When Stephen Greenberg and Norman Hirschfield fill prescriptions for their families, the nation’s health care crisis hits them hard.
Greenberg, who has a son with special needs, says when he began working for General Electric Co., (GE) 35 years ago, paying for health coverage took a smaller bite from his paycheck. Today, he says he pays more for fewer benefits.
Hirschfield, a 25 year GE worker, knows why GE is so determined to raise the amount workers pay for health insurance: “GE made $16 billion in profits last year, and $1.8 billion in its medical division alone. It has a real economic interest in decreasing benefits and increasing rates.”
The two men, both members of IUE-CWA Local 201 in Lynn, Mass., took their concerns to the streets, joining 17,000 other GE employees who walked out Jan 14-16 to protest the company’s unilateral mid-contract decision to increase health insurance co-payments on Jan. 1. The decision could cost each employee as much as $400 a year.
When contract negotiations begin this May, the 14 unions at GE anticipate the company again will demand workers pay more health care coverage, even though the workers accepted lower raises in their previous contract to preserve health benefits. “This strike will serve as a warning to GE that we will fight to keep affordable, quality health care,” says IUE-CWA President Edward Fire.
The GE strikers also sent a message to other employers that workers will not accept the destruction of hard-won health care benefits, Hirschfield says. “We’re not just striking for our own benefits, but for the rest of the nation.”
As union members lobby federal and state legislators for nationwide solutions to health care and pension costs, they are letting employers know they cannot abandon their responsibilities to workers.
Across the country this year, workers face difficult contract negotiations, with maintaining affordable health care and a secure retirement as the top bargaining goals.
“We are in a jobless recovery. The economy is growing, but it is not creating jobs and unemployment is rising,” says Lawrence Mishel, president of the non profit Economic Policy Institute. “Bargaining is always tough when unemployment is up. Rapidly rising health care costs and serious problems in some sectors, such as state and local governments and manufacturing, only add to the difficulty in bargaining.”
Union leaders agree the biggest issue likely will be rising health care costs, as employers seek to pass those costs to workers. According to the Henry J. Kaiser Family Foundation, corporations increased workers’ monthly health insurance premiums an average 27 percent for single coverage and 16 percent for family coverage from 2001 to 2002, despite average hourly wage increases of only 3.8 percent in 2001 and 2.9 percent in 2002. At the same time, health care costs for employers increased 14.7 percent this past year, according to the Labor Research Association- and profits of HMO’s and health insurers rose 25 percent in 2001.
Strategies for bargaining around health care issues often will depend on the financial health of the employer. The International Longshore and Warehouse Union ratified in January a new six-year contract with the Pacific Maritime Association (PMA) that provides for 100 percent employer-paid medical benefits and pension increases. The same month, the Communication Workers of America and the Electrical Workers reached a 20 month agreement with nearly bankrupt Lucent Technologies. The Lucent workers will receive 2 percent wage increases in 2003 and 2004 and employee health care co-payments will increase from $10 to $20 a visit.
“Due to the rising cost of health care, the company was in dire financial straits and on the verge of bankruptcy,” says Electrical Workers Manufacturing Department International Representative Troy Johnson. “We had no choice but to sit down and negotiate some changes for the sake of our current and retired members.”
If Lucent were to declare bankruptcy, its more than 60, 000 retirees would be left without any health care benefits, says CWA spokesman Jeff Miller. So employees agreed to the new health care arrangements to save the retirees’ benefits. “But we would never make concessions to a rich company,” he says.
Health care coverage also played a key role in the contract talks between Teamsters and the Motor Freight Carriers Association (MCFA), which represents the four major freight carriers-ABF Freight System Inc., Roadway Express Inc., USF Holland and Yellow Transportation. Negotiations broke down Jan. 20 when MFCA refused to take off the table its proposals for health care co-payments and reductions in health care coverage-while proposing a wage package below what was negotiated in 1998.
After the 85,000 workers overwhelmingly authorized a strike should a job action become necessary, the employer returned to the table and negotiators reached a tentative five-year agreement Feb. 6. The new agreement increases health and pension benefits over the previous contract. “This contract will provide a shot in the arm to American working families who have been faced with give backs and concessions over the last year,” says Teamsters General President James P. Hoffa.
Fighting for secure retirements
Along with health care, a major issue on the table this year is retirement security. Many pension funds are seriously under funded- and the reasons are the same for most companies, says Ron Gebhardtsbauer, senior pension fellow at the American Academy of Actuaries. Pension funds have been hit with triple whammy- the downward spiral in the stock market, low interest rates and a sluggish economy, all of which reduce companies’ return on pension investments. Corporations are required by law to contribute sufficient funds to make up the deficit, in some cases as soon as five year. “It’s like having to pay off your mortgage in five years in stead of in 30 years,” Gebhardtsbauer says. “At the same time, these companies are seeing health care costs rising and business is down, so this will be a tough year for bargaining.”
