Are Rhode Island Unions Still Strongest in U.S.?
Kate Nagle, GoLocal Contributor
Are Rhode Island Unions Still Strongest in U.S.?
"Like several other states with strong union presence, nearly two-thirds of Rhode Island’s public sector belonged to a union last year, second only to New York," wrote Vince Calio, Thomas Frolich, and Alexander Hess with the site, noting that Rhode Island's overall makeup of workers in unions -- private and public -- stood at 16.9%, based on data collected by the Bureau of Labor Statistics and calculations by Unionstats.com.
"I see from my AFL CIO perspective that almost all of the unions are gaining strength internally with members," said Maureen Martin, Secretary-Treasurer with the RI AFL-CIO. "And not just here, but nationally, with the KOCH bros, ALEC, the monied right-wing group that is having increased control in this country."
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTMike Stenhouse with the Rhode Island Center for Freedom and Prosperity offered a contrasting view, however, of unions in the state.
"Politically speaking, strong labor unions have perpetuated insider cronyism in Rhode Island and have joined with liberals in supporting a highly progressive policy agenda," said Stenhouse. "We also know that through union dues taxpayer dollars are often invested back into political campaigns of union-friendly candidates."
Snapshot of RI
The authors wrote that the percentage of American workers in unions remained unchanged over the last year, noting, "This marks a departure from the nation’s long-term trend. In the past 30 years, union membership has dropped from 20.1% of the workforce in 1983 to 11.2% last year."
Martin, however, said she saw the union effort as "resurging".
"People are smartening up as to what's going on, with the privatization of hospitals, all the things we thought were safe," said Martin. "We could wake up and be an Ohio, an Illinois, and have all this labor strife. There's definitely a resurgence on labor's part."
Ray Sullivan, spokesperson for the plaintiffs group in the state's pension reform lawsuit now heading to trial in September, spoke about scenario facing the unions to date.
"I know that we've stressed the fundamental strengths of the challenge that has been put forward," said Sullivan of his clients' suit over the Rhode Island's 2011 pension reform legislation. "So far in all her rulings, Judge [Taft-Carter] has indicated there's been an implied contract."
Sullivan thought that the union side in the suit showed strength despite the failed mediation process.
"We pursued a path towards settlement because we saw it in the best views of our members, and the state as general, which I think proved that there was a more reasonable path to finding a solution, and in part born forth in the fact that the state was willing to settle," said Sullivan. "We look forward however now to moving forward on the current legal path."
Public, Private Unions
The authors wrote, "While union membership may benefit many Rhode Island workers, high wages could potentially also limit new employment opportunities. Rhode Island’s unemployment rate of 9.5% last year was higher than that of any other state except for Nevada."
Dr. Daniel Harrop, who is currently the Republican candidate for Mayor of Providence, said that he would not link the high unemployment rate with union membership.
"High unemployment signifies more a bad climate for business. which is multi-factorial," said Harrop. "Unions are absolutely essential for private industry, to balance the needs of owners and workers, and the GOP strongly supports private unions."
Harrop continued, "Our issues have always been with public unions -- where the union members organize politically to elect the managers with whom they will then negotiate contracts, such as Mayors. This has always been a conflict of interest, frequently shutting out the (unorganized) general public."
Stenhouse spoke to what he saw as the "enormous direct financial and human costs that the collective bargaining process has on state and municipal budgets."
"We can look at Wisconsin, where it was estimated that the cost of collective bargaining was around $1.2 billion. Granted, we're not that big. A Goldwater Institute study a few years ago estimated that for RI, $252 million a year alone could be attributed to excessive compensation costs for unionized government workers," said Stenhouse. "Based on these findings, I would venture to guess that the total cost of collective bargaining in Rhode Island - in both the private and public sectors - could be approaching three or four hundred million dollars per year."
Looking Ahead
One of the items on the union agenda that Martin spoke to was involving more women in organizing and leadership ranks.
"One of the things we're doing is reorganizing the Coalition of Labor Women (CLUW) here in Rhode Island," said Martin, who spearheads the "For Our Daughter" effort. "We've had one organizing meeting so far, where we had [representatives] from nine different labor groups."
"I see a lot of the unions talk about this, and I saw this as a way to get that next level of activists involved, something meaningful, not just busy work," said Martin. "I'm excited about getting a while new wave of women involved. What we used to call "women's issues" are really family issues -- and workers' issues."
Timeline - Rhode Island Pension Reform
2005-2010
January 2009
Governor Don Carcieri makes pension reform a top priority in his emergency budget plan. His three-point plan included:
1. An established minimum retirment age of 59 for all state and municipal employees.
2. Elimination of cost-of-living increases.
3. Conversion of new hires into a 401(k) style plan.
See WPRI's coverage of Carcieri's proposal here.
2009
Rhode Island increased mandatory employee contributions for new and current employees. New Mexico was the only other state to mandate current employees to increase their contributions.
Read the NCSL report here
(Photo: FutUndBeidl, Flickr)
2010
Rhode Island's state administered public employee pension system only held 48% of the assets to cover future payments to its emplyees.
