Beyond the Weekend: New data reveals how unions benefit communities, consumers, employers, and employees

You’ve probably seen that bumper sticker that says, “The Labor Movement: The Folks Who Brought You the Weekend.” While the sentiment rings true – and not just about the weekend, let’s be clear -  it also evokes a kind of “what have you done for me lately?” feeling.

It turns out the answer is: quite a bit.

Beyond the Weekend, a publication of the American Rights at Work Education Fund, features highlights from five new reports demonstrating the broader value of collective bargaining, including:

• Frontline healthcare workers collaborating with hospital administrators to find real solutions that improve care and control costs.

• Partnerships between union-represented teachers and school administrators boosting student achievement in schools that serve disadvantaged families.

• Union members’ pensions funding public and private works projects that create good American jobs.

• Building trades unions partnering with community groups to create new career paths for workers of color and women.

• And through their unions, childcare providers gaining new skills and resources to improve how they care for children of low-income families.

Read more here » (pdf)

John Burbank, EOI Executive Director

The drumbeat for economic advancement is filled with warnings that our kids must get a college education to get ahead. So it’s instructive to see where those college educations can lead. Take my friend’s son Dale, for example.

He’s 28, with a bachelor of arts degree from the University of Washington. He is highly skilled with computers, audio-visual equipment and other technical systems. He’s personable, articulate, and gets along well with almost anyone.

After graduation, Dale targeted the computer technology sector for job searches. His first job was through a labor supply agency, a three-month contract doing customer service at Nintendo through a new product launch and the Christmas holidays. He was paid $13 an hour, with no sick leave, vacation or paid holidays, or other benefits. His schedule was changed every week, averaging 35 hours or so.

This prevented him from taking a second job or attending classes, since he was never sure what days he would be told to work. And it left him 30 hours short of qualifying for unemployment insurance when he was laid off. So much for job security from a corporation that netted over $930 million last year.

In his current job, Dale has a six-month contract. He works at Microsoft’s Bing, but he is an employee of a different temporary services firm. Now we all assume that if you are at Microsoft, you are well paid. So let’s look at Dale’s situation.

He makes $14 an hour. No health care, no paid sick days, no retirement savings. He does get a bus pass. His job is somewhat mindless and extremely repetitive — and there are productivity standards tied to very modest team bonuses. The bonus structure was changed without notice, however, so those are more difficult to attain.

It is a weird world we live in. Productivity — the added value that each worker creates at his or her job — has doubled overall since 1973. Corporate profits per unit of value added have quadrupled. You can do the math — productivity increases two times and profits increase by four times, so where does the money come from? It comes from workers.

Altogether, workers in the middle of the middle class have seen their wages go up 8 percent since 1973 — that’s two-tenths of a percent per year. They have added a lot more value than that.

But what we hear about more is the young people who are hired at Microsoft, Amazon and Google at salaries that make a lot of older middle class workers look downright poor. I know this because I have relatives who are among that lucky bunch. And they get health coverage, retirement savings, paid time off, and even corporate-paid lunch brought into work.

But the prosperity and the privilege of the few mask the narrowing of opportunity for the many, whether they have high school diplomas, community college degrees or university degrees. And this prosperity also masks that generations-old transfer of income and wealth from workers to the Fortune 500.

The result is we have Dale, a university graduate, working a temporary job with no benefits, hoping and hoping that he will be brought on permanently, while his actual employer — Microsoft — was making over $23 billion in net profits last year. Not to mention that its top five executives were given between $1.3 million and $9.3 million, each! Dale has a job. But does he have a future in the middle class? That’s debatable.

Yesterday Microsoft released a study it sponsored that discussed the opportunity divide for youth. The report “documents the growing economic and social challenges facing youth around the world and the urgent need to provide the education, skills and employment opportunities required for them to succeed in today’s rapidly changing global economy.”

That wasn’t a message intended for Microsoft itself or the rest of the Fortune 500 in the United States. But it sure should be. It is definitely an economic challenge when you make wages that put you hovering above poverty, unable to pay for health insurance that your company won’t provide, saddled by student loans, and wondering how to scrape together the money for further training and education — and don’t even mention saving for retirement.

