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More Businesses Victimized by Nevada Prison Industries

More Businesses Victimized by Nevada Prison Industries

By Bob Sloan

– Other Business owners complain of unfair competition –

When researching material for the Study of Nevada’s Prison Industry Program (released in January), I discovered that in addition to several steel fabrication companies, several other industries and manufacturers have come forward saying they’ve also been compromised by Nevada’s prison industry.  These businesses include; embroidery (Carson City), truck manufacturing (water trucks for construction use), auto restoration and repairing (classic cars) and companies involved in repackaging and/or resale of returned or refurbished goods.

In addition to those industries being victimized, any Nevadan that registers a motor vehicle, trailer or semi that requires a license plate is also being forced to contribute to the profits of the prison industry.

Under a contract with the Bureau of Motor Vehicles, the prison industry receives $.50 for every license plate “manufactured” and distributed in Nevada.  This fee appears to be in addition to the current contract between the NDOC prison industries and the BMV that sets pricing for the production of license plates.  Wording of AB 473 makes the payment mandatory and the money deposited to a dedicated Prison Industry Fund.  Vehicles requiring two plates (front and back) are charged an additional $1.00 per vehicle per year.

Sounds like small change for each vehicle owner – $.50 or $1.00 but with an estimated 2 million vehicles registered annually in Nevada the prison industries is expecting to receive a continuing windfall from this amended legislation.  When added to debts owed by private companies partnered with prison industries (2012 Accounts Payable and Outstanding were in excess of $600,000) the state owned and controlled “company” Silver State Industries continues to reap benefits from taxpayers.  They claim that SSI is self-sufficient and relies upon no tax dollars or appropriations for their operations, but what’s been discovered refutes that claim.  Could it be the license plate fees paid to the prison industries will be used to offset industry losses – at the expense of taxpayers who register their vehicles?

An unanswered question…since most consider registering their cars and paying for licensing a state “tax” for owning a vehicle, are Nevadans actually paying a $.50 cent tax per plate to the Prison Industries?

History

The story of Alpine Steel, LLC and their partnership contract with Nevada’s NDOC industries – Silver State Industries – has been in the news for months now.  When competing companies discovered Alpine had been using prison labor provided at or below minimum wages, they complained to the Governor and members of Nevada’s legislature about unfair competition.

Alpine had been contracting with the NDOC since 2006 to use inmates as a workforce in fabricating structural steel used in private sector construction jobs performed by the company. Due to the low labor costs, Alpine was able to respond to RFP’s and underbid all others for projects.

As the story evolved other issues began to rise to the surface identifying separate but factual concerns; unpaid wages to inmates and NDOC staff, unpaid utilities, unpaid taxes and unpaid lease payments by Alpine Steel.  In the end it was determined that Alpine owed the state nearly half a million dollars in unpaid operating costs.  Under the contract between NDOC and Alpine, there were no requirements for the posting of a performance bond or personal guarantee of payment should the corporation default.

The additional public admittance by NDOC Deputy Director Brian Connett that Alpine Steel had not been vetted for past financial or business practices prior to or during the contract(s) period brought to light that his prison industry operation had bypassed standard business practices when developing contracts with Alpine.

Hearings were held before Nevada’s Ways and Means Committee and the Board of Prison Commissioners (BPC) on the matter.  NDOC Director Greg Cox and Deputy Director Connett were questioned about the debt owed to the state by Alpine, on entry into the Alpine contract without any approval from the BPC and failures of consulting with private businesses and labor groups prior to initiating the steel industry operation.

Former Nevada U.S. Senator Richard Bryan came to the table at these meetings and proposed changes to protect Nevada’s workers, private businesses and protect inmate workers from further exploitation.

Proposed changes to Prison Industry Statute(s)

Apparently In response to concerns voiced by Governor Sandoval and his BPC and the proposal by Bryan, the Nevada Senate has proposed amending the state’s statute on prison industries through SB 478, filed on March 25th.  A hearing before the Senate Judiciary Committee is scheduled for Wednesday April 10th to discuss the proposed changes to NRS 209.

One important change to the statute would require any company wishing to participate in prison industry work programs post a bond to ensure situations such as that with Alpine do not reoccur with the state owed hundreds of thousands of dollars.

Other changes tighten the requirements for consulting private businesses that would be impacted by proposed industry products or services – and for consulting with unions and labor that may be adversely impacted by the labor of inmates. Costs associated with these consultations are borne by the company and not paid for with tax dollars and all new proposed industry or products will vetted by the Interim Finance Committee on Prison Industrial Programs.  Once that committee makes a recommendation, the proposed project is sent to the BPC where the Governor, Attorney General and Secretary of State will make the final decision.

Necessity for these changes

Thomson Water TruckIn addition to the Alpine prison operation, investigation revealed that a previous industry run in partnership between SSI and a private company resulted in the closure of at least one competing private manufacturer.  This was a project involving Thomson Equipment Company and SSI.  Thomson imported tanks and pumping equipment from foreign manufacturers and brought the materials to their prison industry facility where inmates assembled the Water Trucks.

