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March 13, 2009

'Unions matter' in restoring prosperity

Divvying Michigan's share of stimulus: It will take a while

New labor secretary gets pro-union course from Obama administration

$1 billion development hinges on sewer upgrade

AFL-CIO, Change To Win move toward reuniting

News Briefs


'Unions matter' in restoring prosperity

By Robert Reich
Former U.S. Secretary of Labor

Why is this recession so deep, and what can be done to reverse it?

Hint: Go back about 50 years, when America's middle class was expanding and the economy was soaring. Paychecks were big enough to allow us to buy all the goods and services we produced. It was a virtuous circle. Good pay meant more purchases, and more purchases meant more jobs.

At the center of this virtuous circle were unions. In 1955, more than a third of working Americans belonged to one. Unions gave them the bargaining leverage they needed to get the paychecks that kept the economy going. So many Americans were unionized that wage agreements spilled over to nonunionized workplaces as well. Employers knew they had to match union wages to compete for workers and to recruit the best ones.

Fast forward to a new century. Now, fewer than 8% of private-sector workers are unionized. Corporate opponents argue that Americans no longer want unions. But public opinion surveys, such as a comprehensive poll that Peter D. Hart Research Associates conducted in 2006, suggest that a majority of workers would like to have a union to bargain for better wages, benefits and working conditions. So there must be some other reason for this dramatic decline.

But put that question aside for a moment. One point is clear: Smaller numbers of unionized workers mean less bargaining power, and less bargaining power results in lower wages.

It's no wonder middle-class incomes were dropping even before the recession. As our economy grew between 2001 and the start of 2007, most Americans didn't share in the prosperity. By the time the recession began last year, according to an Economic Policy Institute study, the median income of households headed by those under age 65 was below what it was in 2000.

Typical families kept buying only by going into debt. This was possible as long as the housing bubble expanded. Home-equity loans and refinancing made up for declining paychecks. But that's over. American families no longer have the purchasing power to keep the economy going. Lower paychecks, or no paychecks at all, mean fewer purchases, and fewer purchases mean fewer jobs.

The way to get the economy back on track is to boost the purchasing power of the middle class. One major way to do this is to expand the percentage of working Americans in unions.

Tax rebates won't work because they don't permanently raise wages. Most families used the rebate last year to pay off debt - not a bad thing, but it doesn't keep the virtuous circle running.

Bank bailouts won't work either. Businesses won't borrow to expand without consumers to buy their goods and services. And Americans themselves can't borrow when they're losing their jobs and their incomes are dropping.
Tax cuts for working families, as President Obama intends, can do more to help because they extend over time. But only higher wages and benefits for the middle class will have a lasting effect.

Unions matter in this equation. According to the Department of Labor, workers in unions earn 30% higher wages - taking home $863 a week, compared with $663 for the typical nonunion worker - and are 59% more likely to have employer-provided health insurance than their nonunion counterparts.

Examples abound. In 2007, nearly 12,000 janitors in Providence, R.I., New Hampshire and Boston, represented by the Service Employees International Union, won a contract that raised their wages to $16 an hour, guaranteed more work hours and provided family health insurance. In an industry typically staffed by part-time workers with a high turnover rate, a union contract provided janitors with full-time, sustainable jobs that they could count on to raise their families' - and their communities' - standard of living.

In August, 65,000 Verizon workers, represented by the Communications Workers of America, won wage increases totaling nearly 11% and converted temporary jobs to full-time status. Not only did the settlement preserve fully paid healthcare premiums for all active and retired unionized employees, but Verizon also agreed to provide $2 million a year to fund a collaborative campaign with its unions to achieve meaningful national healthcare reform.

Although America and its economy need unions, it's become nearly impossible for employees to form one. The Hart poll I cited tells us that 57 million workers would want to be in a union if they could have one. But those who try to form a union, according to researchers at MIT, have only about a 1 in 5 chance of successfully doing so.
The reason? Most of the time, employees who want to form a union are threatened and intimidated by their employers.

And all too often, if they don't heed the warnings, they're fired, even though that's illegal. I saw this when I was secretary of Labor over a decade ago. We tried to penalize employers that broke the law, but the fines are minuscule. Too many employers consider them a cost of doing business.