Large-scale pension fund failures in the past few years, especially in steel companies such LTV Corp. and Bethlehem Steel Corp., have wiped out an $8 billion surplus for the Pension Benefit Guaranty Corp., which insures pensions for about 44 millions Americans. The corporation reported a deficit o $3.6 billion in 2002, after having an $8 billion surplus in 2001. This is the federal agency’s first deficit since 1995.
Workers in the rubber industry face some of the toughest pension negotiations. Thousands of union workers will reach retirement age in the next few years and pension funds are seriously under funded, says John Sellers, executive vice president of the Steel Workers’Rubber/Plastics Industry Conference (R/PIC). Ensuring the secure retirements of those workers is one of the union’s top priorities as negotiators continue talks for a master contract that covers 40,00 workers and expires April 20.
Pensions will be an issue in the UAW’s bargaining with the Big Three Automakers in contracts covering some 330,000 workers. General Motors Corp. the largest of the Big Three, announced in January that its US pension fund ended the year with a $19.3 billion deficit, even though the company contributed $2.6 billion in 2002. Ford Motor Co. contributed about $1 billion to its pension funds in the past few months to cover shortfalls. Both companies are expected to ask for cutbacks in pension benefits, but UAW officials say they believe the automakers are profitable enough that they can cover the deficits without sacrificing the security of retirees.
With declining profits in the telecommunications industry and a sluggish economy, CWA and IBEW are concerned with retirement security. The main issue in discussions with Qwest/US West and Verizon will be job security, says Miller. The union has lost 40,000 telecommunications jobs over the past two years, primarily through attrition and buy outs.
“We’re concerned about the health of the industry, and we want to save jobs,” Miller says. “These are still profitable companies and we will try to find a way to protect jobs during this telecom meltdown.” The Qwest/US West and Verizon contracts which expire Aug. 5, cover 105,000 employees.
Public sector: Doing more with less
From coast to coast, states are facing declining tax revenues while struggling to pay an increasing number of federally mandated programs, such as homeland security, that are not reimbursed by the U.S. government. As a result, states are suffering their worst financial crisis since World War II, with a $189 billion budget gap for the three fiscal years 2002 through 2004- and the debt still is growing. In addition, state Medicaid costs grew more than 13 percent last year, the biggest jump in nearly a decade.
State and local governments gave tax breaks to businesses, and now they find themselves short on revenues, AFSCME Secretary-Treasurer William Lucy. Another factor contributing the states’ budget crises, says Lucy, is the “incredible shift of responsibility at the federal level to states,”
“President Bush’s policies don’t take into account the impact on state and local governments revenues of unfounded mandates and the downswing in the stock market,” Lucy says.
Among the largest public-sector contracts up this year: AFT and the New York City Board of Education, covering some 80,000 employees and New York State and Civil Service Employees Association/AFSCME, involving 77,000 state workers. In California, SEIU will negotiate a contract with Los Angeles County for 40,000 workers.
New York City Mayor Michael Bloomberg (R) has said he will not support pay raises for city workers, including teachers, until their unions agree to cost savings such as longer work days. Teachers are seeking improved wages and funding to enable the city to hire more teachers and reduce class sizes.
“The union represents people whose incomes have to go up, even in hard times, with the cost of living,” says Randall Weingarten, president of the United Federation of Teachers/AFT.
In New York state, the union is focusing on saving jobs by using its political strength to help increase state revenues, says Ross Hanna, CSEA/AFSCME’s chief negotiator. The union is backing a bill in the state legislature to control prescription drugs costs, which the state pays, for Medicare and Medicaid recipients.
In Los Angeles County, which stands to lose $650 million in state funds for public safety, parks, libraries and other programs, growing budge woes will be on the table when contract talks begin this summer with SEIU Local 660. The union is preparing a negotiating plan to address the county’s efforts to eliminate up to 18,000 jobs.
Acting as one
When negotiators for the Screen Actors and Television and Radio Artists meet with the nation’s advertisers, they will be united in their bargaining goals, having negotiated the contract jointly for the past decade. Leaders of the two unions, which share many common members, have been meeting since November 2002 to plan strategy and set priorities for the talks.
During contract negotiations in 2000, members of the two unions were on strike for six months, eventually beating back employer demands for pays cuts and gaining recognition for the unions’ jurisdiction in commercials recorded for the Internet.
This year, the unions face the same key issues as union members in industries across the board; health care and pensions. Rising health care costs have raised concerns that SAG and AFTRA members may lose some benefits or be asked to pay more for health care. At the same time, pension fund investments have taken some big hits in the stock market and the unions are considering asking the employers to increase their contributions, says ATRA President John Connolly. The current contract, which covers 130,000 members, expires Oct. 29.
:’We have to engage in a national debate about health care and pension security,” Connolly says. “These are major questions for all working Americans.”