What if California’s Government Never Unionized?

UnionA story that still makes the rounds in Sacramento is that Gov. Jerry Brown, speaking off-the-record to a group of business leaders back around 2009, admitted that the worst political decision of his life was signing legislation to permit public employees to form unions and engage in collective bargaining.

Whether or not Gov. Brown actually said this, it is tantalizing to wonder what California would be like if over 1 million state and local government workers did NOT belong to a labor union. How would things be different?

Perhaps the biggest casualties of public employee unionization are California’s public schools. In 1975 the California Teachers Association (thanks to Brown signing the Educational Employment Relations Act) transitioned from being a professional association into a labor union. The negative consequences are far reaching.

The obvious way that unionizing teachers harms public education are the many work rules that have been negotiated. It is nearly impossible to fire a teacher for poor performance, instead – as was argued in the Vergara case, bad teachers get transferred to schools in disadvantaged communities where competent teachers are most needed. When layoffs occur, seniority is prioritized over merit. And tenure, i.e., lifetime employment – a concept originally developed in universities to protect free scientific inquiry –  is granted K-12 teachers after less than two full years of classroom evaluation. All of this guarantees that California’s public schools do NOT have the caliber of educators they could, and union work rules are the reason why.

The less obvious ways unionizing teachers have harmed public education are equally significant. The rhetorical focus of unions is inherently adversarial. Us vs. them. Worker vs. oppressor. In California this rhetoric has been politicized by the left-wing activists who dominate the positions of leadership in the teachers unions. From the top down, it permeates public education, indoctrinating teachers and students with a one-sided, confrontational world view. Students are taught that Western Civilization is the villain of history, that “people of color” are always discriminated against, that “gender” is arbitrary, and that authoritarian solutions are necessary to protect the environment. Almost none of this is true, but nearly two generations of Californian voters were immersed with this propaganda throughout their K-12 years.

Union work rules haven’t just protected bad teachers while driving good ones out of the profession. This is true throughout the public sector, from teachers to public safety to bureaucrats. And thanks to unions, pay is not only disconnected from performance, but the rate of pay has gone out of control. California’s public servants, on average, now collect pay and benefits that are twice what a private sector worker earns for full time work.

Public sector benefits are even more out of control than public sector pay – a public sector retiree in California after a 30 year career can expect a pension that is 26 percent more than private sector workers still on the job; four-times what the average retiree can expect from Social Security.

Other than driving California’s cities, counties and state government to the brink of bankruptcy, and nearly destroying our system of public education, what are the other consequences of unionized government? That answer is simple – they have taken political control of every supposed democratic institution in the state. Their political spending – they collect and spend over $1 billion in dues every year – dwarfs that of any other special interest. Their financial clout over politicians, combined with their influence over thousands of career operatives throughout the state’s regulatory agencies, force all other special interests to go through them. If you want legislation passed, you have to make deals with the government unions.

The core moral principle of unions, collectively standing up to oppression, is perverted in the public sector. Government workers, if anything, are tools of oppression, not victims of it. As it is they have set up two classes of citizens in California. Unionized government workers have job security, health security, retirement security, and pay scales that help to exempt them from the consequences of a politically contrived, punitively high cost of living. And then there are private sector workers, who have none of these privileges, yet pay the taxes to support this.

Unionized government protects its own interests before the public interest. It destroys public financial health, it undermines democracy, but worst of all, it takes away the sense of shared fate that is perhaps the most essential precondition for good government.

Imagine California without government unions. Public education would work because teachers and administrators could be held accountable. Policies to create prosperity and abundance would be endorsed by all voters, because all voters would share in the benefits. Government agencies at all levels would be lean and efficient because a billion dollar per year lobby perpetually favoring bigger government would not exist. Oligarchs and authoritarians would not have access to an omnipotent broker controlling the levers of power, which they could cozy up to for the benefit of the few, to the detriment of the many.

Ed Ring is the vice president of policy research for the California Policy Center.

This piece was originally published by UnionWatch.org

Don’t bet the house against the law of demand

Unions22016’s edition of Labor Day followed a well-established tradition — unions claiming credit for every worker gain. Among their most common assertions, often incorporated in attributing negative wage trends to eroding union power, was that unions raise all workers’ wages. Unfortunately, unions retard rather than raise others’ real earning power.

Unions leverage special government-granted powers (e.g., unique exemption from antitrust laws) allowing current employees to prevent competition from others willing to do the same work for less, a form of collusion that, done by any business, would be legally prosecuted.

The higher union wages that result are then credited for raising all workers’ wages because they supposedly force up other employers’ wages to keep their workers from leaving for those better-paying alternatives. However, their claim cannot be true without violating the law of demand.

Higher wages from unions’ government-imposed monopoly power would push up others’ wages only if it increased the number of such high paying jobs. The reason is that employers need only outbid employees’ actual options to retain them. But by artificially forcing up the cost of hiring their workers, unions reduce rather than increase the number of such jobs offered by employers, reflecting the reduced output consumers will buy at the higher costs and prices that result. Instead of improving the alternatives available to non-union workers, they are worsened, as the displaced workers are forced into competition with others for non-union jobs.

