Why are elected officials so enamored with trade deals?
To The Editor:
When Ross Perot ran for president,
one of the great sound bites of the cam-
paign was, “That big sucking sound
you’ll hear will be American jobs
heading south!” He was talking about
the job losses he predicted would re-
sult from the passage of NAFTA and,
sadly for our country, he was oh so
right.
NAFTA cost hundreds of thousands
of U.S. jobs and brought social and
economic devastation to Mexico.
NAFTA was followed by trade
agreements with Central America, Ko-
rea, Colombia and Peru and each one
accelerated the race to the bottom for
wages, working conditions and envi-
ronmental standards worldwide.
Now we are faced with the Trans
Pacific Partnership, a trade deal that
will dwarf its predecessors. If passed,
the rules of the TPP would govern ap-
proximately 40 percent of the global
economy. It is projected to have a neg-
ative effect on wages for the bottom 90
percent of America’s workforce (the
only workers spared are those earning
minimum wage, whose hourly rate
cannot fall).
Only the top five percent see a clear
increase in income as a result of the
TPP, with the highest gains going to
the top one percent. The TPP, like all
the “free trade” agreements that pre-
ceded it, would clearly be a disaster for
working Oregonians.
The good news? Thanks to unre-
lenting pressure from a variety of com-
munity, environmental and labor inter-
ests, there is a chance that this trade
deal will be derailed by the growing
opposition to the “fast track” process
that allows approval with little Con-
gressional input or oversight.
But the larger question is: Why are
so many of our elected representatives
enamored of these trade deals? They
often tout them as being “good for
business” and, thanks to the trickle-
down theory, eventually good for all of
us. However, the “business” interests
that most of our Congressional delega-
tion support are not the Mom and Pop
businesses on our Main Streets. They
are the interests of Wall Street, multi-
national corporations and the U.S.
Chamber of Commerce that fronts for
them. With the notable exceptions of
Sen. Jeff Merkley and U.S Rep. Peter
DeFazio, the entire Oregon Congres-
sional delegation’s first instinct is to
basically follow the party line and be-
tray the economic best interests of 90
percent of their constituents.
Democrat Kurt Schrader has signed
Republican Rep. Dave Camp’s bill that
endorses the fast-track process.
So how has organized labor re-
sponded? Despite calls for independ-
ent, community-based political action
from AFL-CIO President Richard
Trumka and other national labor lead-
ers, most of Oregon’s labor unions still
turn instinctively to the Democratic
Party, failing to recognize the big lurch
to the right that party took during eight
years of Bill Clinton’s leadership, es-
pecially in the areas of banking and fi-
nance.
Proposed changes to defined benefit pension plans
liable to be another nail in the coffin for pensions
To The Editor:
In response to the pension article in
the NW Labor Press (“Congress
weighs letting union pension plans cut
benefits,” Nov 15, 2013), Plumbers
and Fitters Local 290 voted to estab-
lish a committee to oppose enactment
of any legislation that would raise the
retirement age to 67 (to coincide with
new Social Security laws); end current
employer liabilities for money owed
into defined benefit multiemployer
pension plans, should the employer de-
cide to exit the plan; or that would al-
low underfunded pension plans to re-
duce monthly benefits for both future
and current retirees.
Few people know about this, and
the ones who do seem content not to
inform you.
Under the pretext of “strengthening
private pension plans,” the National
Coordinating Committee of the Multi-
employer Plans, (NCCMP) created the
Retirement Security Review Commis-
sion in 2011 to draft new rules and reg-
ulations to update pension law.
The NCCMP is a non-profit mem-
bership organization composed of plan
administrators, businesses, and union
representatives. The commission heard
testimony from economists, invest-
ment advisers, and experts in alterna-
tive plan designs to advise for changes
in pension law to replace the Pension
Protection Act of 2006. Those rules
“sunset” later this year.
And though this “sunset” may be
the normal expiration of a law de-
signed to do so, these proposed
changes are not normal. They represent
a giant step backwards. The changes
proposed by the NCCMP commission
are meant to stem the flow of employ-
ers exiting a “defined benefit” plan
while making it more attractive to
bring in new employers. We feel that
rather than strengthening the plans,
these proposed changes are liable to be
another nail in the coffin of defined
benefit plans.
Defined benefit plans are consid-
ered the “Gold Standard” of retirement
plans, paying 46 percent more in bene-
fits than a “defined contribution” — or
401(k)-style — plan does. Defined
benefit plans are not as sensitive to gy-
rations of the stock market either. Most
critically, retiring at the bottom of the
stock market is a disaster in a defined
contribution plan, not so in a defined
benefit plan.
Workers that are employed in in-
dustries that may frequently change
employers — including truck drivers,
mechanics, coal miners, longshore, air-
line workers, warehouse workers, mar-
itime workers, actors and film crews,
to name just a few — are covered by
defined benefit multiemployer plans.
This accounts for over 10 million
workers and their families with collec-
tive assets of approximately $450 bil-
lion.
