labor Bernie, GE & Uber
MARSHALLTOWN, Iowa - Speaking at a union hall here, U.S. Sen. Bernie Sanders on Saturday welcomed news that the South Carolina AFL-CIO executive board passed a resolution supporting his candidacy for the Democratic Party presidential nomination and recommending his endorsement by the state and national labor organization.
"We call on the AFL-CIO, union members and working people everywhere to unite behind Bernie Sanders and elect the president America's workers desperately need," the resolution said. The resolution "strongly urges" the national AFL-CIO to endorse Sanders.
Erin McKee, president of the South Carolina AFL-CIO, said the executive board member who recommended Sanders said "nobody in a very long time has stood up for working people and labor like Bernie Sanders has."
South Carolina is among the first four states in the nation to hold primaries or caucuses to begin the process of selecting the Democratic Party presidential nominee. The action by the South Carolina executive board made it the second state, after Vermont, to back Sanders.
Sanders learned the news while campaigning in Iowa, home of the first-in-the nation caucuses.
"We are very pleased to have received the support of the executive board and their recommendation that the South Carolina and national AFL-CIO follow their lead," Sanders said as he prepared to address an audience at United Auto Workers hall.
Resolution Urging Support for Bernie 2016
On June 13, 2015, the Executive Board of the South Carolina AFL-CIO met and voted to adopt the following resolution:
Whereas: The SC AFL-CIO Executive Board is committed to building a broad, effective movement for democratic change, and
Whereas: Our goal is a government that carries out the will of the people, not prop up the profits of the 1% at the expense of the rest of us, and
Whereas: We firmly believe that Senator Bernie Sanders is the strongest candidate articulating our issues. His commitment to union principles and labor's values is longstanding and heartfelt, and
Whereas: As a truly progressive candidate for the Democratic Party nomination, Bernie has the chance to inspire millions of Americans with policy proposals that put the interests of the labor movement, front and center. His campaign will draw attention to what unions and collective bargaining have accomplished for workers and energize our movement, and
Whereas: Labor must step up to fundamentally change the direction of American politics, by refocusing on the issues of our time: growing inequality and pervasive racism, the power of concentrated wealth and its corruption of our democracy, an escalating pension and retirement security crisis, runaway military spending and a militarized foreign policy, Medicare for All, and the need for new, bold solutions to our shared problems.
Therefore be it resolved that: We call on the AFL-CIO, union members and working people everywhere to unite behind Bernie Sanders and elect the President America's workers desperately need, and
Be it further resolved that: The South Carolina AFL-CIO Executive Board strongly urges the AFL-CIO to support Bernie Sanders 2016 and his campaign to become the nominee of the Democratic Party for president.
Adopted on June 13, 2015 and respectfully submitted for consideration to the AFL-CIO by the SC AFL-CIO Executive Board.
New York City
The GE proposals that were slowly unveiled during the morning and afternoon bargaining sessions at the "small table" Tuesday indicate that the company is still not convinced that union members are in no mood to go backwards. The big rally in Erie on Saturday was a good indicator of workers' determination, but members of UE and the other CBC unions will need to keep the heat on GE bosses to get the message through to the company's negotiators in New York.
For months, GE has been telegraphing the punch that came Tuesday - a proposal to end post-65 health insurance for retirees. In January 2015 GE eliminated company-subsidized healthcare for new salaried-exempt retirees. So it was no surprise that the very first company proposal of the 2015 negotiations on Tuesday morning was GE's demand that the CBC unions agree that our members should also lose access to GE post-65 health insurance.
Under the current National Agreement's post-65 plan which provides a series of supplements to Medicare, GE now pays $1,361 per year toward their health benefits. However, retirees pay almost two-thirds of the cost of these benefits ($3,524 per year), including payments for enrolling in Medicare Part B which GE does not subsidize. A post-65 retiree whose spouse is also covered under the Medicare supplements will suffer a double jolt under which GE will no longer pay $2,722 per year in retiree healthcare subsidies.