Those displaced workers increase the labor supply for non-union employment. That pushes wages for all workers in those jobs down, not up. Consequently, union wage premiums do not benefit all workers, but come primarily from other workers’ pockets.

With only about 7 percent of America’s private sector workforce remaining unionized, union power therefore cuts the real incomes of 13 out of 14 workers. And since unions also hike government service costs directly, as well as through other cost-increasing policies (e.g., the Davis-Bacon Act and Project Labor Agreements) which big labor’s political clout has pushed through, all other workers are also harmed as taxpayers.

Unions have also used the same “big lie” technique of constantly repeating the opposite of the truth as fact in other areas. For example, aware that their monopoly power to exclude competing workers stops at the border, unions have long been the core backers of protectionism. They focus their attention on those getting special protection, then assert that their benefits will also spread throughout the economy to benefit others. But they ignore protectionism’s much larger harms — to all other workers who would have gained from expanded exports; to all other workers who, as consumers, have their access to lower cost and superior imports (and domestic production forced to compete with it) restricted; and to all other workers adversely affected by the reduction in real wealth and income produced by domestic protectionism and induced foreign protectionist responses.

Given that Labor Day has been considered the traditional start of “serious” presidential campaigning, it is an appropriate time to remember just how damaging unions’ “big lie” strategy is. Its illogical twist can derail accurate understanding of the harm unions impose on almost all Americans, offering a sobering reminder that “It ain’t ignorance that does the most damage; its knowing so derned much that ain’t so.” After all, when people know they are ignorant of important variables that bear on their decisions, they usually don’t bet the house on them, but when they think they know what is false to be true, they often lose the house. And a lot of American houses are on the line this November.

Gary M. Galles is a professor of economics at Pepperdine University, an adjunct scholar at the Ludwig von Mises Institute, a research associate of the Independent Institute, and a member of the FEE faculty network. His most books are Faulty Premises, Faulty Policies (2014) and Lines of Liberty (2016).

How Government Unions are Hypocrites that Betray the Public

UnionGovernment unions are not unions in any traditional sense of the word. They elect the bosses they “negotiate” with. They are paid through compulsory taxes rather than via a company that has to earn a profit in the competitive market. And they operate the machinery of government which allows them extraordinary latitude to intimidate any business interests who may challenge their agenda.

Among the informed, these assertions are beyond serious debate. Even supporters of government unions acknowledge them – just not on the record. But to inform the public, it is probably too abstract to question the legitimacy of government unions because they “elect their own bosses,” “use taxpayers money instead of earned profits” or “control the bureaucracy.” Perhaps instead it is better to explain how union control of government harms people in their everyday lives.

To that end, here is a partial list of how the actions of government unions contradict their rhetoric, and betray the public they are supposed to serve:

(1) Demonizing “Profits.” From the classroom teacher to the professionally prepared press release, the rhetoric of government unions promotes the idea that “corporate profits” are unjust. The academic focus from primary school through public universities is invariably swayed, thanks to government unions, to challenge the capitalist system. Yet without profits there are no tax revenues. Governments survive financially because corporations make profits. Government unions support legislation that has made California the toughest state in the U.S. to do business. The impact: Brainwashed youth, and fewer successful companies offering fewer good jobs.

(2)  Demonizing “Millionaires and Billionaires.” Government union rhetoric frequently resorts to accusing anyone who wants to expose their destructive hypocrisy as funded by “millionaires and billionaires,” as if that should automatically nullify their arguments. These unions have carefully nurtured a public hostility and resentment towards individual wealth. The problem, however, is that almost anyone who retires after a full career in public service is a millionaire – often many times over. The average full career pension for California’s state and local government workers is over $70,000 per year. The ordinary private sector worker would have to save at least $1.5 million to generate a $70,000 annuity for the rest of their life – with no guarantees. The impact: Higher taxes and reduced services to support government worker pensions that make them all millionaires, leaving the rest of us behind to pay for it.

(3) Defending “Working Families.” That is one of the mantras of the government unions. Fighting for the “working families.” But how does this work in reality? California is one of the hardest states to practice a profession or trade. Certifications and licenses require prohibitive amounts of time and money, excluding the most deserving, aspiring citizens. Workman’s Compensation insurance rates are among the highest in the U.S., making it much harder for small companies to compete and grow their businesses. Crippling regulations. Absurdly time consuming and expensive permitting processes. The impact: Reduced upward mobility, far less opportunities for low income entrepreneurs.

(4) Always “For the Children.” The level of hypocrisy here almost defies description. Government unions have imposed their agenda on education, turning public schools into propaganda mills, indoctrinating students to believe their success or failure in life is primarily determined by whether or not they have “privilege,” and whether or not the state provides sufficient benefits, instead of teaching them the skills they will need to succeed in life on their own. Government unions have defeated any meaningful attempts to hold teachers accountable, or allow principals and superintendents to effectively manage. What they have done to California’s rising generation of students can be accurately characterized as child abuse. The impact: A generation of Californians who are unprepared to assume the responsibilities of adulthood.

