Hostile Takeover Threat Spurs Concessions from Michigan Unions

Michigan’s new Emergency Manager Law is already forcing major concessions from unions. The law gives the governor the power to declare a city insolvent and appoint an emergency manager with virtually unlimited power to reorganize every aspect of city business, including dissolving the city entirely. The emergency manager even has the power to terminate collective bargaining agreements.

As a result of these expanded new powers, public employees unions in some Michigan municipalities are already making large preemptive concessions to keep their cities from tripping any of the “triggers” in the new law that might give the governor an opening to send in a union-busting emergency manager, Eartha Jane Melzer reports in the Michigan Messenger.

In Flint, the firefighters’ union agreed to increase contributions to health insurance and give up holiday pay and night shift differentials. Flint Firefighters Union President Raul Garcia told the Wall Street Journal that these concessions were driven by fear of a state takeover of Flint. “I would rather give concessions that I would like than have an [emergency financial manager] or something of that magnitude come in and say this is what you are going to do,” Garcia said.

The new law also gives the Emergency Manager the power to privatize prisons, Melzer notes.

Detroit grows green

The citizens of Detroit aren’t waiting around for an emergency manager to take over. The city’s industrial economy is dying, but its grassroots economy is stirring to life, Jenny Lee and Paul Abowd report in In These Times. Detroit residents have been growing their own food in town for decades, but recently activists and the city have joined forces to link many small producers into a network that will provide food security for the city.

Wal-Mart and wage discrimination

Next week, the Supreme Court will take up the case of 100 women who are suing Wal-Mart for wage discrimination. As Scott Lemieux explains in The American Prospect, the Court will decide whether these women can band together to sue the nation’s largest retailer, or whether each must sue the firm individually.

Lemieux argues that, for the sake of women’s rights at work, it is very important that these Wal-Mart employees be allowed to sue together instead of one at a time:

Given the compelling stories these individual women can tell, does it matter whether they can file suit collectively? Absolutely, for at least two reasons. First of all, only a class-action suit can properly create a record of the systematic gender discrimination at Wal-Mart. Any individual case can be dismissed as an anomaly or a misunderstanding, but the volume of complaints makes clear that gender discrimination was embedded deeply within the culture of the corporation, a very relevant fact for a discrimination suit.

Litigation is expensive and time-consuming, for the individuals and for the court system. Forcing victims of discrimination to sue one by one makes it less likely that they will seek justice, especially if they’re suing because they were underpaid in the first place. Wal-Mart claims that the class is too large to be allowed to proceed, and that the women couldn’t possibly have similar enough claims. But as Lemieux points out, the class is huge because Wal-Mart is huge.

War and the deficit

Jamelle Bouie writes at TAPPED, in response to the United States’ new military commitments in Libya:

I just wish we could at least acknowledge the obvious truth: conservatives don’t care about deficits but will use them to cut spending on poor people. When it comes to things they like — wars, for instance — they’re willing to pay any price.

The U.S. fired 110 Tomahawk Missiles at Libya on Saturday, at an estimated total cost of $81 million, or 33 times the annual federal funding for National Public Radio.

Sally Kohn of TAPPED notes that the United States scraped together $2.3 million worth of “blood money” to pay off the families of the victims of Raymond Davis, a rogue CIA operative who shot and killed two men who tried to rob him in Pakistan. Laura Flanders of GRITtv calculates that $2.3 million ransom for a single killer would have paid the salaries of 45 Wisconsin public school teachers for a year.

Public pensions 101

We often hear that public pensions are unfunded. On the Breakdown, Chris Hayes of The Nation asks economist Dean Baker what this actually means. Baker explains that so-called “defined benefit” pensions have become rare in the private sector, but remain relatively common in the public sector. A defined benefit pension guarantees the pensioner a certain income. Most private sector pensions are so-called “defined contribution” plans, which means that employer puts aside a certain amount of money each month for the employee, but there’s no guarantee how much return the pensioner will eventually get on that investment.

A state pension fund is considered unfunded if the assets the fund has today aren’t sufficient to cover the defined benefits that are due to workers over the next 30 years. Baker notes that many funds are a lot healthier than they look because their values were calculated at the nadir of the stock market in 2009. The market has since made up a large percentage of that ground. A handful of states were mismanaging their pension funds, but most states have been responsible.

Ethical outlaws

Bea is a manager of a big-box chain store in Maine. The company pays her staff between $6 and $8 an hour and many are struggling. Even as she tries to keep a professional atmosphere in the store, Bea has been known to bend the rules to help an employee in need, as Lisa Dodson describes in YES! Magazine:

When one of her employees couldn’t afford to buy her daughter a prom dress, Bea couldn’t shake the feeling that she was implicated by the injustice. “Let’s just say … we made some mistakes with our prom dress orders last year,” she told me. “Too many were ordered, some went back. It got pretty confusing.” And Edy? “She knocked them dead” at the prom.

