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Weekly Audit: Hostile takeover threat spurs concessions from Michigan unions

Michigan's new Emergency Manager Law is already forcing major concessions from unions. The law gives the governor the power to declare a city insolvent and appoint an emergency manager with virtually unlimited power to reorganize every aspect of city business, including dissolving the city entirely. The emergency manager even has the power to terminate collective bargaining agreements.

As a result of these expanded new powers, public employees unions in some Michigan municipalities are already making large preemptive concessions to keep their cities from tripping any of the "triggers" in the new law that might give the governor an opening to send in a union-busting emergency manager, Eartha Jane Melzer reports in the Michigan Messenger.

In Flint, the firefighters' union agreed to increase contributions to health insurance and give up holiday pay and night shift differentials. Flint Firefighters Union President Raul Garcia told the Wall Street Journal that these concessions were driven by fear of a state takeover of Flint. "I would rather give concessions that I would like than have an [emergency financial manager] or something of that magnitude come in and say this is what you are going to do," Garcia said.

The new law also gives the Emergency Manager the power to privatize prisons, Melzer notes.

Detroit grows green

The citizens of Detroit aren't waiting around for an emergency manager to take over. The city's industrial economy is dying, but its grassroots economy is stirring to life, Jenny Lee and Paul Abowd report in In These Times. Detroit residents have been growing their own food in town for decades, but recently activists and the city have joined forces to link many small producers into a network that will provide food security for the city.

Wal-Mart and wage discrimination

Next week, the Supreme Court will take up the case of 100 women who are suing Wal-Mart for wage discrimination. As Scott Lemieux explains in The American Prospect, the Court will decide whether these women can band together to sue the nation's largest retailer, or whether each must sue the firm individually.

Lemieux argues that, for the sake of women's rights at work, it is very important that these Wal-Mart employees be allowed to sue together instead of one at a time:

"Given the compelling stories these individual women can tell, does it matter whether they can file suit collectively? Absolutely, for at least two reasons. First of all, only a class-action suit can properly create a record of the systematic gender discrimination at Wal-Mart. Any individual case can be dismissed as an anomaly or a misunderstanding, but the volume of complaints makes clear that gender discrimination was embedded deeply within the culture of the corporation, a very relevant fact for a discrimination suit."

Litigation is expensive and time-consuming, for the individuals and for the court system. Forcing victims of discrimination to sue one by one makes it less likely that they will seek justice, especially if they're suing because they were underpaid in the first place. Wal-Mart claims that the class is too large to be allowed to proceed, and that the women couldn't possibly have similar enough claims. But as Lemieux points out, the class is huge because Wal-Mart is huge.

War and the deficit

Jamelle Bouie writes at TAPPED, in response to the United States' new military commitments in Libya:

"I just wish we could at least acknowledge the obvious truth: conservatives don't care about deficits but will use them to cut spending on poor people. When it comes to things they like -- wars, for instance -- they're willing to pay any price."

The U.S. fired 110 Tomahawk Missiles at Libya on Saturday, at an estimated total cost of $81 million, or 33 times the annual federal funding for National Public Radio.

Sally Kohn of TAPPED notes that the United States scraped together $2.3 million worth of "blood money" to pay off the families of the victims of Raymond Davis, a rogue CIA operative who shot and killed two men who tried to rob him in Pakistan. Laura Flanders of GRITtv calculates that $2.3 million ransom for a single killer would have paid the salaries of 45 Wisconsin public school teachers for a year.

Public pensions 101

We often hear that public pensions are unfunded. On the Breakdown, Chris Hayes of The Nation asks economist Dean Baker what this actually means. Baker explains that so-called "defined benefit" pensions have become rare in the private sector, but remain relatively common in the public sector. A defined benefit pension guarantees the pensioner a certain income. Most private sector pensions are so-called "defined contribution" plans, which means that employer puts aside a certain amount of money each month for the employee, but there's no guarantee how much return the pensioner will eventually get on that investment.

A state pension fund is considered unfunded if the assets the fund has today aren't sufficient to cover the defined benefits that are due to workers over the next 30 years. Baker notes that many funds are a lot healthier than they look because their values were calculated at the nadir of the stock market in 2009. The market has since made up a large percentage of that ground. A handful of states were mismanaging their pension funds, but most states have been responsible.

Ethical outlaws

Bea is a manager of a big-box chain store in Maine. The company pays her staff between $6 and $8 an hour and many are struggling. Even as she tries to keep a professional atmosphere in the store, Bea has been known to bend the rules to help an employee in need, as Lisa Dodson describes in YES! Magazine:

"When one of her employees couldn't afford to buy her daughter a prom dress, Bea couldn't shake the feeling that she was implicated by the injustice. 'Let's just say … we made some mistakes with our prom dress orders last year,' she told me. 'Too many were ordered, some went back. It got pretty confusing.' And Edy? 'She knocked them dead' at the prom."

Andrew, a manager in the Midwest is quietly padding his employees’ paychecks because he knows their wages aren't enough to live on. Andrew knows he might be accused of stealing, but he does it anyway because the alternative is unthinkable.

Dodson interviewed hundreds of low- and middle-income people about the economy between 2001 and 2008. Along the way, she stumbled on what she calls "the moral underground," a world where managers bend the rules at corporate expense to enable their low-wage staff to get by. It is legal to pay people less than a living wage, but increasing numbers of people like Bea and Arthur have decided that the situation is morally unacceptable, and quietly acted accordingly.

This post features links to the best independent, progressive reporting about the economy bymembers of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The MulchThe Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

 

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