There are two ways to look at the Communications Workers of America (CWA) strike against Verizon, mirror images of each other. (The International Brotherhood of Electrical Workers also is striking, but CWA is the main labor voice.)
First: Why should the striking workers have it better than everyone else? Why should they get away with having paid-for health care and time off and all the other things that the company now wants to take away?
Second: Why don't other workers have it as good as the striking workers? Why don't other people have paid-for health care and time off and all the other things that Verizon now wants to take away?
Depending on how one looks at it, the strike could be seen as a last stand for a standard of living that's rapidly vanishing.
The political chattering classes like to make a big deal about the demise of the middle class in America, yet at the same time the government and business have done all they can to make sure that whatever middle class can struggle to survive doesn't interfere with the rights of corporations to make as much money as they can (and to contribute as much money as they can to political campaigns).
This is not the economy of the 1950s when unions were strong and the tax rates on the richest people were in the 70 percent range. Unions are decimated and demonized, tax rates on the wealthy and corporations are lower than ever, U.S. companies are busy shipping jobs overseas while sitting on big profits without having to hire U.S. workers or even try to bring the economy out of the doldrums.
Financially, the company is doing well, with more than $30 billion in profits over the last three years on which they have paid no taxes -- and even got $1 billion in tax benefits. So why Verizon going after the unions so that the company wants to do away with paid health care, cutting disability benefits, reducing sick days and holidays, to name just a few items on the bargaining table? Here's the union's list of Verizon management demands:
• Wages - both annual and progression increases will be tied to your yearly evaluation. If you receive a "Does Not Meet Position Requirements" you will not receive an increase.
• Eliminate Night and Saturday Differential
• Eliminate Sunday premium pay.
• Eliminate Double Time for hours past 49/week
• Eliminate all Overtime Caps.
• Eliminate city allowances.
• Create new job titles for the consumer and business call centers that would work on a commission-based wage schedule.
Pensions
• Eliminate pension accruals. For anyone currently on the payroll your pension will be frozen as of December 31, 2011 and after that, there will be no more pension plan.
• Eliminate the Pension Cash-Out option.
• Modify the 401(k) Plan and the CPS.
• Eliminate the Sickness Death Benefit.
Benefits
• Eliminate the current health care, prescription, dental, and vision plans and offer plans with high deductibles and contributions.
• Eliminate accident disability benefits.
• Cut in half the sickness disability benefits.
• Reduce sick time pay to 5 days per year for those members with 20 or more years; 4 days for those with 15-20 years; 3 days for those with 7-15 years; 2 days for those with 2-7 years; 0 days for those with less than 2 years.
• Reduce Paid Holidays to seven.
Job Security
• Eliminate the Job Security Provisions for all employees.
• Eliminate the Movement of Work Protection
• Eliminate the 35 mile transfer provision
• Eliminate provisions in Force Adjustment Plan
• Eliminate New Contracting Initiatives agreement - which would allow them to increase the level of contracting
Other
• Eliminate the Next Step Program
• Eliminate the half day on Christmas Eve
• Reduce the notice to the Union on Major technological changes from 6 months to 30 days
• Eliminate the Dependent Care Reimbursement Fund
In most sectors, there is international competition depressing prices and competition to see who can hire the cheapest overseas labor. But telecommunications is not one of those sectors. The industry has the type of jobs not easily shifted overseas. Maintaining a telecom network and serving customers has to be done by people in the area. Verizon is stuck with American workers and their salaries and benefits.
Much of the angst has come because the wireline side of the business is supposedly lagging, at least in comparison to the wireless side of the house. Even so, the high-speed connections market is growing, and the average revenue per user Verizon collects is growing as well.
Even if one concedes that wireline is lagging, what is the justification for treating workers in the wireless side the same way? The Wall Street Journal reports that the few union workers in the wireless business have already taken the same cuts that Verizon wants to impose on union workers in the wireline business.
Here is one piece the company's response that exemplifies the conflict: "Today, Verizon spends $4 billion annually on employee health care, and certain representatives of CWA's described 'middle class' workforce earn a total of $140,000 annually in total compensation and benefits. Faced with these realities, the company must make changes to its cost structure to remain competitive."
There are a couple of responses here. First, if Verizon really was concerned about rising health care costs, it should have supported a progressive health care bill -- a public option, single-payer plan, for example. Second, so what if some of the 'middle class' work force earns $140k? I'd bet that many white-collar types do. What's the problem with some union members earning it? With seniority and OT, that's not a big deal.
And third, with whom is the company concerned about remaining competitive? It has a near-monopoly on landline businesses and could soon find itself in a duopoly on the wireless side of which it now has close to 40% of the business. If any companies are sitting pretty these days, phone companies come the closest. The industry has dominated the regulatory apparatus so that, in the name of "deregulation," most competition and consumer choice has been eliminated. It has spread sufficient wealth in the legislature to members of both parties so that any attempts to impose any rules that enable competition, fairness or consumer choice are met with immediate denunciations and angry letters with many signatures.
Now we come to the pebble-in-the-shoe. Despite the general sympathy one might have for the unions as they fight to preserve their benefits, the policies the CWA follows can't help but generate not a little schadenfreude. We ask: Why is telecom policy the exception to the generally progressive union policies? Further:
Why with the company taking such a hostile attitude toward its workers, would the union stroll arm in arm with Verizon (and with AT&T for that matter) through the telecom public policy world supporting policies that hurt consumers? What benefits can they possibly derive from supporting the companies' efforts to do away with an Internet in which everyone has an equal opportunity to get online? Does the union think that by supporting AT&T's takeover of T-Mobile that the company will go easier on them when their contracts come up (even as the odds of the deal happening are dropping)? Why does the union defend the companies at every turn, even defending the loss of jobs because the traditional wireline business is fading?