(5) Respect for “Contracts.” The selective moral outrage mustered by government unions when it comes to “contracts” is exemplified by their response to pension reformers who want to lower the pension benefit formulas – just for work to be performed in the future. Because back in 1999, these same unions lobbied successfully to raise pension benefit formulas not just from then on, but back to the day each active government worker began their career. According to the same body of California contract law, they claim these retroactive benefit increases were justified, yet they fight – and win – in court whenever anyone tries to decrease these same benefits only from now on. The impact: Taxpayers are condemned to bail out these financially unsustainable pensions.

(6)  Fighting “Big Money in Politics.” The problem with this ersatz fight by government unions is simple: In state and local elections in California, nobody spends as much money as government unions. Just government unions, just in California, collect and spend over $1.0 billion per year in dues. About one-third of that, nearly $700 million every election cycle, is spend explicitly on politics and lobbying. An equal share probably goes to public education campaigns designed to promote the government union agenda. There is no special interest anywhere with the means, much less the desire, to challenge these unions. They are active in every political contest, no matter how small or how big, with access to as much cash as they need. The impact: Unions are the “big money in politics,” and their interests trump the public interest.

(7) Fighting “Big Business.” By now it should be clear enough – “big business” has no interest in challenging government unions. They collude instead, in a partnership where the government unions – who control legislation that will either favor or thwart business interests – are the dominant partner. And why shouldn’t big business partner with government unions? When oppressive regulations drive innovative competitors out of business, the monopolistic established corporations have the financial resources to comply. Why not let excessive government regulations destroy the competition? The impact: Less innovation, fewer new jobs, higher prices to consumers.

(8) Fighting “Wall Street.” This is the most ridiculous claim of all by government unions. Because when government unions successfully negotiate pay, benefit and hiring decisions that cause government deficits, Wall Street firms make billions underwriting new bond issues. And when government unions negotiate pension benefit enhancements, the union controlled pension funds invest even more money with Wall Street firms including hedge funds and private equity funds. Government is Wall Street’s biggest customer. The Wall Street influenced policies that have destroyed the ability of ordinary Americans to save for retirement or buy an affordable home have been a boon to the super rich and the pension funds. The impact: The government union alliance with Wall Street is a major factor in the hollowing out of America’s middle class.

The fact that most Californians still don’t understand the difference between government unions and private sector unions should come as no surprise. Government unions have spent literally billions of dollars over the past decades, hiring the best professional public relations talent in the world, to convince Californians they are on their side. But they’re not. Quite the contrary. Their hypocrisy is only matched by their corrosive impact on our economy, our freedom, and our democracy.

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Ed Ring is the president of the California Policy Center.

Teachers Union’s New Gambit to Cheat Taxpayers Annually

Teachers unionCalifornia is a fabulous place. Fantastic weather, fertile fields, glorious mountains and a thousand mile coastline have long beckoned many to the Golden State.

And then there is the state legislature.

This law-making body is very far from fabulous. Its main activities in our one-party state are taxing, spending and regulating our business community, workers and economy to death. Additionally, many of its members are in the pocket of the California Teachers Association, which is by far the biggest political spender in the state, unleashing $290 million on candidates and causes between 2000 and 2013.

The latest legislative sop to the unions is AB 2835, a CTA-co-sponsored bill that, if it passes, will force local governments, including school districts, to provide 30-minute in-person orientations, paid for by the taxpayer, to each and every new public employee during work hours within the first two months of their being hired. But as pointed out by several government officials in a piece that ran in the East Bay Times recently, cities, counties and special districts already do that, spending “the better part of a full day educating new employees on the benefits available to them, policies on harassment and violence, and how to respond to possibly harmful workplace situations. Our employees begin their public service with the knowledge they need to serve their communities.”

However, AB 2835 goes way beyond that, requiring local governments to set aside half of an hour – within the first hour of any orientation it provides – for each union representing public employees to speak, with almost no restrictions, to new employees. “It won’t matter if local governments are using an online or video orientation to maximize tax dollars and avoid unnecessary travel expenses. It won’t matter if a police officer or firefighter should be on-call to respond to emergencies instead of meeting with his or her union representative. Every employee. In-person. Thirty minutes during the first hour of an orientation. Every time.”

This requirement would place an enormous administrative burden on government, and it won’t come cheap. The California State Department of Finance has estimated that the mandate would cost taxpayers “more than $70 million annually for local governments and more than $280 million annually for school districts.”

AB 2835 would especially pose logistical problems for schools because the 30 minute orientation sessions would be held during the work day. Colleges, which have numerous collective bargaining units, would be especially affected.  As the Association of California Community College Administrators points out, allowing each collective bargaining unit 30 minutes to make a presentation, “will result in a significant length of time, which will require colleges to hire additional staff to cover classes and other critical campus safety services during the orientations.”

Not surprisingly, the bill is backed by a gaggle of labor organizations. In addition to CTA, the California Faculty Association, California Nurses Association and SEIU are behind it. The opposition includes the California School Boards Association, the League of California Cities and the Association of California School Administrators.

Just as onerous as the cost and disruptiveness will be the quality of the orientation session. This is going to be a hard sales pitch, plain and simple. Or, in less polite terms, indoctrination. I guarantee that the results of a study released in April by the Heritage Foundation – which found that between 1957 and 2011, mandatory collective bargaining costs a family of four between $2,300 and $3,000 a year – will not be a topic of discussion.

