The Verizon workers that took to the streets last week in Valley towns and elsewhere in the Northeast have more to deal with than just their employer. “The Verizon Strike: Tone-Deaf,” an editorial that appeared August 10 in the Pittsburgh Tribune-Review, sets up a faux ethos crafted to discredit the workers’ message to the public as well as the company.
“To better understand why organized labor has such a bad reputation,” the piece begins, “consider the nationwide strike by 45,000 unionized employees of Verizon Communications Inc.
“Verizon has the audacity—labor’s troglodytes say—to ask workers to pay a yet-to-be-detailed percentage of their health insurance premiums. Unionized employees pay nothing now.
“And, oh, the temerity of the communications giant—the Luddites of Labor say—for trying to get out of the once-traditional (but clearly unsustainable) defined-benefit pension system in favor of a defined-contribution plan (along the lines of a 401k).
“Truth be told, these striking Verizon workers, represented by the Communications Workers of America and the International Brotherhood of Electrical Workers, are living in something worse than Fantasyland. Most American workers long ago began contributing to their health-care premiums. And ‘traditional’ pensions are about as rare as a duck standing on a telephone line.
“No one wins in a strike&. certainly not workers, especially when they’re egged on by labor’s entitlement mentality.”
This fight is not about a play on the unions’ parts to make gains for the workers. It’s about their fight to hold on to what they have. Yes, many American workers already contribute to their health care premiums; some don’t work for titans as profitable as Verizon, and others have been forced for questionable reasons to make contributions that are, in many cases, constantly rising, in effect reducing their incomes. The question that matters is whether Verizon can afford to continue the no-premium benefit it’s extended its workers until now (the workers do, by the way, pay co-pays).
With $22.5 billion in profits over the last four years year and a federal tax bill of zero last year—in fact, the company got a refund of $1.3 billion from the government—the burden is on Verizon to show that it can’t pay for the health coverage.
Verizon also wants to freeze pensions for current workers and eliminate them for new hires, a change the union opposes. This editorial offers no figures to undercut the union’s positions, only adjectives.
“Unsustainable,” says the Tribune-Review. “As rare as a duck standing on a telephone line.” The latter crack, intended to make workers who don’t get pensions jealous, is an example of the rapid adoption of a “new normal” by interests who want people to forget how recently defined benefit pensions were the norm—before businesses scrapped them in favor of higher profitability with benefits confined to top-layer management.
J.P. Morgan’s investor newsletter “Eye on the Market” recently reported that a 1.3 percent increase in the Standard and Poor 500’s profit margins between 2000 and 2007 was due in large part to decreases in wages and benefits, practices driven by the same mentality that produced this editorial.
So pensions are “clearly unsustainable”? For whom? According to retirement finance experts, it’s forcing workers to fall back on 401ks after their working years that’s going to produce an unsustainability crisis as more and more people reach 65 with inadequate nest eggs. It’s enough to look at the current delirium tremens in the stock market to see why workers as well as executives need defined benefit pensions.
And let’s think for a moment about “labor’s entitlement mentality.” Over the past four years, Verizon has paid its top five executives $258 million. Last year its CEO, Ivan Seidenberg, was paid $18 million, nearly 300 times as much as the average Verizon worker earned. Who has the entitlement mentality here?
