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George Curry

The Misinformation Campaign Against Public Employees

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(NNPA) After listening to the governor of Wisconsin and financially illiterate journalists, its easy to gain the impression that city, county, state, and federal employees are overpaid slouches who benefit from hefty pension and generous retirement benefits funded by unsuspecting taxpayers.

Such a conclusion, however, is grossly inaccurate.

Many of the misperceptions about government workers stem from the heated debate in Wisconsin over whether the state should limit the collective bargaining power of state employees. One constant refrain is that public employees are overpaid.

According to an analysis of recent census data by the New York Times, public employees enjoy a pay advantage over those working in the private sector, but not because of the reasons cited by opponents of collective bargaining.

“The Times’s analysis found that over all, median wages for state workers exceeded that of private sector workers in all but three states – Indiana, Missouri, and New Hampshire,” the newspaper reported. “Those numbers, however, can be deceptive. State workers tend to be more highly educated than those in the private sector: More than half of state workers have college degrees, compared to just over one-quarter of those in the private sector. Researchers have also said that states tend to employ few high school dropouts.”

In Wisconsin, the epicenter for the debate over public employees, government pay exceeds private sector pay by 22 percent. But, more than 60 percent of state workers hold college degrees.

Public workers are paid four to 11 percent less than private-sector workers with similar education, job tenure, and other characteristics, according to the Center for State & Local Government Excellence.

The Center on Budget and Policy reports that teachers make up the largest share of local and state government workers, totalling 6.9 million, followed by protective services (law enforcement officers and fire fighters) with 2.5 million, higher education (2 million) and health (1.4 million).

Some experts project that pension shortfalls will reach as high as $3.2 trillion this fiscal year. However, Dean Baker of the Center for Economic Policy & Research, dismisses that likelihood.

“….It is worth noting that the size of the shortfall in many of these funds has likely already been reduced as a result of the fact that the stock market has continued to recover from its downturn in 2008 and 2009,” he said.

Part of the debate over public employees is based on raw politics.

“In many states, Republicans who came to power in the November elections, often by defeating union-backed Democrats, are taking aim not only at union wages, but union power as they face budget gaps in the years ahead,” the New York Times reported.

Wisconsin is one of those states.

“On paper, Wisconsin might seem an unlikely candidate for an assault on unions,” a story in the February 18 New York Times observed. “Like many other states, it has grappled with large spending gaps during the economic downturn, but its projected deficits for the next two years are nowhere near the worst in the country – more like the middle of the pact. Its 7.5 percent unemployment rate is below the national average. Its pension fund is considered one of the healthiest in the nation, and it is not suffering from huge shortfalls that other states are facing.”

Perhaps the most misleading aspect of the debate is that Wisconsin is giving state employees something that they have not earned.

David Cay Johnson destroys that myth in a column posted on www.tax.com.

“When it comes to improving public understanding of tax policy, nothing has been more troubling than the deeply flawed coverage of the Wisconsin state employees’ fight over collective bargaining,” he writes. “Economic nonsense is being reported as fact in most of the news reports on the Wisconsin dispute, the product of a breakdown of skepticism among journalists multiplied by their lack of understanding of basic economic principles.”

He continued, “Gov. Scott Walker says he wants state workers covered by collective bargaining agreements to ‘contribute more’ to their pension and health insurance plans. Accepting Gov. Walker’s assertions as fact, and failing to check, created the impression that somehow the workers are getting something extra, a gift from taxpayers. They are not.

“Out of every dollar that funds Wisconsin’s pension and health insurance plans for state workers, 100 cents comes from the state workers. How can that be? Because the ‘contributions’ consist of money that employees chose as deferred wages – as pensions when they retire – rather than take immediately in cash. The same is true with the health care plan. If this were not so a serious crime would be taking place, the gift of public funds rather than payment for services.”

