Thousands protest anti-union bill in Wisconsin
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AP – In a Feb. 15, 2011 photo, people put down sleeping bags and blankets for an all-night vigil at the Capitol …
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By SCOTT BAUER, Associated Press – 1 hr 23 mins ago
MADISON, Wis. – Thousands of people descended on the Wisconsin state Capitol again Wednesday to protest a bill that would strip most public employees of their collective bargaining rights, but Gov. Scott Walker insisted he has the votes to pass the measure.
On the second consecutive day of demonstrations, Walker said he was open to making changes in the legislation, the boldest anti-union proposal in the nation. But he said he would not "fundamentally undermine the principles" of the bill, which he says is needed to help balance a projected $3.6 billion budget shortfall and avoid widespread layoffs.
"We're at a point of crisis," Walker said.
The full Legislature could begin voting on the proposal as early as Thursday.
More than 13,000 protesters gathered at the Capitol on Tuesday for a 17-hour public hearing on the measure. Thousands more came Wednesday, with hundreds chanting "Recall Walker now!" outside the governor's office.
If adopted, the bill would mark an especially dramatic shift for Wisconsin, which was the first state to pass a comprehensive collective bargaining law in 1959. The American Federation of State, County and Municipal Employees — the national union representing all non-federal public employees — was founded in 1936 in Madison.
There were some signs that support for the plan may be waning among Republicans who control the Legislature. Senate Republicans met in secret Wednesday morning to discuss the bill. Asked where Republicans stood on Walker's proposal, Sen. Dan Kapanke of La Crosse told The Associated Press, "That's a really good question. I don't know."
The protests have been larger and more sustained than any in Madison in decades. More than 1,000 protesters, many of whom spent the night in sleeping bags on the floor of the Rotunda, shouted "Kill this bill!" on Wednesday.
In Madison, more than 40 percent of the 2,600 union-covered teachers and staff called in sick, forcing the superintendent to call off classes Wednesday in the state's second-largest district. No other widespread sickouts were reported at any other school, according to the state teachers union which represents 98,000 teachers and staff.
Prisons, which are staffed by unionized guards who would lose their bargaining rights under the plan, were operating as normal without any unusual absences, according to Department of Corrections spokeswoman Linda Eggert.
Walker has said he would call out the National Guard to staff the prisons if necessary. A union leader for prison workers did not immediately return messages.
Before Tuesday's marathon hearing, Republican leaders in the Senate and Assembly said they had enough votes to pass the bill as Walker proposed.
Scott Spector, a lobbyist for AFT-Wisconsin, which represents about 17,000 public employees, said the demonstrations were having an effect on lawmakers.
Union representatives were attempting to sway key moderates for a compromise, but Democrats said the bill would be tough to stop. Democrats lost the governor's office and control of the Legislature in the November midterm elections.
"The Legislature has pushed these employees off the cliff, but the Republicans have decided to jump with them," said Sen. Bob Jauch, one of 14 Democrats in the 33-member chamber.
While other states have proposed bills curtailing labor rights, Wisconsin's measure is the most aggressive anti-union move to solve budget problems. It would end most collective bargaining for state, county and local workers, except for police, firefighters and the state patrol.
Protesters targeted the budget committee's public hearing Tuesday to launch what Republican Rep. Robin Vos called a "citizen filibuster," which kept the meeting going until 3 a.m. Wednesday.
Two floors below the hearing, dozens of University of Wisconsin-Madison teaching assistants and students poured into the Capitol rotunda late Tuesday evening, putting down sleeping bags and blankets. Many were asleep on the floor when the hearing ended.
"I just think it's really crappy," said Alison Port, a 19-year-old freshman from Wauwatosa. "Let's take all the rights away. If he starts here, where's he going to stop? What else is he going to throw at us? It's only going to get more extreme."
But when voters elected Walker, an outspoken conservative, along with GOP majorities in both legislative chambers, it set the stage for a dramatic reversal of Wisconsin's labor history.
Walker's plan would make workers pay half the costs of their pensions and at least 12.6 percent of their health care premiums. State employees' costs would go up by an average of 8 percent. The changes would save the state $30 million by June 30 and $300 million over the next two years to address a $3.6 billion budget shortfall.
Unions could still represent workers, but could not seek pay increases above those pegged to the Consumer Price Index unless approved by a public referendum. Unions also could not force employees to pay dues and would have to hold annual votes to stay organized.
In exchange for bearing more costs and losing leverage, public employees were promised no furloughs or layoffs. Walker has threatened to order layoffs of up to 6,000 state workers if the measure does not pass.
Wisconsin is one of about 30 states with collective bargaining laws covering state and local workers.
