New Adventures In The Law Of Unintended Consequences

Yesterday reported that 40,000 Longshoremen, members of the International Longshore and Warehouse Union (ILWU), have formally ended their association with the AFL-CIO. In a letter to Richard Trumka, ILWU President Robert McEllrath cited quite a list of grievances as reasons for the dissolution of their affiliation, but prominent among them was the AFL-CIO’s support of Obamare. The AFL-CIO President Richard Trumka is a strong supporter of President Obama and worked hard for the passage of ObamaCare. Like the rest of us, Mr. Trumka is now realizing what ObamaCare will do to America‘s healthcare system and to union healthcare programs, and is no longer supporting ObamaCare.

The article reports two areas of disagreement:

The Longshoreman leader said, “President Obama ran on a platform that he would not tax medical plans and at the 2009 AFL-CIO Convention, you stated that labor would not stand for a tax on our benefits.” But, regardless of that promise, the President has pushed for just such a tax and Trumka and the AFL-CIO bowed to political pressure lining up behind Obama’s tax on those plans.

McEllrath also went on to say that they support stronger immigration reform than the AFL-CIO is supporting.

The article reminds us that only 11.3 percent of the Americans belong to unions. In 2012, 35.9 percent of public-sector workers belonged to unions, and 6.6 percent of private sector workers belonged to unions. Unions need to expand their membership in order to fund their pension funds.

As previously reported at

In a column in the Washington Examiner in April, Mark Hemingway pointed out that the average union pension plan had only enough money to cover 62 percent of its financial obligations.  Pension plans that are below 80 percent funding are considered “endangered” by the government; below 65 percent is considered “critical.”  Union membership is declining, which means that less people are paying into these funds.

The fact that the ILWU is walking away from the AFL-CIO is significant. This is a serious blow to the unionization of America.

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The Pot Calling The Kettle Black

The problem with class envy is that it gets old and boring after a while. All of us would like to make more money, but that doesn’t mean we have to resent the people that do. If someone makes their money honestly, we should celebrate their success–not try to take it away from them.

Well, not everyone sees it that way. The Washington Free Beacon posted an article today about AFL-CIO President Richard Trumka. Mr. Trumka has been criticizing CEO pay, stating, “Runaway CEO pay isn’t just bad for our economy, it’s bad for the morale of working families, too. All workers, from the executive suite down to the shop floor, contribute to making a company successful. But these corporations are buying into the myth that the success of a corporation is the result of its CEO alone.”  He is absolutely entitled to his opinion, but do his words sound a little different when you realize that he earns more than eight times what the average American worker earns.

The article reports:

According to the Center for Union Facts, Trumka brought home a gross salary of $264,827 in 2010, plus another $18,513 in additional compensation, to represent his union. The union leader has earned well over $200,000 every year since he was promoted to Secretary Treasurer in 2003.

In 2011, Trumka earned $293,750.

Unions have been major contributors to democrat political campaigns. In the 2010 mid-term elections, the AFL-CIO gave almost a million dollars, 93 percent of those donations going to Democratic candidates.

Mr. Trumka’s statement might carry more weight if he practiced what he preaches.

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Political Rumblings

Yesterday Ed Morrissey at Hot Air posted an article about union bosses being dissatisfied with the progress of unions under Democrat administrations.

The article reports:

The growing rift between labor and their Democratic allies was on full display Thursday, as AFL-CIO President Richard Trumka told reporters that labor groups are planning to scale back their involvement with the Democratic Party in advance of the 2012 elections.

Going forward, Trumka said, the labor movement will build up its own political structures and organizations rather than contribute to and depend on the Democratic Party’s political operation. …

Labor has traditionally been a major contributor to Democratic candidates and causes around the country. Trumka said that their outside effort will help keep union-backed candidates more accountable for promises made on the campaign trail.

“Let’s assume we spent $100 in the last election,” he said, explaining the union’s position.

“The day after Election Day, we were no stronger than we were the day before,” said Trumka. “If we had spent that [$100] on creating a structure for working people that would be there year round, then we are stronger.”

What is this really about? The unions have spent a tremendous amount of money supporting Democrat candidates. Unions accounted for three of the top five high-spending outside groups in the 2010 election cycle. Needless to say, they were not as successful as they had hoped. Because of problems with union pension funds, unions need labor-friendly politicians in power to keep them going. Unions depend on growth in membership to keep funding their pension plans so that the members who have paid in over the years will get paid the pensions they were promised. According to the Pension Protection Act of 2006, pension plans whose funding levels are below 80 per cent are considered endangered, and plans whose funding levels are below 65 per cent are considered in critical condition.

It was reported in on March 2, 2010:

“The SEIU National Industry pension fund is right at the 65% mark. The Newspaper Guild’s plan is at 62.8%, which is interesting in that newspapers seem uninterested in reporting on the problem. Sheet Metal Workers National is only funded to 38%.” 

This is a ponzi scheme. Unless the unions drastically increase their membership in the very near future, their pension funds will run out of money. It will be interesting to see exactly what the unions do in 2012. Strong union support of candidates who are not traditional Democrats could create a huge problem for the Democrats in national and local elections.


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