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IFL: Taxes Are The Legislature’s Responsibility


He's not the king only the governor

He’s not the king only the governor

Buried deep in all of the messes that the Branstad Administration has created, there is a little known action going on in the Department of Revenue which will have dangerous consequences not just to the funding of vital services of programs that Iowans depend on, but could upset the delicate balance of power between our three branches of government and their powers within the Iowa constitution.

The Department of Revenue will be considering ARC 2239C, and administrative rule proposal. The rule, proposed by the state Department of Revenue, would apply to the state sales tax on manufactured products but would expand the exemption for items used in the manufacturing process. The price tag for this is somewhere between $30-90 million from the state’s funds.

When the Governor and House Republicans are saying that we cannot afford adequate school funding, moving forward with this rule seems unethical
(emphasis mine). When we allegedly cannot fund mental health institutes, moving forwards with this rule seems morally wrong. When we cannot show that there will be any value for Iowa workers’ wages, nor any link to job creation or retention, this seems like a corporate handout at the worst time possible.

But even more worrisome, we need to not just look at why it is a bad idea, we need to look at how they are going about it. The legislature has rejected this proposal before, as recently as two years ago. But in addition, the legislature has traditionally held that it has the sole authority to tax and spend, not the executive branch. The reasons for this stretch back to the American Revolution, and the slogan “no taxation without representation.” This is a bedrock of American democracy, and it is being undermined.

Normally a proposal such as this should have gone through the proper House and Senate committees, and voted on the floor by both chambers before being signed or vetoed by the Governor. That’s basic “Schoolhouse Rock” stuff we all learned as youngsters. This rule being implemented without legislative action threatens to undo the way our republic works. It doesn’t matter what party is in charge of the legislature and Governorship, this is a bad idea and the repercussions will last for a long time.

I guess the Governor is thinking “Why even have a legislative branch?” They apparently get in his way to rule by fiat, with legislators asking questions about his botched Medicaid privatization scheme, his plan to close mental health facilities, his plan to underfund our schools, and now this.

At first glance this is a bad proposal. But, we’ve never had a chance to work with our business counterparts to find a way that perhaps would give an opening to ensure that this can benefit workers or ensure that our goal here is really to create jobs, not just line the accounts of corporations operating in our state.

We’ve let the Department of Revenue know how we feel. However, the most important thing you can do is make sure that your friends, family, and community know what an injustice this is. The more we lift the veil on these shady practices, the more Iowans wake up and realize their government isn’t working for them anymore. Letters to the editor of your local newspapers are a good way to help bring this to light.

Elections of course have consequences. We will have the opportunity to turn this around, but we need your help. If you’d like to volunteer for the Labor 2016 campaign, please contact us HERE.


Oscar Mayer’s Long Road

Photo Credit Wikimedia Commons

Photo Credit Wikimedia Commons

DAVENPORT — The Kraft Foods Oscar Mayer plant on Second Street will be razed as its new owner, Kraft Heinz, plans to move operations and layoff much of the workforce at the long-time meat packing plant.

Wednesday’s announcement, that Kraft Heinz will close seven plants in the U.S. and Canada over the next two years as part of a downsizing that will eliminate 2,600 jobs, or roughly 14 percent of its North American factory workforce, was widely anticipated by workers.

The company plans a new Davenport facility, contingent upon government financial support, however, some view it as a devil’s bargain because the net impact will be to lose about 800 jobs.

United Food and Commercial Workers Local 431 had not been consulted about the changes.

“They threw the union under the bus,” plant employee Curtis Grant of Eldridge said in an interview with the Quad City Times.

Concessionary bargaining is nothing new to Local 431 whose members ratified a four-year contract with Kraft Foods Oscar Mayer on Nov. 13, 2014. The sticking point in those negotiations was insurance and pensions.

“Now with Heinz, the company is basically telling Davenport give us subsidies to shutter the Second Street plant and build a new facility on the north side or we will close completely and take all the work to Missouri,” said a local worker who requested anonymity via email. “Both the city and the union are painted into a corner. And now with them talking about building a new $200 million plant, the building trades are excited to get those jobs. It’s a devil’s bargain.”

In the takeover of Kraft Foods by Heinz, business partners Warren Buffett of Berkshire Hathaway and global investment firm 3G Capital hope to reduce expenses by $1.5 billion by exploiting synergies among operations and consolidating back office functions including supply chain management, accounting and administration.

