Honey, University of Washington-Tacoma Branch Professor of Humanities, left, voiced disagreement with a column by Paul Krugman, right. The peripatetic media personality and author Krugman is also a Professor, at Princeton University, where he teaches Economics and International Affairs.

New York Times
(May 11, 2009) NOTE: The following letter from Michael Honey appeared in the May 11 issue of the New York Times. It was written by the Washington State Labor expert in response to a May 4 column in the NYT by economist, professor and columnist Paul Krugman.

‘WE ALSO NEED MORE UNIONS’

“Paul Krugman (column, May 4) writes that the ‘falling wage syndrome’ undermines economic growth. Hence, we need ‘more stimulus, more decisive action on the banks, more job creation.’ Why not say it? We also need more unions. Falling wages stem in part from drastic union decline.

Under President Franklin D. Roosevelt, the Wagner Act protections of union rights allowed workers to restore their wages and dignity. Unions became the best antipoverty program, the Rev. Dr. Martin Luther King Jr. said. Yet workers who organize today can expect to be fired. Employers use Wagner Act election procedures to intimidate workers. They violate other labor protections with impunity.

One hundred seventy-four historians have petitioned Congress to support the Employee Free Choice Act. To restore wages, we need to make it easier to organize and more costly for employers to deny workers their rights.”

[From Michael Honey, Tacoma, Washington, May 8, 2009. The writer is a Professor of Humanities at the University of Washington, Tacoma Branch, and is President of the Labor and Working-Class History Association.]

Teamsters News Link:
U.S. JOBLESS RATE HITS 8.9% BUT PACE OF LOSSES EASES

New York Times

MICHAEL DARDA Michael Darda joined MKM Partners, LLC inDecember 2003 as Chief Economist and Director of Research. Prior to joining MKM, Darda worked as Chief Economist and Director of International Research Polyconomics, Inc., a research firm located in New Jersey. Before joining Polyconomics, Inc., he worked in the Wisconsin State Legislature as a Press Secretary and Staff Economist for State Senator Margaret A. Farrow. Darda is a contributor to The Wall Street Journal and the National Review. He has also been published in the Washington Times and the Financial Times. He is a frequent guest on CNBC and appears regularly on Bloomberg financial television and radio. He graduated with honors in economics, journalism and public relations from the University of Wisconsin at Whitewater.

(May 8, 2009) The American economy lost another 539,000 jobs in April and the unemployment rate leapt to 8.9 percent, yet the deterioration was slightly milder than expected, buoying hopes that better days are approaching.

“The labor market is still very weak, but it looks like the most intense spate of weakness is probably behind us,” said Michael Darda, chief economist at the research and trading firm MKM Partners. “Less bad is always a prelude to good. It's going to take some time for this economy to get back on its feet, but we might be closer to the recession ending.”

Investors on Wall Street appeared to buy into that message, sending stock prices soaring in early trading.

Coming a day after the Treasury pronounced American banks healthier than many analysts had anticipated, the Labor Department's monthly snapshot of the job market presented the clearest evidence to date that the nation's economic free fall appears to have been arrested.

The acute shock that began last fall as the investment bank Lehman Brothers collapsed, followed by several other prominent institutions, has finally relented. Panic is no longer the dominant motif of American commercial life.

“It's a confirmation that we're in the early stages of a turn,” said Ethan Harris, co-head of United States economic research at Barclays Capital. “We're getting further and further removed form the confidence shock of last fall.”

But others emphasized that the easing of dire worry, while unambiguously positive, does not mean the economy is close to regaining vigor. Crisis may have merely given way to something more familiar and milder, yet still miserable for tens of millions of people: a continued slog through the longest, deepest recession since the Great Depression, with demand for goods and services weak and jobs exceedingly hard to find.

“This is really horrible in any normal context,” said Dean Baker, co-director of the Center for Economic and Policy Research in Washington. “This isn't recovery. It's a slowing recession. In any other time other than the recession we're in, we'd be appalled by these numbers.”