It would be nice if coming out of this strike, and anticipating negotiations with AT&T or other companies, CWA would take a more enlightened stand toward consumers generally, along with concern for union members and jobs. Given the union's history, however, it's not likely.
Follow Art Brodsky on Twitter: www.twitter.com/artbrodsky
Anyway, if their skills are so great and they are so valuable to the company, then they shoudl get more else where. Let them go and let people who can accept the terms of Verizon work theri instead.
Kai
A merchant, it has been said very properly, is not necessarily the citizen of any particular country.Bk III, Ch IV, pg.456
Whenever the legislature attempts to regulate the differences between masters and their workmen, its counsellors are always the masters. When the regulation, therefore, is in favor of the workmen, it is always just and equitable; but it is sometimes otherwise when in favor of the masters. Bk I, Ch x, Part II, pg.168
We rarely hear, it has been said, of the combinations of masters, though frequently of those of the workman. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Bk I, Ch VIII, pg.80
A man must always live by his work, and his wages must at least be sufficient to maintain him. They must even upon most occasions be somewhat more, otherwise it would be impossible for him to bring up a family, and the race of such workmen could not last beyond the first generation. Bk I, Ch VIII, pg.81
The Wealth of Nations is one of my favorite books and provides the foundation for modern economics. It is, however, not the definitive work on wage rates and unemployment (just like Freud’s work is not the definitive basis of today’s psychoanalysis). Much research has been done since then.
The best people on wage theory in my opinion are the Austrians, through Real Business Cycle Theory. www.mises.org.
Good luck on your continued education. Hopefully with a little reading you can evolve to 21st century understanding of the wage rate determination instead of referring to 18th century pre-Industrial Revolution literature.
I will leave you with Quote from Smit:
‘There is one sort of labour which adds to the value of the subject upon which it is bestowed; there is another which has no such effect. The former, as it produces a value, may be called productive; the later, unproductive labour. Thus, the labour of a manufacturer adds, generally, to the value of the material which he works upon, that of his own maintenance, and of his master‟s profit. The labour of a menial servant, on the contrary, adds to the value of nothing.… A man grows rich by employing a multitude of manufacturers; he grows poor by maintaining a multitude of menial servants. The labour of the latter, however, has it value, and deserves its rewards as well. (WN: p191)’
In the case of the Verizon ‘wired’ workers, they are the unproductive or menial labour.
Kai
Historically, local phone service NEVER made money, but was supported by long distance and business accounts --not its also supported by HSI and cell phones.
What about the billions that management has received during the past contract -- the media isn't talking much about that.
STRIKE, STRIKE, STRIKE!!!
To sum it up the vast majority of the wireless traffic travel over the wireline network. The wireline network was, and still is, built and maintained by the Union workers. The high quality work ethics and standards of these workers made Bell Atlantic the huge profits which enabled them to become Verizon, and build up Verizon wireless. Now Verizon wants to strip these workers of everything they bargained for in the last 50 years? That is the definition of corporate greed!
stealing as much cable as you can,
STEAL AWAY!!
There is a huge misunderstanding among the public, and misrepresentation by Verizon, about the difference between the WIRELINE and WIRELESS networks.
When you make a call on your cellphone in Philly to your sister in D.C. the call does not magically go through the air from phone to phone. The signal is WIRELESS from you phone to the nearest cell tower, then it it goes on a copper or fiber WIRELINE data circuit, to the nearest WIRELINE central office, it is the routed via WIRELINE fiber backbone to the WIRELINE central office nearest to your sisters location, where it travels on a copper or fiber WIRELINE data circuit to the cell tower closest to you sister, where it becomes a WIRELESS signal to her phone. Almost all of the WIRELINE paths illustrated above are installed and maintained by the CWA and IBEW workers who are currently on strike. In most cases the vast majority of your WIRELESS call is traveling on the WIRELINE network.
American business is out to get the workers...If you trust management you are probably a corporate sycophant !
So, silly company for trying to figure out how make money from their under-performing division.
My two posts above are in response to your ludicrous assertions regarding wireline and wireless. Please read them for an education on the reality of the business.
P.S. Can you please reference these magical financial reports you have read?
Is the union standing up for position incompetence? What is this, a teachers' union in New York?
"In 2010, Verizon's tax bill was $2.5 billion on total income of $12.7 billion, compared with taxes of $1.9 billion on total income of $13.5 billion in 2009. Over the last five years, Verizon has paid out more than $7.5 billion in income taxes."
http://newscenter.verizon.com/2011-bargaining/issue-accuracy.html
These are the types of wages and benefits everyone should be fighting for. Instead the upper 1% have us in-fighting over grand political positions that we have no influence over.
Good luck CWA - hope you win the last stand of the middle class.
Do you honestly think that if Verizon is able to pay lower wages you will get lower prices??
Come to the 21st century- any savings goes to the company/stockholders.
As sanemd stated they will not lower prices.
In fact the reason they restructured their data plans and eliminated unlimited data (essentially a price hike), is because they are overselling the wireless services. What the vast majority of the public fails to get, is that the majority of the wireless traffic, both voice and data travels on the wired backbone and infrastructure installed and maintained by the workers now on strike.
Since two contracts ago (8 yrs) our numbers have been nearly halved, from around 80,000 members to 45,000. This was done mostly through attrition and early retirement offers, in order to "keep Verizon competitive in the changing wireline environment." The amount of landlines has not dropped by half in this time period, so the existing workers have been forced to increase productivity to maintain the same level of service (which we have). However with this already reduced workforce, they cannot upgrade the backbone network to the cell sites fast enough to keep up with the bandwidth needs of the wireless products they are selling. If they break the union and get contractors or replacement workers to upgrade the network do you really think they will lower the wireless service prices? I highly doubt it.