As if the attack on retiree health wasn't bad enough, GE's second proposal on Tuesday morning was to end company-paid life insurance for hourly employees who retire after January 1, 2016. GE did graciously offer to allow retirees to purchase retiree life insurance with their own money. Under the current National Agreement, GE is required to provide a life insurance benefit which at age 65 is reduced to half of annual pay, up to a maximum of $50,000.
CBC bargainers were deeply troubled by the company's proposals, which, while not unexpected, were still thoroughly unappetizing. The union negotiators expressed their strong opposition to GE's attack on retirement benefits, just as thousands of union members and supporters had done during the big rally in Erie on Saturday. When UE, IUE-CWA, UAW, IAM, and IBEW bargainers left the morning session for a lunch break, they were already suffering from indigestion caused by two servings of the company's distasteful proposals. Afternoon "Small Table" Focus on Pensions
After the noxious morning proposals, in the afternoon GE offered several proposals on pension issues. Its first afternoon proposal dealt with a new company proposal to automatically enroll new employees in the Retirement Savings Program (RSP), and unless they specifically opt out of the program, GE would immediately begin deducting RSP savings from their paychecks.
Several CBC bargainers expressed the view that encouraging savings is good. But the unions attacked GE's refusal to permit post-2011 hires from participating in the regular pension, and demanded that pension participation be restored retroactively for those members. When GE bargainers complained that only half of the post-2011 hires save through RSP, CBC leaders replied that the high healthcare costs GE has imposed make it impossible for these workers to afford additional deductions from their paychecks.
GE did offer some minor improvements in the guaranteed pension and proposed a pension update similar to the one offered in 2011, and the company proposed to renew the early retirement supplements, although with no improvements. The company also offered another minor improvement: a slight increase in the annual earnings threshold at which employees are required to make mandatory pension contributions.
When pressed by CBC bargainers to respond to other union proposals to improve pension benefits, GE's reply was that it "wasn't interested." GE couldn't even give the unions the courtesy of a response to those proposals, or their reasons for their disinterest in the improvements sought by union members.
GE's proposals on the Special Early Retirement Option (SERO), SERO 30, and the Plant Closing Pension Option (PCPO) were also underwhelming. Although GE did propose to renew those programs and make a small upward revision to the Special Supplement, it did not respond to any of the vital union proposals to make SERO meaningful. UE specifically made the case that the "save-a-job" feature of SERO be restored so that older workers could elect early retirement with medical coverage and supplements, thereby preserving a job for a less senior employee. UE International Rep. Gene Elk recounted how the Erie plant lost hundreds of jobs, but that only 17 senior workers received SEROs since 2012. GE continued to claim that the program was too expensive and continued to resist important union SERO proposals.
At the conclusion of the afternoon season, one CBC bargainer aptly commented: "I know it's still early in the week, but I have never been so disgusted." UE was represented at the small table by UE General President Bruce Klipple and International Representative Gene Elk. Small table bargaining will resume on Wednesday, June 17 at 9:00 a.m. SUBCOMMITTEE MEETINGS BEGIN
In addition to these developments at the "small table," this was the first day of bargaining sessions of the two subcommittees, in which union leaders from all of the CBC unions meet with company representatives and push for key demands. One subcommittee deals with contract language issues and the other with pensions and insurance. Fighting for Job Security
The main focus of the contract language subcommittee was the crucial issue of job security. Union representatives from all the unions present hammered GE over the inadequacy of the current contract language on job security, and the company's reckless policies in subcontracting, outsourcing, farm-out and transfer for work affecting production and non-production jobs. Speaker after speaker offered examples of outsourced work being done poorly, requiring costly and time-consuming rework by the union members who could and should have done the work in the first place. The company is "over-eager" to outsource, said Local 506 President Scott Slawson, one of the two co-chairs of the committee, and is "quick to pull the trigger" on farm-out. "With adequate notice and the chance for us to discuss the company's needs, it can be beneficial to both union and company. We can often save the company money and do the work quicker and more reliably." Other union leaders echoed that view, and co-chair, Rick Madal of IUE-CWA Local 707, added, "Nobody knows the work like we do."