The numbers for April looked good only in comparison to recent months, with February's data revised to show a net reduction in jobs of 681,000 — down from an initial drop of 651,000 — and March revised from an initial loss of 663,000 to 699,000.

The slightly less awful jobs report for April appeared to reflect a moderate slowdown in the pace of layoffs, but not a sudden predilection among businesses to hire. The April data was boosted by a surge of government hiring in preparation for the 2010 Census, while private payrolls actually dipped by 611,000.

Most experts contend that significant hiring is likely to take many more months if not years to emerge. Businesses are expected to cut an additional two million jobs before the economy begins growing again and the unemployment rate begins to ebb, probably sometime in 2010. Any recovery that takes hold is expected to be long and faltering, though economists expressed hope that the worst losses were ending.

It is often said that the labor market is a lagging indicator, meaning it tends to improve long after other aspects of the economy trend up. But the job market also happens to be the piece of the economy that is most important to ordinary people, and now particularly so, making such pronouncement cold comfort in many households.

After years of borrowing against soaring home prices and tapping cheap credit cards to spend in excess of incomes, millions of Americans have been forced to live within the confines of what they bring home from work. Since the recession began in December 2007, 5.7 million jobs have disappeared from the economy. In recent months, wages have stopped growing. This retrenchment chokes off the spending power needed to generate demand for more employees at factories, shopping malls and offices.

“We're seeing fewer people employed, and those who are employed aren't seeing their earnings power increase,” Mr. Baker said. “It's tough to see where a recovery can come from.”

But those with more optimistic outlooks put the emphasis on the massive, government-led initiatives under way aimed at boosting demand for goods and services, and thus increasing the need for workers.

A $787 billion package of federal aid to state and local governments, along with tax cuts, is beginning to wash through the economy and should boost fortunes later this year. The Federal Reserve and the Treasury have been pouring money into mortgage markets and other areas of finance, bringing down the costs of borrowing.

“You have monetary and fiscal stimulus the likes of which the world has never seen,” said Mr. Darda.

The question is whether fresh job losses combined with continued declines in real estate prices will prompt millions more Americans to fall behind on their mortgage payments, leaving banks counting fresh losses and prompting them to pull back anew on lending. If that happens, the economy could weaken further, exacerbating joblessness. The next few months should offer indications of whether the Obama administration's initiatives are sufficient to avert that scenario.

For another month, the jobs report offered up a catalog of unfolding household distress. Manufacturing jobs declined by 149,000, employment in professional and business services retrenched by 122,000, and construction employment slipped by 110,000.

The unemployment rate reached 15 percent among African-Americans, 21.5 percent for teenagers, and 9.4 percent for adult men.

Those figures do not account for the millions of people working part-time because their hours have been cut or have failed to land full-time jobs. When those people are counted along with those who would like jobs but have given up looking, the so-called underemployment rate reached 15.8 percent — up from 15.6 percent in March and 9.2 percent a year earlier.

For those out of work, this recession has already proven to be the most punishing since the government began tracking the length of unemployment in 1948: Among the officially jobless, 27.2 percent were unemployed for more than six months, the highest figure on record.

“We can't forget that joblessness lasts well after the official end of recessions,” said Andrew Stettner, deputy director the National Employment Law Project in New York. “It's going to take a lot of job training and unemployment benefits well through 2010.”

Catherine Morse of East Mesa, Ariz., is among those suffering the realities of such data points. She has been looking for work for six months since she lost her job as an officer manager at a building company. She has been living on her savings, which are dwindling, she said.

“I've been looking every day, but I haven't been getting anything,” she said.

Whatever happens to the economy going forward — whether the government initiatives successfully spur growth, or whether banks stumble anew and commerce contracts — businesses will almost surely hire timidly going forward, say economists, with elevated levels of joblessness likely to be a feature of American life for many months.

“We have to start facing up to the fact we're headed for an unemployment rate above 10 percent,” said Lawrence Mishel, president of the Economic Policy Institute in Washington, adding that the rate “will stay high for quite a while.”