July 2012 Labor Notes

June 1st brought terrible news on the jobs front: the previous month saw only 69,000 jobs created, and the unemployment rate climbed back up to a dismal 8.2 percent. To add insult to injury, previous months’ jobs numbers were revised downward as new data showed that fewer jobs were added in April and May than previoulsy thought.

Wisconsin’s gubernatorial recall election was a devastating set-back for Big Labor, to be sure (see the July, 2012 issue of Labor Watch for details). But unions also lost big in California, where voters in two cities approved drastic cuts to public-employee pensions. As the New York Times noted, “they did so in a way governments traditionally avoid: moving to cut not just the benefits of future hires, but also those of current city workers, whose pensions generally have much stronger legal protections than those of private-sector workers.” The votes were overwhelming; 66 percent for San Diego and 69 percent in San Jose. Interestingly, Michael Barone notes that those cities voted “63 and 69 percent” respectively for Barack Obama back in the 2008 presidential election.

Union officials have responded to the shellacking they received in Wisconsin and California by…calling for higher taxes? Appearing on FOX News Sunday with Chris Wallace on June 10th, AFL-CIO Deputy Chief of Staff Thea Lee was asked how cities and states can continue paying for the bountiful health and pension benefits of public workers when so many local governments are faced with severe budget crises. Ms. Lee’s answer? “We absolutely could raise taxes, and we ought to raise taxes.” Even after the Wisconsin wake up call, Big Labor failed to get the message – the way to America’s heart is not through its wallet.

Like father like son: On May 10th James J. Kearney Jr. was sentenced to 30 months in prison and three years’ probation for embezzling $560,000 from a Jersey City, New Jersey construction union. Prosecutors say that beginning in January 2009, Kearney, formerly the secretary-treasurer for local 45 of the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers (IAIW) union, withdrew $471,000 in cash from the union’s Bank of America account and pocketed $90,365 in membership dues and other fees from the Jersey City union. Kearney admitted to using the money for personal use, primarily to pay off outstanding debts from sports gambling. This case is unrelated to an ongoing investigation of his father, James Kearney Sr. (former local 45 business manager), who was arrested last November for soliciting – and receiving – bribes to allow contractors to hire nonunion workers. If crime runs in the family, then perhaps luck does too, and Kearney Sr. will receive an equally lenient sentence.

The Service Employees International Union (SEIU) is teaming up with Priorities USA Action, a pro-Obama super PAC, to launch a $4 million ad campaign against Mitt Romney that will target three swing states with large Latino communities: Colorado, Nevada, and Florida. The effort will feature 30 second TV ads and minute-long radio ads, with brief Romney sound bites in English and reactions from citizens in Spanish. Priorities USA Action is a progressive super PAC that receives significant funding from the SEIU and Dreamworks Animation CEO Jeffrey Katzenberg.

36-year old Pedro Palacios has pled guilty to wire fraud, admitting he wrote over $225,000 worth of unauthorized checks from a Texas Border Patrol union account. Palacios was hired to repair a union computer by his father-in-law, who was then treasurer of the Border Patrol Union Council Local 2455. Palacios, who admitted to forging signatures on over 60 unauthorized checks, appeared before a federal judge in Laredo, Texas on June 11th, and he is currently free on bond awaiting his sentencing.

On May 21, members of the American Federation of the State, County, and Municipal Employees (AFSCME) settled a dispute with the Sharpsville Area School District of Pennsylvania over the right to eat spoiled food. Unionized cafeteria workers had been required to pay for consumables that had expired or that had been reheated, which state food regulations state cannot be served to students, but the union felt that that seemingly sensible prohibition “violated established past practice.” The settlement states that unionized cafeteria workers can now in fact consume the expired products, at their own risk, for no cost. Oh, sweet victory…or in this case, pungent victory.