Unions & Labor Policy
- Release time allows government employees to take a leave of absence from their jobs to perform union work.
- Many government employees working for the union are paid by taxpayers while still accruing benefits as if they were working in the public sector.
- In the School District of Philadelphia, up to 63 employees can perform union work while still accruing publicly-provided benefits.
In a special Friday night voting session, board members in Monessen School District unanimously approved a new teachers’ contract, which runs through 2018. The terms of the contract, including the cost, is a secret. Still, local property taxpayers are now contractually obligated to foot the bill. Sound unfair? And Monessen is only the latest example of a secretive collective bargaining process that leaves taxpayers in the dark.
Whenever decisions over public money are made, government and elected officials need to be open and transparent. Taxpayers have the right to know how their money is spent. This is common sense. And it’s why a growing number of states are bringing more transparency to public sector labor negotiations. Here in Pennsylvania, the Senate has already passed contract transparency legislation.
SB 645, sponsored by Sen. Patrick Stefano (Westmoreland), requires a summary of public sector collective bargaining agreements be posted on state, school district, or local government websites two weeks prior to signing. This allows taxpayers to see cost projections and raise objections if the proposed contract does not represent the best interest of taxpayers and workers.
The Pennsylvania House now has an opportunity to take up SB 645.
Without reform, taxpayers will continue to be stuck paying for secretive backroom deals as exemplified in Monessen School District. Notifying the public after a labor contract is already signed is too little, too late, as there is no turning back. Instead of treating taxpayers as an afterthought, lawmakers should make labor contracts transparent and give Pennsylvanians a seat at the table.
The first month of a new school year is an exciting—but stressful—time for school teachers. This is particularly true for young, newly-hired teachers who must quickly acclimate to their students, colleagues, and a professional environment.
In Pennsylvania, however, rookie teachers face an additional burden. A recent article in the Wall Street Journal explains how the commonwealth’s hemorrhaging pension system stacks the deck against young teachers:
The pension plans…are structured to favor the small minority who teach in a single system for a working lifetime, at the expense of the vast majority who leave the system much earlier in their careers.
Our state’s backloaded defined benefit pension system is a bad deal for younger teachers—not to mention workers who begin their career late or shift to another job. Fewer than 25 percent of Pennsylvania’s teachers will remain in the school system long enough to even become vested in their pension.
The WSJ article continues:
Under current plan structures, teachers accrue almost no retirement wealth in their first several years—then accrue substantially more as they near retirement age. The hypothetical Philadelphia teacher earns an average of about $1,326 in retirement compensation (in present-value terms) during each of her first 25 years of employment, followed by an average of about $37,593 during each of her last 10 years.
The Pennsylvania Public School Retirement System’s actuaries expect that about 80% of teachers will leave the system before their pension benefit is worth a single dollar. And according to a report last year from Bellwether Education Partners, more than half of all public-school teachers nationally will exit their school systems before their pensions vest.
Pennsylvania’s young public school teachers deserve better. They deserve a retirement account that is portable, and they deserve to own their retirement savings. Helping young teachers is yet another reason for Gov. Wolf to re-consider his veto of meaningful pension reform.
Government union leaders argue against meaningful pension reform with radical rallying cries like, "Your pension is under attack!" and mounds of other misinformation. Here's a quick fact check on some of the most common pension reform myths:
1. Myth: “Pension reform will cost taxpayers $40 billion.”
Fact: The Pennsylvania Employment Retirement Commission (PERC) estimates Senate Bill 1—passed by the legislature but vetoed by Governor Tom Wolf—would save taxpayers $10.1 billion over 32 years. The $40 billion figure refers to a different bill from a different legislative session. Moreover, the number is misleading because it assumes pension funds would generate a lower stock market return under the reform proposal.
2. Myth: “Defined contribution plans are bad for workers.”
Fact: If this were the case, unions would not offer defined contribution plans to their own employees. But they do. PSEA, SEIU, UFCW, AFSCME, AFT, AFL-CIO and PFT all offer a defined contribution plan, like a 401(k), to their employees, either alone or as part of a hybrid plan.
|Union||PSEA||SEIU||UFCW 1776||AFSCME 13||AFT-PA||AFL-CIO Pennsylvania||Philadelphia Federation of Teachers|
Defined Contribution Plan Started
1972 & 2013
1979 & 1997
Also has Defined Benefit Plan?