Everyone has seen these trucks along highways and large construction sites where they’re used to spray water to keep dust down during construction.  A company that built the same trucks there in Nevada was forced to close those operations in 2006 due to the Thomson products being distributed through auctions and other outlets for as much as 30% less than the competing company’s pricing.  Workers were laid off and the company closed the division that manufactured the same products Thomson had begun selling for less.

“I either had to pay my workers much less or stop my operation to be competitive,” the company owner told me during an interview.  “I chose to close the operation down and not make any more water trucks.  With so many Thomson products dumped on the markets, I could ill afford to pay prevailing wages to my employees and continue to be competitive.

“I had no idea that those Thomson products were made using inmate labor.  I heard they were importing components from Asia and attributed the lower pricing to that.  If I had known at that time that I was forced to close and lay off good workers because prisoners paid minimum wages were used to undercut my pricing, I would have protested to state authorities.  I don’t know if protesting would have stopped it because from what I’ve read in the paper, the state is promoting prison industries.”

According to minutes of the Prison Industry Finance Committee, Thomson was bought out by a foreign conglomerate out of New Zealand and Australia.  They changed the name of the company to Silver Line Industries and began to import a huge number of tanks and other equipment from Hong Kong and elsewhere which the inmates of Nevada would transform into new truck products.  They stopped the prison operation a few years ago, but not before that operation caused the closure of competing Nevada businesses and put several workers on unemployment.  While the company put out of business by the prison industry paid prevailing wages to their workers, Thomson/Silver Line paid inmates minimum wage.

Shelby AmericanI interviewed owners of several car restoration companies in Nevada over the past couple of months.  They advised they were basically unaware of the car restoration industry run by SSI and had no idea they were competing against prisoners doing the same work on privately owned vehicles.  When I asked them about Shelby American’s use of inmate labor on the Shelby Mustang products, none of those interviewed had any inkling inmates were involved in that operation.  One said he had several acquaintances working for Shelby out by the race track in Las Vegas who assembled the Shelby line – and thought they were also manufacturing the parts used in the production.  A 2000 CNN article on Shelby American and a Wall Street Journal article about the restoration of a number of cars owned by private collectors was shown to one restorer.  The Shelby article revealed:

“Shelby American, manufacturer of the Shelby Cobra sports cars, pays Deere and a dozen other inmates at the facility an hourly wage to build every part of the car except the engine. Other workers at the Indian Springs penitentiary work for other private companies or the state restoring cars, beveling and staining glass windows, upholstering chairs and making bed mattresses.

”After five years of loyal service to his employer, the 63-year-old Deere earns less than $8,000 a year in his full-time job, gets no vacation or sick pay and is unlikely to ever be promoted.”

The WSJ story contained this information:

“The cases in question are cars—very cool vintage cars. They come in rough and battered, and inmates restore them to their original glory. It may be the penal system’s most unusual workshop…

“The auto shop’s present inventory includes 32 cars in some stage of restoration. Among them: two 1960s-era Corvettes, two 1960s Mustangs, a 1959 Thunderbird, a 1965 Malibu, a 1935 Chevy pickup and two 1969 GTOs.

“All kinds of customers bring their cars in. Barry Becker, a Las Vegas realtor, has had nearly a dozen cars restored by prisoners.

‘I just keep buying stuff I don’t need,’ he says. Among his prison-rescued treasures are a 1937 Dodge sedan convertible, a 1937 Dodge “Woody” wagon, a 1956 Nash Metropolitan and a 1941 Plymouth pickup truck

“A Las Vegas couple recently agreed to pay the prison $19,000 for a re-do of a 1973 Datsun 240Z, with a V8 engine installed. “Mom’s going to go to the store really fast,” says the shop’s director, Carl Korsgaard.

“Inmates, including a few murderers and lifers, have been trained to do everything from sanding steel bodies down to sewing upholstery. One upholsterer was born in Cuba, where Mr. Korsgaard believes he absorbed his countrymen’s talent for keeping vintage U.S. vehicles on the road.”

Corvette restored by SSIThe business owner exclaimed, “How can the state openly promote a program such as that?  By using inmates to restore or repair privately owned vehicles, they are taking work away from hard working business owners and our employees.  I haven’t committed a crime…my workers aren’t criminals and we need work to put food on the table and pay our bills, raise our kids.  How can the state justify doing something like this that they know hurts business owners like me and dozens of others trying to make a living restoring cars?”

I couldn’t honestly answer his questions.

In 2011 the owner of Billow’s Embroidery in Carson City, Nevada began protesting to the NDOC, SSI and ultimately to Governor Sandoval that his company was losing business due to direct competition with a prison industry doing embroidery.  His complaints included the fact that he had to pay fair wages, benefits and provide insurance for his workers, while the prison industry paid no benefits, insurance and only paid minimum wage.  This made their products and service pricing substantially less than Mr. Billow was able to compete against.

Mr. Billow was invited out to the SSI Embroidery operation and given a tour of the prison industries located at the prison.  He was asked to stop complaining about unfair competition as training of prisoners was important and necessary.

