Tuesday, February 22, 2011

New Era of Labour Conflict

Free market capitalism is praised for creating an efficient utilization of resources, producing  goods with high demand and low cost. Uncontrolled, it also has the disadvantages of reducing competition through corporate consolidation, producing unemployment, and concentrating wealth.

During the last century, federal reforms were legislated to reduce practices that limited competition (anti-trust acts); create social safety nets (unemployment insurance); and mitigate the impact of the business cycle (fiscal and monetary policies of the Federal Reserve Bank). 

In 1935,  in an attempt to reduce labour conflict and provide for a greater sharing of wealth, the U. S. passed the National Labor Relations Act, allowing employees to establish collective bargaining through labour union representation.   It became illegal for employers to interfere with the process of union certification, to attempt to intimidate employees, or to refuse to bargain in good faith.

We now have the sad situation in Wisconsin, in which the recently elected governor has announced that he doesn't believe in collective bargaining. His position is that management alone should establish wages, benefits, and working conditions.  The rationale given is the need to reduce a projected state budget deficit.  Further, he threatens the employees with massive layoffs, if he doesn't get his way.

These tactics are meant to intimidate employees and reduce their power in the workplace.  The proper, honest way to amend a collective agreement is through negotiation, not by decree.

Prior to the passage of the NLRA, clashes between union organizers and management security were frequently violent.  Employees advocating unionization could be fired and blacklisted.  They fought back through sit-ins and wildcat strikes.  I wonder if this is where we are headed again.

Saturday, February 19, 2011

Debt Woes

In 1993, Canadians became concerned about the amount of debt its federal government was accumulating.  The debt/GDP ratio had risen to 68% and 35% of all revenue was going to pay interest on the debt.  It was time to get the financial house in order.

Over the next few years, a number of unpopular measures were instituted.  The Goods/Services Tax was introduced; the federal government stopped cost sharing with the provinces for health and social services; Employment Insurance eligibility was curtailed.  For a dozen years (1997-2008), the Canadian federal government ran a surplus.  The debt/GDP ratio fell to 29%, by far the lowest of the G7 countries.

Canadians, as usual, took these changes with stoicism, perhaps even with some satisfaction.  There was grumbling about the GST, but not many demonstrations.  Part of the reason was that the increased burden of providing services was absorbed by the Provinces; and the cutbacks were followed by a period of relative prosperity, during which the economy grew.

During the current recession, the Canadian federal debt/GDP ratio has climbed back to 38%.  The situation in all other developed countries seems much worse.  In the U. S., it sits at 70%; (100%, if you count debt to the Federal Reserve).  Some European countries have debt over 100% of GDP.

The Canadian and U. S. federal figures, of course, don't show the debt of the Provinces/States.  The Provinces of Ontario and Quebec have fared more poorly than the western provinces, as the Canadian economy has shifted from manufacturing to resources.  Down the road, they may face more austerity.

In the U. S., many states are struggling with their budgets.  Sadly, in Wisconsin, the first remedy is an attack on the collective bargaining rights of the public employees.  Turning Wisconsin into a "right-to-work" state (union membership not required, regardless of vote) will not help the people of Wisconsin.          

The solution to U. S. debt woes is tax reform; an honest, perhaps unpopular, review of entitlement programs; as well as the question of how much world-policing can they afford. For all the complaining about taxes, U. S. tax rates are low.  Such deductions as mortgage interest are of most benefit to the wealthy.  And why mortgage interest any more than rent?  Most developed countries have some form of value-added or federal sales tax.  There are bound to be unpopular choices, but they are much better than attacking middle-class workers.

Wednesday, February 9, 2011

Pension Perils

Some say that I'm lucky to be retired and have an employment pension.  I agree.  My complaint is that my pension benefits seem to be deteriorating bit by bit.

I retired at a time when my employer was downsizing and the number of retirees suddenly increasing.  The Pension Board of Trustees announced that they could no longer afford the dental plan.  I could purchase Blue Cross dental insurance if I wanted.  Shortly after, the Extended Health Care annual deductible was increased from $30 to $250. 