Also missing from the pitch will be a recent study by Cornell researcher Michael Lovenheim. He found that “laws requiring school districts to engage in collective bargaining with teachers unions lead students to be less successful in the labor market in adulthood. Students who spent all 12 years of grade school in a state with a duty-to-bargain law earned an average of $795 less per year and worked half an hour less per week as adults than students who were not exposed to collective-bargaining laws.”

Will the orientation stress that collective bargaining creates significant potential for polarization between employees and managers? Or that it decreases flexibility and requires longer time needed for decision making? Or that it protects the status quo, thereby inhibiting innovation and change? Or that it restricts management’s ability to deal directly with individual employees? Nah.

AB 2835 was birthed when CTA leaders were frightened that the Friedrichs decision was going to go against them and decided they needed to deliver a sales pitch to teachers who would no longer be forced to pay money to the union as a condition of employment. But with Antonin Scalia’s death and the Supreme Court’s subsequent refusal to rehear the case, this bill is irrelevant; CTA and the smaller California Federation of Teachers still have a captive audience. Just about every public school teacher in the state will continue to be forced to pay a union if they want a job in a public school. But if CTA and other unions still insist on trying to convince prospective members of their value, they should do it after hours and not ding the taxpayer in the process.

The bill sailed through the California State Assembly and now rests in the State Senate where it must be voted on by August 31sttomorrow, for it to become law. So, if you live in the Beholden State, please contact your state senator immediately and keep your fingers crossed. And should the bill become law, prepare for even more money to be transferred from your wallet to the unions’ already healthy coffers.

Larry Sand, a former classroom teacher, is the president of the non-profit California Teachers Empowerment Network – a non-partisan, non-political group dedicated to providing teachers and the general public with reliable and balanced information about professional affiliations and positions on educational issues. The views presented here are strictly his own.

This piece was originally published by UnionWatch.org

L.A Teachers Head Ready to Incite a ‘State Crisis’ If Union Demands Not Met

UTLA Alex Caputo PearlAlex Caputo-Pearl is the president of United Teachers Los Angeles, a union that has a long and storied history of discarding presidents elected as firebrands but who reign as defenders of the status quo. Caputo-Pearl seems determined to end that cycle and bring teacher union militancy to the entire state of California.

In a July 29 speech to at the UTLA Leadership Conference, Caputo-Pearl outlined the union’s plans as it readies for the expiration of its contract next year and a gubernatorial election in 2018.

“The next year-and-a-half must be founded upon building our capacity to strike, and our capacity to create a state crisis, in early 2018,” Caputo-Pearl told an audience of 800 activists. “There simply may be no other way to protect our health benefits and to shock the system into investing in the civic institution of public education.”

While it’s not clear what form a “state crisis” would take, Caputo-Pearl described a series of actions the union will undertake in coming months, beginning with a paid media campaign in September denouncing “billionaires … driving the public school agenda” and a “massive” political mobilization to ensure the November passage of Proposition 55, which would extend a 2012 measure that raised taxes on high-earning residents to fund schools.

UTLA will then set its sights on the next Los Angeles Unified School District board elections.

“We must face off against the billionaires again in the School Board elections of 2017, and WE MUST WIN,” Caputo-Pearl said, explaining that the next board would vote on a new contract. The union needed to help elect a board that would resist a “vigorous campaign to cut our benefits” by district leaders, he suggested.

But Caputo-Pearl isn’t content to shape LAUSD’s agenda. He hopes to organize the entire state.

“All of the unions representing LAUSD workers and the teachers unions in San Diego, San Bernardino, Oakland, and San Francisco share our June 2017 contract expiration date,” he said. “We have an historic opportunity to lead a coordinated bargaining effort across the state.

“Coordinated action could dramatically increase pressure on the legislature and fundamentally shape the debate in the 2018 Governor’s race.”

Caputo-Pearl stopped short of calling for a multi-city teacher strike, but pointing to a common contract expiration date that enabled “coordinated action” put it on the table.

The UTLA president had another white whale to harpoon: Proposition 13, the state’s iconic 1978 initiative that capped property tax rates. Caputo-Pearl said he wanted to revive the union-backed “Make It Fair” campaign that sought to hike taxes on commercial property.

UTLA is in position to pursue an aggressive agenda because of itssuccessful internal campaign to raise dues by 33 percent earlier this year and new joint affiliation with the National Education Association and the American Federation of Teachers. Now the union will launch an internal campaign to solicit more money from members in the form of PAC contributions, Caputo-Pearl said. Currently only about 20 percent of UTLA members donate to its PAC.

There will of course be organized opposition to Caputo-Pearl’s vision for the future, and some of it may come from his own parent unions. While UTLA is by far the largest local of both the state NEA and AFT branches — the California Teachers Association and the California Federation of Teachers, respectively — these unions have their own officers and elected bodies that represent members throughout the state. Even if they agree with most of Caputo-Pearl’s agenda, they may be wary of his ambition. Their leaders might remember that former UTLA president Wayne Johnson rode a 1989 teacher strike all the way to the presidency of CTA.