During the tour Mr. Billow described as a “dog and pony show” he was shown the prison’s printing industry shop.  Mr. Billow observed that inmates were being trained on and using antiquated AB Dick offset printing equipment.  He stated, “I learned printing while in school on that equipment decades ago.  I couldn’t understand how training inmates on such old equipment would prepare them for employment in the printing industry upon release, when they would know nothing about the digital and advanced printing machinery used in the private sector.”

Mr. Billow felt that the “tour” he was given was conducted as a way of demonstrating that he was up against a huge industry run by the state and that to continue to complain would be useless.  He said he felt that it was an effort into intimidating him into silence.

Jacobs Trading Company

bigjacobsAn ongoing industry run at the women’s prison facility operated by SSI, is a partnership with Jacobs Trading Company.  Jacobs is a national company that specializes in buying, refurbishing and repackaging returned or damaged products from retailer such as Wal-Mart and Best Buy.  Female prisoners are paid minimum wage for their labor.

The Great Recession was a boon for Jacobs Trading Co., the liquidation company in Hopkins MN. that bears the name of Irwin Jacobs, one of the state’s best-known businessmen. The company deals in overstocks, scratch-and-dents and returned merchandise and saw operating income rocket to $14 million in 2009 from $5 million in 2008.  Jacobs relies heavily upon prison labor for their repackaging operations.

Inmate workers receive the materials and repair if necessary and then remove all labeling, advertising and UPC coding that identifies the original manufacturer or retailer.  They then repackage and ship the refurbished products all over the country.  Recently Jacobs demanded SSI provide the money to expand their prison operation at the women’s prison.  Jacobs said they need another loading dock in order to put on a third shift and employ another eighteen female prisoners.

Rather than “request” the NDOC or SSI provide the new construction, Jacobs demanded that they do so, and threatened to reduce their operation to a single shift and lay off inmate workers if the state run department did not meet their demands.  Some refer to this as sharp negotiating others would call it a form of extortion.

Research revealed that Jacobs Trading Company has created an “empire” within the repackaging industry in the U.S.  Currently they operate in prison industry operations in at least six states.  Consider the following discussion that occurred fifteen years ago in reference to Jacobs Trading’s operation in Minneapolis – and legislation proposed to favor Jacobs’ use of inmate labor:

“Corrections officials are quick to cite a statewide labor shortage to justify deals such as the Jacobs bill. Employersare having trouble finding people to work, they point out.

But Neuenfeldt shoots back: “If Jacobs wants to bring 50 jobs to Wisconsin, it would be good to open up an operation in central-city Milwaukee or somewhere else in the state where we have high unemployment.

“And I would think that the business community, especially small business, would have some concern over businesses set up using prison labor, because if this guy pays a dollar an hour it’s pretty hard to compete with that,” he adds.

If the Jacobs legislation passes as currently written, Jacobs will indeed pay inmates $1 per hour, skirting a federal interstate commerce law that requires that prisoners working for commercial ventures be paid prevailing wage.

Federal law only applies to the production or manufacturing of a product,” says Steve Kronzer, director of Badger State Industries. “If they started repairing then it would be considered manufacturing, and then it would come under the federal law.”[1]

The Jacobs plan demonstrates the enthusiasm with which the Department of Corrections is expanding into the private sector–even at the expense of profits. “The whole reason for doing this thing is so the state gets money back to cover its losses for boarding these people,” says Neuenfeldt.

But, the labor rep says, some basic math shows that the savings would be minimal, possibly nonexistent.

The 50 inmates involved would be paid $1 per hour for 1,950 hours. This would cost Jacobs $97,500 a year in wages. Thus, each inmate would be paid about $2,000 a year. Fifteen percent of that would go to the corrections system, and another 5% would go to the victim-restitution fund. The state’s 15% comes to $14,625, plus an estimated $8,000 savings from wages the state would no longer pay the inmates who would otherwise be employed in other ventures. So the state gain would be around $27,525.

But the state would also have to pay for a supervisor, which the AFL-CIO estimates will cost $17,800. This brings the state’s take down to $9,725. Subtract the costs of facility adjustments and security measures, and “the Jacobs bill could even be a money-losing proposition,” says Neuenfeldt.

So why do it?

“You have to understand the mentality that goes on within the prison industries itself,” says Nick George, director of government relations for Wisconsin Manufacturers and Commerce. George served on a prison industries advisory committee that discussed the governor’s budget proposals.

“In prison industries, there is a mentality, and this is not unique to Wisconsin, of wanting to see their industries grow,” he explains. “They have a number of advantages over private industry, and a lot of the individuals who run these prison industries have an empire-building attitude.”

Several of these operations are identified as participating in the federal Prison Industries Enhancement Certification Program (PIE Program).  This program allows companies to use inmate labor to manufacture products sold and shipped across state lines – but only where the company pays prevailing wages to the inmates, consults with private companies performing the same manufacturing or services and with labor unions, prior to start-up of the industry.

While the Jacobs operation in Nevada is listed as a PIE Program participant, the inmates are not paid comparable wages.  They receive minimum wage or less for all job descriptions, regardless of years of experience or skill.