Source: U.S. Department of Labor form 5500 searchable database
3. Myth: “Defined benefit plans provide a superior retirement.”
Fact: The Pew Research Center suggests state workers who leave their jobs after 10, 15 and 18 years of service would enjoy higher retirement income under Senate Bill 1, relative to the current system. This is due to the design of defined benefit plans, which tend to backload benefits.
Defined contribution plans are more generous for workers who begin their careers late or shift to another job—in other words, for the vast majority of today’s workforce. For example, fewer than 25 percent of Pennsylvania’s teachers will stay in the school system long enough even to become vested in their pension.
4. Myth: “Defined contribution plans cost more to administer and provide inadequate investment returns.”
Fact: In practice, large defined contribution plans cost less to administer than the average public sector defined benefit plan, as highlighted in a new study by Dr. Josh McGee for the Manhattan Institute.
In fact, McGee points out fees for the Pennsylvania Public School Employees Retirement System (PSERS) have tripled the average cost of the largest defined contribution plans. Gov. Wolf, who has expressed concerns about the investment fees state pension plans pay each year, should take note.
McGee's study also finds that investment returns are similar for defined contribution plans and that most defined contribution plans offer annuities—providing predictable annual income.
The facts are clear: meaningful pension reform is a critical protection for union workers. It would fulfill promises to current workers while providing future workers a more secure and flexible retirement.
Unfortunately, union members have been misled by their union leadership. On annual reports filed with the US Department of Labor, unions report exactly how much they spend on "political activity and lobbying".
Unions are also required by the IRS to notify members about how much of their dues go to politics. PSEA, for instance, estimates 10 percent of dues will be used on politics. To keep members in the dark, PSEA buries this disclosure notice deep within their magazine, and no longer posts it online.
The only thing unions cannot spend dues money on is direct contributions to candidates. These contributions come from Political Action Committees (PACs)—though these campaign contributions are also deducted from government workers' paychecks at taxpayers expense.
Union dues can also be funneled to "SuperPACs." These political committees support candidates for office—explicitly calling for or against the election of a candidate (though spending cannot legally be coordinated with a candidate).
As the Pennsylvania Department of State notes, these SuperPACs—technically called "independent expenditure committees"—can receive unlimited amounts of union dues. Last year, three government unions (AFSCME, the National Education Association, and the American Federation of Teachers) gave $1.6 million in union dues to a SuperPAC called Pennsylvania Families First—which supported Gov. Tom Wolf's election.
It is unfortunate that union leaders continue to mislead their members on how much they are spending from workers' dues on politics.
New documents obtained by the Commonwealth Foundation (publicized by the Post-Gazette in a recent story) show a frightening closeness between Gov. Wolf and union leaders, particularly leaders at the SEIU.
In 2014, Tom Wolf was the biggest recipient of union campaign contributions. Unions donated more than $3.4 million directly from union PACs—plus millions in additional support through union “independent expenditures”—to the Wolf campaign. SEIU led the way with more than $988,000 in contributions. It appears those donations are paying off.
Michael Brunelle, the former executive director of SEIU's PA State Council, is now special assistant to the governor and regularly collaborates with his former employer. Emails between Mr. Brunelle and union officials show the administration sharing news releases, talking points, and other documents before they are published.
Brunelle’s emails also show the administration working with SEIU, the Pennsylvania Budget and Policy Center, and the "Better Choices for PA Coalition" to coordinate press conferences in support of Gov. Wolf's tax proposals. Coincidentally, the coalition continues to blame Republicans for prolonging the budget stalemate and defend Gov. Wolf, despite his veto of all human services funding and his cancellation this week of budget negotiations.
The Wolf administration regularly discusses how many letters and calls SEIU, the Pennsylvania State Education Association (PSEA), and others are making to lobby for Wolf's budget—and advises where to send those letters.
Most worrisome is the collusion over a controversial executive order.
SEIU officials helped draft an executive order that enabled SEIU and AFSCME (American Federation of State, County & Municipal Employees) to rapidly unionize tens of thousands of home health care workers—and deduct union dues from their paychecks. These dues can be spent on political activity and lobbying to push the governor's agenda. This executive order is currently being challenged in court.
As James noted in a post earlier today, Gov. Wolf's education agenda has clearly put PSEA and PFT (Philadelphia Federation of Teachers) leaders ahead of the needs of children.