Caputo’s broad themes were underscored by a guest speaker: Karen Lewis, president of the Chicago Teachers Union and idol of advocates for more muscular union activism. She argued that teachers need to organize across district, state, and even union boundaries, telling conference attendees, “we cannot do this work alone, and we cannot do this work in isolation from one another.”

If UTLA’s agenda becomes the agenda of all California teacher unions and is ultimately successful, the union militancy train will leave the West Coast and travel through many other states. Union leaders comfortably situated in the status quo will have to jump aboard or get run over.

This piece was originally published by the74million.org

Quality Education Remains Thwarted by Teachers Unions

shocked-kid-apAn article in today’s American Prospect, of all places, offers an in-depth look at just how little progress has actually been made toward restoring quality education to California’s public school students. Because the article appears in a publication that is “dedicated to American liberalism,” and because “American liberalism” depends more than anything else on billions in annual political contributions from government unions, you almost have to read between the lines to realize who the bad guys are.

Nonetheless, “California’s Ed Reform Wars,” by Rachel Cohen, all 3,200 words of it, is a fine piece of work. Read it closely, if you can stomach the facts. The bad guys – a matter of opinion, of course – are the government unions. The victims? California’s students, and the future of this great state.

Covered first is the uncertain fate of the Vergara case, funded by wealthy activists – many of them liberals – in the Silicon Valley. The plaintiffs are public school students whose case was founded on the argument that union work rules, specifically the policies governing tenure, layoff and dismissal policies, cause disproportionate harm to students in low-income communities. During round one, two years ago in a Los Angeles courtroom, reformers were mesmerized by the brilliant closing arguments of the lead attorney for the plaintiffs, along with the ruling by the judge in the case, who emphatically agreed.

That was then. In April of this year, by a 3-0 vote, the California Court of Appeals unanimously struck down the original Vergara v. California decision. The case will now go to the California Supreme Court. Its chances aren’t great.

But shouldn’t elected officials, not the courts, make policy decisions? In a perfect world, that would certainly be true, but in California’s state Legislature, as Cohen herself writes, “Following the original Vergara decision, Republican lawmakers introduced a package of three bills to extend the time it would take a teacher to earn tenure, to repeal the “last-in, first-out” statute that makes layoff decisions based on seniority, and to establish an annual teacher evaluation system. These bills, however, got nowhere in the Democratic-controlled statehouse.”

Here’s where the story gets interesting. Because then a democratic assemblywoman who takes money from government unions, Susan Bonilla, tried to push legislation through that might reform at least some of the employment statutes that protect bad teachers. Cohen writes:

“Bonilla proposed, among other things, giving principals the option of waiting until a teacher’s third or fourth year to grant tenure, and placing poorly performing teachers in a program that would provide increased professional support. If the ineffective teacher received another low performance rating after a year in this program, Bonilla’s legislation would enable schools to fire the teacher through an expedited process.”

Might that be watered down enough? Might that not have a chance? For the children?

Forget it. Despite endorsements including one from the editorial board of the Los Angeles Times, the teachers union issued an “action alert” to their members, calling the bill “an all-out assault” by “corporate millionaires and special interests.” The bill was going to go nowhere in California’s union-controlled legislature. So Bonilla tried again. As Cohen reports:

“In June, Bonilla introduced an amended version of her bill, one that would require new teachers to work for three years before becoming eligible for tenure. Her bill no longer included provisions to create a new teacher evaluation system, to require teachers with poor performance reviews to be laid off before those with less seniority, and to remove many of the dismissal rules that administrators found frustrating.”

Not much left there. Just a bill to marginally extend the probationary period before teachers acquire tenure. But still it was opposed by the unions, and it died in committee by a vote of 9 to 2. The two legislators who voted in favor were due to be termed out and therefore could vote their consciences.

When it comes to government unions, perhaps the teachers union most of all, the lack of support for bipartisan reform is not a mystery. Government unions in California collect and spend over $1 billion each year, which gives them the ability to financially dominate any election, anytime, anywhere, whenever they choose. But there’s more to it. These unions use their financial and organizational power to anoint not only politicians, but also bureaucrats, teachers, and anyone in the business community who may have any need to work with the government bureaucracy. They can anoint, or they can target. Best friend or worst enemy? Take your pick.

Liberals know this, but they tolerate the teachers union because along with all that money the union gives their candidates, the union political agenda matches their own – bigger government, more regulations. They don’t understand, course, that more regulations favor big business and destroy entrepreneurs who deliver the competitive innovations that have improved our lives. And they certainly don’t put enough importance on innovation in education.

Someday liberals may care enough “for the children” to stand up to the teachers union. Don’t hold your breath.

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Ed Ring is the president of the California Policy Center.

Teachers union has given more than $13 million to extend income taxes on wealthy Californians

As reported by the Los Angeles Times:

California’s largest teachers union has given more than $13 million to the effort to extend income tax hikes on California’s highest earners, according to newly released state campaign finance reports.

The report shows the California Teachers Assn. gave $3 million between April and June this year, in addition to the $10 million the union donated last month.

