Chicago Rally Against Illinois Budget Cuts

June 30, 2009

Hundreds of community and labor activists, including direct victims of drastic proposed budget cuts by the State of Illinois, rallied to demand "No Cuts." They demanded that the legislature take steps to pass a budget to preserve vital social services. Several times the crowd spontaneously burst into chants of "Tax the Rich."

Congress Hotel Strikers - Still Strong after Six Years

Chicago Congress Hotel workers have been fighting for 6 years for a decent contract. Faced with wage cuts and other unfair demands the workers walked out 6 long years ago - still they fight on with ever growing labor and community support. This week the battle also shifts to City Hall when the Chicago City Council will consider denying the Hotel permits it needs for expansion. This year a host of labor leaders and elected officials spoke out in support at this years 6th Anniversary demonstration including Illinois Gov Pat Quinn.

L.A. Free Choice Rally \

At a rally on June 3 at Senator Dianne Feinstein's L.A. office, Maria Elena Durazo, Executive Secretary-Treasurer of the Los Angeles County Federation of Labor calls on Senator Feinstein to "Let President Obama Sign The Employee Free Choice Act!"

Card Check and Gut Check

By Harold Meyerson

Thursday, May 14, 2009

If our nation was governed by business's version of democratic choice, we would hold elections to determine the winner, but nearly half the time the incumbent would remain in power even if he lost.

In its campaign to derail the Employee Free Choice Act (EFCA), business has fearlessly depicted itself as the defender of elections and the secret ballot as well as the foe of the dread "card check" -- the process, championed by unions and included within EFCA, that would allow workers to sign union affiliation cards rather than compelling them to go through a ratification election in which harassment and firings of workers are all too common.

But the kind of democratic choice that business favors is choice without consequence -- a position made clear by its opposition to the other key component of EFCA: binding arbitration between company and union if they've been unable to agree on a contract within 120 days of a union winning the election. A study of first-contract negotiations by John-Paul Ferguson and Thomas A. Kochan of MIT's Sloan School of Management makes clear why such arbitration is needed. After surveying 22,000 unionization campaigns between 1999 and 2004, the authors found that even after a majority of workers voted for a union, they actually reached a contractual agreement with management (which is currently under no legal obligation to come to an agreement) only 56 percent of the time.

Heads, management wins. Tails, the employees lose.

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Merrillville Indiana USW Rally "Keep it Made in America"

On May 11 hundreds of Steelworkers rallied in Merrillville Indiana demanding that manufacturing jobs be maintained in America.

Lonnie Randolf, Indiana State Representative and Tom Conway, United Steelworkers Vice President speaking:

Falling Wage Syndrome

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The New York Times
Published: May 3, 2009

Paul Krugman

Wages are falling all across America.

Some of the wage cuts, like the givebacks by Chrysler workers, are the price of federal aid. Others, like the tentative agreement on a salary cut here at The Times, are the result of discussions between employers and their union employees. Still others reflect the brute fact of a weak labor market: workers don’t dare protest when their wages are cut, because they don’t think they can find other jobs.

Whatever the specifics, however, falling wages are a symptom of a sick economy. And they’re a symptom that can make the economy even sicker.

First things first: anecdotes about falling wages are proliferating, but how broad is the phenomenon? The answer is, very.

It’s true that many workers are still getting pay increases. But there are enough pay cuts out there that, according to the Bureau of Labor Statistics, the average cost of employing workers in the private sector rose only two-tenths of a percent in the first quarter of this year — the lowest increase on record. Since the job market is still getting worse, it wouldn’t be at all surprising if overall wages started falling later this year.

But why is that a bad thing? After all, many workers are accepting pay cuts in order to save jobs. What’s wrong with that?

The answer lies in one of those paradoxes that plague our economy right now. We’re suffering from the paradox of thrift: saving is a virtue, but when everyone tries to sharply increase saving at the same time, the effect is a depressed economy. We’re suffering from the paradox of deleveraging: reducing debt and cleaning up balance sheets is good, but when everyone tries to sell off assets and pay down debt at the same time, the result is a financial crisis.

And soon we may be facing the paradox of wages: workers at any one company can help save their jobs by accepting lower wages, but when employers across the economy cut wages at the same time, the result is higher unemployment.

Here’s how the paradox works. Suppose that workers at the XYZ Corporation accept a pay cut. That lets XYZ management cut prices, making its products more competitive. Sales rise, and more workers can keep their jobs. So you might think that wage cuts raise employment — which they do at the level of the individual employer.

But if everyone takes a pay cut, nobody gains a competitive advantage. So there’s no benefit to the economy from lower wages. Meanwhile, the fall in wages can worsen the economy’s problems on other fronts.

In particular, falling wages, and hence falling incomes, worsen the problem of excessive debt: your monthly mortgage payments don’t go down with your paycheck. America came into this crisis with household debt as a percentage of income at its highest level since the 1930s. Families are trying to work that debt down by saving more than they have in a decade — but as wages fall, they’re chasing a moving target. And the rising burden of debt will put downward pressure on consumer spending, keeping the economy depressed.

Things get even worse if businesses and consumers expect wages to fall further in the future. John Maynard Keynes put it clearly, more than 70 years ago: “The effect of an expectation that wages are going to sag by, say, 2 percent in the coming year will be roughly equivalent to the effect of a rise of 2 percent in the amount of interest payable for the same period.” And a rise in the effective interest rate is the last thing this economy needs.

Concern about falling wages isn’t just theory. Japan — where private-sector wages fell an average of more than 1 percent a year from 1997 to 2003 — is an object lesson in how wage deflation can contribute to economic stagnation.

So what should we conclude from the growing evidence of sagging wages in America? Mainly that stabilizing the economy isn’t enough: we need a real recovery.

There has been a lot of talk lately about green shoots and all that, and there are indeed indications that the economic plunge that began last fall may be leveling off. The National Bureau of Economic Research might even declare the recession over later this year.

But the unemployment rate is almost certainly still rising. And all signs point to a terrible job market for many months if not years to come — which is a recipe for continuing wage cuts, which will in turn keep the economy weak.

To break that vicious circle, we basically need more: more stimulus, more decisive action on the banks, more job creation.

Credit where credit is due: President Obama and his economic advisers seem to have steered the economy away from the abyss. But the risk that America will turn into Japan — that we’ll face years of deflation and stagnation — seems, if anything, to be rising.

Ilinois Steelworkers protest Plant Closing

Photos by Scott Marshall

Hundreds of Steelworkers and retirees from USW Local 7367 and District 7 held a protest demonstration at the Federal Building in the Chicago Loop April 30th to demand that ArcelorMittal, the largest steel company in the world, "Use It or Sell It." ArcelorMittal is closing it's Hennepin, Illinois plant and destroying 300 good steelmaking jobs. The company is the largest employer in the area and the economic impact of the closing will be devastating to the entire community.