"This system as designed today is fundamentally unsustainable, and it is in your best interest to fix it" - Gina Raimondo
Check out Wall Street Journal's coverage here.
November 2010
Gina Raimondo defeats opponent Kernan King in the election for General Treasurer of Rhode Island using her platform to reform the structure of Rhode Island's public employee pension system. She received 201,625 votes, more than any other politician on the 2010 Rhode Island ballot.
April 2011
Raimondo leads effort to reduce the state’s assumed rate of return on pension investments from 8.25 to 7.5%.
Her proposal includes plans to suspend the Cost of Living Adjustment (which allows for raises corresponding with rates of inflation for retirees), changing the retirement age to match Social Security ages, and adding a defined contribution plan.
May 2011
Raimondo releases “Truth in Numbers”, a report detailing the pension crisis and offering possible solutions. She continues to work to raise public support for her proposal.
"Decades of ignoring actuarial assumptions led to lower taxpayer & employee contributions being made into the system." - Gina Raimondo (Truth in Numbers)
Read GoLocalProv's analysis of the report here.
Read the Truth in Numbers report here.
October 2011
Governor Lincoln Chafee and General Treasurer Gina Raimondo present their pension reform legislation proposal before a joint session of the General Assembly.
“Our fundamental goal throughout this process has been to provide retirement security through reforms that are fair to the three main interested parties: retirees, current employees and the taxpayer…I join the General Treasurer in urging the General Assembly to take decisive action and adopt these reforms.”- Gov. Lincoln Chafee
October 2011
Head of Rhode Island firefighters’ union accuses Raimondo of “cooking the books” to create a pension problem where one did not exist. Paul Valletta Jr. states that Raimondo raised Rhode Islanders’ assumed mortality rate to increase liability to the state, using data from 1994 instead of updated information from 2008, and lowered the anticipated rate of return on state investments.
“You’re going after the retirees! In this economic time, how could you possibly take a pension away?” Paul Valletta Jr (Head of RI Firefighters' Union)
Read more from the firefighters' battle with Raimondo here.
Check out the New York Times' take on RI's pension crisis here.
November 17, 2011
The Rhode Island Retirement Security Act (RIRSA) is enacted by the General Assembly with bipartisan support in both chambers. RIRSA’s passing is slated to reduce the unfunded liability of RI’s pension system and increase its funding status by $3 billion and 60% respectively, level contributions to the pension system by taxpayers, save municipalities $100 million through lessened contributions to teacher and MERS pension systems, and lower the cost of borrowing.
Read more from GoLocalProv here.
November 18, 2011
Governor Lincoln Chafee signs RIRSA into law. According to a December 2011 Brown University poll, 60% of Rhode Island residents support the reform. Following its enactment, Raimondo holds regional sessions to educate public employees on the effects of the legislation on their retirement benefits.
Read about how Rhode Islanders react to RIRSA here.
January 2012
Raimondo hosts local workshops to explain the pension reforms across Rhode Island. She also receives national attention for her contributions to the state’s pension reforms. The reforms are given praise and many believe Rhode Island will serve as a template for other States’ future pension reforms.
Read about the pension workshop here.
Read Raimondo's feature in Institutional Investor here.
March - April 2012
Raimondo opposes Governor Chafee’s proposal to cut pension-funded deposits. She continued to provide workshops on the pension reforms.
December 5, 2012
Raimondo publicly opposes Governor Chafee’s meetings with union leaders in an effort to avoid judicial rulings on the pension reform package. In response, Chafee issues a statement supporting the negotiations.
Read more about Raimondo's opposition here.
Read about Chafee's statement here.
March 2013
Led by the Rhode Island State Association of Fire Fighters, unions protest the 2011 pension reform outside of the Omni Providence where Governor Lincoln Chafee and General Treasurer Gina Raimondo conduct a national conference of bond investors.
Read about Raimondo's discussion of distressed municipalities here.
April 2013
The pension plan comes under increased scrutiny as a result of the involvement of hedge funds and private equity firms. Reports show that $200 million of the state pension fund was lost in 2012.
"In short, impressive educational credentials and limited knowledge of investment industry realities made Raimondo ideally suited to champion private equity’s public pension money grab." - Ted Seidle (Forbes)
Read GoLocalProv's coverage of the State Pension Fund's losses here.
Read Ted Seidle's criticism of Raimondo in Forbes.
June 2013
Reports show that the State’s retirement system increased in 2013 by $20 million despite the reforms being put into effect the previous year.
Read GoLocalProv's investigation into the rising pension costs here.
September 2013
Matt Taibbi publishes an article in Rolling Stone detailing Raimondo’s use of hedge funds as a questionably ethical tool to aid with pension reform.
Read Taibbi's article in Rolling Stone.
Read GoLocalProv's response to Taibbi here.
October 2013
As Raimondo eyes the role of Governor of Rhode Island in 2014, more behind-the-curtain information about the 2011 pension reform comes to light.
Read more from GoLocalProv about the players in the pension battle here.