Walker has argued that the public employee concessions are modest considering what private sector workers have suffered during the recession. Democratic opponents and union leaders said Walker's real motive is to strike back at political opponents who have supported Democrats over the years.
Wednesday, February 16, 2011
http://finance.yahoo.com/news/How-the-middle-class-became-cnnm-2876148381.html
How the middle class became the underclass
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Annalyn Censky, staff reporter, On Wednesday February 16, 2011, 9:28 am EST
Are you better off than your parents?
Probably not if you're in the middle class.
Incomes for 90% of Americans have been stuck in neutral, and it's not just because of the Great Recession. Middle-class incomes have been stagnant for at least a generation, while the wealthiest tier has surged ahead at lighting speed.
In 1988, the income of an average American taxpayer was $33,400, adjusted for inflation. Fast forward 20 years, and not much had changed: The average income was still just $33,000 in 2008, according to IRS data.
Meanwhile, the richest 1% of Americans -- those making $380,000 or more -- have seen their incomes grow 33% over the last 20 years, leaving average Americans in the dust. Experts point to some of the usual suspects -- like technology and globalization -- to explain the widening gap between the haves and have-nots.
But there's more to the story.
A real drag on the middle class
One major pull on the working man was the decline of unions and other labor protections, said Bill Rodgers, a former chief economist for the Labor Department, now a professor at Rutgers University.
Because of deals struck through collective bargaining, union workers have traditionally earned 15% to 20% more than their non-union counterparts, Rodgers said.
But union membership has declined rapidly over the past 30 years. In 1983, union workers made up about 20% of the workforce. In 2010, they represented less than 12%.
"The erosion of collective bargaining is a key factor to explain why low-wage workers and middle income workers have seen their wages not stay up with inflation," Rodgers said.
Without collective bargaining pushing up wages, especially for blue-collar work -- average incomes have stagnated.
International competition is another factor. While globalization has lifted millions out of poverty in developing nations, it hasn't exactly been a win for middle class workers in the U.S.
Factory workers have seen many of their jobs shipped to other countries where labor is cheaper, putting more downward pressure on American wages.
"As we became more connected to China, that poses the question of whether our wages are being set in Beijing," Rodgers said.
Finding it harder to compete with cheaper manufacturing costs abroad, the U.S. has emerged as primarily a services-producing economy. That trend has created a cultural shift in the job skills American employers are looking for.
Whereas 50 years earlier, there were plenty of blue collar opportunities for workers who had only high school diploma, now employers seek "soft skills" that are typically honed in college, Rodgers said.
A boon for the rich
While average folks were losing ground in the economy, the wealthiest were capitalizing on some of those same factors, and driving an even bigger wedge between themselves and the rest of America.
For example, though globalization has been a drag on labor, it's been a major win for corporations who've used new global channels to reduce costs and boost profits. In addition, new markets around the world have created even greater demand for their products.
"With a global economy, people who have extraordinary skills... whether they be in financial services, technology, entertainment or media, have a bigger place to play and be rewarded from," said Alan Johnson, a Wall Street compensation consultant.
As a result, the disparity between the wages for college educated workers versus high school grads has widened significantly since the 1980s.
In 1980, workers with a high school diploma earned about 71% of what college-educated workers made. In 2010, that number fell to 55%.
Another driver of the rich: The stock market.
The S&P 500 has gained more than 1,300% since 1970. While that's helped the American economy grow, the benefits have been disproportionately reaped by the wealthy.
And public policy of the past few decades has only encouraged the trend.
The 1980s was a period of anti-regulation, presided over by President Reagan, who loosened rules governing banks and thrifts.
A major game changer came during the Clinton era, when barriers between commercial and investment banks, enacted during the post-Depression era, were removed.
In 2000, President Bush also weakened the government's oversight of complex securities, allowing financial innovations to take off, creating unprecedented amounts of wealth both for the overall economy, and for those directly involved in the financial sector.
Tax cuts enacted during the Bush administration and extended under Obama were also a major windfall for the nation's richest.
And as then-Federal Reserve chairman Alan Greenspan brought interest rates down to new lows during the decade, the housing market experienced explosive growth.
"We were all drinking the Kool-aid, Greenspan was tending bar, Bernanke and the academic establishment were supplying the liquor," Deutsche Bank managing director Ajay Kapur wrote in a research report in 2009.
But the story didn't end well. Eventually, it all came crashing down, resulting in the worst economic slump since the Great Depression.
With the unemployment rate still excessively high and the real estate market showing few signs of rebounding, the American middle class is still reeling from the effects of the Great Recession.