Johnson provides this simple analysis: “…State workers are not being asked to simply ‘contribute more’ to Wisconsin’s retirement system (or as the argument goes, ‘pay their fair share’ of retirement costs as do employees in Wisconsin’s private sector who still have pensions and health insurance). They are being asked to accept a cut in their salaries so that the state of Wisconsin can use the money to fill the hole left by tax cuts and reduced audits of corporations in Wisconsin.”

George E. Curry, former editor-in-chief of Emerge magazine and the NNPA News Service, is a keynote speaker, moderator, and media coach. He can be reached through his Web site, www.georgecurry.com You can also follow him at www.twitter.com/currygeorge.

Labor Unions are Fighting for Survival

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(NNPA) The showdown between public unions and the governor of Wisconsin is drama likely to be replayed in other budget-challenged states during the next few months and may determine whether American unions rebound or become a fading fixture of the past.

According to the National Conference of State Legislatures, 44 states and Puerto Rico have introduced legislation governing labor unions and collective bargaining.

Because so much is at stake, both pro- and anti-labor groups around the nation have sent protesters to Wisconsin during the past week to support their cause. Thousands of protesters, including teachers, rallied in Madison, the state capital, to voice their concerns. Anti-labor protesters have also marched in the streets to express their support for a proposed measure to strip public unions of much of their power.

At the center of the debate is Governor Scott Walker’s proposal to save $330 million through mid-2013. Under the plan, government workers will have to pay more than half the costs of their pensions and at least 12.6 percent of their healthcare premiums. Unions would still be allowed to represent workers, but could not seek pay increases above the Consumer Price Index unless approved by a public referendum. Firefighters, police officers, and state troopers would be exempted under the new plan.

Labor officials say they are willing to compromise on pension and healthcare benefits, but not their ability to freely negotiate on behalf of government workers. At the national level, the budget battles feature organize labor, a key base of Democrats, and fiscally conservative Republicans, the key to GOP election gains last November.

Although public unions are being blamed for many of Wisconsin’s woes, they are not the real culprits.

The Associated Press reported on February 1st, that a “new analysis released Monday showed that Wisconsin’s budget could be between $79 and $340 million short by June 30, 2013 due largely to anticipated Medicaid expenses and a court-ordered repayment to a fund that was raided four years ago.”

Wisconsin is obligated to pay Minnesota $58.7 million after the end of a tax-reciprocity agreement between the two neighboring states. The state is under court order to pay $200 million that was illegally transferred in 2007 from a state medical malpractice fund, according to the Milwaukee Journal Sentinel.

Further complicating matters, Governor Walker pushed through tax cuts in his first month in office that are estimated to bring in $117 million less in projected state taxes during the next two year. Another $72 million drop is a result of lower than expected tax revenues.

Like his federal counterparts, Walker argued that the lower tax cuts will create economic growth. This is the same argument that President George W. Bush used in getting two federal tax reductions through Congress. But, the promised economic growth never materialized.

In Wisconsin, organized labor is losing the public relations battle as anti-labor Republicans enjoy a larger share of state houses and governors’ mansions.

According to a survey conducted earlier this month by the Pew Research Center for the People & the Press, “The favorability ratings for labor unions remain at nearly their lowest level in a quarter century with 45% expressing a positive view. Yet the public expresses similar opinions about business corporations – 47% have a favorable impression – and this rating is also near a historic low.”

The Pew report observes: “Americans express mixed views of the impact of labor unions on salaries and working conditions, international competitiveness, job availability and productivity. About half (53%) say unions have had a positive effect on the salaries and benefits of union workers, while just 17% say they have had a negative effect. Views are similar about the impact of unions on working conditions for all workers (51% positive, 17% negative).”

It is ironic that the debate over the role of unions is being played out in Wisconsin, the first state to enact of major collective bargaining law in 1959. The American Federation of State, County and Municipal Employees was founded in 1936 in Madison.