That is not the economic future Americans have bargained for — and it isn’t a future with which we should saddle our kids.

From the Everett Herald

Policy Brief: Doing better than "getting by": How to expand WA Basic Health

The number of people without health insurance in Washington has climbed over the last decade, even during economic upswings. At the same time, enrollment in Washington’s Basic Health Plan has fallen dramatically, the result of several years of compounding state budget cuts. Today, Basic Health covers only 35,000 residents, and more than 157,000 are on the wait list due to shortfalls in state funding.

In 2014, the Affordable Care Act (ACA) will ensure health care for all those covered by Basic Health. In the meantime, lawmakers may choose to maintain Basic Health through 2013. However, mere maintenance will not address the failure of the private insurance market to provide coverage to growing numbers of Washington residents.

There is a better alternative – one that expands Basic Health coverage without raising new revenue: The legislature can authorize the state to issue revenue bonds for a portion of the Tobacco Settlement revenues. Doing so will enable Basic Health to cover more than 155,000 people –  including the majority on the current wait list – as Washington voters originally intended.

Factors that favor revenue bonding:

• Bonding existing revenue requires only simple majorities of the legislature to pass.

• A lump-sum payment is worth more today than an equivalent stream of revenue apportioned to future years. The future value of $1 million is not as much as its present value. This devaluation is compounded by inflation. For example, the purchasing power of $1 million 20 years ago would require nearly $2.5 million today to have the same value.

• Bonds issued by the Tobacco Settlement Authority are the obligation of the Authority, not the state.

Get the full story in EOI’s latest policy brief: Doing better than “getting by”: How to expand WA Basic Health

Washington’s Basic Health Plan is designed to fill the gap, but years of budget cuts have reduced enrollment from a high of 135,000 in 2002 to just 35,000 today. Today, over 157,000 Washington residents who qualify for Basic Health are wait-listed – while state legislators debate yet more cuts to the program. But further budget cuts won’t just undermine Basic Health – it may also harm the state’s still-fragile economic recovery, since the available data indicates that every $1 million invested in health care funds approximately 14 jobs across all sectors in Washington.

The weakening pulse of health insurance coverage in Washington

Employers are shifting costs for health coverage to their employees, and employer-provided health coverage rates have fallen even in periods of economic growth.(1)

In Washington, the proportion of employers offering health coverage to full-time employees dropped from 76% in 2002 and 2003, when the state was coming out of a recession, to 66% in 2007, when the state was experiencing strong economic growth. In 2010, just 54% of employers offered health coverage to full-time employees.(2) The share of Washingtonians under 65 receiving employer-sponsored health insurance fell from 66.9% in 2001 to 60.6% in 2010.

In 2010, nearly one million Washingtonians had no health coverage. Among adults aged 18-64, the rate of uninsured is now 22.4%, up from 20.8% in 2009 and 17% in 2008.(3) At least one in four Washingtonians are under-insured, according to the Washington State Office of the Insurance Commissioner (OIC) (4), and the rate of uninsured is not expected to drop when the economy recovers.(5)

Designed to fill the gap, Basic Health now undermined by repeated budget cuts

Washington’s Basic Health Plan (BHP) has provided medical insurance coverage for low-income Washington workers for nearly 25 years. The state subsidizes health insurance for eligible residents, who share costs by paying monthly premiums, annual deductibles and co-pays to receive care.

Premiums are based on gross family income – to be eligible, individuals and families must have income below 200% of the federal poverty level, or $3088 per month for a family of three.(6) Health care is provided by the private sector; organizations that partner with the state include Community Health Plan, Group Health and Molina.

Basic Health became a permanent state program in 1993. In 1995, the Republican-controlled Legislature retained and expanded Basic Health, even while dismantling Washington’s implementation of universal health coverage. At that time 37,580 Washingtonians were enrolled in Basic Health. By 1997, enrollment had rocketed to 124,348.(7)

As enrollment continued to rise in the years that followed, Washingtonians demonstrated their support for Basic Health. In 2001, voters overwhelmingly approved a tax initiative that dedicated the bulk of its revenue to expansion of Basic Health coverage: Initiative 773. The measure, which increased the tax on cigarettes by 60 cents, was approved by two-thirds of voters with the intent to increase the number covered by Basic Health to 175,000 residents.

