Thursday, December 06, 2012

Fiscal Cliff: Michigan Union Experiencing Same Pension Headache it Forces on Schools

When it rains it pours for the Michigan Education Association.  It was recently defeated on Election Day when it attempted to pass a ballot proposal that would have enshrined collective bargaining in the state constitution. Now it’s in full panic mode about a rumored Right to Work bill that may be introduced in the state legislature.

So as the union’s power is waning, it appears the cupboard may be going bare, too.

The MEA has been foundering under staggering liabilities for the last few years, and it may have just gone over the cliff.

Despite only a minor drop in membership – less than 2 percent – a recently-filed financial report reveals the union’s net assets dropped from $-111 million to $-159 million in one year.

That appears largely due to a massive increase in its pension liability for its own employees

The union’s 2011 report revealed its pension and health care liability was $163,921,351. In 12 months, it ballooned by $44.6 million to a new total of $208,524,148. This increase accounts almost completely for the union’s massive $48 million drop in net assets.

The irony, of course, is that the union is suffering from the same type of pension liability headaches it routinely imposes on school districts and the state government.

The union is learning that it costs too much to guarantee employees sweet pension deals, particularly during hard times. Given that reality, one might expect the MEA to have more mercy on local school boards and the state when it comes to demanding cushy pensions for teachers.

MEA employees have demanded from the union what the union has been demanding on behalf of its dues payers. It’s a vicious, unsustainable cycle and everyone is paying the price.


New Hampshire Teachers call dress code ‘Condescending’

Just how far has the culture in government schools devolved?  School district efforts to professionalize staff is now considered an affront to teachers.  At least that’s the attitude emanating from teachers in the Hampton, New Hampshire SAU 90 school district.

The school board is considering an update to its dress-code policy for teachers, and, according to, “several teachers are insulted such a policy exists, telling them blue jeans, sneakers, flip-flops and tank tops are off limits.”

Superintendent Kathleen Murphy said staff members feel the proposed policy is “derogatory and condescending.”

It’s derogatory to ask professionals to dress a little more professionally that the young children in their charge?

Thank goodness several school board members are rejecting this protest as an affront to their authority. Citizens elect the board to run the schools and make the rules. Nobody elected the union to run anything.

“’Who backs up management?” board member Ginny Bridle-Russell asked. “What happens if they go to a teacher and say, ‘I don't feel that dress is appropriate, it's too short,’ and the teacher (responds by saying), ‘Says who?’”

Board Chairwoman Charlotte Ring said dress codes must be standardized in districts like Hampton that have more than one school.

“I wouldn't mind going without a policy if we had one building principal and one school,” Ring said. “But we have three schools and three building principals, and what may be acceptable in one school might not be in another.”

The fact that any school board has to navigate a controversy over the employee dress code illustrates the alarming amount of power teachers unions have grabbed over time.

The unions use that same power to block changes that really matter to students, like new evaluations that increase teacher accountability and improve instruction.

The proposed dress policy in Hampton is on hold for now and the superintendent is planning to report back to the school board in January with more information, according to the news report.

In the meantime, teachers will continue to be free to dress like they’re on the seashore instead of a classroom.


School buses, teamsters, and rent-seeking

A new statute in Illinois makes safety the primary consideration in public schools awarding contracts to school bus operators. This replaces the taxpayer-friendly rule that contracts should be awarded to the qualified provider that bids the lowest price. Safety has already been part of qualification. The statute passed the Illinois Legislature at the behest of the Teamsters Union, which has a master agreement with First Student School Bus Transportation Services (a subsidiary of the UK's First Group). The agreement makes it difficult for First Student to compete on price with relatively union-free operators such as Durham School Services (a subsidiary of the UK's National Express Group).

John T. Coli, a Teamster official, exclaimed, “The new law will finally ensure that driver safety, skills and student security are not trumped by reckless, fly-by-night owner-operators hoping to win contracts with the lowest possible bid.” Which operators are “reckless and fly-by-night”? To the Teamsters and their political satraps, they are, by definition, union-free operators.

Another Teamster boss, James T. Glimco, passionately proclaimed, “It’s one thing for the state to want to save money on its transportation services, but we cannot jeopardize student safety to help Illinois save a few extra bucks on its contracts.” But the new statute has very little to do with student safety. It is really about rent-seeking—that is, decreasing the competitive advantage of operators who are relatively free of excessive Teamster-imposed labor costs. Illinois safety bureaucrats will always rank a Teamster-impaired school bus operator as safer than any of its competitors, notwithstanding that actual safety records show no significant differences.

And First Student is definitely union-impaired. In its commentary regarding First Student's financial prospects for fiscal year 2012, Bank of America wrote,  “We believe that the current school bidding season will be challenging, with [First Student] protecting its margins at the cost of volume, and thus potentially losing a number of contracts to competition.” It has to protect its margins because of its Teamster-driven increases in labor costs. 

How did First Student fall prey to the Teamsters? Beginning in 2001 the union undertook a corporate smear campaign to depreciate First Student's reputational capital. In 2006, Martin Gilbert, the Chairman of FirstGroup, signaled surrender when, at the UK company's Annual General Meeting, he promised to “stamp out anti-union behavior” and declared that the company “would do everything in its power to ensure the company was neutral on the issue of employee representation.” From 2006 to 2008 the Teamsters and their favorite academic union apologists—e.g., John Logan of San Francisco State University and Lance Compa of Cornell University—attacked First Student for its alleged failure to live up to the promises of 2006. Curiously, Logan and Compa argued that United Nations and International Labor Organization rules require employer neutrality in union representation campaigns.

In 2008 First Student fully surrendered to the Teamsters by adopting a “Freedom of Association” policy that compels it to remain neutral in all Teamster organizing efforts. First Student’s freedom of association policy requires it “to refrain from management conduct . . . which is intended to influence an employee's view or choice with regard to labor union representation.” The result? According to William Gould, chairman of the National Labor Relations Board in the Clinton administration and a monitor of First Student's neutrality policy, First Student's “union membership increased from approximately 18 percent to more than 80 percent” from 2008 through 2010. Gould thinks this is wonderful, but it is actually nothing more than a malign consequence of surrender-through-neutrality.

Notwithstanding William Gould to the contrary, when a company that is a target of union organizing refrains from providing its employees with reasons to remain union-free, it trespasses against its employees' freedom of association.

Freedom of association has two parts: any person can agree to associate with any other person (or group) and any person can refuse to associate with any other person (or group). In brief, freedom of association means any person is free to associate with any other person who is willing to associate with him.

To give effect to worker freedom of association the National Labor Relations Act (NLRA) was amended in 1947 to permit and encourage employer free speech in union organizing campaigns. Freedom of association requires that workers make an uncoerced, informed choice regarding unionization. That choice requires that workers hear both sides of the unionization debate. Employer neutrality is a trap for employers and employees.

The Teamsters are trying to capture Durham in the neutrality trap, but Durham has chosen to speak vigorously and truthfully against unionization whenever and wherever  the Teamsters try to corral more dues-payers among its employees.

More here

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