On Friday, Berkshire Hathaway reported third-quarter profits more than doubled to $9.4 billion as the completion of the Kraft-Heinz merger boosted the paper value of its stake in the food giant. The deal was good for the third richest man in the world.

Thursday, the Iowa Department of Economic Development announced a $4.75 million incentive plan for the Davenport plant closing, including $3 million once the facility is razed.

“We are glad that Davenport, was able to successfully compete for a new, state-of-the-art manufacturing facility that will certainly position it for future growth,” said Debi Durham, director of the IEDA in a press release. “As major brands merge in this sector, consolidation and modernization will be the outcome.”

Durham said to the Quad City Times she is aware of the potential negative perception of providing state-funded financial assistance to a company that is downsizing its workforce both in Iowa and nationally.

“The optics are not lost on us, and believe me, the sensitivity is not lost on us. We care about people,” she said. “So we do the plays that we believe give us the greatest opportunity for the future, and I think that was what you saw here today.”

Durham said offering financial assistance to a company that is downsizing is not unique and could become more common as more large companies merge.

“We’re going to see more of this,” Durham said. “You’re seeing large mergers going on at a very high level between equals. And any time that happens and we have facilities, that’s something to watch for us.”

It appears Durham’s department has become like a turkey vulture picking over the carrion of what used to be a robust manufacturing economy and the middle class it supported.

If we consider what the Davenport plant makes – bologna, Lunchables, and other branded, highly processed meat products – this day had to come. In part, consolidation of the food industry is a reaction to the fact that tastes have changed and sales of some traditional products have declined. The processed meats industry is experiencing declining consumption of meat in general, and an interest in healthier options, according to data aggregator Statista, Inc.

The World Health Organization supports moderation of consumption of preserved meats to reduce the risk of colorectal cancer and has been doing so since 2002. On Oct. 29, WHO released a new report regarding the connection between red meat and cancer. Juxtaposition of this story with news about Kraft Foods Oscar Mayer, and Buffett’s third quarter financial results tells a broader story. Things have changed since Oscar F. Mayer immigrated from Germany and began selling sausages from his butcher shop in Chicago in 1883.

This story hits personally because not only did my maternal grandmother, my father and I work at the plant, the rise of Oscar Mayer as a global brand framed my early participation in our consumer society. I’m not alone in that.

When the Mayer family sold the company to General Foods in 1981, the Reagan revolution that resulted in decimation of the middle class had already begun. While it would have been hard to predict today’s outcome in 1981, what’s happening is not surprising in that context.

The two year transition to plant closure will hopefully enable employees to figure out what to do with the rest of their lives. Perhaps that is the best that can be expected.

Here is the entire statement provided to employees at one of the affected plants:

“Following an extensive review of the Kraft Heinz North American supply chain footprint, capabilities and capacity utilization, we are announcing the closure of seven manufacturing facilities in North America: Fullerton, California; San Leandro, California; Federalsburg, Maryland; St. Marys, Ontario, Canada; Campbell, New York; Lehigh Valley, Pennsylvania; and Madison, Wisconsin. In a staged process over the next 12-24 months, production in these locations will shift to other existing factories in North America.

We are also planning to move production from our existing Davenport, Iowa, facility to a new, state-of-the-art location within the Davenport area; and move part of our cheese production from our Champaign, Illinois, facility to other factories within our network, which will create will make Champaign a center-of-excellence in dry and sauce production. Both moves will take up to two years to complete.

Our decision to consolidate manufacturing across the Kraft Heinz North American network is a critical step in our plan to eliminate excess capacity and reduce operational redundancies for the new combined Company. This will make Kraft Heinz more globally competitive and accelerate the Company’s future growth.

We have reached this difficult but necessary decision after thoroughly exploring extensive alternatives and options. This action will reduce the size of our North American factory-based employee population by a net number of approximately 2,600 positions.

At the same time, we will invest hundreds of millions of dollars in improving capacity utilization and modernizing many of our facilities with the installation of state-of-the-art production lines.

We will treat our people with the utmost respect and dignity. At the appropriate time, affected employees will receive severance benefits, outplacement services and other support to help them pursue new job opportunities. Kraft Heinz fully appreciates and regrets the impact our decision will have on employees, their families and the communities in which these facilities are located,” Michael Mullen, SVP of Corporate & Government Affairs.

