The Era of Broken Promises for Workers: From New Deal to Raw Deal

Larry Cohen, President 

Defending our members' employment, health and retirement security is a huge and common challenge across all CWA sectors.

In fact, every union in America today also finds itself on the defensive at the start of contract bargaining, forced to battle concession demands from employers that force our focus away from imagining improved wages and job conditions.       

Rather than joining us in pressing Congress and the White House for a national solution to the health care crisis, nearly all employers would rather offload their mounting medical costs onto workers.  And many non-union employers simply drop health coverage, as more than a quarter of a million did over the last five years.

As stories in this CWA News describe, such employer behavior merely compounds the crisis.  About 46 million Americans have no health coverage at all, and subsidizing their care continues to drive up insurance premiums for the rest of us and also hand taxpayers higher costs for state health programs.

While the current political climate in Washington has stifled any attempt at comprehensive reform for now, the labor movement has turned to the states with a push for a Fair Share Health Care campaign to keep employers like Wal-Mart from shifting their obligations and costs onto taxpayers.

The AFL-CIO scored a recent victory in Maryland where, with support from CWA locals, lawmakers overrode the governor's veto to require big companies to pay 8 percent of payroll to either provide benefits or subsidize health programs for the poor.   Labor is pressing similar campaigns in 33 other states.

On another front, worker retirement security is under assault as never before as corporations line up to freeze traditional defined benefit pension plans and jettison health coverage for retirees.

CWA members at United Airlines and US Airways and workers elsewhere have been victimized as companies manipulate bankruptcy laws to tear up union contracts and get rid of pension obligations.  Members at auto parts maker Delphi are now facing a similar threat.

What's really outrageous is the role of Congress, which actually passed a bill last year – at the behest of the credit industry – to make it harder for private citizens to file for bankruptcy, while declining to curb corporate bankruptcy abuses and shore up pension standards.

And now, some of America's wealthiest corporate icons like Verizon and IBM have frozen their traditional pensions – in Verizon's case, for non-represented workers with no union contract to protect them.  It wasn't long before Sprint Nextel and other healthy companies joined this shameful parade.

What you hear is the shattering of an informal social contract among government, business and labor that developed in the post-World War II years.  In the spirit of the New Deal, and with organized labor representing 35 percent of the private sector – then a powerful force – employer-provided health care and pensions became a public policy model in those years.  Government gave employers tax breaks to provide benefits, and workers and unions lowered wage demands in return for them.     

Now we are in the era of broken corporate promises and a government policy that it characterizes as the "ownership society," which for workers essentially means, "You're on your own."

Rather than tackle the health care crisis in a meaningful way, President Bush proposes individual health savings accounts, which supposedly would help contain rising costs by making people "smart shoppers" for medical services because they would be paying more for them.

Presumably the shift from guaranteed pension benefits to market-based 401(k) savings programs fits with the administration's philosophy of personal "ownership" too.  The White House not only has expressed no concern over the trend, but it looks a lot like Bush's plan to shift Social Security to a risky system of individual Wall Street investments.

Clearly, the decline in union representation to less than 13 percent of the workforce today (8 percent in the private sector) and the resulting loss of power for working families is primarily responsible for the transition from New Deal values to what we might term the Raw Deal.

What's happening to worker benefits spotlights the linkage between union growth, political power and bargaining results – our key CWA Triangle programs.   It's why we are having discussions across CWA on what steps to take to be able to fight back on all of these fronts, every single day.  Let us know your thoughts by going online to ga.cwa-union.org/future.