UE's proposals call for removing the 60-day time limit on decision bargaining; including farm out and maintenance subcontracting in the types of work transfers that require notice and bargaining; and for work transfer notices to become null and void, and the work to stay where it is, six months after the date of transfer provided in the company's original notice. UE also called for improved benefits in several other job loss events.
Company representatives claimed that outsourcing happens due to "ups and downs of the business," but union representatives showed, with examples, that such fluctuations are often known months in advance, and that when the union is notified it can often provide the best and most cost-effective answer to the company's needs. Local 506 Chief Plant Steward Leo Grzegorzewski pointed out that, in Erie, if a machining department has more work than it can handle, a machining area in another building may be able to do the added work. He added, "The vendor is not really 'on time' when we have to redo all of their work."
Matt Louisa of IAM Local 912 in Evendale said that contractors are allowed to circumvent the plant standards, resulting in inferior work. "Not adhering to plant standards is costing the company money."
Other representatives from the IBEW, IUE-CWA, IFPTE offered similar examples.
Scott Slawson talked about the "epic" transfer of work notice Local 506 was given in 2013 about a massive movement of work to Texas, "to a plant that was already built and already producing when we received the notice." He described how GE stalled on giving requested information and otherwise abused the process.
Company spokesman mischaracterized UE's proposal to lift the 60-day time limit as a call for "never-ending bargaining." But UE Organizer Omar el-Malah pointed out that the law requires good-faith bargaining until the parties reach impasse or reach agreement, and that does not mean "never-ending bargaining." UE News Managing Editor Al Hart said the company's game plan in 2013 transfer of work decision bargaining in both Erie and Ft. Edward was to take advantage of the 60-day limit and "run out the clock."
Local 332 Business Agent Sherice Stark said Ft. Edward workers could have saved their jobs "if we had a chance before you made up your minds." She said GE is building a new capacitor plant with new equipment in Florida, but, "You could have put new equipment in our plant, and we have the knowledge to make you even more money." She said GE makes the kind of decisions it makes because, "You don't put a face to the worker." That last comment drew applause from the more than 25 union leaders in the room - the only comment that received applause.
After the beating they had taken in the morning session, in the afternoon the company people changed the subject by, for the first time in recent memory, putting forward proposals in a subcommittee meeting. It offered nine proposals, most of which were minor increases or adjustments in such benefits as Income Extension Aid, Relocation Assistance, and Preferential Placement. One proposal was for a cut, reducing the period of the rate guarantee from 78 weeks to 26 weeks.
UE was represented on the contract language subcommittee by UE Local 506 President Scott Slawson, UE Local 506 Chief Plant Steward Leo Grzegorzewski, UE Local 332 Business Agent Sherice Stark, UE Local 618 President Mike Divins, and UE Field Organizer Omar el-Malah Pension and Insurance
The participation of 30 union negotiators in the Pension and Insurance Subcommittee indicated how important both of those issues are in this year's negotiations. Co-chairs Jim Ledford of the IUE-CWA and Frank Fusco, business agent of UE Local 506, led a review of all the union proposals on these topics, with extensive discussion of many of them. The morning was devoted to pensions and the afternoon to health insurance. The unions pushed the importance of offering the Special Early Retirement Option (SERO) with a replacement or "save-a-job" feature to open jobs for new hiring, and called for offering SERO windows in 2015 and 2017. They also told the company that current retirees need a real increase in their monthly benefits, not a so-called "13th check," which is in effect a one-time lump sum for retirees.
