Friday, April 30, 2010

President Makes "Legal" Payoffs to Unions

News you might not read about in the mainstream media...

In what has the appearance of a quid pro quo, President Obama has found a way to subsidize the beleaguered unions by executive order. With the swift stroke of the pen, Obama is directing all non-union employees contracting with public construction projects to "donate" 4-5% of their paychecks into the fledgling union pension funds. In the fifties and sixties, they called this extortion and racketeering. Today, it's apparently called legal payback.

Obama Gives Unions a 'Massive Payback' with Executive Order, Contractors Claim

( – The nation’s non-union contractors, who constitute the bulk of the construction industry, say President Obama has given a “massive payback” to unions by implementing an executive order that would help them secure billions of dollars in construction contracts on public projects -- and a House Republican congressman agrees.

The executive order, implemented in mid-April, encourages federal agencies to use “project labor agreements” or PLAs on their construction projects, which could require any non-union workers to pay into ailing union pension funds and follow work guidelines set out by a union. link
In an industry where thousands are struggling to find work, this sweetheart deal/payoff from the President to the underfunded union pension funds serves as another blow to private businesses while propping up unions that can not compete in the private sector because their retirement plans are out of line with industry standards. Under Obama's PLA directive, this would be no problem by transferring non-union wages into the funds. Rep. John Kline (R-Minn)agrees:

Rep. John Kline (R-Minn.), who joined the news conference, agreed, telling he believed that the new policy saw unions “scrambling” to make their under-funded pension plans solvent by adding new contributors through PLAs.

Union pension plans, Kline said, are “grotesquely under-funded.”

“(Unions) are desperate,” Kline said. "(T)he real solution here is for them to seriously look at the benefits and renegotiate the exorbitant benefits that they’re getting -- in other words tightening their belt --and they’ve been unwilling to do that, so they’re scrambling for anything else to make these things solvent.”

Brett McMahon, a vice president at Miller & Long Concrete Construction, explained how union pension plans will benefit under PLAs from his private workers, because workers at competitive companies are essentially giving their wages to union retirees.

“We would have to divert contributions -- 4 or 5 percent of weekly paycheck, literally --into a pension fund where just by the rules of it -- just by the rules of the vesting schedule, which is a 5 year minimum -- there is absolutely no chance whatsoever that a new worker will be vested during the course of a project. How could anyone possibly rationalize taking 4 or 5 or 6 percent of a guy’s literal paycheck, and depositing something that he has absolutely no possibility whatsoever of being on?”
For the full story on how the PLA's work, (and the union's response) please read the whole article at CNS.

How only 15% of the construction workforce is currying favor with our President while the other 85% are being asked/directed to subsidize the unions should be a criminal act, but not so in today's business climate. Once again, the private sector gets the shaft.

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