Union bosses are marching today in New York City to demand that the Senate pass the Dodd Wall Street Bailout Bill.
"It’s time to hold Wall Street accountable," Heather Booth, one of the organizers of the march, told Daily Finance in an interview about today’s protest.
Perhaps the rank and file union members would better spend their time marching on their own union headquarters demanding accountability for their pension funds.
While union bosses funnel millions into support of Democrats in elections nationwide (over $130 million in the 2008 Senate, House and presidential election cycle alone), pension funds of rank and file union members are grossly underfunded and in crisis.
“Union pensions which are by and large the multi-employer pensions are in trouble,” Rep. John Kline (R-Minn.), top Republican on the House Education and Labor Committee told HUMAN EVENTS. “One of the problems with these union pension plans is that the nature of the governing body is sort of half union members, half employers. The unfairness of it is the union members are there day in and day out — the employers revolve. The union members on these boards constantly push for greater benefits, greater benefits are awarded, and it’s simply unsustainable.”
“You now have orphans — that is employees and retirees who are part of these pension plans where there’s no employer anymore,” Kline said. “The burden on the employers that are left standing goes steadily up. The withdrawal liability is in millions and millions of dollars and would put companies out of business. They are in great trouble."
Kline points out that it is the rank and file member pension plans in particular that are in crisis. The officer pension plans of the very union bosses marching today on Wall Street are better funded.
“The officer pension plans are typically in much better shape than the rank and file pension plans,” Kline said. “Looking at raw statistics, the rank and file pension plan is funded at about the 79% level while the officer pension plans are funded at 93% on average.”
Kline said the rank and file union workers suffer from discrimination in myriad ways. As one particular example he pointed to a series of recent actions to remove the Department of Labor regulations that require union bosses to file LM-2 forms.
“These LM-2 forms require unions to report their financial activities in an effort to allow the department to crack down on frankly embezzlement on the part of some union leaders stealing money from the union members,” Kline said.
Kline said there is a thread in the Obama administration of a pro-union leader bias protecting the union bosses at the expense of the rank and file member in a whole series of actions.
“The problem is that there is a lack of accountability required of union leaders and no clear union pension financing rules,” said Dana Furchtgott-Roth, senior fellow and director of Hudson Institute’s Center for Employment Policy.
Her recent report, “Comparing Union-Sponsored and Private Pension Plans: How Safe are Workers’ Retirements?” produced with independent economist Andrew Brown found accountability requirements sorely lacking.
“Our report shows that union members have few assurances that the trustees of their pension funds are acting in their best interest,” Furchtgott-Roth said. “With the current low levels of union membership, unions are doing their best to recruit new members. The advertised benefits of joining a union sound appealing, but there is a widespread pattern of poor performance among collectively-bargained benefit pension plans that everyone should know about.”
The report shines a bright light on the problem: the deliberate underfunding of the rank and file union pension plans.
A summary of the report showed:
Officer pension plans are often better funded than those for rank-and-file union members.
The analysis reviewed 30 staff and officer pension plans relating to some of the largest 46 rank-and-file pension plans.
On average, the rank-and-file pension plans had 79% of funds needed to cover their obligations. Nine of the rank-and-file pensions were fully funded, while 24 were less than 80% funded.
Officer plans were 93% funded on average. While nine of the pensions were fully funded, eight were less than 80% funded.
Rather than negotiating better-funded pensions, unions spend money on politics.
Labor unions have contributed more than $130 million to the 2008 Senate, House and presidential election cycles.
This influence includes PACs, advertising for union member candidates, and forming “527” groups which allow them to donate but not support a specific candidate.
This policy, however, highlights the biggest problem with respect to union political spending. Such spending, by law, is supposed to come from voluntary contributions, not the dues that members are required to pay.
The full report can be found here on the Hudson Institute website. (pdf)
Remember while the labor bosses are marching on Wall Street today demanding more regulation for eveyone else, they’re working with the Obama administration behind closed doors to dismantle regulations that require their own financial accountability.