According to the U.S. Department of Labor, the union membership rate of public sector workers (36.2 percent) is more than five times the private rate of 6.9 percent. Within the public sector, union membership was highest among local government workers such as police officers, fire fighters, and teachers.

A Labor Department survey in 2010 showed that African-Americans were more likely to be union members (13.7 percent) than Whites (11.7 percent)), Asians (10.9 percent) or Hispanics (10 percent).

Unionized full-time wage and salary workers had a median weekly income of $917 in 2010. Workers not represented by unions earned $717 -- $200 less than union wages.

The U.S. Bureau of Labor Statistics reported that 11.9 percent of all wage and salary workers in the U.S. belonged to unions in 2010, down from 20.1 percent in 1983.

By all accounts, labor unions were primarily responsible for creating the American middle class in the bygone era when manufacturing was king. In an era of economic belt-tightening and rising Republican influence in politics, however, they are serving as convenient scapegoats for pro-business voices that wanted to get rid of them all along.

George E. Curry, former editor-in-chief of Emerge magazine and the NNPA News Service, is a keynote speaker, moderator, and media coach. He can be reached through his Web site, www.georgecurry.com You can also follow him at www.twitter.com/currygeorge.

The Obama Budget: Valentine Day Massacre

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(NNPA) President Obama released his $3.7 trillion budget proposal for fiscal 2012 on Valentine Day and it immediately became the object of a Valentine’s Day Massacre by Republicans in the House and Senate who want deeper budget cuts.

Lost amid the GOP criticism was that President Obama proposed $61 billion in cuts. His plan includes a 50 percent cut ($2.5 billion) in the government’s program to help low-income people pay their heating bills and slicing $300 million in community development block grants. At a time Obama is highlighting the need for infrastructure spending and a clean environment, he is proposing eliminating almost $1 billion from grants that go to states for water treatment plants and infrastructure programs.

Republican leaders say that Obama’s budget was dead on arrival. GOP leaders have proposed returning federal spending to 20.6 percent of gross domestic product (GDP), the average of federal spending from 1970 to 2008.

“Limiting spending to a historical average of some kind has been a longstanding goal of very conservative organizations such as the Heritage Foundation,” noted a report by Paul N. Van de Water of the Center on Budget and Policy Priorities, a non-partisan think tank in Washington, D.C. “The reality is, however, that policymakers will find it virtually impossible to maintain federal spending at its average level back to 1970 without making draconian cuts in Social Security, Medicare, and an array of other vital federal activities.”

Trying to peg federal spending to an arbitrary figure from the past ignores the enormous changes in American society that ranges from increased federal responsibility in the post 9/11 environment to a flood of baby boomers reaching retirement age. There are three key reasons why trying to roll back federal spending to 1970 or even 2000 levels ignores today's reality, according to the Center on Budget and Policy Priorities report:

· The aging of the population – the percentage of Americans aged 65 and older will grow by more than half during the next 25 years – and that growth will increase the cost of the three largest domestic programs: Medicare, Medicaid, and Social Security.

· Federal responsibilities have grown. Since 2000, for example, federal responsibilities have expanded in the aftermath of the September 11, 2002 terrorist attacks; aid to veterans has increased as a result of the Iraq and Afghanistan wars; the Medicare prescription drug benefit added by Congress in 2003 along with health care reform will also expand federal spending, even though health care will eventually lower the deficit.

· Spending on federal debt will be substantially higher than it has been the past 40 years. The combination of the Iraq and Afghanistan wars, the Bush-era tax cuts and their extensions and a severe recession have contributed to the public debt being almost twice as large (as a percentage of GDP) as it was in 2001. Higher interest costs have accompanied the rising debt.

The budget debate isn’t just a matter of numbers. The budget also defines us as a country.