Another indication of labor’s influence over the governor is David Fillman’s recent appointment as chairman of the State Employees’ Retirement System (SERS). Fillman is the executive director of AFSCME’s Council 13, representing the largest group of state workers. AFSCME's refusal to support real pension reform may lead to Detroit-style pension benefit cuts.
Union leaders' influence with the Wolf administration shows why reforms like contract transparency during labor negotiations are needed.
How can a governor in lock step with state employee labor union expect taxpayers to trust him to negotiate contracts worth billions of dollars with his largest campaign contributors—behind closed doors?
Collaborating with political allies isn't a crime, but Gov. Wolf's record of supporting one special interest to the detriment of middle-class families, students, and home care workers should trouble anyone who believes our elected officials should serve the people, not union leaders.
Mary loves teaching culinary arts, but she doesn’t want her name used in political mailers. Jane spent a career in the classroom, but she can’t donate the money she earned to her chosen scholarship fund. And Frank is a veteran teacher who wants to resign his union membership but can’t until 2017, after he is eligible for retirement.
Mary, Jane, and Frank are just a few of Pennsylvania’s teachers inspired by a passion to educate but, stymied by the union leaders charged with representing them. Now, they are speaking out in support of the Teacher’s Bill of Rights, presented by Free to Teach (FTT), a project of the Commonwealth Foundation.
FTT aims to enshrine a Teacher’s Bill of Rights into law to end the exploitation of Pennsylvania educators by the politically powerful. The list of rights includes:
- The right to associate professionally as I choose, without being forced to contribute financially to any organization I do not support.
- The right to be rewarded as a professional based on my job performance.
- The right to protect my paycheck and not be forced to fund political views I oppose.
- The right to have flexibility to meet the learning needs of students regardless of job action stipulations by the union.
- The right to employment based on merit, not just years of experience.
Regrettably, these rights are only aspirations for most Pennsylvania teachers. Under the current system, many teachers are mistreated at the hands of their union. Here are a few examples:
- Frank is trapped. Frank, a high school teacher in Lackawanna County and 28-year member of the National Education Association, disagrees with the political causes his dues support. When he learned of his right to resign union membership, he also learned his current contract prohibits him from leaving the union until June 2017, after he is eligible for retirement. “The union does not represent or even respect my deeply held convictions,” Frank says. “It forces me to violate them.”
- Mary was exploited. Williamsport-area educator Mary Trometter was a member of the Pennsylvania State Education Association (PSEA) for more than 20 years. She was shocked when her name was used—without her consent—in a political mailer the union sent to her husband asking him to “join Mary in voting for Tom Wolf for Governor.”
“I was so appalled by the content of this election letter, I ripped it in two before realizing that I should speak up about my experience,” Mary wrote. “Unions used to protect the little guy, like my great-grandfather. But they’ve become what we used to fight against. Now they’re the big bosses and ordinary union members are the little guy.”
- Jane was rejected. As a religious objector to union membership in Chester County, Jane Ladley donated her “fair share fee,” otherwise “owed” to the teachers’ union, to charity. But the PSEA rejected her choice of a scholarship fund that was designed for high school seniors who displayed an interest in the U.S. Constitution. “They are telling me which groups I have to choose,” Jane said. “It’s a wrong that needs to be righted.”
Using teachers as political pawns and ignoring their will demonstrates a lack of respect for teachers and the students they teach. Once educators are no longer subject to the whims of unions, they will truly be free to teach.
Did Attorney General Kathleen Kane promise a sweetheart deal to union leaders in exchange for support of her controversial chief of staff? According to The Philadelphia Inquirer, enough evidence exists to warrant an FBI investigation into the matter:
In recent months, agents have questioned at least three people about several issues, including Kane's role in negotiating a new contract with the union representing narcotics agents in her office, according to people familiar with the matter.
The agents sought information about whether Kane suggested to union officials that she would look favorably on their contract if they supported her embattled chief of staff, sources said.
The investigation may end without any charges filed against Kathleen Kane. However, the fact that Kane and other high-ranking government officials—like Gov. Wolf—can promise favors under a veil of secrecy during contract negotiations should greatly concern Pennsylvanians.
Already this year, the Wolf administration ratified and signed a contract worth billions of dollars without public input. Likewise, school boards in eastern and western Pennsylvania have rushed into new deals without any public awareness
This is why collective bargaining transparency is essential.