And the federally-run Pension Ben-
efit Guaranty Corporation (PBGC), de-
spite its name, does not guarantee de-
fined benefit pensions. The PBGC is
empowered by the government to back
up, but not guarantee, the pensions of
troubled defined benefit pension plans.
The PBGC itself will be insolvent
within 10 to 15 years unless significant
changes in funding are made.
We want you to decide. Read NC-
CMP’s document, “Solutions Not
Bailouts,” with an open mind. The doc-
ument can be found at http:www/nc-
cmp.org.
If you find this report to be disturb-
ing, contact us at sfred3@msn.com or
503-281-2600.
Fred Smith
UA Local 290
Portland, Ore.
O PEN
F ORUM
I contend that we should keep that
in mind when these “good Democrats”
come to our political action commit-
tees (PACs) seeking campaign funds;
we may not be able to match the polit-
ical spending of corporate interests, but
at the very least, we should not help
fund our own demise.
Ray Kenny
IBEW Local 48
Bend, Ore.
The ‘Gullibility
Grand Prix’
To The Editor:
Having a foot in two camps (a
union member and conservative Chris-
tian) not only provides a unique obser-
vation post, but raises questions like:
which group is the most gullible?
Christians who still believe the GOP
has their back, or union members who
still think the Democrats have theirs.
Each election cycle they both wake
up just long enough to sniff the same
old bone tossed to them by their “sup-
porters.”
What caused this question to resur-
face was the news that President
Obama has once again blocked the
Keystone XL pipeline. He is also push-
ing yet another “free trade” agreement
(the Trans Pacific Partnership, or
“NAFTA on Steroids”) following the
trail blazed by the Clinton Administra-
tion.
Based on these latest “inconvenient
truths,” I see union members ahead by
a nose in the “Gullibility Grand Prix.”
Dean Wolf
IBEW Local 48
Retired
Tigard, Ore.
The clear benefits of a higher federal minimum wage
Reprinted from the
New York Times Editorial Board
Republicans sputtered with outrage when the
Congressional Budget Office said that immigra-
tion reform would lower the deficit, strengthen
Social Security and speed up economic growth.
They called for the office to be abolished when it
dared to point out that tax cuts raise the deficit or
when it highlighted the benefits of health care re-
form. But now that the budget office has predicted
(and exaggerated) the possibility that an increase
in the minimum wage might result in a loss of
jobs, Republicans think it’s gospel.
“This report confirms what we’ve long
known,” said a spokesman for the House speaker,
John Boehner. “While helping some, mandating
higher wages has real costs, including fewer peo-
ple working.”
What Republicans fail to mention is that the
report from the budget office, a federal nonparti-
MAY 16, 2014
san agency, was almost entirely positive about the
benefits of raising the minimum wage to $10.10
by 2016, as President Obama and Congressional
Democrats have proposed.
More than 16 million low-wage workers, now
making as little as $7.25 an hour, would directly
benefit from the increase, the report said. Another
eight million workers making slightly more than
the minimum would probably also get raises, be-
cause of the upward “ripple effect” of an increase.
That would add $31 billion to the paychecks of
families ranging from poverty level to the middle
class, significantly increasing their spending
power and raising the nation’s economic output
and overall income.
In fact, the report said, 900,000 people would
be lifted from poverty with a wage increase. The
income of those below the poverty line would in-
crease by a total of $5 billion, or 3 percent, at no
cost to the federal budget.
The vast majority of those getting raises would
not be teenagers with part-time jobs. Nearly 90
percent of them are adults 20 and older, and 53
percent of them work full time. Women represent
56 percent of them.
But the report said there could be a cost to the
wage increase, and most of the headlines have fo-
cused on the possible loss of 500,000 jobs, or
about 0.3 percent of total employment. That bears
further scrutiny, because, unlike the benefits, the
employment estimates have been disputed by a
wide variety of nonpartisan economic studies.
What the report actually says is that there is a
two-thirds chance that a $10.10 wage would pro-
duce job losses in a range from just above zero to
one million. The number 500,000 was simply
picked as a midpoint. (There is a one-third chance
the wage increase would lead to more than a mil-
lion job losses or actually increase employment.)
A range that big is essentially the budget office’s
NORTHWEST LABOR PRESS
way of saying it doesn’t really know what would
happen to employment if the wage goes up, be-
cause, as the report says, there is vast uncertainty
about how much wages will go up on their own
over the next three years, and uncertainty about
how employers would react to a higher minimum.
The budget office didn’t do its own research
on those variables. It surveyed the economic lit-
erature on the subject, and chose a figure more
conservative than the most recent and rigorous
studies have found. That means the job-loss figure
needs to regarded skeptically, as a careful read-
ing of the report shows, while the benefits are
undisputed.
Those benefits to millions of low-wage work-
ers overwhelmingly outweigh the questionable
possibility of job losses. Lawmakers who focus
only on the potential downside of an enormously
beneficial policy change are the same ones who
never wanted to do it in the first place.
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