THE BLOG
08/11/2011 05:31 pm ET Updated Oct 11, 2011

The Pebble in the Shoe of the Communications Workers Strike Against Verizon

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.