However, over the last decade Basic Health has become a regular target for spending reductions; state lawmakers have decreased funding and lowered enrollment levels. As a result, coverage has fallen dramatically; in less than 10 years, about 100,000 people have lost Basic Health benefits. As the rate of uninsured has climbed, the wait list has swelled. Officially established in May 2009, the wait list has grown to more than four times the number of enrolled in just two and half years.(8)

Basic Health: A strategic investment in jobs and productivity

Basic Health doesn’t just protect the economic security of tens of thousands of workers in or near poverty – it also protects thousands of jobs in the health care sector, and helps maintain Washington’s economic productivity.

A healthy workforce is a productive workforce. The Commonwealth Fund found that worker health issues resulted in national annual economic losses of $260 billion, or 2.4% of gross domestic product (GDP). Commonwealth concluded that providing health coverage boosts worker productivity by increasing access to important preventative care, and maintaining worker health is a positive economic investment.(9)

Health care is a key sector of the economy in most regions of the state.(10) Not only do health care dollars directly impact local economies, they also support workers who put earnings back into the economy. This creates an employment multiplier effect: as workers spend their income, it indirectly maintains and generates job opportunities throughout the state. In Washington, every $1 million invested in health care funds an average of 14 jobs across all sectors.(11)

Sources:

1. John Holahan, “The 2007-2009 Recession and Health Insurance Coverage,” January, 2011, Health Affairs 30, 1 (2011): 145-152.

2. Washington Employment Security Department, “2010 Employee Benefits Survey Report,” Labor Market and Economic Analysis, August 2011.

3. U.S. Census Bureau, 2010 American Community Survey, Tables DP03 and B27001 for Washington.

4. Mike Kreidler, “State of the uninsured: Health coverage in Washington State,” December 2011, Office of the Insurance Commissioner, www.insurance.wa.gov.

5. Mike Kreidler, “A problem we can’t ignore: The hidden and rapidly growing costs of the uninsured and underinsured in Washington State,” November 2009, Office of the Insurance Commissioner, www.insurance.wa.gov.

6. Washington State Health Care Authority, http://www.basichealth.hca.wa.gov/.

7. Washington State Office of Program Research, February 2, 2011 presentation to the House of Representatives Ways and Means Committee, http://apps.leg.wa.gov/cmd/default.aspx?cid=WAYS.

8. Washington State Health Care Authority, data request, received December 9, 2011.

9. Karen Davis, et. al., “Health and Productivity Among U.S. Workers,” August, 2005, The Commonwealth Fund, http://www.commonwealthfund.org/usr_doc/856_Davis_hlt_productivity_USworkers.pdf.

10. Mike Kreidler, “A problem we can’t ignore: The hidden and rapidly growing costs of the uninsured and underinsured in Washington State,” November 2009, Office of the Insurance Commissioner, www.insurance.wa.gov.

11. Office of Financial Management, “The 2002 Washington Input-Output Model,” http://www.ofm.wa.gov/economy/io/2002/default.asp.

The recession has taken a big toll on jobs and family incomes – and on public revenue. The state has mostly cut services, not raised revenue, resulting in $10.5 billion in cuts. (Note: Federal aid in 2009-10, rainy day funds, and fee increases prevented deeper cuts.)

Cuts from 2009-11 include:

• K-12 education: Elimination of student achievement funds & teacher cost of living adjustments; 7,000 fewer K-12 employees.
• Higher ed: 4-yr college funding reduced 40%, 2-yr reduced 20%, with large tuition increases.
• Health care: 60,000 cut from Basic Health.
• Children’s services: Fewer children receiving health, childcare, and other services.
• Elder care: Reduced home-care hours for vulnerable seniors and disabled.
• Cuts to state agencies: Consolidation of state agencies, elimination of jobs.
• State employees: Mandatory furloughs and higher contributions for health insurance.

John Burbank, Executive Director

Reprinted from The Everett Herald

It isn’t any surprise that people are pessimistic and negative right now. If we have jobs, we are worried about keeping them. If we don’t, we are worried about making ends meet, especially as unemployment insurance has run out for tens of thousands of jobless workers in our state.