The latest revelation from the Pension Trustees is that most of the group benefits are being eliminated, effective April, 2012.  This includes the Pension Plan portion of the Medical Services Plan premiums, which will increase my monthly payments from $45 to $109 ($768 annually); and Extended Health Care for spouses/dependents.  The latter covers 70% of the cost of prescription drugs, but it looks like I'll have to purchase more Blue Cross insurance if I want to include my wife's needs.  Group life insurance is also being eliminated, although I lost this a few years ago when I turned 65.  Those 60-65 will have to buy their own insurance (expensive when you are no longer in the larger pool of younger employees).

These benefits were promised, and we thought we were paying for them through years of contributing to the Pension fund.  We were assured that they would be there, and that the Plan was prudently administered.  The current newsletter states that the basic pension plan is secured and assured for life.  Unfortunately, that only means if nothing upsets the projections.

In reality, the Pension Board can't assure the pension.  Unforeseen events can bring it down.  Pension payout projections depend on forecasting the amount of contributions, the amount of benefit payments, and the amount of investment income.

When the BC Liberals reduced the size of Provincial Government in 2002-2003, the amount of contributions declined and the benefit payments dramatically increased.  This resulted in the elimination of dental coverage and the increased Extended Health Care deductible.  The current round of reductions is the result of mismanagement of the fund and a loss of $2.5 billion (14% of fund) in the economic downturn of 2008-2009.  Obviously not prudent management.  Although it has recovered somewhat, the amount of the Pension fund is still less than it was in 2007.

The consolation we are left with is that other major pension plans in BC are having to make similar changes.

Thursday, February 3, 2011

For All Seasons

Thomas Cromwell (1485-1540)
I was watching "A Man for All Seasons", in which Thomas Cromwell (1485-1540), Chief Minister to Henry VIII,  attempts in a heavy manner to persuade a very principled Thomas More to support Henry's divorce from Catherine of Aragon and marriage to Anne Boleyn.  I felt a little uncomfortable, Thomas Cromwell being my 14th Great Granduncle.

I am descended from Thomas' sister Katherine Cromwell.  Although Katherine's husband was Morgan ap Williams, her son Richard preferred the Cromwell association so much that he adopted his Mother's name (and his descendants kept it).

Katherine's grandson Henry Cromwell was grandfather (through his son Robert) of Oliver Cromwell (1599-1658), Lord Protector of England.  Henry's great granddaughter Edith Cromwell (through his son John and grandson Richard) joined her brothers in Maryland and married Christopher Gist, my 9X great grandfather.
Christopher Gist, George Washington

Christopher and Edith (Cromwell) Gist's grandson, also Christopher Gist, was a scout for George Washington; and in turn grandfather of George Gist (Cherokee Native name Sequoyah), who developed a syllabary of the Native language.

My 5X great grandmother Mary Gist, also descended from Christopher and Edith (and second cousin to Sequoyah)  married James Stevenson (1754-1845), who served in the Revolutionary War at the Battle of King's Mountain.  Mary's granddaughter Mary Stinson (shortened from Stevenson) married John White  (1807-1857), had eleven children, including my gg grandfather Robert White (1844-1938).
James Stevenson

As well as Thomas Cromwell,  "A Man for All Seasons" also includes Anne Boleyn, my 1st cousin 14X removed.  We are both descended from Thomas Howard (1443-1524), 2nd Duke of Norfolk, his daughter and my 13th great grandmother Katherine Howard being sister to Anne Boleyn's mother Elizabeth.  I have the same relationship to Henry VIII's fifth wife, Catherine Howard, daughter of Thomas Howard's son Edmund.
Unfortunately for Anne, Catherine, and Thomas Cromwell, they all lost their heads at the Tower of London; Anne and Catherine for adultery (treason) and  Thomas for mismanaging Henry's fourth marriage to Anne of Cleves.  My own ancestor, Katherine, was widowed in 1531 by the execution of her husband Rhys ap Griffith Fitzuryan, also at the Tower for conspiring against the King.