Marathon Pundit: NLRB overreach, Chicago pension edition

Thursday, September 22, 2011

NLRB overreach, Chicago pension edition

City of Big Union Pensions

Big Labor bosses get big pensions in Chicago. The Chicago Tribune reports that former Chicago Federation of Labor president Dennis Gannon was placed on the Chicago municipal payroll for one day--just to fatten his pension.

Most city workers spend decades in public service to build up modest pensions. But for former labor leader Dennis Gannon, the keys to securing a public pension were one day on the city payroll and some help from the Daley administration.

And his city pension is more than modest. It's the highest of any retired union leader: $158,000. That's roughly five times greater than what the typical retired city worker receives.

In fact, his pension is so high that it exceeds federal limits and required the city pension fund to file special paperwork with the Internal Revenue Service to give it to him.

Gannon's inflated pension is a prime example of how government officials and labor leaders have manipulated city pension funds at the expense of union workers and taxpayers. Like other labor leaders, he was able to take a long leave from a city job to work for a union and then receive a city pension based on a high union salary.

From the Wall Street Journal:

How did the city end up paying him a pension nearly three times his salary? That's where things get interesting. Few labor leaders took city pensions, the Tribune reports, "until the law was changed in 1991 to base those workers' city pensions on their union salaries instead of their old city paychecks, dramatically boosting the amount they could receive"--a provision that "became law with no public debate among state legislators and, more importantly, no cost analysis."

And no accountability: "No one from either the state Legislature or city government will take credit for the law, which passed in 1991, and the process of drafting pension legislation in Springfield is so shrouded in secrecy that there's no way of knowing exactly whom to hold responsible."

And no possibility of reversal: "The state constitution says pension benefits cannot be diminished once they are earned."

The Daily Caller:

The Labor Department is expected to soon finalize new "persuader regulations" that would force labor lawyers, consultants and specialty firms to publicly disclose all of their financial and personal information.

Nathan Mehrens of Americans for Limited Government told The Daily Caller that the regulations, known officially as the Labor-Management Reporting and Disclosure Act, would cripple employers and employees when dealing with union bosses. Combined with a slew of other pro-union Labor Department and National Labor Relations Board (NLRB) regulations, Mehrens said this regulation would likely force employers to succumb to organizing efforts.

If Labor Secretary Hilda Solis implements the "persuader regulations" in their current form, all private sector employer-employee relations service providers will be required to open their financial books to the public. Parties that fail to file the required information are criminally liable and could be punished with jail time, a fine, or both.

Directly affected entities include firms that advise companies on how to handle union organizing efforts, human relations companies that help develop benefits plans for company employees, and virtually every possible entity that has anything to do with employee rights.

The Bloomington Pantagraph:

If Democrats in the Senate are serious about creating jobs and improving the business climate in the United States, they will go along with Republicans to approve a bill to limit the government's authority to interfere with where businesses locate their operations.

The House already has approved House Resolution 2587, the Protecting Jobs from Government Interference Act. Under the act, the National Labor Relations Board could not order an employer to restore or reinstate any job or require an employer to invest in a particular plant or facility.

Last week’s 238-186 vote was largely along party lines, with just eight Democrats voting for it. All Pantagraph-area congressmen voted “yes.”

The bill was introduced by U.S. Rep. Tim Scott, R-S.C., in response to action taken by the NLRB against Boeing's planned jet-manufacturing plant in his state. An NLRB lawyer claimed the plant was being opened there to retaliate against union workers in Washington state for previous strikes.

South Carolina is a "right-to-work" state. Unions are free to organize workers there, but employees can't be compelled to pay union dues as a condition of employment.

Mickey Kaus writing for the Daily Caller:

How about paying back the $15 billion first? I'm sure there are sophisticated arguments for why the UAW members shouldn't pay back the taxpayers who bailed their employer out of bankruptcy before they negotiate a deal that gives them each a $5,000 bonus. I just can't think of them right now. … Just from a PR standpoint, repaying the debt would seem like a good idea. …

Chevy dealership, Glenview, IL

Sure, as a going concern, GM has to pay to keep its employees from bolting to a competitor. But what are the odds that most of GM's UAW workers (i.e, the ones not in the $14-an-hour Tier Two) could find jobs anywhere near as good as the ones they now hold? Almost all their leverage comes from the Wagner Act’s power to strike and not be fired. Without Wagner, they’d be free to quit, which they would not do. (Go ahead. Make GM's day.)

It’s one thing to give workers power to negotiate above-market wages through collective bargaining–hey, let them squeeze the bosses for all the bosses can bear. It's another thing when they squeeze more than the bosses can bear, the bosses go broke, and ordinary citizens, many poorer than UAW members, have to make up the difference. After that, why let the UAW continue to extract Wagner Act wages as if nothing happened? …

The $15 billion aside, if GM is so profitable it can afford to give its new hires a raise and all its UAW workers plush health benefits and a big bonus, that's great. But why do I fear the economic assumptions underlying these numbers will prove to be unrealistic? Sure, GM's doing OK now, with two of its major competitors (Toyota and Honda) crippled by the Japanese earthquake. Those two are now coming back online, while other GM competitors like Hyundai and VW are gaining market share. VW, at least, is explicitly pursuing a low-cost price-chiseling strategy, the better to exploit its non-union wage advantage. Plus the whole new car market may be shrinking as the economy stalls.