In other states Jacobs has failed to register these operations as PIE though the products received at those facilities cross state lines and finished products are shipped back across state lines.  Here is a listing of some of those current or former Jacobs operations:

  1. Nevada – Southern Nevada Correctional Center.

  2. Oklahoma – Eddie Warrior Correctional Center (not listed as PIE).

  3. Idaho

  4. North Dakota

  5. Indiana –  Bunker Hill,  and Rockville, Indiana

  6. Minnesota

Currently Nevada is the only “PIE” operation listed for Jacobs…yet as shown, they are operating in Oklahoma without listing it as a PIE industry.  In each of the foregoing states inmates are used as the sole workforce for Jacobs’ repackaging operations.  Jacobs does not use non-inmate labor in their repackaging operations.  Looking at the map of distribution centers operated by Jacobs, one finds that they are placed in areas where the prison industries are operating.  In a couple of those industry operations, Jacobs has acquired exclusive contracts with Corrections Corporation of America to use inmate labor and facilities under control of this private prison company.

Jacobs Trading and its owner, Irwin Jacobs have been in the news in a similar manner to Alpine Steel and owner Randy Bulloch over questionable business practices.  In 1997 Jacobs retail operations were sold to Petters Group Worldwide.  After failing to make payments for their purchase, the stores were ultimately shut down.

(It is interesting to note that Tom Petters, whose company had purchased the retail operations from Jacobs Trading, was recently convicted of multiple felony counts as part of a $3.65 Billion Ponzi scheme.)

In 2010 Irwin Jacobs came under intense scrutiny over investments made in a top boat company, Genmar.  It appears Jacobs urged investors to put money into Genmar before the company wound up in bankruptcy.  In the two years preceding that collapse, Jacobs and some of his investors received substantial “dividends” from Genmar as it was financially foundering.

Once the bankruptcy was final, Jacobs and one of his investor friends began buying Genmar back for pennies on the dollar, vowing to make it one of Jacob’s “best acquisitions ever.”

Corruption in Prison Industries

I mention Jacobs and the appearance of manipulating businesses and use of inmate labor, because a means of capitalizing off cheap labor permeates all the companies involved in prison industries.  Alpine Steel revealed that aspect to Nevadans recently.  Previously I wrote about U.S. Technologies that was formed for the specific purpose of using inmate labor in the PIE Program to provide a labor advantage to numerous companies acquired by U.S. Technologies.

Like Jacobs, UST formed exclusive contracts with CCA and/or Geo Group to allow them to operate at all facilities owned or managed by these private prison companies that have prison industry operations.

Board members of UST included many top names of the politically and financially powerful in Washington; George J. Mitchell, William Webster, General Alexander J. Haig Jr., etc.  In 2006 UST went belly up after the Chairman was indicted for embezzling over $20 million in investor funds.  The SEC devalued UST stock and the high profile Board members ran from any connectivity to UST as quickly as possible.

In Florida the prison industry corporation PRIDE came under fire for creating nine spin-off corporations to take advantage of the PIE Program and turn huge profits.  The entire executive staff was forced to retire once the scandal broke but that didn’t save four private companies that had been taken over entirely by PRIDE, putting the legal business owners into bankruptcy.

Beyond the cheap low cost labor, is the ability to secure equally cheap leases on state owned manufacturing facilities and as in Nevada, avoid paying the Modified Business Tax on employees.  Alpine secured a lease of 20,000 square feet of manufacturing space from the NDOC.  The contract charged Alpine $.26 cents per square foot for that property.  The average cost per square foot for comparable space in the private sector is $.68 cents a square foot.  Which means Alpine enjoyed a savings of $95,000 in operational expenses every year.

This “savings” to Alpine Steel reduced the potential revenue stream to taxpayers – for the lease of public owned facilities – to the tune of that same $95,000.  When we calculate savings realized by Alpine over the past 7 years that this contract with SSI existed, we easily determine that taxpayers lost more than $665,000 in potential revenue.  Between this loss of potential income and the actual amount owed to the state by Alpine Steel in unpaid debt and unpaid taxes, Nevada is out more than $1 million dollars.  Over the next four years Alpine’s owner has agreed to repay $438,000 owed in the unpaid debt without additional penalties or interest…but the income lost under the leases is gone and there is no provision for Alpine to repay the additional $38,000 owed to the Dept of Revenue for unpaid state taxes.

That $1 million dollars represents a huge loss to a state with high unemployment rates, a declining tax base and increasing government costs.  Nevada in effect subsidized one company’s operations to the tune of a million dollars over half a decade while the competing companies lost income and the ability to hire new workers due to that subsidization.  To me this is beyond unfair, it borders on the very definition of corruption.

Additionally, Jacobs Trading, JT Wholesale, the Embroidery industry and other companies that have left SSI; Shelby American, Thomson Equipment, etc. all have/had similar sweetheart leases on publicly owned facility spaces and inmate wage rates.  How much more in revenue was denied to Nevada’s taxpayers from these leases?  How many more Nevada workers were not hired because inmates were used instead?