This isn't right. The most important feature of the Employee Free Choice Act, which will be considered by the just-seated 111th Congress, toughens penalties against companies that violate their workers' rights. The sooner it's enacted, the better - for U.S. workers and for the U.S. economy.

The American middle class isn't looking for a bailout or a handout. Most people just want a chance to share in the success of the companies they help to prosper. Making it easier for all Americans to form unions would give the middle class the bargaining power it needs for better wages and benefits. And a strong and prosperous middle class is necessary if our economy is to succeed.

(Robert B. Reich, former U.S. secretary of Labor, is professor of public policy at UC Berkeley and the author, most recently, of "Supercapitalism." This is from an op-ed that first appeared in the Los Angeles Times).


Divvying Michigan's share of stimulus: It will take a while

By Marty Mulcahy
Managing Editor

LANSING - Michigan is in line to get about $7 billion in federal stimulus money, but it's probably going to take months to figure out how it's all going to be spent.

The state's construction industry will eventually be prime beneficiaries of the money. The most definitive information available is that $847 million will be earmarked for road and bridge repairs in Michigan - and that's money that can be spent relatively soon.

But longer term, Michigan is still sorting out where and how other portions of the stimulus will be spent. Inquiries are directed to the state's official website, which said last week: "Once decisions are made about which projects will best help us achieve our goals - creating jobs, spurring economic growth, and helping Michigan families - we will share that information with you here."

Mike Crawford, executive director of the Michigan Chapter of the National Electrical Contractors Association, acknowledged that at least initially, the road builders would be the prime beneficiaries of the federal dollars. "We're going to be looking at how the plans unfold over the next few weeks," he said. "We know there's going to be money available, for example, to improve energy efficiency in public buildings, schools, city halls, DPWs, etc. We just haven't been able to get our hands on any figures."

Michigan AGC President Bart Carrigan pointed to "a surprising amount of water and sewer construction," as well as unexpected money for high-speed rail that President Obama inserted in the spending bill at the minute. "Overall," he said, "there's not nearly as much as we would like to have seen, but it still looks to be a significant amount. At the moment, most what we've heard is anecdotal stuff and lots of rumor."

Michigan Gov. Jennifer Granholm said on the state's stimulus website that the wish list from local communities to fund various projects "was overwhelming." There were more than 16,000 requested proposed projects totaling more than $49 billion. "The size and scope of this request list demonstrates that there are far more needs in Michigan than the recovery plan can fund," the state report on the stimulus money said.

On the list is everything from boiler replacement in an Addison County elementary school to installing energy efficient lighting in a Zeeland public works building.

President Obama said on March 3 that two weeks after he signed the $787 billion American Recovery and Reinvestment Act into law, "we are seeing shovels hit the ground" - although not very many of them. He said the $28 billion from his economic recovery program that's being spent on road and bridge work will save or create 150,000 jobs by the end of next year.

"Transportation projects that were once on hold are now starting up again as part of the largest new investment in America's infrastructure since President Eisenhower built the interstate highway system," Obama said. Long-term, Obama expects his economic recovery plan to save or create, 400,000 jobs will be targeted toward rebuilding the nation's infrastructure - roads, bridges, schools, levees, dams, and commuter buses and trains.

The Michigan Infrastructure and Transportation Association said the stimulus money will "provide a boost to Michigan's heavy construction industry." But the association added: "MITA has been clear in saying that the one-time stimulus is no replacement for a long-term, stable funding source. The association continues to call on state legislators to immediately address the chronic shortage of money for the transportation budget and provide new dollars to cover the unmet needs for municipal water and sewer systems."

Part of the difficulty in nailing down spending is that states are given some latitude in how to spend the money. Spending on Medicaid and the state's schools will eat up about $4 billion of Michigan's $7 billion in stimulus money - but some of that school spending could include construction and renovation work.