“Additionally, Kraft Heinz is announcing that in 2016 we will move Oscar Mayer and our US Meats Business Unit from Madison, Wisconsin to our co-headquarters in Chicago. The move will bring 250 jobs to the Chicago area.

Members of the Oscar Mayer and US Meats Business Unit will have the opportunity to move with the business to Chicago. The move centralizes all our U.S. Business Units to our co-headquarters of Chicago and Pittsburgh, which will drive increased collaboration and efficiency.”

Dubuque Working Families Summit


Dubuque Federation of Labor to Host

Dubuque Working Families Summit

On Saturday, November 7th, the Dubuque Federation of Labor, AFLCIO, will host a day-long program, “Working Families Summit” at Northeast Iowa Community College Downtown Dubuque Campus from 10am – 4PM

The program will include a day of action, break-out sessions, and interactive discussions that examine ways to create coalitions to work on issues like raising family wages, health and education, and civil rights & immigration.

The Nation Magazine contributing writer John Nichols will keynote the summit. Other community, labor, and policy experts will speak during panel discussions and break out sessions, including Pam Jochum, Iowa Senate President, Mike Owen, Iowa Policy Project, Tammy Wawro, ISEA president, Inclusive Dubuque, and others tba.

“We can help to shape the presidential debate for 2016 to focus more on issues related to working families,” said Bruce Clark, president of the Dubuque Federation of Labor, AFL-CIO. “I want to see broader understanding of the number of issues from raising wages, to supporting families, to protecting civil rights, so that we all understand each other’s issues and can support each other.”

The summit will run from 10 a.m. to 4:00 p.m. at the Dubuque campus of Northeast Iowa Community College, 700 Main Street Dubuque. More information about the agenda and arrangements will be provided in the coming weeks.

Participants and Sponsors so far include: the Dubuque Federation of Labor, AFL-CIO; Iowa Federation of Labor, AFLCIO; ISEA; NAACP; Inclusive Dubuque; LULAC; Presentation Lantern Center, and others.

The event is free and open to the public and includes lunch. Free handicapped accessible is available in the city ramp less than one block away.

For more information and to Register for the summit, visit our Facebook Page – Working Families Summit:

WHEN: Saturday, November 7, 10 AM – 4 PM
WHERE: Northeast Iowa Community College; 700 Main Street, Dubuque, Iowa
COST: Free and open to the public!


“So That A Positive Conservative Message”

Positive conservative? Oxymoron?

Positive conservative? Oxymoron?

“can rise to the top of the field.”

This is a line that Scott Walker used in his speech retiring his presidential bid for this round. BTW, look out Wisconsin – Walker will be wanting to burnish his right wing bona fides for 2020 and beyond. Wisconsin and its citizens will pay the price.

Let’s look at just how positive the conservative message is this time around:

First Positive Message:
We will continue to do everything we can to push the 17 + million Americans who now have health coverage through the PPACA back into the tyranny of coverage at the whim of insurance companies. This will include allowing insurance companies to drop coverage anytime they feel like it. All PPACA reforms will be rescinded so we can return to the normal state of insurance companies making your health decisions.

Second Positive Message:
We will do all we can to send a huge amount of people to countries they are no longer members of and cause a humanitarian crisis of unheard of proportions. We will do this to to satisfy the most racist in our party. This will not create or open new jobs in our country, because we will continue to “offshore” jobs. Besides the demand that those we deport will cause demand for many products to fall off markedly. Once more, a very positive message.

Third Positive Message:
We will cut off any government aid for the poor, the disabled and all others. If you are poor or disabled, then you must suffer and not take money from those who have more through the government.

Fourth Positive Message:
We will do all we can to cut women’s health services, especially the concept of choice. We will also do all we can to stop any forms of contraception thus nearly ensuring a massive amount of unwanted pregnancies and births. Women who have sex outside of marriage deserve the shame and burden of children they can’t care for.

Fifth Positive Message:
Guns will be allowed all places in this society and can be owned by all persons no matter what their fitness mentally. While this may create terror among the populace it is acceptable because a portion of a clause in the constitution has been interpreted to allow unfettered access to guns of any type.

Sixth Positive Message:
America must be ready to go to war at the drop of a hat over perceived grievances great and small. We will sacrifice your children and the public treasury in this cause. War is good business.