So there is a lot of incentive for companies to partner with state run prison industries.  The temptation to realize huge savings off cheap labor, low cost leases, tax breaks, and no requirement to pay worker benefits is too attractive to companies already looking desperately for an “edge” in their respective markets.

When government administrators “help” by increasing the incentives for companies to bring their manufacturing and labor needs to prison industries, it further depresses the normal employment and sales markets.  Leases to the likes of Alpine Steel were made without approval or even review by the Legislature or the Executive branch of government.  The wage rates paid to inmates are likewise without review or question…all leading to the current situation in Nevada.

When we realize the numbers of industries, businesses and unemployed workers who continue to be harmed because of prison industry operation we begin to understand why Nevada jobs are becoming scarce, why private business sales are suffering and why new businesses are finding it more difficult to compete against a captive workforce supported by state subsidized operations.

The Senate Judiciary Committee is scheduled to discuss the proposed changes to Nevada’s prison industries this coming Wednesday.  I would encourage those who think they are or may be adversely affected by competition in your industry by prison labor, to attend and use this opportunity to voice your opinion.



[1] This is the loophole that Senator Bryan’s proposal to Governor Sandoval would close.  This would protect Nevada employers and workers before protecting workers and businesses in other states.  When SSI’s prison made goods are sold in Nevada, there is no protection to business or workers, requirements to consult with labor or competitors.  Only when SSI products leave the state, are workers and businesses in receiving states getting protection by requiring the inmates are paid comparable wages and consultation with labor was fulfilled.

Voters Legislative Transparency Project Presents First 2013 “Transparency Award”

Voters Legislative Transparency Project Presents First 2013 “Transparency Award”

Assembly Speaker Marilyn Kirkpatrick

On March 19th VLTP issued the organization’s first ever Transparency Award to Nevada Assembly Speaker, Marilyn Kirkpatrick (D-Clark Co.).  This award was presented to Speaker Kirkpatrick by one of VLTP’s Nevada members last week.

1st VLTP Transparency Award to NV. Speaker, Marilyn Kirkpatrick

These awards are reserved for individuals who help make proposed or existing legislation transparent to their constituents.  Speaker Kirkpatrick has questioned the use of inmate labor by Nevada’s prison industries (Silver State Industries), asking probing questions as to whether the inmates are in fact being “trained” or whether the program is being operated as a means of exploiting prisoners for their labor on behalf of private companies.  VLTP was honored to issue the very first of these Transparency Awards to the Nevada Speaker in response to her efforts of protecting the workers and private businesses in Nevada from unfair prison labor practices.

Several companies have signed petitions to the Nevada Board of Prison Commissioners objecting to unfair practices involving the use of prison labor and NDOC facilities to manufacture products used in the private sector to allow certain companies the ability to underbid and secure lucrative contracts.  The companies operating out of the NDOC’s prison industries pay minimum wage or less to the inmate workers, an hourly rate far below that of what is paid by competing companies for labor in the private sector.  Additionally the complaints included a provision allowing leasing of state owned facilities to these prison based companies that are far below the Nevada average for lease of comparable manufacturing space.

Currently the BPC is investigating all actions involving Silver State Industries and the NDOC for non-compliance with state requirements of contact and consultation with private companies and labor groups and unions prior to initiating new industries, contracts or development of new product lines.  The BPC review includes current leases and industry contracts to determine what impact those may have upon workers, unions and Nevada’s unemployed.

Pictured below as she exited from one of several hearings, Speaker Kirkpatrick,  holding the VLTP Award, stated that receiving it,”was a bright point is her otherwise hectic day.”

Speaker Kirkpatrick with VLTP award (2)

We at VLTP look forward to presenting more such awards throughout the remainder of 2013 and beyond, as we and those deserving such awards continue to pursue full disclosure of legislation and laws that are/were written and proposed on behalf of special interest groups and lobbyists in pursuit of profiting at the expense of taxpayers and the general public.

 

Michigan House to Punish Counties Over RTW

Michigan House to Punish Counties Over RTW

In a legislative frenzy only to be rivaled by the great lameduck circle-jerk of 2012, Michigan lawmakers are churning-out stop-gap bills meant to do nothing more than punish unions and employers for negotiating in good faith.

A number of laws, including Right-to-Work, are set to take effect this week. As Democracy Tree reported last month, numerous state universities were renegotiating their contracts for ten year terms in amicable agreements across the table designed to stabilize relations in the face of the pending contract wars that would otherwise ensue under RTW. Lawmakers quickly responded by entering a bill that would penalize these institutions 15 percent for bargaining in good faith prior to enactment of RTW, and the contentious chaos it will bring.

Last week, Washtenaw County, also acting in good faith, legally renegotiated their contract in an effort to avoid the predictable divisiveness of RTW. In another legislative temper tantrum, House lawmakers have again crafted a bill to similarly punish units of government for cooperating with their unions. what rtw laws actually do

Yesterday, the House General Government Appropriations Subcommittee approved a bill to withhold an un-specified amount of revenue sharing from units of government that work with their unions.

