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Don't punish workers for fiscal problems; stop catering to the fat cats

Rochester Business Journal
October 23, 2009

We have had the stunning revelation from Unshackle Upstate that union workers make more and have better benefits than non-union workers. We plead guilty. The right to join a union and bargain collectively built the middle class, raised all boats and was the greatest upward mobility program and anti-poverty program ever seen.

Nationally, private-sector unionization is down to about 9 percent, and accordingly real wages have been down for decades, half as many people have defined-benefit pensions, taxes are much less progressive and most of the wealth workers produce goes to the richest few. Unshackle Upstate's proposals are the same things we have heard for 30 years-cut the union workers too, and cut our taxes-while the wealthy have their hands in the till and we continue a race to the bottom.

Sadly, the right to collective bargaining in the public sector has not been as successful as Unshackle maintains. With every burst bubble and recession, corporate managers and the politicians they own have whipped up the public to balance budgets on the backs of people who do the real work. Public employees in New York have lost jobs in the past year, endured unpaid furloughs and seen positions go unfilled, which puts more work on remaining employees during tough times when the demand for their services is increasing.

Rochester firefighter vacancies have gone unfilled, more than 100 teachers have been laid off and many city workers have lost their jobs over the last several years, even before the official start of the recession, December 2007. As for the City School District, members of the Rochester Business Alliance and Superintendent Jean-Claude Brizard have defended teacher layoffs while acknowledging that the central administration is overstaffed, but no layoffs have been announced among the six-figure salaries. Those people don't teach and are not represented by unions.

I was brought up to believe you are not entitled to both sides of the street, but that is what Unshackle is demanding. The Taylor Law and Triborough Amendment, which it wants changed, were designed as protections not for workers but for the public. They make the right to withhold one's labor illegal, and in return the employer must maintain the status quo.

The right to withhold one's labor from an employer is embodied in the Emancipation Proclamation and the 13th Amendment, which outlawed slavery and involuntary servitude. It naturally follows that such a right must extend to groups of workers. These compromises that make the right to strike illegal for public employees have historically limited the gains of public employees as compared to the private sector.

In other ways, the public-private comparison breaks down. When Unshackle complains that public employees have better pay and benefits than private-sector workers, is that because it includes minimum-wage service and retail workers in the comparison? How many jobs in the private sector have duties and responsibilities similar to those of police officers, firefighters, teachers, prison guards, probation officers, social workers and building and bridge inspectors?

Here are three suggestions that will balance the state budget and reduce taxes. First, enact real health care reform. How about Medicare for all in New York? In Canada, universal health care began province by province.

Other industrialized democracies pay about $4,000 per person annually for health care, but we will be near $8,000 after the next rate increase. Even if our system cost $6,000 per person, 50 percent more than elsewhere, a saving of $2,000 times 700,000 state employees and more than 300,000 retirees would exceed $2 billion.

When you consider the additional cost in our property and school taxes for every public employee, it is clear that genuine health care reform also would decrease those taxes. For-profit insurance companies also have driven up the cost of workers' compensation for businesses. The members of the Business Alliance, polled year after year, state that health care is their No. 1 cost concern, and when you add the costs of health care that are hidden in property taxes, school taxes and worker's compensation, actual taxes are a distant second.

Second, New York should return to a more progressive income tax, which was reduced by more than half as the result of successful efforts by corporate and banking interests. The Fair Share Tax, which raised the income tax this year for the wealthiest New Yorkers, is only temporary, and a bipartisan compromise also imposed higher taxes and fees on working people.

For all those years when the income tax was being made less progressive, state government shifted mandates-costs for education, special-needs children and many other things-to localities in the form of higher property taxes, school taxes, sales taxes and user fees. As a result, a household with $40,000 in income is approaching 12 percent in state taxes, while a billionaire's permanent rate is 6.5 percent.

New York needs $15 billion to $20 billion just for infrastructure maintenance and repairs, which are important for business and our quality of life. That is the reason for the progressive tax: Working people don't have that money, period.

Third, we should get our money back from Wall Street. Business publications generally agree that when guarantees, interest, TARP funds and the rest of the bailout and stimulus costs are added up, we could be on the hook for trillions of dollars to keep the Great Recession from becoming worse than the Great Depression. In September 2008, $4 trillion was lost in days from 401(k) accounts and pension funds, including a large amount from New York's pension fund. And companies that received taxpayer bailouts continue to give out billions of dollars in fat bonuses.

We should demand that there be no lobbying with our money and that any insurance or financial company on our dole will pay something like 40 percent federal and 40 percent state tax on any income over $400,000 until we are paid back. Any earnings over this threshold will yield only 20 cents on a dollar for the corporate connivers-and the people who brought on the recession should thank us that our overpaid prison guards are not watching over them.

Let's get real money from those who are really responsible and can afford it.

James Bertolone is president of the Rochester Labor Council, AFL-CIO. He also is president of the American Postal Workers Union Local 215.10/23/09 (c) 2009 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303.


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