Here is some of what we know about Michigan's portion of the stimulus money:

  • Without putting a price tag on the work, the Michigan web site said a portion will provide funding sufficient to modernize at least 383 schools in Michigan, to add and improve labs, classrooms and libraries.
  • On March 4, Granholm announced that communities that submitted sewer and drinking water infrastructure projects last spring and summer in anticipation of receiving low-interest loans for repairs this year will be among the first eligible to receive the federal funding. The stimulus money is expected to provide $168.5 million and $67.5 million respectively for sewer upgrades and drinking water improvements in Michigan this year.
  • According to the Engineering News Record, Michigan is also in line to receive $134 billion in "transit capital."
  • $279 million for "weatherization" work.
  • 43 million for public housing.
  • More than one million jobless workers will be offered an additional $100 per month in unemployment insurance benefits, and benefits will be offered to an additional 162,000 laid-off workers.
  • Provided will be a "making work pay" tax cut of up to $800 for about 95 percent of Michigan workers, designed to pay out immediately into workers' paychecks.
  • The first $2,400 of unemployment compensation will be excluded from gross income in 2009. This exclusion will reduce taxable income for Michigan taxpayers on both their federal and state tax returns. The exclusion will save Michigan recipients of unemployment compensation up to $104 on their Michigan returns.
  • Across all industries, the recovery package is estimated to retain or create 109,000 jobs in Michigan.
  • Nationwide, the bill authorizes an additional $1.6 billion of new clean renewable energy bonds to finance facilities that generate electricity from the following resources: wind; closed-loop biomass; open-loop biomass; geothermal; small irrigation; hydropower; landfill gas; marine renewable; and trash combustion facilities.

The bill also authorizes an addition $2.4 billion of qualified energy conservation bonds to finance state, municipal and tribal government programs and initiatives designed to reduce greenhouse gas emissions. None of the money in these categories is state-specific at this time.


New labor secretary gets pro-union course from Obama administration

WASHINGTON - It's a new day at the U.S. Department of Labor, which was criticized during the Bush years as a lapdog for the business community rather than a guard dog for the interests of American workers.

By an 80-17 margin on Feb. 24, the Senate confirmed Rep. Hilda Solis, D-Calif., as President Barack Obama's Labor Secretary. The final vote for Solis was delayed for several weeks, during which Senate Republicans dropped a filibuster threat. Meanwhile, President Obama has also sought more money in the Labor Department budget, and has pledged better workplace safety enforcement.

"Finally Americans will have a Secretary of Labor who represents working people, not wealthy CEOs," said AFL-CIO President John Sweeney.

Solis, whose father was a Teamster and whose mother was also a union member, is the successor to Elaine Chao, who under the Bush Administration drew the scorn of organized labor. Chao supervised: a department that stopped rules to prevent debilitating repetitive-motion injuries for workers, sought to prevent employees of the new Homeland Security Department from unionizing, and reclassified hundreds of thousands of American workers as "supervisors" to prevent them from unionizing.

Solis has supported labor's No. 1 legislative priority, the Employee Free Choice Act. And she chose an IBEW training center in Miama to make one of her first official appearances. "It's a demonstration of our commitment to help inspire people who may have been laid off or are in dead-end jobs," she said. "These are jobs" at the IBEW center "with an average starting salary of $28 an hour. I hope to see these programs expand with stimulus funding,"

Enforcement is Solis' other key priority for workers. "We want to protect workers' rights and protect them in workplaces," she told TV cameras before the walking tour. "The first priority is jobs and job creation," she said later. "That goes hand-in-hand with enforcement. There'll be a lot of federal contracting and we'll be looking at how standards should be set" in wages, benefits and working conditions for federal contractors to meet, "and getting the best data" for the tasks, Solis said.

In that area, Obama has partially sped ahead of his own Labor Secretary, with a January executive order favoring project labor agreements on federal construction contracts and another order banning contractors' use of federal dollars for or against union organizing drives at their worksites. Contractors could still use their own money.

"We'll be putting back investigators into the Wage and Hour Division and OSHA
(the Occupational Safety and Health Administration). Any good semblance on investigating and monitoring in those areas has been eroded over the last eight years. We've put more priority on enforcing laws against unions than against employers who abuse their workers," Solis added.

Sweeney praised a 4.7% increase for the Labor Department's budget, saying it provides "much-needed funds" for "shoring up our unemployment insurance program, better enforcement of workplace health and safety and wage and hour laws, and new training initiatives, among other things."

"The Department of Labor will once again stand up for working families and be an advocate for everyday people," Obama said.