These bills make the GOP motive crystal clear:  They are intended to create tension between public sector workers and their employers. They are not the acts of statesmen — they are the petty and unprofessional misbehaviors of children dressed in suits.

Additionally, this demonstrates the woeful lack of knowledge of our elected leaders. Research found that Michigan public sector employers are happy with their union relationships, and that the premise behind RTW is utterly false.

The University of Michigan recently collaborated with Michigan Public Policy Survey late last year on an extensive research project that found that Michigan’s local units of government were satisfied with their union relationships and negotiations.

In a RTW study conducted by the Michigan State University School of Human Resources and Labor Relations, published in January 2011 by the Employment Policy Research Network, examined the economic impact in all 50 states over a three year period, comparing and contrasting RTW states to those that had strong labor standards. Among their key findings:

  • “…high wages increase aggregate demand in the state leading to increased economic activity.”
  • “Right-to-work laws and taxes seem to have no effect on economic activity. Similarly, unionization has little effect on economic activity.”
  • “…unionized firms are able to use productivity enhancements to offset any higher costs associated with collective bargaining.”
  • “…results suggest that the benefits of Right-to-work laws and tax reductions may be more political than economic.”

Michigan lawmakers should be ashamed of themselves.

Gov. Snyder has equivocated in his remarks about legislating penalties against the public sector for acting in good faith. If history teaches us anything, it is clear Michigan cannot predict what Snyder will do out of political expediency.

Amy Kerr Hardin from Democracy Tree

democracy tree-vltp

Postal Service to Cut Saturday Mail to Trim Costs

The ALEC-led death spiral for the USPS continues.  We wonder what will happen after UPS and FedEX get the USPS privatized and then decide that they are not going to deliver the mail to unprofitable routes.  Who will pick up the  slack?  Who else–WE THE TAXPAYERS!

Hey there USPS Management and Union Leaders:  get out there and fight for your survival!  Instead of death by a thousand cuts, go public with the information we have given you about the ALEC-Koch connections to the privatization efforts. http://www.vltp.net/aleckoch-cabal-pursuing-privatization-postal-service-ups-fedex/ Try out some righteous indignation on the public which is once again being manipulated to generate more profit for ALEC Corporate Members at the expense of the taxpayers – and your jobs.

WHERE ARE YOUR FELLOW MEMBERS OF ORGANIZED LABOR?  IF UNIONS DON’T STAND UP FOR EACH OTHER, ALEC-WRITTEN-LEGISLATION WILL SUCCEED AT ELIMINATING THE UNION MOVEMENT FOREVER.

HEY THERE–AFL-CIO, SEIU, AFSCME, IBEW AND ALL THE REST OF YOU UNIONS!  SUPPORT YOUR FELLOW UNION MEMBERS AND SUPPORT THE TAXPAYERS OF AMERICA.  FIGHT FOR YOUR SURVIVAL!  WHO ELSE IS GOING TO REPRESENT THE RIGHTS OF WORKERS?

Fight to survive or become history.
—The editors of www.vltp.net

WASHINGTON (AP) — Apparently trying an end-run around an unaccommodating Congress, the financially struggling U.S. Postal Service says it will stop delivering mail on Saturdays but continue to disburse packages six days a week.

In an announcement scheduled for later Wednesday, the service is expected to say the Saturday mail cutback would begin in August and could save $2 billion annually.
postmaster General Tom DonahoeFILE – In this Sept. 6, 2011 file photo Postmaster General Patrick Donahoe testifies on Capitol Hill in Washington. The U.S. Postal Service will stop delivering mail on Saturdays but continue to deliver packages six days a week under a plan aimed at saving about $2 billion, the financially struggling agency says. (AP Photo/J. Scott Applewhite, File)The move accentuates one of the agency’s strong points — package delivery has increased by 14 percent since 2010, officials say, while the delivery of letters and other mail has declined with the increasing use of email and other Internet services.Under the new plan, mail would be delivered to homes and businesses only from Monday through Friday, but would still be delivered to post office boxes on Saturdays. Post offices now open on Saturdays would remain open on Saturdays.

Over the past several years, the Postal Service has advocated shifting to a five-day delivery schedule for mail and packages — and it repeatedly but unsuccessfully appealed to Congress to approve the move. Though an independent agency, the service gets no tax dollars for its day-to-day operations but is subject to congressional control.

It was not immediately clear how the service could eliminate Saturday mail without congressional approval.

But the agency clearly thinks it has a majority of the American public on its side regarding the change.

Material prepared for the Wednesday press conference by Patrick R. Donahoe, postmaster general and CEO, says Postal Service market research and other research has indicated that nearly 7 in 10 Americans support the switch to five-day delivery as a way for the Postal Service to reduce costs.

“The Postal Service is advancing an important new approach to delivery that reflects the strong growth of our package business and responds to the financial realities resulting from America’s changing mailing habits,” Donahoe said in a statement prepared for the announcement. “We developed this approach by working with our customers to understand their delivery needs and by identifying creative ways to generate significant cost savings.”