Andrew, a manager in the Midwest is quietly padding his employees’ paychecks because he knows their wages aren’t enough to live on. Andrew knows he might be accused of stealing, but he does it anyway because the alternative is unthinkable.

Dodson interviewed hundreds of low- and middle-income people about the economy between 2001 and 2008. Along the way, she stumbled on what she calls “the moral underground,” a world where managers bend the rules at corporate expense to enable their low-wage staff to get by. It is legal to pay people less than a living wage, but increasing numbers of people like Bea and Arthur have decided that the situation is morally unacceptable, and quietly acted accordingly.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint.

Related Stories:

Fascism Comes To Michigan

Update: Wal-Mart May Have Discriminated Against Millions of Women

Does A Bus Driver Make $160,000?


Photo courtesy of bluewinx15 via flickr
written by Lindsay Beyerstein, Media Consortium blogger


Mick R.
Mick R7 years ago

Barbara Cindric - Cities, counties and staes are not corporations and can't be run like them for numerous reasons. Besides corporations declare bankruptcy all the time and guess who bails them out. You the taxpayer, both under Bush and President Obama. Unions are the only organizations fighting for working women and men and, if you read a little history, you'd know not to curse them but support them whenever possible. By the way, foreclosures are due almost exclusively to corporate greed in the current economic downturn. Tell that hotdog thing to the top 1% who own 34% of this nations net wealth or the top 20% who own 85% of it. Quit giving corporate welfare and make them be socially responsible and there would be plenty of money to go around.

Martha Eberle
Martha Eberle7 years ago

All these stories were great!

... the managers who helped out their employees "under the table"; I especially liked the "prom dress" story.

... the courageous people in Flint and Detroit, making the concessions, so that more ruinous things don't happen to them (remember the "shared sacrifice" all of us are supposed to make, except Wall St and the banks?)

... the brave women of Wal-Mart, who have been waiting almost ten years to have their case heard -- it MUST be a class action suit, or they don't have a chance

... the MILITARY spending -- 110 Tomahawk missiles in a couple minutes, used 33 times the money of the annual budget of NPR, yet the repubs want to cancel NPR's funding!!!

... All of these stories bring me some hope in these troubled times.

Mick R.
Mick R7 years ago

Cora B. - This has nothing to do with putting the taxpayer first. A little research and you will find that in almost every area of the country public employees are neither over paid nor over compensated. This is about the politics of power and class warfare.

Mick R.
Mick R7 years ago

Robert O. - You are obviously ignorant of both unions, of any type, and of the draconian law that is being used to do irreversable damage to the middle class and the state of Michigan. Read a little you might learn something.

Robert O.
Bob B7 years ago

Takes a lot of courage and determination to battle with government unions in an effort to protect taxpayers. Let's hope the taxpayers win.

And what is the point of a government union? It's to be able to shut the whole system down if they don't get everything they want.

Cora B.
Cora Bird7 years ago

Hat's off to any government leader who puts the taxpayers first over unions and well paid government employees. Remember these people work for you.

Nicole Oliva
Nicole O7 years ago


Sound Mind
Ronald E7 years ago

Barbara C, I do believe people have been eating hot dogs at best, many living on rice and beans for MUCH too long now. The current crop of politicians are psychopathic, marching to the Koch Bros., big oil’s, Healthcare “Insurer’s” Fascist agenda. They covet possessions and power, they gain special pleasure in usurping and taking from others; what they can plagiarize, swindle, and extort are fruits far sweeter than those they can earn through honest labor. And once having drained what they can from one source, they will turn on another to exploit, bleed, and then cast aside; their pleasure in the misfortune of others is unquenchable. People are used as a means to an end; they are to be subordinated and demeaned.

lyn L.
l L7 years ago

And Barb' after they bleed you people that you are so happy that this is happening to; your local government is going to dissappoint you and screw even you, mark my words. cause what you are finding glee about is hitler's coming into power in your life time. They did the same tactics to germany during hitlers rise to power. You better hope that you won't be in the group who is the next eye of target. Gotta wonder why none of the national governments are not interveneing to stop this?

lyn L.
l L7 years ago

And Barb' after they bleed you people that you are so happy that this is happening to; your local government is going to dissappoint you and screw even you, mark my words. cause what you are finding glee about is hitler's coming into power in your life time. They did the same tactics to germany during hitlers rise to power. You better hope that you won't be in the group who is the next eye of target. Gotta wonder why none of the national governments are not interveneing to stop this?