Before the $10-million contribution, supporters of the Proposition 55 campaign reported having $14 million in the bank. Also supporting the measure are the California Hospital Assn., Service Employees International Union and the California Medical Assn. …

Click here to read the full article

Why Teachers Union is Desperate to Pass Prop. 55

K-12-spending-1California voters face a daunting challenge in November in that they’ll be asked to become familiar with a stunning 17 ballot measures. Some consultants fear that this will overwhelm many voters, who will choose either to vote no on everything or not vote on many initiatives.

But when it comes to Proposition 55, ignorance of its contents is not likely to be a problem for voters. The California Teachers Association and its allies are likely to spend $100 million or more on saturation TV and social media ads depicting the measure as crucial to the future of California public education.

Prop. 55 would extend for 12 years the temporary tax hikes on single people earning more than $263,000 and couples earning more than $526,000 that voters approved in 2012 (then at slightly lower income thresholds) as part of Proposition 30. Instead of sunsetting at the end of 2018, the income tax increase would continue through 2030. The $7 billion or more this is expected to generate annually would be earmarked for education. The temporary sales tax hike that voters also approved in 2012 will lapse at the end of this year.

Revenue recession took toll on teachers

prop 55 websiteThis month, the CTA wrote a $10 million check to the Yes on 55 campaign, which now has a $28 million warchest. The CTA and the smaller but still powerful California Federation of Teachers are likely to write several more checks that size to try to avoid the headaches that public school teachers faced from 2008 to 2012 during California’s long revenue recession.

While the “step” increases in pay that teachers typically receive in 15 of their first 20 years on the job were largely protected, strapped school districts didn’t grant additional across-the-board pay hikes that many provided during recent tech bubbles that pumped up capital gains revenue for the state. They also pushed for teachers to pay more toward their benefits and in some cases accept layoffs that extended beyond the newly hired to those with several years of experience.

As the Legislative Analyst’s Office graphic above shows, education spending has strongly rebounded since 2012, helped by a new boom in Silicon Valley and Proposition 30’s adoption that year. But the CTA and the CFT share Gov. Jerry Brown’sskepticism that the current good times can last. After first insisting that the temporary tax hikes must be allowed to expire because that’s what voters were promised, Brown has been far less vocal on the topic in the wake of new forecasts from his Department of Finance that state deficits are likely in coming years without retention of the income-tax hike.

Since state coffers are the main source of K-12 funding, Prop. 55’s approval is crucial to maintaining teachers’ pay and benefits. In most school districts, compensation eats up more than 80 percent of general fund budgets.

But Prop. 55’s route to passage may be rougher than Prop. 30’s in 2012. The Sacramento Bee editorial page has already saidthat support for extending the tax hikes should be explicitly linked to reforms in teacher tenure and to teacher unions’ support for state-subsidized childcare for poor families.

Some state lawmakers may also try to leverage their support for Prop. 55. Led by Assemblywoman Shirley Weber, D-San Diego, they are unhappy with how 2013’s Local Control Funding Formula has been implemented. The measure was supposed to pump billions of dollars in extra funding to districts with large numbers of English-language learners and foster children so they could provide help specifically for such students.

But three years in, education reform groups say that’s not happening, citing the absence of evidence of additional help for either category of student. Last year, Superintendent of Public Instruction Tom Torlakson said the local control dollars could be used broadly for general pay raises, overruling a lower-ranking official.

This article was originally published by CalWatchdog.com

Government Unions Benefit from the Asset Bubble that Harms Workers

Earlier this month the California Policy Center released a study that provided additional evidence that the U.S. stock indexes are overvalued by approximately 50 percent, along with calculations showing the impact of a major downward correction on the solvency of California’s state and local government pension systems. Stocks are now at unsustainable bubble valuations.

Not covered in this study, but equally overvalued, are bonds, which pension systems misleadingly categorize as “fixed income” investments in their portfolio disclosures. CalPERS even went so far as to trumpet their success in earning a 9.29 percent return on “fixed income” investments in their most recent press release – a healthy return that offset losses elsewhere and allowed them to earn a marginally positive return of 0.61 percent last year. But “fixed income” investments usually refers to bonds, and bonds are also at unsustainable bubble valuations.

Here’s why bonds are overvalued today: Whenever new bonds are issued at lower fixed rates of interest than the bonds that were issued before them, then those older bonds that pay higher fixed rates of interest can be sold for more money than their original price. This is because on an open market, buyers will price a resold bond at a value calculated to equalize returns. When rates go down for new bonds, the prices for existing bonds go up. The problem is that back in the 1980s, bonds were being issued at rates as high as 16 percent, and today, they’re being issued at rates close to zero. After a 30 year ride, interest rate drops can no longer be used to elevate the value of bond portfolios.

At a macroeconomic level, every possible investment in the world is overvalued today, because central banks have lowered interest rates to zero in a desperate attempt to continue a decades long disease in which they have spent more than they’ve collected. Governments got to borrow money for next to nothing, and assets kept appreciating. But the binge is almost over, and unlike the savvy super-rich, pension funds can’t just take their winnings off the table.