Seventh Positive Message:
Anything can be a source for profit for private business. This includes prisons, public water supplies, libraries, fire departments and any other enterprise that is currently in the public sector

Eighth Positive Message:
There is a lot of money to be made from privatizing education from pre-kindergarten to advanced degrees. We must end public supported education. That is socialism.

Ninth Positive Message:
The health of the planet must take second billing to businesses ability to make money and also not be charged with cleaning the effects of their enterprises.

Tenth Positive Message:
We continue to be amazed how well tax cuts have worked for certain sectors of American society. We will continue those tax cuts.

Eleventh Positive Message:
Corporations have gotten very healthy through hands-off governmental policy. This will continue. Among those will be no attempt to force corporations to share their profits through programs like minimum wage.

Twelfth Positive Message:
No Net Neutrality. Corporations will manage your access and monitor your activity with fees determined by a market controlled by only a few players.

Thirteenth Positive Message:
Climate Change has negative implications. We will do away with those by challenging the science and use of positive descriptors for change deniers such as calling them “skeptics.”

Fourteenth Positive Message:
We are busting workers’ right to organize into unions. This will allow more capital to flow to the corporation and give them better control of their assets, both human and monetary.

Fifteenth Positive Message:
We will redirect Social Security funds and Medicare funds to private companies. While the effect on these programs may be lethal to the programs, at least they will go out under the banner of free enterprise instead of socialism.

See? Nothing but positive coming from the right! The Democrats have nothing like this. I am sure of that.

Pushing Back On Raising Minimum Wage

Solon Polling Place

Solon Polling Place

RURAL JOHNSON COUNTY — The nearby City of Solon is concerned about the impact of the recently passed county ordinance to raise the minimum wage. The city council doesn’t buy in, local businesses don’t buy in.

On Sept. 10, the Johnson County Board of Supervisors held the last of three readings of a new ordinance to raise the county minimum wage in $0.95 increments to $10.10 per hour by Jan. 1, 2017. The board passed the ordinance unanimously.

The Cedar Rapids Gazette reported the Solon city council is considering opting out of the new county minimum wage structure.

According to the Solon city administrator, the city council is considering just such an action.

An agenda of the council’s Sept. 2 meeting lists “discussion on minimum wage ordinance by Johnson County.” Draft minutes from the last council meeting, which have not been posted online, show council members unanimously voiced opposition to the county’s minimum wage ordinance. Local business owners also spoke out against it, saying they couldn’t afford raises for all of their employees while maintaining the same staff levels.

Doug Lindner of the Solon Economist recounted Mayor Steve Stange’s Sept. 2 survey of council members here. The council unanimously opposed raising the wage in Solon as laid out in the new ordinance.

City Attorney Jim Martinek was directed by Stange to review the proposed county law and research the city’s options and responsibilities, according to Lindner. Council is expected to take up the issue at its Sept. 16 meeting.

KCRG – TV9 interviewed local business owners Leo Eastwood and Sam Lensing in a news segment that aired Sept. 11.

Eastwood owns Eastwood’s Sports Bar and Grill. He is well known in the community and has placed political advertisements for favored Republican candidates at his place of business. His business recently moved from a strip mall at the edge of town to Main Street, where he joined a growing group of bars and restaurants in the city of 2,300 people.

“You’ve got to pass that along or you’re not going to be in business long,” Eastwood said to KCRG of a potential mandatory wage increase.

Lensing owns the most visible business on Main Street, Sam’s Main Street Market, a full service grocery store. Another of Lensing’s businesses, D & D Pizza, recently vacated its space across the street from the grocery store and Eastwood moved in.

Sam’s Main Street Market is and has been an important part of the community, sponsoring local events, collecting funds for the local food bank, and preventing the city from becoming a food desert for people with limited transportation.

“If this wage hike does increase that much where people have to raise their prices what’s it going to do for their business?” Lensing asked in the interview.

Sam’s Main Street Market competes with Fareway, Aldi, HyVee, Walmart and Costco. Because Solon is a bedroom community, people who commute to work have an easy option to buy groceries and sundries elsewhere. The convenience of his location brings customers willing to pay more rather than make a special trip to another town. KCRG didn’t report how many employees Lensing has at near minimum wage to validate his concern.

All of this seems like a tempest in a teapot, and here’s why.