“There are limits to how much Social Security can be cut without undermining its crucial role in reducing poverty and replacing income lost when a wage earner retires, dies, or becomes disabled,” the Center on Budget and Policy Priorities report states. “Social Security benefits are quite modest, averaging only $1,175 a month (or $14,105) a year) for a retired worker. Social Security checks now replace about 37 percent of an average worker’s pre-retirement earnings –one of the lowest of any western industrialized country –and that figure will gradually fall to about 32 percent over the next two decades, largely because of the scheduled increase in the full retirement age to 67.”

Obama’s pledge to freeze the pay of federal employees and any tampering with Social Security would have a disproportionate impact on people of color. According to the latest “State of the Dream” report by United for a Fair Economy, 59.1 percent of Blacks and 64.8 percent of Latinos depend on Social Security for more than 80 percent of their family income. And, African-Americans are 70 percent more likely than Whites to work for the federal government.

In his budget, Obama proposed allowing the Bush tax cuts to expire in 2012, ending subsidies to oil and gas companies and eliminating tax breaks for companies that do business overseas. Unfortunately, Obama provided no details or specific proposals. GOP leaders who insisted on extending the Bush era tax breaks for the wealthy are unlikely to favor curbing corporate welfare. Eliminating $125 billion a year in corporate welfare would be more than enough to offset the proposed cuts in domestic spending.

It is clear than neither Obama nor Republicans will on their own volition protect the interests of the truly needy in the budget debate. That’s why Americans need to mobilize to force them to make more sensible decisions. It’s easy to admire how protesters in Egypt and Tunisia have rallied in recent weeks to force a change in their government.

It’s time to raise our voices in the U.S. We have social media and technology at our disposal. Let’s use it to now let our elected officials know we want them to protect average Americans, not big business and the wealthy.

George E. Curry, former editor-in-chief of Emerge magazine and the NNPA News Service, is a keynote speaker, moderator, and media coach. He can be reached through his Web site, www.georgecurry.com You can also follow him at www.twitter.com/currygeorge.

Recession has Expanded Racial Economic Gap

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(NNPA) The notion that when Whites catch a cold, Blacks get pneumonia has been validated in two recent studies that show the economic gap between Whites and people of color has grown during the economic downturn.

That’s the conclusion reached by a Center for American Progress report titled, “The State of Communities of Color in the U.S. Economy” and by a State of the Dream report by United for a Fair Economy titled, “Austerity for Whom?”

“The Great Recession of 2007-2009 produced widespread employment losses for communities of color and White families alike – losses that have yet to be overcome amid the still tentative economic recovery,” the Center for American Progress study observed. “All U.S. households were severely hurt by the recession but communities of color experienced larger losses than whites. This also means that, as the economic recovery deepens and the labor market recovers, communities of color will have to climb out of a deeper hole to regain the same level of economic security as they had before the crisis.”

But there were significant variations even among people of color.

“Americans saw few economic gains during the last business cycle, with stagnant or declining homeownership and wages, high unemployment rates, and low employment rates even as the economy grew,” the Center for American Progress reported. “Latinos, in comparison, saw comparatively strong job gains that were reflected in other gains, particularly in homeownership, during the last business cycle. Those gains, though, were insufficient to provide a buffer for Latinos once the recession hit, leading Latinos to lose most of the ground gained during the previous business cycle [March 2001 to December 2007].”

Although the data showed Asian American employment and income was on par with Whites, that observation could be misleading because it relies heavily on figures for Chinese and descendants from India. Very little data was compiled on Vietnamese Americans or Cambodian Americans, two groups likely to be less affluent than Chinese and Indians.

According to data compiled by the Center for American Progress:

• The unemployment rate for African-Americans was 15.8 percent in the fourth quarter of 2010, compared to 12.9 percent for Latinos, 7.3 percent for Asian Americans and 8.7 percent for Whites.

• Homeownership rates for Blacks in the third quarter of last year was 45 percent, compared to 47 percent for Latinos and 74.7 percent for Whites.