New Bond Issues, Rates by Nation – June 2016 (red = negative)

Bond issue rates
Negative coupon bonds, a desperate experiment that isn’t going to end well.

This is all tedious drivel, however, if you are a unionized public employee in California. Your retirement security is guaranteed by “contract.” It’s the result of deals cut between union “negotiators” and the politicians they make or break. As a government employee in California, if you’ve worked 30 years, the average annual retirement benefit you can expect if you retire this year is worth over $70,000. To honor that expectation, CalPERS is already mid-way through their latest reassessment, a 50 percent increase to their collections from participating agencies. And if there is a 50 percent market correction (“fixed income” and equity), expect them to double or even triple their collections from taxpayers.

If you are a private citizen trying to prepare for retirement today after, say, 45 years of work and saving, good luck. Because there is no safe investment left in the world. And while you are likely to have to cope with, for example, suspended dividend payments on stocks that are down 50 percent, expect your taxes to go up in every imaginable category – sales, property, income, and hidden taxes embedded in your utility bills and phone bills. It will be “for the children” and “for public safety.” And if there’s a vote required to increase the tax, it will usually pass, because most voters don’t pay property tax, or income tax, or if they do, the taxes are indirectly assessed and invisible to them.

This is the oppressive hoax that government unions have perpetrated on the working families they claim they want to protect. They have exempted their own members, government workers, from the consequences of a corrupt financial system where they are leading partners. When governments spend more than they make and have to borrow money, central banks lower interest rates to make it easier to work the payments into the budget. At the same time, lower interest rates goose the value of stocks and bonds, helping the pension funds claim they can earn 7.5 percent per year. And when the house of cards collapses, taxpayers bail out the banks and the government pension funds.

The next time a spokesperson for a government union speaks disparagingly about Wall Street corruption, remember this: They are partners with Wall Street. They support overspending for their own compensation and benefits, creating deficits that have to be covered by taxes and borrowing. Their pension funds demand high returns, and the bankers comply, with rates that encourage borrowing and deny ordinary people the ability to save. Now that interest rates have hit zero and are even going negative in an exercise of monetary chicanery that has no rival in history, the end is near.

Public sector union leaders need to start remembering they represent public servants, not public overlords who are exempt from the reality that you can only spend as much as you earn. As it is, these union leaders are the overpaid mercenaries of capitalism at its most corrupt.

*   *   *

Ed Ring is the president of the California Policy Center.

Court Sides With Gerawan Farm Workers Over Union

Gerawan FarmingA three-judge panel just unanimously struck down California’s Mandatory Mediation and Conciliation secrecy law as unconstitutional, handing a win to Gerawan Farming and employee Lupe Garcia. Mandatory Mediation and Conciliation was signed into law by Democratic Gov. Gray Davis in 2002.

The May 9, 2016 decision by the Fifth District Court of Appeals in Fresno just handed farmworker Lupe Garcia a win in his battle for constitutional rights against the United Farm Workers and the California Agricultural Labor Relations Board.

Garcia challenged his right to attend portions of the binding formation process known as the Mandatory Mediation and Conciliation, after being locked out by the ALRB. The court reversed a lower trial court that had favored the ALRB, finding a state law to be unconstitutional.

The win means that employee Lupe Garcia, who works at Gerawan Farms in Fresno, will have his lawsuit against the Agriculture Labor Relations Board go forward.

It also means for Garcia and the thousands of Gerawan farmworkers, their case will be heard.  “The Board has continued to put up barriers at every stage of this proceeding to keep the farmworkers’ will suppressed, and we look forward to having this important, democratic issue decided,” attorney Paul Bauer said.

The legal case is the result of a years-long battle between the farm workers at Gerawan Farming, and the United Farm Workers labor union, which tried to force several thousand workers into the labor union despite the workers’ decertification election to oust the union once and for all.

Lupe Garcia and Gerawan sued the ALRB in Fresno County Superior court over ALRB members’ refusal to allow Garcia to attend mediation meetings on the contract. Garcia requested the ALRB‘s permission to attend and observe the on-the-record phase of the MMC process, where evidence and argument would be presented by the parties to the mediator on all disputed issues, Bauer explained. Ironically, the ALRB denied Garcia‘s request claiming he was not a party to the Mandatory Mediation and Conciliation. Then, rubbing salt into the wound, issued a policy decision that members of the public have no right to attend MMC proceedings.

“Pursuant to Labor Code section 1164 et seq., if an agricultural employer and a union certified to represent the agricultural employees of that employer have failed to reach an initial collective bargaining agreement, the Board may, if requested by one of the parties and certain statutory conditions are met, order them to undergo a binding process referred to as mandatory mediation and conciliation,” Attorney Bauer said in a press statement. “In the MMC process, after an initial 30-day period of voluntary mediation is exhausted, a decision-maker (the mediator) takes evidence and hears argument from the parties on all disputed issues (the on the record phase of the MMC process) and then submits a report to the Board stating the mediator‘s findings on what he or she believes the terms of the CBA should be. When the report becomes the final order of the Board, it establishes the terms of an imposed CBA to which the parties are bound.”

