CTU attorney goes two-for-two in Op Ed pages... New York Times and Wall Street Journal on same day
The day after the Chicago Tribune published an op ed by Chicago Teachers Union President Karen Lewis, CTU attorney Tom Geoghegan went two-for-two with Op Ed pieces published in both The New York Times and The Wall Street Jounal. The Times article dealt with the attacks on Social Security by Republicans and some Democrats. The Wall Street Journal Op Ed was on a different topic, the attack by Boeing on its highly skilled union workers. Thomas Geoghegan has been one of the lawyers representing Chicago Teachers Union members in the federal litigation against the Chicago Board of Education that resulted in the federal courts upholding teacher tenure in Chicago as as a property right.
TIMES ARTICLE BELOW HERE:
Get Radical: Raise Social Security
By THOMAS GEOGHEGAN, Chicago, The New York Times (On line edition, June 19, 2011, national print edition June 20, 2011. http://www.nytimes.com/2011/06/20/opinion/20geoghegan.html?hp)
Chicago Teachers Union attorney Thomas Geoghegan (facing reporter, white shirt and tie) talked to the press on January 7, 2011, after CTU lawyers once again appeared in federal court against the Board of Education's firing of more than 1,000 teachers during the summer of 2010. Standing behind Geoghegan are several of the teachers who took part in the court proceedings as well as CTU Vice President Jesse Sharkey and Staff Coodinator Jackson Potter. Substance photo by George N. Schmidt.As a labor lawyer I cringe when Democrats talk of "saving" Social Security. We should not "save" it but raise it. Right now Social Security pays out 39 percent of the average worker's preretirement earnings. While jaws may drop inside the Beltway, we could raise that to 50 percent. We'd still be near the bottom of the league of the world's richest countries -- but at least it would be a basement with some food and air. We have elderly people living on less than $10,000 a year. Is that what Democrats want to "save"?
"But we can't afford it!" Oh, come on: We have a federal tax rate equal to nearly 15 percent of our
G.D.P. -- far below the take in most wealthy countries. Let's wake up: the biggest crisis we face is that most of us have nothing meaningful saved for retirement. I know. I started my career wanting to be a pension lawyer. In the 1970s, lawyers like me expected there to be big pots of private pensions for hourly workers. By the 1980s, as factories closed, I was filing hopeless
lawsuits to claw back bits and pieces of benefits. Now there are even fewer bits and pieces to get.
A recent Harris poll found that 34 percent of Americans have nothing saved for retirement -- not even a hundred bucks. In this lost decade, that percentage is sure to go up. At retirement the lucky few with a 401(k) typically have $98,000. As an annuity that's about $600 a month -- not exactly an upper-middle-class lifestyle. It's too late for Congress to come up with some new
savings plan -- a new I.R.A. that grows hair, or something. There's no time. We have to improve the one public pension program in place. Should we means-test it? No. I don't care if they go out and buy bottles of Jim Beam: let our elderly have an occasional night out at a restaurant.
The most paralyzing half-truth in this country is that people hate taxes. People are willing to pay taxes that they spend on themselves. Two-thirds of those surveyed in a CBS/New York Times poll in January were willing to pay more taxes to save Social Security at its modest level. To "save" it, most of us don't need to pay. We could lift the cap on high earners, the 6 percent of workers who make over $106,800 a year. If earnings above the cap were subject to the payroll tax with no
increase in benefits to high earners, there would be no deficit in the Social Security trust fund in 2037, as projected.
If people are willing to pay more just to "save" Social Security, they should be glad to pay more to raise it.
What does it take to get Social Security up to half the average worker's earnings? According to the National Academy of Social Insurance, to close the deficit and raise benefits to nearly half of average worker earnings, we would need to find an additional 5 percent of taxable payroll, or find the money elsewhere. If we lift the cap on the payroll tax without paying more benefits to those above it, that gets us 2.32 percent (or a bit less if we slightly increase benefits to the rich). Dedicating revenues from the estate tax at its 2009 levels to Social Security gets another half percent. A few other tweaks, like covering new public employees, add another 0.42 percent. The remainder can be found by raising the payroll tax by roughly 1 percentage point for both employees and employers.
I can hear the argument: It will discourage jobs, blah, blah. While I sympathize with the health costs employers pay (I am an employer, at our tiny law firm), they have had a windfall on pensions. In 1975, when I left law school, around two-fifths of American workers were in defined-benefit plans. Now it's just a fifth, and dropping. For employers, that's not the real
bonanza.
Retirees today are shortchanged on Social Security because they have been shortchanged on wages for their entire working lives. The labor economist Richard B. Freeman points out that the hourly earnings of workers dropped by 8 percent from 1973 to 2005 while productivity shot up 55 percent or more. The United States is one of the few developed countries where workers are routinely cheated of a share in higher productivity.
And where has the money from the extra productivity gone? It's gone right to the top, to the top few percent. If wages had been paid fairly based on productivity, there would have been enough money subject to the payroll tax to avoid even a modest shortfall.