We see the stock market lose billions, then gain billions, then lose billions again in the space of several hours. Tuition has broken the $10,000 barrier at the University of Washington, and $3,500 at Everett Community College. More and more people are working without health insurance, while the state has steadily defunded basic health coverage. Class sizes are increasing, actual courses are decreasing, and physical education and arts and music are left shriveling on the vine of wilted revenues.

But we are not all in this boat together. We are not all sharing the doubt, fear and suffering. The corporate elites of Boeing and Microsoft and Amazon and Starbucks are doing just fine. The largest businesses in the United States are enjoying record profits. Paul Allen has his islands and submarines. Jeff Bezos can fund his Bezos Family Foundation, which focuses on education and young people, while defunding public education across the country by threatening to leave any state that tries to collect sales taxes on Amazon sales.

After Sept. 11, 2001, we as a people had a moment of solidarity with each other and with our country. We were ready to answer the call to protect our country, to build our democratic society and to realize the greater good. We collectively blew up that moment of patriotism by answering George W. Bush’s call to go shopping.

We allowed that president to lead us down a road of lies and into wars which the current president still hasn’t gotten us out of. Instead of funding our schools, our roads, our health coverage, and yes, our wars, we gave Bush a pass to cut taxes again and again, especially on the wealthy.

The current president, despite all he says, is continuing that tradition. Instead of workers’ wages keeping up with productivity increases, or at least inflation, we have allowed them to fall behind, while increasing workers’ payments for health care, retirement accounts, and their kids’ higher education. Instead of acknowledging Social Security as the backbone of retirement income, especially with the cratering of 401(k) accounts and the extinction of defined benefit accounts, we allow ourselves to be deluded into undermining Social Security as well. Instead of realizing what the current President promised as universal health care, more and more Americans have no health insurance and our elected leaders appear willing to make us wait until we are 67 years old to get Medicare.

We are not a stronger or better country now than 10 years ago. The multinational corporations that are based in America, like Boeing, Microsoft and GE, are stronger and wealthier. But we aren’t. We are a divided and fearful nation. So maybe we should look north, across the border, for inspiration.

The second largest political party in Canada is the New Democratic Party (NDP). It is largely supported by workers and unions. This party made universal health coverage a reality in Canada. It has ensured affordable higher education. Thanks to the NDP, all workers can balance work and family with family leave insurance. For the NDP, family values are not just rhetoric — they are part of the fabric of life and law in Canada.

Three weeks ago, Jack Layton, the leader of the NDP, lost his fight with cancer. Layton wrote a letter to his fellow Canadians just two days before he died. He signed off with this salute: “My friends, love is better than anger. Hope is better than fear. Optimism is better than despair. So let us be loving, hopeful and optimistic. And we’ll change the world.”

That is something for all of us to consider, whether we live north of the border, or in these United States. We can reclaim the spirit and solidarity of Sept. 12, 2001. But we won’t do it by undermining our own government and the public services it provides. That was the agenda of greed and you-are-on-your-own enabled by the attacks of Sept. 11, 2001.

If we want a future of opportunity and security for our children, we must put what is best for all of us first. It is not me, it is us.

[CORRECTION: The original version of this column incorrectly stated that Jeff Bezos funds an environmental camp on Bainbridge Island. That camp is actually funded by Paul Brainerd.]

The U.S. health care system is possibly the most inefficient in the world: We spend twice as much per person on health care as other advanced countries, but we have worse health outcomes, including a lower life expectancy. The government, through programs like Medicare and Medicaid, pays for approximately half of the country’s health care, almost all of which is actually provided by the private sector. Thus, the bulk of our projected rising budget deficits are due to skyrocketing health care costs.

Click to use the interactive chart

The CEPR Health Care Budget Deficit Calculator shows that if the U.S. can get health care costs under control, our budget deficits will not rise uncontrollably in the future. But if we fail to contain health care costs, then it will be almost impossible to prevent exploding future budget deficits.

The Calculator lets you see what projected U.S. budget deficits would be if we had the same per person health care costs as any of the countries listed below, all of which enjoy longer life expectancies than the U.S. (Life expectancies are listed in parentheses.)