• Racial and ethnic difference have stayed the same or worsened during the recession and recovery. Unemployment rates rose faster for African-Americans and Latinos than for Whites while homeownership rates fell faster. “Trends for poverty rates, health insurance coverage, and retirement savings also show widening gaps by race and ethnicity throughout the recession and recovery after 2007.”

United for a Fair Economy is a Boston-based non-profit organization that focuses on economic equality. It issues a “State of the Dream” report each year on Dr. Martin Luther King Jr.’s birthday.

“Four decades after the Civil Rights movement, Blacks still earn only 57 cents and Latinos earn 59 cents for each dollar of White median family income,” this year’s report noted. “The contrast is even starker for net wealth; that is, the total value of investments, savings, homes and other property minus any debt. Blacks hold only 10 cents of net wealth and Latinos hold 12 cents for every dollar that Whites hold.”

As President Obama and Congress continue to address the nation’s economic woes, they should understand how seemingly neutral changes in Social Security and reducing the number of government employees will have a disproportionate impact on African-Americans.

For example, 59.1 percent of elderly African-Americans and 64.8 percent of elderly Latinos depend on Social Security for more than 80 percent of their family income. Among Whites, the figure is 46 percent. Without Social Security, 53 percent of elderly Blacks and 49 percent of older Latinos would live in poverty.

Largely because of limited job opportunities in the private sector over the years, Blacks have turned to government employment to advance their careers. According to the State of the Dream study, Blacks are 70 percent more likely to work for the federal government than Whites and 30 percent more likely to work in such public sector jobs as teachers, social workers, bus drivers and public health inspectors.

This is particularly true for Black males. Black males earn 57 cents to each dollar of White male earnings, the report states. In the public administration sector, however, Black males earn 80 cents to each dollar of White male earnings.

Whether working in the private or public sector, African-Americans are beginning to see an erosion of past economic gains.

In 1947, Blacks earned 51 cents to each dollar of White family median income. By 1977, African-Americans were earning 56 cents to each White dollar, a gain of 5 cents.

“Then, as the backlash took hold, progress slowed – and stopped,” the State of the Dream report noted. “By 2007, Blacks earned slightly over 57 cents (57.4 cents) to each White dollar, a gain of just one penny in thirty years. Two years later, as the Great Recession set in, Blacks lost a half-cent, ending at 57 cents to each White dollar of median family income.”

As Republicans and Democrats continue to spar over budget cuts, the State of the Dream report proposes more race-sensitive policies.

It says: “We must honor the legacy of Dr. King by enacting policies that can help to narrow the racial economic divide and bring the opportunity for prosperity to all Americans.”

George E. Curry, former editor-in-chief of Emerge magazine and the NNPA News Service, is a keynote speaker, moderator, and media coach. He can be reached through his Web site, www.georgecurry.com. You can also follow him at www.twitter.com/currygeorge.

Democrats and Republicans Should End Corporate Welfare

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Reprinted from Sacramento Bee

Speaker of the House John Boehner wants to cut at least $100 billion from the federal budget. President Obama agrees that there should be some spending reductions, but the budget shouldn’t be balanced on the backs of poor and working-class Americans. There is a way that both camps can have their way – end corporate welfare.

According to the Cato Institute, a libertarian policy group in Washington, corporate welfare cost American taxpayers $92 billion in fiscal 2006, a figure that has grown to approximately $125 billion per year. And, the beneficiaries include such major companies as Boeing, Xerox, IBM, Motorola, Dow Chemical, and General Electric.

The Cato Institute defined corporate welfare as “any federal spending program that provides payments or unique benefits and advantages to specific companies or industries.”

Stephen Slivinski, director of budget studies of the think tank, conducted a detailed policy analysis of the issue in 2007 titled, “The corporate Welfare State: How the Federal Government Subsidizes U.S. Businesses.

The report shows that despite all of the public pleas for the federal government to play a reduced role in private businesses, many Fortune 500 companies are using the federal government as their personal ATMs and have made no moves to get off of the dole.