The council’s concern, as reported by the news media, seems like a knee-jerk reaction to the minimum wage increase by a small number of business owners. The retail price increase a minimum wage increase may or may not require would have little impact in a community where the median household income is more than $62,000 per year — substantially higher than either the county-wide or state-wide figures. The argument about raising prices is a red herring.

How many low wage workers has the council heard from? I wasn’t at the meeting, but probably zero. In my experience covering council meetings for the Solon Economist I found councilors exercised a reasonable amount of diligence in matters like this. While the composition of the council has changed since I covered them, one hopes they will get feedback from Solon residents who work at or near the minimum wage in the city before opting out of the county ordinance. It is a voice not heard in this discussion to date.

There has been no public discussion of the impact on the Solon workforce of opting out. There are a lot of questions to be answered, including, how many near minimum wage jobs (earning below $10.10 per hour) would be affected? Where do Solon workers in near minimum wage jobs live? Would near minimum wage employees at Solon businesses seek employment at higher wages elsewhere as a result of the city opting out? How do near minimum wage workers in Solon get health insurance mandated by the Patient Protection and Affordable Care Act, and at what cost to taxpayers? Has the city council read the ordinance to understand which businesses are required to comply and which are not? At present, there are no public answers.

As I wrote on Friday, the new county ordinance does little to address the underlying causes of poverty here. It turns out getting cities like Solon to buy in will be yet another delay in pursuit of social and economic justice.

The Union Difference: Fair Wages and Benefits

labor movementThe continuing debate over our economic inequality focuses on globalization and technology. These are seen as the determinants of our transformed economy and rising inequality. Remedies usually focus on better education and more training.

But this explanation largely omits discussion of unions and workers’ power. Americans are already better educated than ever, with high school and college graduation rates at record levels. Rapid technological change is not unique to the present as it occurred in other eras since World War II as well. Globalization, furthermore, is not a force of nature but rather a set of trade, tax, and corporate policies that largely benefit employers.

While most workers are producing more and earning less, corporate profits soar. Last year the pay gap between CEOs and typical workers widened to 373-l. Over the last fifteen years, even college graduates have seen little or no economic gains.

In 2014, only 11 percent of all US workers belonged to a union. Rather than just falling victim to natural causes, unions were assaulted. Beginning in the mid-1970s, corporations launched campaigns depicting unions as obstacles to competition, hired union busting law firms, and convinced Congress to pass laws banning effective union organizing tactics. Multinationals wrote trade and tax rules that facilitated moving jobs abroad and threatening labor at home.

The decline of union bargaining power correlates with the wage stagnation over the last five decades. Besides pushing down the wages of the working class, it also increases the incomes of the wealthiest 10 percent.

In much of America today, work no longer results in a decent paycheck and a rising standard of living. The portion of the economic pie that goes to working people currently stands near the smallest on record since 1947. Similarly the gap between worker pay and labor productivity has widened since the 1970s. In a healthy economy, wages and productivity would rise in tandem, but in recent decades, productivity gains have flowed increasingly to executive compensation and shareholder returns, rather than wages. The low-wage business model has essentially turned public aid into a form of corporate welfare.

Restoring shared prosperity and rebuilding the working and middle classes requires recognizing the role of the workforce in creating wealth. Reviving unions will take new forms of organizing, new alliances, and new thinking. In Los Angeles, a creative union movement helped elect officials who then used government procurement and zoning powers to demand that companies pay decent wages, adhere to labor standards, and end sabotage of worker organizing. In last summer’s fast food walkouts, new alliances with religious and community groups and support from elected officials protected workers and helped enlist consumer support for better wages. In Seattle, unions played a major role in the successful push for the $15.00 minimum wage.

Despite opposition from some employers, conservatives, and public officials, unions have brought diverse voices together, and their struggles have elevated the working conditions, the standard of living, and the recognition of not just their members, but of all who labor. Labor’s power comes not from dollars, but from organizing. Unions’ have the ability to take bold action to defend workers’ rights in the workplace, in the street, and at the ballot box.

The challenge for organized labor is to translate the real dismay about wage stagnation and economic inequality into collective action that raises wages and ensures prosperous companies share more of their profits with their workers. This won’t be easy in today’s entrenched big money politics. The first step is to focus on empowering workers to organize and bargain collectively, and thereby rebuild a strong worker voice in both the workplace and in our politics.