The yellow line shows projected deficits based on baseline projections from the non-partisan Congressional Budget Office (CBO). The blue line shows where the deficits would be if health care costs in the U.S. were to rise only due to the aging of the population and stay even with per capita GDP growth (based on CBO’s “Low Health Care Cost” projection).

Use the CEPR calculator »

In just four days, the Family Care Act enforcement bills now under consideration in Olympia must pass out of the House or Senate. We need your help to make it happen.

Since 2002, Washington’s Family Care Act (FCA) has helped ensure workers can use the paid time off they’ve earned to care for a sick family member. For the most part, it’s worked well — but state agencies don’t have the authority to stop employers from retaliating against workers who use the FCA.

Lawmakers are considering companion bills to provide modest FCA enforcement — but with so many bills vying for their attention, they need a nudge from you.

It’s easy: just call the state legislative hotline at 1-800-562-6000 and say you’d like to leave a message for your state Representatives and state Senator. (Alternatively, you can look up your legislators here and send each of them an email.)

Your own message will be most effective, but here are a few points to get you started:

• I urge your support for (“House Bill 1828” if speaking with your Representative; “Senate Bill 5263“, if speaking with your Senator).

• For most employees and employers in the state, the Family Care Act has been working well. Unfortunately, in some cases follow up and enforcement is necessary.

• When people can care for their families, we all benefit from reduced health care costs, and employers benefit from better productivity and higher morale.

• Children and adults get better more quickly when a family member is present. Follow up care improves when family members are able to hear doctor’s instructions.

With your help, we can get a Family Care Act enforcement bill on the Governor’s desk this year – thank you for your support!

Davis rightly notes that spending on health care is a major driver in Washington’s budget. But he overlooks the simple fact that the state doesn’t set the price for health care any more than you or I set the price for fruit. The state can set reimbursement rates for different services, or negotiate to some extent with private insurance providers on the costs of employee health coverage.

But at the end of the day, Washington isn’t really providing health care – it is paying for it. That means if that reimbursement rate isn’t high enough, doctors won’t provide that particular service. (Or the insurance company won’t pay the doctor enough to provide it.) Similarly, if the state isn’t willing to pay a certain premium for employee health insurance, then employees don’t get health insurance.

Davis seems to think that if states just budget less for health care, that will somehow drive down overall health care costs. His proposals? Push more people into the private health insurance market, make more government payments to private insurers, and have more people paying more money for their health insurance. In other words, the same failed ideas that got us into our current health care mess.

If he really wanted to lay out why the U.S. health care system has higher costs and lower performance than other industrialized countries, Davis would write about the well-documented inefficiencies of the private health insurance market, including high paper shuffling costs and big executive compensation packages, among many other cost drivers.

Rather than addressing those underlying problems, Davis just argues that since private sector workers are paying a lot more of their salary toward health care, public sector workers ought to do the same. The truth is, with people losing their health insurance right and left, making health care less affordable for thousands of Washingtonians isn’t going to make people – or the state budget – any healthier.

You can choose not to buy apples and get (cheaper) bananas instead. But what do you substitute for health care?

Aubrey Davis, EOI Board Member

by Aubrey Davis

From the Seattle Times: TWENTY years ago, Washington created the Basic Health Plan (BHP) to provide reasonable health care for people who work for employers that do not offer them insurance and do not pay enough for them to afford to buy individual coverage on the market. The BHP is partly financed by income-adjusted premiums paid by participants, and since 2002, partly by a voter-approved tax on cigarettes.

Today, facing a massive revenue shortfall thanks to the recession, lawmakers are weighing whether to shut down the BHP entirely. The consequences of doing so were vividly described by Times reporter Carol Ostrom’s story ["Amid budget crisis, hard health-care decisions: Where to cut?" Jan 13]. The loss would not only threaten people’s health, but their very lives. And it would eliminate a program that will be fundamental for the state’s participation in national health-care reform in 2014.

The irony is that the BHP, while financed by direct-user payments and a voter-approved tax, faces closure. Meanwhile, our state is forgoing billions in tax revenue through hundreds of corporate tax loopholes and exemptions that voters never approved in the first place, and that haven’t been seriously re-examined since.

Read the full column in the Seattle Times »