But the president of the National Association of Letter Carriers, Fredric Rolando, said the end of Saturday mail delivery is “a disastrous idea that would have a profoundly negative effect on the Postal Service and on millions of customers,” particularly businesses, rural communities, the elderly, the disabled and others who depend on Saturday delivery for commerce and communication.

He said the maneuver by Donahoe to make the change “flouts the will of Congress, as expressed annually over the past 30 years in legislation that mandates six-day delivery.”

There was no immediate comment from lawmakers.

But others agreed the Postal Service had little choice but to try.

“If the Congress of the United States refuses to take action to save the U.S. Postal Service, then the Postal Service will have to take action on its own,” said corporate communications expert James S. O’Rourke, professor of management at the University of Notre Dame.

He said other action will be needed as well, such as shuttering smaller rural post offices and restructuring employee health care and pension costs.

“It’s unclear whether the USPS has the legislative authority to take such actions on its own, but the alternative is the status quo until it is completely cash starved,” O’Rourke said in a statement.

The Postal Service is making the announcement Wednesday, more than six months before the switch, to give residential and business customers time to plan and adjust, the statement said.

“The American public understands the financial challenges of the Postal Service and supports these steps as a responsible and reasonable approach to improving our financial situation,” Donahoe said. “The Postal Service has a responsibility to take the steps necessary to return to long-term financial stability and ensure the continued affordability of the U.S. Mail.”

He said the change would mean a combination of employee reassignment and attrition and is expected to achieve cost savings of approximately $2 billion annually when fully implemented.

The agency in November reported an annual loss of a record $15.9 billion for the last budget year and forecast more red ink in 2013, capping a tumultuous year in which it was forced to default on billions in retiree health benefit prepayments to avert bankruptcy.

The financial losses for the fiscal year ending Sept. 30 were more than triple the $5.1 billion loss in the previous year. Having reached its borrowing limit, the mail agency is operating with little cash on hand.

The agency’s biggest problem — and the majority of the red ink in 2012 — was not due to reduced mail flow but rather to mounting mandatory costs for future retiree health benefits, which made up $11.1 billion of the losses. Without that and other related labor expenses, the mail agency sustained an operating loss of $2.4 billion, lower than the previous year.

The health payments are a requirement imposed by Congress in 2006 that the post office set aside $55 billion in an account to cover future medical costs for retirees. The idea was to put $5.5 billion a year into the account for 10 years. That’s $5.5 billion the post office doesn’t have.

No other government agency is required to make such a payment for future medical benefits. Postal authorities wanted Congress to address the issue last year, but lawmakers finished their session without getting it done. So officials are moving ahead to accelerate their own plan for cost-cutting.

The Postal Service is in the midst of a major restructuring throughout its retail, delivery and mail processing operations. Since 2006, it has cut annual costs by about $15 billion, reduced the size of its career workforce by 193,000 or by 28 percent, and has consolidated more than 200 mail processing locations, officials say.

They say that while the change in the delivery schedule announced Wednesday is one of the actions needed to restore the financial health of the service, they still urgently need lawmakers to act. Officials say they continue to press for legislation that will give them greater flexibility to control costs and make new revenues.

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This was written by PAULINE JELINEK  and posted at the Associated Press.  The original posting can be seen at http://bigstory.ap.org/article/postal-service-cut-saturday-mail-trim-costs

Jobs Bill Stalls – Legislation Allowing More Corporate Access To Prison Labor Passed

A VLTP Special Report by Bob Sloan, Executive Director

LABOR UNIONS AND GROUPS – PULL THE WOOL FROM OVER YOUR EYES AND GET ACTIVELY INVOLVED NOW – BEFORE ITS TOO LATE!

Over the past two weeks VLTP published the first, second and final segments of an expose reporting on the use of prison labor in Nevada to deny jobs to local unemployed workers in Las Vegas. In researching for these articles, a very disturbing development came to light involving a lack of transparency concerning legislative action(s) taken that impact upon America’s workers – employed and unemployed alike – that must be widely reported.

VLTP would encourage readers to take a few minutes and read the full expose that links ALEC and prison industry advocates together in advancing legislation to expand prison industries nationwide.  It is filled with the legislation, individual names, corporations and links to videos of meetings where this expansion began and how Nevada is simply the latest example of sending American jobs to prison.

That being said, I am very disturbed and need to get breaking news out to DK readers about a development that will impact ALL labor in the U.S. – and in the worst way possible.  Congress has loudly argued over President Obama’s “Jobs Bill” for a couple of years now, stalling any discussion of it in the House.  At the same time Congress very, very quietly passed legislation giving Federal Prison Industries authorities the go ahead to expand their operations with two critical measures.  This was done under More →

New Michigan Law in the Works to Destroy Public Education

A posthumous legacy of Michigan’s 96th Legislature — some ugly unfinished business the state can expect to see lead the parade of bills introduced in the new session:

Neophyte Republican party hard-liner, Lisa Posthumus-Lyons rode the coat-tails of her daddy, Dick Posthumus, into the Michigan House in 2010. After his failed gubernatorial race and loss to Jennifer Granholm, Dick worked his backroom corporate affiliations, and the father-daughter team surfed their well-greased skids into power positions within the Snyder Administration. The 32 year old freshman lawmaker, Lisa Posthumus-Lyons, fresh out of dabbling in the real estate business, was appointed Chair of the House Education Committee when the previous occupant, Rep. Paul Scott, was recalled.