Ralph Scharnau teaches U.S. history at Northeast Iowa Community College, Peosta. He holds a Ph.D. from Northern Illinois University. His publications include articles on labor history in Iowa and Dubuque. Scharnau, a peace and justice activist, writes monthly op-ed columns for the Dubuque Telegraph Herald.

Two Things About Labor

Working the Alley

Trash Picker Working the Alley

As a child Dad would take us to the Eagles hall for a Labor Day event sponsored by his union. There were speeches and socializing, food and beverages, and one year I won a canned ham in a raffle which I proudly brought home to Mother. A lot of people attended and I got to know some of them after joining the union to work at the meat packing plant for a couple of summers while I was an undergraduate. It was an open shop, but I joined the union and still have my union retirement card.

After college, I joined the U.S. Army and was assigned to an infantry company. In the military, and in a number of government and private jobs, I was occasionally a worker, but mostly have managed people and resources over a 40-year worklife. I’ve viewed unions from multiple perspectives, with a personal stake in the union-management relationship. Two things seem most important about the changes in worklife over the years.

Work is not valued adequately. The rise of management consulting firms—that purport help companies drive profitable growth through the effective use of compensation—have methods of assigning value to work. What they do is help companies optimize and reduce human resources costs. Private business has been working to shed people-costs for years and some believe there is an application for these skills in government as well. The growth of outsourcing, temporary job agencies and part time workers are all part of this successful-for-business movement.

What is the value of food security, a livable homelife and a strong social support network? People who do the work to provide these things are taken for granted.

Compensation is a murky endeavor at best. At a job interview in 2014, the district manager of an international service organization emphasized there were no benefits in his company which employed more than 20,000 workers. The work was part-time, and under the Patient Protection and Affordable Care Act, companies who employed people more than 30 hours per week are required to provide health insurance. The company kept employees under 30 hours per week.

The starting hourly wage was above average for the kind of work in the area. To get health insurance mandated by the ACA, people who worked there when I did often turned to the ACA health exchanges for coverage and subsidies. My policy through the exchange costs about $1,200 per month without subsidy. There are stories of much higher premiums for families. If you take the premiums divided by the number of hours worked, it amounts to a $9.89 per hour subsidy of my worklife.

Businesses have methodologies to understand the value of benefits packages. Workers often don’t. While some appreciate the fact that an employer will provide a benefits package, few workers I know put a pencil to it. The focus is almost totally on wages that can be spent and this distorts the value of working for a company. Too, it is hard to define the value of benefits like disability insurance, life insurance, paid time off, and employee appreciation days. People who focus solely on hourly wage rates often don’t understand the broader context in which wages exist in society.

It’s a personal tradition to work on Labor Day. Even when I worked for an oil company, I drove to the office on Labor Day. Besides security, I was often the only person in the high rise office building on Michigan Avenue in Chicago.

These days the jobs I work are part time and temporary. Working on Labor Day now means finding my way to a home writing table to work on a freelance article, or making a trip to the garden to pull weeds. All of this has value, just not monetary value. Maybe that’s my point.

What is the value of living a reasonably secure life? It’s a lot higher than it feels for working people.

Lincoln: Labor Is The Superior Of Capital

Happy labor dayAs yet another Labor Day rolls by, there is optimism among the ranks of labor unions that they will once more hold a prominent place in the economy of our country. With the rise of the right wing in this country with Ronald Reagan, labor has been beaten mercilessly in Congress, in statehouses across the country, and in a nearly 100% corporately owned media. This is a concerted effort to bust unions in every walk of life from the class room teacher to fast food workers to industrial workers who have seen their jobs sent to other countries by so-called “American” companies at at an alarming rate.

When Republicans want to claim moral high ground on race they always reach way back to Abraham Lincoln to remind folks he is the “great Emancipator.” But Republicans are all about suppressing wages and busting unions, so they seldom remember that their hero Lincoln also was a believer in in the superiority of labor to capital. In case you have never seen this quote, it may be good to have in your back pocket to pull out when you run into some union basher:

It is not needed, nor fitting here [in discussing the Civil War] that a general argument should be made in favor of popular institutions; but there is one point, with its connections, not so hackneyed as most others, to which I ask a brief attention. It is the effect to place capital on an equal footing with, if not above, labor, in the structure of government. It is assumed that labor is available only in connection with capital; that nobody labors unless somebody else, owning capital, somehow by the use of it induces him to labor. This assumed, it is next considered whether it is best that capital shall hire laborers, and thus induce them to work by their own consent, or buy them, and drive them to it without their consent. Having proceeded thus far, it is naturally concluded that all laborers are either hired laborers or what we call slaves. And further, it is assumed that whoever is once a hired laborer is fixed in that condition for life.