“In his request to the Board, Garcia argued that he and other members of the public had a constitutional right of access to the on-the-record portion of the MMC process,” Bauer said. “In response to the Board‘s no-public-access ruling, Garcia filed a declaratory relief action in the trial court, seeking a judicial declaration that the Board‘s ruling violated a right of public access protected under both the federal and state Constitutions. The Board demurred on the ground that the trial court lacked jurisdiction because Labor Code section 1164.9 limited all judicial review of the Board‘s rulings in such cases to the Court of Appeal or Supreme Court. The trial court agreed with the Board and sustained the demurrers without leave to amend. Garcia argued that (1) Labor Code section 1164.9 did not preclude the trial court from exercising jurisdiction because that section is unconstitutional and (2) the Board‘s no-public-access policy violates a right of public access to civil proceedings protected under the federal or state Constitution, or both.”

Fifth District Court of Appeals

I attended the Fifth District Court of Appeal hearing in Fresno April 20. California Deputy Attorney General Nelson Richards told a three-judge panel “It has never been a right” for farm workers to sit in on labor mediation meetings, and never should be.

“I can only imagine why the general public is not allowed in,” attorney David Schwarz said in court.

“Mr. Garcia only wanted to ask, ‘Can I step into the room and see what’s going on?’” Attorney Bauer told the court. “The silence is deafening, and spoken loud and clear to Mr. Garcia when the door closed in his face when he wanted to know about his wages, working conditions, seniority…” Bauer called the ALRB “Bureaucratic Tyranny.”

Bauer told the court that Lupe Garcia made the 100 mile trip to attend the 2013 meeting with 15 other workers to find out what was going on. But it was the UFW and ALRB attorneys who decided not to let Garcia observe the MMC proceedings. “They were told they could read about it in a transcript,” Bauer said.

Bauer asked the Agricultural Labor Relations Board, which represents the workers, to let them in to the meeting, but was told, “No. You’re not a party to the process.” The ALRB told Bauer and the workers that the UFW represents the workers. “It was such a juxtaposition to suggest they were adequately represented,” Bauer said. The ALRB said Mr. Garcia was not a party to the proceedings, has no standing, and barred him from his own proceedings. “He’s left wondering, ‘what are they trying to hide,’” Bauer told the court.

Last year, the same three-judge California appeals panel struck down the section of state law that allows the ALRB to force UFW contracts on farmworkers, and ruled that section of the law, unconstitutional.

The judges agreed that the ALRB should have allowed Gerawan Farming to prove that the UFW had abandoned thousands of its members for two decades. “More fundamentally, we agree with Gerawan’s constitutional arguments that the MMC [mandatory mediation and conciliation] statute violates equal protection principles and constitutes an improper delegation of legislative authority,” the Fifth District Court of Appeals judges ruled.

Farmworker Silvia Lopez alleged as a plaintiff in the suite that the ALRB was violating her Constitutional right to freedom of association. The three judges agreed.

The ruling showed that Gerawan Farming and  Silvia Lopez were truthful all along, while the ALRB’s general counsel Sylvia Torres-Guillen, and its Visalia director Silas Shawver, were clearly in the wrong.

 ALRB Lawyer: Workers Have No Right To Witness Negotiations

Deputy Attorney General Nelson Richards, representing the ALRB, said in his argument that neither the employee or employer had the right to be in the negotiations, but acknowledged when asked by the judges, that the union is allowed to have as many employees in the proceedings. Richards claimed it was the policy of the National Labor Relations Board. “Why can’t other employees come in and observe the proceedings when it impacts their employment?” Presiding Judge Hill asked. “There’s no historical precedent for this,” AG Richards said. “The MMC follows the federal MMC – it’s confidential.”

“So the bargaining unit can bring in anyone, but because it’s confidential, can bar other employees from watching?” Presiding Judge Brad R. Hill asked.

Gerawan attorney David Schwarz explained that the National Labor Relations Act is different than the California Agricultural Labor Relations Act. “Out Constitution is different,” Schwarz said. “To suggest somehow we can infer legislative jurisdiction is incorrect. The NLRA doesn’t have forced contracting.”

UCLA law professor Eugene Volokh, representing the California Newspaper Publishers’ Association, told the justices that mediation meetings function similar to a bench trial and should be open to the public.

“The Court of Appeal agreed with Garcia on the first point, and sent the action to the trial court on the second,” Attorney Bauer said. “As to section 1164.9, it held that its absolute preclusion of superior court jurisdiction, even in exceptional circumstances where as with Garcia the sole statutory mechanism for judicial review was unavailable and constitutional rights were at stake, impermissibly divested the superior court of its original jurisdiction without an adequate constitutional foundation for doing so.”

“While we are happy to return to the Superior Court and win again there, we wonder why the ALRB persists in its blatantly unconstitutional policy of barring workers from proceedings where their working conditions and wages are being addressed,” Dan Gerawan said. “We call on the ALRB to rethink its position and agree to open proceedings even if the UFW wants them closed. The ALRB must protect workers first and foremost. The secret hearing policy is obviously unconstitutional and the ALRB should stop wasting taxpayer dollars defending it.”

To read the ruling, click hereF069896 – Opinion

This piece was originally published by the Flash Report