(Reporting by Mark Gruenberg, PAI Staff Writer)


$1 billion development hinges on sewer upgrade

By Marty Mulcahy
Managing Editor

SAGINAW TWP. - Increased sewer capacity is in the pipeline at the township's Southwest Wastewater Treatment Plant, where the building trades are at work.

Projected to increase capacity from 4.8 million gallons per day to 6.5 million, the upgrade is necessary for the expansion of the Dow Corning Corp.'s Hemlock Semiconductor Plant (HSC) in nearby Thomas Twp. That plant is being built to manufacture monosilane gas, a specialty gas used in the manufacturing of liquid crystal displays and thin-film solar cells.

The $10.3 million sewer work is "a vital part of securing HSC's $1 billion investment," said township Supervisor Timothy Braun.

The year-long project is expected to wrap up in September.

Saginaw Twp. provided a good explanation of the treatment process. Wastewater arrives at the plant site in gravity sewers and then receives primary treatment. Chlorine is also added for odor control. Primary treatment is provided by two mechanically cleaned bar screens and two aerated grit tanks. Screenings and grit materials are disposed of into a dumpster and hauled to a landfill.

Primary effluent treatment is accomplished in two circular primary settling tanks. Sedimentation is pumped from the settling tanks into two high rate anaerobic digesters. Secondary treatment consists of extended aeration with activated sludge in two oxidation ditches. Ferric Chloride is then added to the waste stream for the removal of phosphorous, followed by the addition of polymers to aid in settling.

Secondary clarification occurs in two circular final settling tanks. Sedimentation from these two tanks is returned to the oxidation ditches and transferred as needed to another process for additional settling and disposal. The clear effluent that is discharged from the final settling tanks then enters the last purification stage of the treatment process. Chlorination/disinfection is applied using chlorine gas and jet mixing. The treated effluent is then dechlorinated and further polished in a 6.1 million gallon polishing pond. Sodium Thiosulfate is also added to aid in the dechlorination process prior the discharge to the Tittabawassee River.

"We're doing great out here," said Miller Sage plumbing foreman Jeremy Wilson. "This is a nice little job." He said the plant has a variety of fixtures and pipe, ranging from 36 inches to four inches. "It's clean work, a lot cleaner than you'd expect," he said. "You get some smell in the morning which can be a little rough, but that's about it."

IN THE SAGINAW Township Southwest Wastewater Treatment Plant's de-chlorination building, Plumbers and Steamfitters Local 85 members Harold Dust, left, and Jeremy Wilson go about the task of installing a new 36-inch by 20-inch eccentric reducer into the treatment system. They're working for Miller-Sage.

INSTALLING REINFORCING IRON for a trough around a clarifying pool at the Saginaw Township Southwest Wastewater Treatment Plant are brothers Mario and Dave Hernandez of Iron Workers Local 25, working for C & A Re-Steel.


AFL-CIO, Change To Win move toward reuniting

By Mark Gruenberg
PAI Staff Writer

(PAI) - An AFL-CIO statement has given the green light to ongoing talks designed to reunify the nation's competing union federations. As approved by the AFL-CIO Executive Council in Miami on March 4, the statement says "now is the time to bring the union movement back together."

But the devil is in the details, especially the hurdles reunification must leap.

Success would reunite the 56-union, 10-mllion member AFL-CIO with the seven-union, six-million member Change To Win (CTW). The CTW unions left the AFL-CIO at the older federation's Chicago convention four years ago. The unaligned National Education Association is also in the talks. At 3.2 million members, NEA is the largest U.S. union.

All three groups worked together on politics last year and passage of the Employee Free Choice Act - labor's #1 legislative priority - last year and this year. And there is a lot of AFL-CIO-Change To Win cooperation on the ground in most states, though the split persists at the national union level.

"In recent weeks, a number of AFL-CIO union leaders and a number of Change To Win union leaders, along with the heads of both federations, have been in informal discussions about such a reunification," the statement says. "No agreements have been reached, but issues have been identified and options discussed."

The talks have been actively pushed by David Bonior, the former House Democratic Whip from Mt. Clemens who now heads labor-backed American Rights at Work. There is, for now, no set timeline for them to come to an agreement.

Change To Win Communications Director Greg Denier said in a telephone interview the talks "are positive and moving forward." Driving issues are health care reform and the Employee Free Choice Act, after their joint cooperation in labor's successful Election 2008, he added. "In the '08 elections, we operated as one unit and produced tremendous results. The discussions are a work in progress," Denier said.