Upon election, Snyder named the elder Posthumus as his senior advisor and legislative lobbyist. The appointment of Posthumus, a Michigan farmer with extensive legislative experience (having been the longest serving Senate Majority Leader in Michigan’s history) should have been the first clue that the Snyder administration would be nothing like the one painted in the campaign. More →

Privatizing Government Services in the Era of ALEC and the Great Recession – Part IV – Unions and Collective Bargaining

IV.   UNIONS AND COLLECTIVE BARGAINING

Many ALEC bills target teachers and collective bargaining, and laws that
are similar to those bills have been enacted in the aftermath of the Republican victories in 2010.  For example, in Indiana, where Republicans had a 60-40 House majority and a 37-13 Senate super-majority, the Senate labor committee chair coupled limits on teacher collective bargaining with teacher merit pay and state-funded vouchers for students to attend private schools. 121  In addition, teacher collective bargaining was limited to salaries, benefits, and total number of work days. 122

A. Public Employee Freedom Act

ALEC Summary:  “Excluded from National Labor Relations Act (NLRA),
public employees are subject to state and local laws governing collective
bargaining.  Many of these laws are ‘monopoly bargaining laws,’ which More →

Ohio Bleeding

Paula Garfield is a 30-year veteran teacher of special education for Columbus city schools.  She was recently elected as an Ohio Education Association Delegate, and received the Columbus Education Association’s Outstanding Member of the Year award.  She was highly involved with We Are Ohio, and is a guest speaker for Ohio Women’s Democratic Caucus, War on Women, and others.  This is Paula’s blog, and it is a beautifully eloquent posting.  Paula is a member of our Facebook group–Resist The Privatization of America, where she posted this article. 

Thank you Paula.

With 24 days until the Presidential election, I spent a total of 26 hours of my weekend travelling across the State in Ohio, speaking at 3 events regarding Educators for President Obama: Women, laborers, middle class, elderly, minorities, college students,  teachers, firefighters, police, unions, pensions, postal service: we all have the same attackers. Their tactics consist of the war on women, replacing public schools with private for profit schools,replacing free public schools with the Kasich (K-suck) voucher system  attacking and dismantling of free public appropriate education, destroying planned parenthood, holding jobs for ransom.

The same Republicans try to make sure that measures don’t get by the House of Representatives and thus cannot get to the Senate .Since the Republican Party controls the House, it serves the Corporations  and not “We the People,” who elected them to represent us.

I talked about Right to Work -for less-, Voter ID Laws and other means of voter suppression across the USA in Republican governed states as I canvassed on Sunday. I knocked on doors for all Congress Reps in my voting area, delivered signs, got the appropriate forms to those  who have relocated to Columbus, Ohio.  I answered questions from a Canadian, who works here in the area, who was in disbelief about what is happening to America in comparison to Canada’s rights, freedoms.

I am just now sitting down, after finding all my lawn signs for my makeshift Democratic ballot, destroyed…some burned, some shredded.I am cleaning up what the wind scattered across my complex. I am just off the phone trying to hook up voters with signs in the district/area with field leader contacts across the state, and staring at 122 emails, all of which I must answer from people wanting to know what they can do to help because some have awakened, and have realized the impact on them, their children, their futures, their homes, their lives.

There is a great deal more covered in Paula’s article, Ohio Bleeding.  I highly recommend clicking here to read all of it.

Mich. Court of Appeals smacks down Snyder & Schuette, orders collective bargaining amendment onto ballot

Score one for the good guys

The Michigan Court of Appeals has once again ordered the Republicans on the Board of State Canvassers to halt their efforts to disenfranchise hundreds of thousands of Michigan voters and directed them to place the Protect Working Families, formerly Protect Our Jobs, ballot initiative on the November ballot. The measure will ensure that collective bargaining rights are protected in our state constitution and prevent the wholesale destruction of those rights by extremist anti-labor majorities like we have in our state legislature today.

To read this important story, please click here

DISCLOSE Act dies again

On a strictly partisan 53-45 vote, it fell short of the 60 votes needed to break a GOP filibuster

The bill, sponsored by Sen. Sheldon Whitehouse (D-R.I.), would force unions, nonprofits and corporate interest groups that spend $10,000 or more during an election cycle to disclose donors who give $10,000 or more. Whitehouse’s version no longer required sponsors of electioneering ads to have a disclaimer at the end and pushed the effective date to 2013.

“When somebody is spending the kind of money that is being spent, a single donor making, for instance, a $4 million anonymous contribution, they’re not doing that out of the goodness of their heart,” Whitehouse said on the floor.

To read comments from the likes of John McCain as to why he now opposes campaign finance reform, please click here