In fiscal 2006, the study found, the federal government spent $92 billion in direct and indirect subsidies to businesses and private- sector corporate entities.

“Supporters of corporate welfare programs often justify them as remedying some sort of market failure,” the report stated.

“Often the market failures on which the programs are predicated are either overblown or don’t exist.”

That notwithstanding, the report is replete with examples of the type of wasteful government spending that both Democrats and Republicans pretend to abhor. The largest subsidies studied in the report were granted by the Department of Agriculture ($43.7 billion). Much smaller subsidies were provided by the Department of Defense ($11.8 billion), the Department of Transportation ($5.7 billion), the Department of Housing and Urban Development ($5.1 billion) and the State Department ($4.6 billion).

The Export-Import Bank is a perfect example of unjustified federal spending. The stated purpose of the bank is to finance the purchase of U.S. goods in foreign countries. Its 2008 budget request said it was needed “to sustain U.S. jobs by financing U.S. exports.”

The Ex-Im Bank, as it is known, does that “by using taxpayer money to subsidize loans to foreign purchasers of U.S. products and to provide loans and loan guarantees to U.S. companies seeking to enter the export market. It also provides insurance for companies investing overseas,” the Cato report stated.

Boeing, the aircraft giant, receives 54.5 percent of long-term guarantees, causing some to refer to the Export-Import Bank as “Boeing’s Bank.” Other major recipients include General Electric and Conoco Phillips.

“Supporters of the Ex-Im Bank suggest that government credit is needed to level the playing field for U.S. companies as they compete against foreign countries that receive support from their government. Yet, the Ex-Im Bank’s most recent annual Competitiveness Report points out that fewer than one-third of all its loans and guarantees go to counter subsidized competition.”

The Department of Agriculture’s Farm Service Agency Market Access Program “provides the trade associations of private agricultural firms with taxpayer dollars to help offset their foreign advertising cost,” the study noted. “At least 20 percent of this spending goes to promote brand-name products overseas.”

Why should American taxpayers subsidize the foreign advertising budgets of McDonalds, General Mills, Campbell’s Soup, Pillsbury, Miller’s beer and Gallo wines, as has been the case in the past? The largest direct subsidy program in the federal budget is for crop and farm subsidies.

Even though Congress voted in the late 1980s to phase out agricultural subsidies, they have instead increased during the past years, rising from $9.3 billion in 1990 to $24.3 billion in 2005.

According to the study, the proportion of Americans living on farms has declined 16.3 percent in 1948 to approximately two percent in 40 years. Yet, because of technology, farm productivity is at its highest level.

Most farmers don’t receive direct subsidies from the federal government,” the report states. “The taxpayer-financed handouts go to only about one-third of the nation’s farmers and ranchers. So, where does all the taxpayer money spent on farmers actually go? Mainly to large corporate agribusinesses and the richest farmers. In 2005…the richest 10 percent of all subsidy recipients received 66 percent of all subsidies.”

Cash-strapped states will be forced to reexamine state corporate welfare. In Pennsylvania, for example, the state provided more than $40 million in subsidies to a Sony plant, only to see it leave the state just as Volkswagen, the previous owner of the site, had done earlier.

Recognizing the powerful intersection of lobbyists, elected officials and money, the Cato report recognized that reforming corporate welfare is not likely to come about through the works of federal lawmakers heavily influenced by lobbyists. It therefore recommended creating a corporate welfare reform commission. But given the success of Obama’s high-profile deficit commission, his eagerness to make peace with the business community and the Republicans’ traditional pro-business positions, Congress and the executive branch are unlikely consider ending corporate welfare as we know it.

George E. Curry, former editor-in-chief of Emerge magazine and the NNPA News Service, is a keynote speaker, moderator, and media coach. He can be reached through his Web site, www.georgecurry.com You can also follow him at www.twitter.com/currygeorge.

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