As I write, the Democrats are proposing to cut payroll taxes -- supposedly to create jobs. But the last cut in the payroll tax, a few months back, led to little or no hiring. And did I mention the Paul Ryan plan? Just wait until the Democrats accept some "reasonable" version of this Republican document.
A bigger pension -- a raise in Social Security benefits -- is the stimulus this demoralized country needs. Come on, Democrats: think of F.D.R., Robert Wagner, or heck, even Lyndon B. Johnson. Let's ask ourselves: Who are we for?
Thomas Geoghegan is the author of "Which Side Are You On?: Trying to Be for Labor When It's Flat on Its Back."
WALL STREET JOURNAL ARTICLE BELOW HERE (From National Edition, Chicago, Section 1, p. A15):
Boeing's Threat to American Enterprise, By Thomas Geoghegan
Conservatives are in an uproar that the general counsel of the National Labor Relations Board has filed an unfair labor charge against Boeing. It seems the president of Boeing was unwise enough to blurt out that his company would move a production line to South Carolina as payback for past strikes by machinists in Seattle. It's a dead bang violation of the National Labor Relations Act, even if it comes as a surprise to Republicans and many other Americans.
Section 7 of the Wagner Act, passed in 1935, states that all workers can engage in concerted activities without reprisal. The president of Boeing said, in effect: You exercise those rights and we're moving. Companies have long done such things, of course, but CEOs aren't usually so gaffe-prone as to say so.
The Boeing case may show that labor is so out of mind that CEOs have forgotten what they can or cannot say. It would have been easy enough for Boeing to move the production line to South Carolina and let the workers in Seattle draw the conclusion. There is little bar to a runaway shop if the CEO is careful with his public statements.
Yet the Boeing case has a scarier aspect missed by conservatives: Why is Boeing, one of our few real global champions in beefing up exports, moving work on the Dreamliner from a high-skill work force ($28 an hour on average) to a much lower-wage work force ($14 an hour starting wage)? Nothing could be a bigger threat to the economic security of this country.
We should be aghast that Boeing is sending a big fat market signal that it wants a less-skilled, lower quality work force. This country is in a debt crisis because we buy abroad much more than we sell. Alas, because of this trade deficit, foreign creditors have the country in their clutches. That's not because of our labor costs — in that respect, we can undersell most of our high-wage, unionized rivals like Germany. It's because we have too many poorly educated and low-skilled workers that are simply unable to compete.
We depend on Boeing to out-compete Airbus, its European rival. But when major firms move South, it is usually a harbinger of quality decline. Over and over as a labor lawyer in the 1980s and 1990s, I saw companies move away from Chicago, where the pay was $28 an hour, to some place in South Carolina or Louisiana, where the pay was about half that. While these moves aggrieved me as a union lawyer, it might have consoled me as an American if those companies went on to thrive globally.
But too often, alas, it was the beginning of the end, as it was for Outboard Marine Corporation, where I once represented workers. In the 1990s, the company went from the high wage union North to the low wage South and was bankrupt by 2000. There are reasons workers in the North get $28 an hour while down in the South they get $14 or even $10. Adam Smith could explain it: "productivity," "skill level," "quality."
Here is yet another American firm seeking to ruin its reputation for quality. Why? To save $14 an hour! Seriously: Is that going to help sell the Dreamliner? In terms of the finished product, the labor cost is minuscule: $14 in hourly wages, at most. It's incredible that conservatives claim such small differences in labor cost would be life or death to Boeing. It's not labor cost but labor skill that is life or death to the survival of Boeing, never mind pilots and passengers.
If the history of runaway shops proves anything, it's that many go "South" in more than one sense of the word. If that sounds unfair to the South, it is union busting that has inflicted the real unfairness in the region: income inequality and inferior schools.
At this moment especially, deep in debt, we cannot afford to let another company like Boeing self-destruct. Boeing is not a product of the free market — it is an extension of the U.S. Government. Over the years, our taxpayers have paid to create a Boeing work force with exceptionally high skills. That work force is not just an asset for Boeing — it's an asset for the country. Why should the country let Boeing take it apart? Every American should be rooting for the NLRB's general counsel, as the board itself has not yet found a violation.
Most depressing of all, Boeing's move would send a market signal to those considering a career in engineering or high-skilled manufacturing. It is a message that corporate American has delivered over and over: Don't go to engineering school, don't bother with fancy apprenticeships, don't invest in skills. No rational person wants to take on college or even community college debt to come out and work on the Dreamliner — which should be the country's finest product — for a miserable $14 an hour. If a single story in the news can sum up the reasons for America's global decline, it's the decision to build a Dreamliner that will gut the American dream.
Mr. Geoghegan a lawyer in Chicago, is author of "Which Side Are You On? Trying to Be For Labor When It's Flat on Its Back" (Farrar, Straus and Giroux, 1991).
