Meat&Poultry - April 2012 - (Page 102)

Labor BY RICHARD ALANIZ Balancing and bargaining act It’s a story that’s playing out across the country – cash-strapped governments are scrambling to balance their budgets while hamstrung by the contracts of current and retired public union workers. The situation has led to demonstrations, legislators fleeing their states and harsh words from both sides. The details differ from state to state, but governments are fi nding themselves facing the same fundamental fi nancial challenges brought on by generous union contracts. As states try to fi ll budgetary gaps, they have little maneuvering room because of existing agreements with public Facing a $15 billion budget deficit, the state’s General Assembly passed a 45 percent corporate tax increase and a 66 percent income tax increase in January. But while the state can raise taxes, it cannot lay off any members of the American Federation of State, County, and Municipal Employees Council 31. That’s because in the midst of his reelection campaign last year, the Democratic governor Pat Quinn signed an agreement with the union promising no layoffs or facility closures until the end of June 2012. If the state does lay off any employees, they will have to be non-union workers. For weeks, protestors turned the statehouse in Madison, Wis., into a circus while they railed against Walker’s actions to balance the budget. Although Walker’s actions set off a fi restorm of protests, many states do not grant their workers any collective bargaining rights. Pensions persist Pensions have also become major fi nancial burdens for states looking to balance their budget. Obviously, not all the public sector employees who receive pensions belong to unions, but those in unions often tend to have more muscle when it comes to negotiating and protecting pension benefits. According to some estimates, governments across the country have $1 trillion in unfunded pension liabilities. As state, local and the federal governments strive to balance budgets in an economy that is still struggling, companies need to keep a careful eye on how exactly those holes will be fi lled. If public-sector unions don’t step up to do their part and share in the sacrifice, governments will have limited options. They can take on the unions directly, which can be difficult and politically dangerous. Or they can try to raise money through higher taxes, which will hurt businesses and their private-sector employees, who have already suffered in this difficult economy. ■ Richard Alaniz is senior partner at Alaniz and Schraeder, a national labor and employment firm based in Houston. We would like to hear from you – to comment on this story or to request reprints, contact us by email at Cash-strapped governments are scrambling to balance their budgets while hamstrung by the contracts of current and retired public union workers. sector union members. Without the ability to renegotiate contracts or get concessions from unions, governments are left to increase their tax rates and cut services. And the consequences for businesses and their private-sector employees are becoming steeper all the time. Collective bargaining rights In Wisconsin, collective bargaining rights for public unions have been a major sticking point. Wisconsin governor Scott Walker, in taking on the collective bargaining rights of his state’s public sector employees, has pointed to the highest-paid employee in the city of Madison. In 2009, it was a bus driver who earned $159,258. That included $109,892 in overtime, which was guaranteed as part of the union’s collective bargaining agreement. The bus driver was one of seven in Madison who made more than $100,000 per year in 2009. Walker said in a statement in March, “Our reform plan gives state and local governments the tools to balance the budget through reasonable benefit contributions. In total, our budget-repair bill saves local governments almost $1.5 billion, outweighing the reductions in state aid in our budget. Money equals power Some public-sector unions, particularly teachers unions, donate huge amounts of money to political candidates, creating concerns about cozy relationships with politicians. Consider the situation in Illinois. 102 • Meat&Poultry • April 2012 •

Table of Contents for the Digital Edition of Meat&Poultry - April 2012

Meat&Poultry - April 2012
Table of Contents
Commentary - Assassinating effective technology
Business Notes - LFTB fallout continues
Business Notes - Thompson to CEO of McDonald’s
Business Notes - Introducing: NAMA
Business Notes - Group to acquire Burger King restaurants
Business Notes - JBS may leave Argentina
Business Notes - JBS Q4 earnings advance despite Pilgrim’s Pride loss
Business Notes - Tyson addresses its strategy and stance on LFTB
Washington - Family farm labor pains
Cover Story - Team builder
Food Safety - Full speed ahead
CEO Series - Executive experience
Ground Beef - Burger nirvana
Meat Processing - Operations & Engineering
Flooring - Building a solid foundation
Contract Sanitation - Focus on plant sanitation
Sanitation Tips (Consejos de Sanidad) - Cleaning compounds
Sanitation Tips - Be cautious with chemicals
Packaging Solutions - Sandwich success
Ingredient Issues - ‘Real food’ nutrition
Ingredient Trends - Tracking global ingredient trends
Small Business Matters - Remote possibilities
Leadership Development - Creating future leaders
From the Corral - On-farm handling
Labor - Balancing and bargaining act
Names in the News
New Product Showcase
Classified Advertising
The Insider

Meat&Poultry - April 2012