Mike Ferritto, Local 506 vice president, said the costs of healthcare are significantly cutting into the standards of living of many GE workers. "When I was hired by GE 10 years ago I was very proud. Now I go to the doctor's office and people huff and puff when I show them my insurance card. It's embarrassing." Ferritto added that disgust with the current health plan is widespread among GE employees at many levels. "I had management people in Erie encouraging me when they heard I was coming to negotiations. 'Go get them for us, too,' they told me."
Ric Cassilli, business agent of IUE-CWA Local 201, told the company that what it did to salaried retirees on healthcare was "heartless and cruel." He added, "You've hit the 90 year-olds in the nursing homes, and you're telling them to call or go online to get into the health insurance exchanges."
UE was represented on the Pensions and Insurance Subcommittee by Frank Fusco and Mike Ferritto, Local 506; Melvin O'Dell, Local 332; Fred Harris, Local 601; and Peter Knowlton, Northeast Region president.
By Alison Griswold
In what could be an explosive decision, the California Labor Commission has found that a driver for Uber in San Francisco is an employee of the company. That's from a ruling filed in state court on Tuesday and first reported by Reuters. It's pretty damning. "Defendants hold themselves out as nothing more than a neutral technological platform, designed simply to enable drivers and passengers to transact the business of transportation," the commission writes. "The reality, however, is that Defendants are involved in every aspect of the operation."
The driver, Barbara Berwick, has been awarded roughly $4,000 in unpaid expenses, plus interest. Uber is appealing the ruling. Uber spokeswoman Kristin Carvell stressed in a statement that the labor commission's decision is "non-binding" and applies only to a single driver.
The threat that Uber's drivers could be deemed employees in the eyes of the law has loomed over the ride-hailing company for a while now--and it's a big one. Uber's vast business and multi-multibillion dollar valuation fundamentally depends on its assumption that drivers are independent contractors, and not employees. When drivers are treated as contractors, they carry the bulk of the company's operating costs. Uber drivers are required to pay out of pocket for everything from gas to insurance to routine car cleanings and maintenance. It adds up fast. While Uber has boasted that drivers in certain markets like New York City can earn as much as $90,000 driving on its platform, after expenses are added into the mix, that take-home figure gets much lower.
Just as importantly, drivers who are contractors, and not employees, also aren't required to get benefits and other labor protections that employees are traditionally awarded. For Uber and all its peers in the so-called 1099 economy, this is another key thing that helps to keep costs low, rides cheap, and thin margins viable.
Determining whether workers should be classified as contractors or employees is rarely a simple matter. Uber points to its drivers' abilities to set their own schedules as evidence that they operate independently and shouldn't be considered traditional employees. Drivers, on the other hand, argue that Uber sets strict standards for how many rides they need to accept while on the road, and how they ought to interact with passengers--and reserves the right to deactivate their accounts (basically, the equivalent of firing) if they don't comply. In California, where the issue of whether drivers for Uber and its main rival Lyft are employees is headed to trial, U.S. district judges have in two separate rulings declined to make a final decision. "The test the California courts have developed over the 20th Century for classifying workers isn't very helpful in addressing this 21st Century problem," one wrote.
So until now, the big, scary question--the one that could decimate Uber, and Lyft, and all the 1099 companies like them--has basically remained a hypothetical. Which is why it's so important that the California Labor Commission has finally stepped in to say, Yes, this Uber driver is an employee, and she's owed $4,000 in expenses. Imagine if Uber suddenly had to pay $4,000 back to all of its drivers in California, much less across the U.S. Even its $5.9 billion in funding would presumably wilt at the thought. It's undeniable that Uber drivers becoming employees would be a huge blow to Uber's business model. What we still don't know is: How huge?
This article has been updated to include a statement from Uber.
Correction, June 17, 2015: Due to an editing error, the original headline of the article misstated that the labor ruling said Uber drivers are employees. The ruling applies only to one driver.
Alison Griswold is a Slate staff writer covering business and economics.