The federation also made the point the four-year-old split involved issues dealing with "structure, governance, financing and programs of the federation." The issues now being discussed include labor's "governance, mission jurisdiction and organizing responsibility, programs and finances."

At the time they left, the Change To Win unions - the Service Employees,
Teamsters, Laborers, United Food and Commercial Workers, Carpenters, UNITE HERE and the Farm Workers - had a range of complaints about the AFL-CIO.

One was the fed spent too much on politics and not enough on organizing, another was about a push to force smaller unions to merge with larger ones, and a third was about the size of the AFL-CIO headquarters staff. They also disagreed on who should lead the AFL-CIO in the future - an issue that will arise at this year's AFL-CIO convention, scheduled for Pittsburgh in September.

At the time of the split and since then, there were also jurisdictional squabbles, many involving Service Employees against other unions in the health care field.

But the talks are not solely in the hands of the two federations' leaders, AFL-CIO President John J. Sweeney and Change To Win Chair Anna Burger, who is also SEIU's Secretary-Treasurer. Panels of union leaders from both federations are in the talks, and the fed's resolution said Sweeney must share responsibility for the talks with the AFL-CIO Executive Committee. That panel has 19 union leaders.

The AFL-CIO said reason for the reunification talks is "the economic crisis acing American workers." And that election of labor-backed Democratic President Barack Obama, and "probable passage of the Employee Free Choice Act and other important changes in our political and economic environment, provide us with unprecedented opportunity" for progress, which reunification would aid.




News Briefs

New money floated for new Soo Lock
In the Consolidated Appropriations Act for Fiscal Year 2009 that passed the U.S. House of Representatives on Feb. 25 the first funding for the start of construction for a new lock at Sault Ste. Marie was buried.

According to the office of U.S. Rep. Bart Stupak (D-Menominee) there were nearly $30 million in funding for Michigan projects in the measure, include $17 million for the Soo lock project. If it survives scrutiny by the U.S. Senate and wins President Barack Obama's signature, the money would be used to pay for cofferdam construction needed to prevent water flow into the old and obsolete Sabin and Davis locks. The old locks are where the new "superlock" is to be built.

The new lock would be a twin to the existing 1,000-foot Poe Lock, and act as a backup in case of a malfunction.

The entire lock project has been estimated at over $500 million. Over the last 13 years the U.S. Army Corps of Engineers has invested $20 million in engineering and designing it. Though the cofferdams will only be a small portion of the overall effort, Congressman Stupak said they "will really get the Soo lock off the board."


Senate Republicans oppose EFCA
Not that it's going anywhere, but a resolution opposing the Employee Free Choice Act was adopted by the Republican-dominated Michigan Senate on Feb. 19. The vote came down along party lines, 20 Republicans- yes, 16 Democrats- no.

The Employee Free Choice Act would make it easier for unions to organize workplaces by allowing workers to use the simpler card-signing method to vote. A secret ballot system would also be available to workers.

The symbolic resolution has no chance of passing the Democrat majority in the Michigan House or get approval from Democratic Gov. Jennifer Granholm - and it's a federal issue anyway. The Employee Free Choice Act is expected to be a political hot potato later this year, with the big business community rabidly opposing the law.

A statement from the Michigan AFL said the resolution "shows that Republicans do not care about workers, they only care about their friends in big business." The state AFL-CIO called on the Michigan House to adopt a resolution in support of the Employee Free Choice Act.

DTE reveals plans For renewable power
On March 5, DTE Energy Co. disclosed plans to add 1,200 megawatts in electricity capacity from renewable resources by 2015.

Most of the electricity is to be generated by wind turbines. The utility has obtained easements on over 50,000 acres of land in Michigan's Thumb area, mainly in Huron County, to build wind farms.

DTE also indicated it will pursue 20 megawatts in electrical capacity from two solar energy pilot projects. The utility indicated it will be setting up energy efficiency programs and working with third party energy producers in meeting the state's renewable energy goals.

To pay for the program that utility has proposed a renewable energy surcharge of up to $3.85 per month for Detroit Edison residential customers and $1.20 per month for MichCon residential customers.

(From Michigan Construction


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