Meanwhile, as corporate profits come roaring back and the stock market charges ahead, the wealthiest people continue to eclipse their middle-class counterparts.
"I think it's a terrible dilemma, because what we're obviously heading toward is some kind of class warfare," Johnson said.
Annalyn Censky, staff reporter, On Wednesday February 16, 2011, 9:28 am EST
Are you better off than your parents?
Probably not if you're in the middle class.
Incomes for 90% of Americans have been stuck in neutral, and it's not just because of the Great Recession. Middle-class incomes have been stagnant for at least a generation, while the wealthiest tier has surged ahead at lighting speed.
In 1988, the income of an average American taxpayer was $33,400, adjusted for inflation. Fast forward 20 years, and not much had changed: The average income was still just $33,000 in 2008, according to IRS data.
Meanwhile, the richest 1% of Americans -- those making $380,000 or more -- have seen their incomes grow 33% over the last 20 years, leaving average Americans in the dust. Experts point to some of the usual suspects -- like technology and globalization -- to explain the widening gap between the haves and have-nots.
But there's more to the story.
A real drag on the middle class
One major pull on the working man was the decline of unions and other labor protections, said Bill Rodgers, a former chief economist for the Labor Department, now a professor at Rutgers University.
Because of deals struck through collective bargaining, union workers have traditionally earned 15% to 20% more than their non-union counterparts, Rodgers said.
But union membership has declined rapidly over the past 30 years. In 1983, union workers made up about 20% of the workforce. In 2010, they represented less than 12%.
"The erosion of collective bargaining is a key factor to explain why low-wage workers and middle income workers have seen their wages not stay up with inflation," Rodgers said.
Without collective bargaining pushing up wages, especially for blue-collar work -- average incomes have stagnated.
International competition is another factor. While globalization has lifted millions out of poverty in developing nations, it hasn't exactly been a win for middle class workers in the U.S.
Factory workers have seen many of their jobs shipped to other countries where labor is cheaper, putting more downward pressure on American wages.
"As we became more connected to China, that poses the question of whether our wages are being set in Beijing," Rodgers said.
Finding it harder to compete with cheaper manufacturing costs abroad, the U.S. has emerged as primarily a services-producing economy. That trend has created a cultural shift in the job skills American employers are looking for.
Whereas 50 years earlier, there were plenty of blue collar opportunities for workers who had only high school diploma, now employers seek "soft skills" that are typically honed in college, Rodgers said.
A boon for the rich
While average folks were losing ground in the economy, the wealthiest were capitalizing on some of those same factors, and driving an even bigger wedge between themselves and the rest of America.
For example, though globalization has been a drag on labor, it's been a major win for corporations who've used new global channels to reduce costs and boost profits. In addition, new markets around the world have created even greater demand for their products.
"With a global economy, people who have extraordinary skills... whether they be in financial services, technology, entertainment or media, have a bigger place to play and be rewarded from," said Alan Johnson, a Wall Street compensation consultant.
As a result, the disparity between the wages for college educated workers versus high school grads has widened significantly since the 1980s.
In 1980, workers with a high school diploma earned about 71% of what college-educated workers made. In 2010, that number fell to 55%.
Another driver of the rich: The stock market.
The S&P 500 has gained more than 1,300% since 1970. While that's helped the American economy grow, the benefits have been disproportionately reaped by the wealthy.
And public policy of the past few decades has only encouraged the trend.
The 1980s was a period of anti-regulation, presided over by President Reagan, who loosened rules governing banks and thrifts.
A major game changer came during the Clinton era, when barriers between commercial and investment banks, enacted during the post-Depression era, were removed.
In 2000, President Bush also weakened the government's oversight of complex securities, allowing financial innovations to take off, creating unprecedented amounts of wealth both for the overall economy, and for those directly involved in the financial sector.
Tax cuts enacted during the Bush administration and extended under Obama were also a major windfall for the nation's richest.
And as then-Federal Reserve chairman Alan Greenspan brought interest rates down to new lows during the decade, the housing market experienced explosive growth.
"We were all drinking the Kool-aid, Greenspan was tending bar, Bernanke and the academic establishment were supplying the liquor," Deutsche Bank managing director Ajay Kapur wrote in a research report in 2009.
But the story didn't end well. Eventually, it all came crashing down, resulting in the worst economic slump since the Great Depression.
With the unemployment rate still excessively high and the real estate market showing few signs of rebounding, the American middle class is still reeling from the effects of the Great Recession.
Meanwhile, as corporate profits come roaring back and the stock market charges ahead, the wealthiest people continue to eclipse their middle-class counterparts.
"I think it's a terrible dilemma, because what we're obviously heading toward is some kind of class warfare," Johnson said.
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