Labor opposes Wall Street grab
for retirement savings

Labor unions took to the streets on March 31 in a National Day of Action for Retirement Security. The AFL-CIO coordinated demonstrations targeting the Wall Street brokerage firms of Wachovia Securities and Charles Schwab Corp. in more than 70 cities, including San Francisco—home to Schwab headquarters—New York, Boston, Chicago, Austin, Texas, and Washington, D.C.

Charles Schwab, company founder and CEO, is a leading proponent of privatized accounts and a major Republican donor. His discount brokerage house has been a favorite among many labor unions and their members. No longer.

Labor is targeting a broad swath of the financial giants who support President Bush’s plan to privatize Social Security, cut benefits and swell the deficit by $5 trillion over the next 20 years. The firms exert their influence the old-fashioned way—with money discreetly donated to front groups that then launch multimillion-dollar, pro-privatization ad campaigns. The front groups have names like the Alliance for Worker Retirement Security and Coalition for the Modernization and Protection of America’s Social Security, but security for workers is not their goal. They work for business.

How much do the brokerages stand to gain if the public is forced to divert their Social Security payments into private accounts? Potentially billions, say economists. The president’s plan is still sketchy, but he has said it could be modeled after the Thrift Savings Plan offered to federal employees. People would have a limited choice of broad-based investment options with low administrative fees. As their holdings increased in value, they might exercise an option to invest in a greater choice of private-sector funds. University of Chicago economist Austan Goolsbee estimates that over the next 75 years, this proposal would generate fees worth $475 billion under the Thrift-type option or $940 billion under the private-sector fund option.

In Washington, D.C., a throng of hundreds, including some 50 AFT staff and activists, picketed Schwab and Wachovia offices. They heard AFL-CIO president John Sweeney call the Bush plan "a flimflam scheme" that would reduce the standard of living of tomorrow’s retirees and saddle the young with an exploding federal deficit. Sweeney warned the firms not to "try to pick our pockets while you line yours."

In addition, AFT president Edward J. McElroy wrote to the president of Charles Schwab, one of the firms that manage the AFT staff pension plans. McElroy notified him that pension fund trustees are considering taking AFT’s business elsewhere, and asked to meet with him.

There is evidence that labor’s voice is getting through. So far, two investment firms, Edward Jones and Waddell & Reed, announced that they have withdrawn from the Alliance for Worker Retirement Security.

The AFL-CIO also is raising the pressure through an online information campaign at http://www.wallstreetgreed.org/.

AFT task force fights healthcare crisis

The prolonged rise in healthcare costs continues to hinder the ability of unions to stop cost-shifting at the bargaining table. To counter the problem, the union must focus on improving the quality of healthcare to bring down costs, as well as bargaining proactively to control the impact of cost increases, says the AFT’s Healthcare Task Force, which met in March in Washington, D.C.

The task force examined challenges the union faces, including proposed legislation to cut Medicaid funding and provider reimbursement in Medicare, and efforts to move workers away from employer-based insurance coverage to health savings accounts and other tax incentives that would shift the burden of healthcare costs to workers.

"Employer-based benefits are becoming increasingly vulnerable," said AFT associate director of legislation Bill Cunningham, who gave the task force an overview of healthcare legislation before Congress.

One of the best ways to prepare local and state leaders for healthcare bargaining, says the task force, is to help them evaluate their healthcare plans for quality, access and affordability and to share best ideas and practices. In addition, the union benefits from developing resource materials to educate members about the interrelated problems of healthcare costs, quality and access, say task force members.

During the meeting, the task force heard presentations from Tom Anapolis, director of program services at New York State United Teachers, and Tom Bilodeau, director of research and bargaining at MEA-MFT, the merged state affiliate in Montana.

In New York, the union is helping locals compare healthcare plans so they can secure the best plan for members. In Montana, the union is backing legislation to create a single statewide health insurance program specifically for school employees and retirees.

On the national front, the AFT continues to work with affiliates and state federations to help locals examine and adopt innovative strategies that can lower healthcare costs at the bargaining table. These strategies include wellness programs, which focus on health management through disease prevention, medical self-care and health promotion; disease management programs for members with chronic conditions; and case management to help members deal with high-cost healthcare.

CFT joins other unions to stop Calif. governor’s agenda

If California gov. Arnold Schwarzenegger was looking for a fight, he found it.

Public employees across the state have responded to Schwarzenegger’s broadside on public employees and the institutions they serve with an aggressive, coordinated grass-roots outreach and lobbying effort.

Through meetings with individual legislators, through rallies and demonstrations, through leafleting at shopping centers and other public places, AFT members across the Golden State are standing up for their rights and for the rights of those they serve in schools and universities.

At issue are Schwarzenegger’s unprece-dented efforts in the Legislature and through a series of planned ballot initiatives that would end guaranteed pensions for teachers and public employees, remove a voter-approved "floor" for school and college funding, and institute a fuzzy merit pay system that would lock teachers into probationary status for five years.

The governor’s agenda also would ramp up efforts to privatize services in K-14 districts and colleges and impose crippling limits on how public employees can participate in political dialogue through their unions.

Clearly, Schwarzenegger is feeling the heat from Californians who oppose these measures. Recently, he announced he would pull his pension ballot initiative—but also signaled that a "new and improved" plan to privatize pensions would be crafted and reintroduced.

"He is still determined to eliminate the security of our defined-benefit pensions," warns California Federation of Teachers president Mary Bergan, who is also an AFT vice president. "We can smile for a moment, but we can’t relax our efforts."