Now, there is no such relation between capital and labor as assumed, nor is there any such thing as a free man being fixed for life in the condition of a hired laborer. Both these assumptions are false, and all inferences from them are groundless.

“Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.Capital has its rights, which are as worthy of protection as any other rights.

This was from a speech Lincoln gave concerning the Civil War to congress on Dec. 3, 1861.

The next election will be crucial, very crucial to labor. Be sure to vote and get your friends to vote. And be sure to vote for candidates who actually believe in policy that is in line with labor. Hopefully, those so called “Reagan democrats” have learned their lesson.

Wages And Private Sector Unions

labor movementAs we approach Labor Day, the lockout of United Steel Workers at six Allegheny Technologies plants is a sad commentary on the state of affairs of public sector unions.

“Management has locked out more than 2,000 workers in an effort to extract concessions on health and retirement benefits from union members,” according to Michael Hiltzik of the Los Angeles Times.

“ATI is demanding steep increases in out-of-pocket health care expenses and the elimination of pensions for new hires, essentially creating a two-tier wage and benefit system. In addition, ATI wants to expand the use of outside contractors and impose work rule changes that would turn workers into casual laborers, with irregular and unpredictable shift times, less access to overtime pay and worse working conditions,” according to Evan Winters of the World Socialist Web Site.

It is no secret that American business has been working to shed pension and health insurance liabilities, and for the most part has been successful during the post-Reagan era. If they had their way, companies would seek to eliminate most operational liabilities from having employees by outsourcing and using temporary, part-time workers without benefits.

That the company (through a third party) is able to offer temp workers as much as $3,000 per 84-hour week without benefits – plus a guaranteed layoff if a new contract between labor and management is signed – is a demonstration of the power of capital in this capital intensive industry. The average annual wage for a USW worker at Allegheny Technologies is $90,000, which includes mandatory overtime.

If $90,000 per year plus benefits seems like a lot, the work is physically demanding, dirty, repetitive and resoundingly dull. For long-time steel workers, it is a way of life, fraught with injury and physical deterioration. On a scale of wage justice, steel workers should be at the higher end of the range.

Yet the company can, and likely would pay a premium rate to keep the plant operating, albeit at a lower rate of efficiency, until the union contract is settled – or when the temporary workers are made replacement workers. Hiltzik called it a “race to the bottom,”  and friends of labor would agree.

The union is damned if they do and damned if they don’t. On the one hand, some members believe USW leaders are too cozy with Allegheny Technologies management, according to Winters. Rank and file may or may not accept a deal presented for a vote. On the other hand, if there were no USW, management would long ago have made the changes they seek in this new contract.

In 2014, 6.6 percent of private-sector workers in the U.S. were union members, according to the Bureau of Labor Statistics. In Iowa, it is slightly higher at 6.9 percent, or 84,791 union members. As a right to work state, there are another 7,500 private-sector workers who are not union members, but work at a company where the pay and benefits are set by a union contract.

The Allegheny Technologies lockout is a case where each contract negotiation has become an opportunity to break the union, rather than to make adjustments in pay and benefits to serve both employees and the company. Because of the capital intensive nature of the steel industry, labor is required to keep plants operating. Just not workers represented by a union.

Everyone’s Becoming Fungible

Fairness for Temp Workers(Editor’s Note: Robert Reich has been a media pundit, lecturer and writer popular with progressives. From time to time he hits home as with this post on the lack of income predictability for a growing segment of Americans. It is now 40 percent, but soon to be a majority of workers, according to Reich. Here’s a snippet. Click through to read the entire post).

As Labor Day looms, more Americans than ever don’t know how much they’ll be earning next week or even tomorrow.

This varied group includes independent contractors, temporary workers, the self-employed, part-timers, freelancers, and free agents. Most file 1099s rather than W2s, for tax purposes.

On demand and on call – in the “share” economy, the “gig” economy, or, more prosaically, the “irregular” economy – the result is the same: no predictable earnings or hours.

It’s the biggest change in the American workforce in over a century, and it’s happening at lightening speed. It’s estimated that in five years over 40 percent of the American labor force will have uncertain work; in a decade, most of us.

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