Making the collective bargaining process transparent will let taxpayers demand better deals for their money. Politicians will no longer be able to negotiate in the shadows of closed-door offices. Instead, voters will have a window to peer into during deal-making.
Legislative leaders have rightly rejected a so-called pension reform "compromise," a plan that fails to address the problems in our pension system and continues to put our kids and grandkids on the hook for our pension liabilities.
It's that burden on future generations that prompted Jim, a teacher in Lawrence County, to speak out.
I chose teaching because I enjoy interacting with students and helping them learn. My science classes show students that certain actions yield predictable results. With this in mind, I am particularly concerned about Pennsylvania’s current retirement system for state employees, which includes public school teachers.
Our pension system is underwater by more than $50 billion and, without change, will sink billions deeper. While this is bad news for educators, it’s downright frightening for parents and catastrophic for our Commonwealth.
My wife and I have five wonderful daughters. We’ve raised them to be responsible and self-sufficient. Only a hypocrite would ask them to deprive their children - my grandchildren - in order to pay for my retirement.
The truth is, pensions were originally offered with good intent: to retain quality state employees when higher pay was available in the private sector. Yet, according to 2014 data from the Bureau of Labor Statistics, the average salary of Pennsylvania state employees is higher than those of private sector employees. The original justification for defined pensions is now moot.
The pension crisis is not another political soapbox issue. I know what it’s like to be faced with the unexpected. In 2008 when the economic downturn hit, I was working as a patent attorney and had my own pension plan. The high cost of this pension compelled me to terminate my own pension - I just couldn’t afford it. At the same time, a teaching opportunity arose that allowed me to continue providing for my family’s future.
The vast majority of private companies have realized the dangers of defined benefit pension plans and have switched to defined contribution plans, such as a 401(k). Unlike pensions, employees legally own the money in a 401(k) plan. Investments move with the employee, can be accessed before retirement, can compensate for inflation, can be left to one’s children, and exist independently of any employer’s fiscal status.
We must fix our broken pension system. The future retirement of state employees should not be dictated by politicians, and the faulty formula will continue to produce abysmal results. Passing the costs of today’s broken system to our children is morally unacceptable.
The newest state contract with AFSCME—the union representing more than 30,000 state workers—was signed earlier this week.
Yet citizens still cannot get copies of this contract online.
It is now 115 days since the first report of an agreement, and 87 days since union members voted on the deal.
So why aren’t the contracts being shared with taxpayers?
Because the new agreement is only for one year, Gov. Wolf and AFSCME leaders—who contributed more than $1.2 million to Wolf’s campaign—will continue negotiations on yet another deal. The negotiations will occur behind closed doors.
Thankfully, legislation that would shed a light on this process—and give taxpayers an estimate of the cost of union contracts before they are signed—sits before the state House now. It is critical that Pennsylvanians have more transparency in these secret union deals.
Political mailers supporting candidates are par for the course during elections—unless those mailers are sent by government unions and funded with members’ dues. Then, they’re illegal.
But that didn’t stop the Pennsylvania State Education Association (PSEA) from sending them—or the Pennsylvania Labor Relations Board from punting on its authority to enforce the law.
Last fall, Assistant Professor and PSEA member Mary Trometter opened a letter from the PSEA addressed to her husband, asking him to “join Mary in voting for Tom Wolf for Governor on November 4.”
Appalled not only at the partisan mailer but that her name was used—without her permission—to endorse Wolf, Mary decided to hold the union accountable. She and The Fairness Center filed a charge with the PLRB. Recently, though, the PLRB announced its function was not to enforce the law and sent the case to Attorney General Kathleen Kane’s office for enforcement.
The question isn’t whether PSEA used members’ dues for politicking—they admitted to this. The question is whether those charged with enforcing the law will turn a blind eye and continue to let the union exploit members for political gain.
Mary plans to appeal the PLRB’s decision and is also calling on AG Kane to enforce the law.
Legislation introduced in the House and Senate would also protect teachers like Mary from being used as ATMs to fund union campaigning. “Mary’s Law,” also known as paycheck protection, would require union leaders to go directly to members to collect money for politicking, instead of relying on taxpayer-funded collections to advance the union’s political agenda.
It’s indefensible that the PSEA thinks it can take Mary’s dues money and hijack her name for political gain.
You can stand with Mary by urging your lawmakers to support Mary’s Law.
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