Delaware County Could Miss Right-to-Work Boom, Chief of Kentucky County Predicts

GEORGETOWN, Delaware—Despite one county’s decision to reject a right-to-work law, Delaware will remain the only state in the Northeast and Mid-Atlantic with a local statute prohibiting imposition of union mandates on private sector employees.

The town of Seaford intends to move ahead with its right-to-work law even though surrounding Sussex County backed down in the face of pressure from labor unions whose leaders argued that the change would drive down wages.

“Right to work is one tool that will help to improve our competitive posture so we can lure in new businesses,” Seaford Mayor David Genshaw told The Daily Signal in an interview.

And in Kentucky, where local action to pass right-to-work laws has galvanized the movement, one county official says Seaford did the right thing for its residents last month even as Sussex County backed down this week.

“People are noticing that Warren County, Kentucky, is a great business-friendly place to live, to work, or to start a business,” Mike Buchanon, the county’s judge-executive, told The Daily Signal.

Right-to-work laws prohibit private sector employers from entering into agreements that make union membership and payment of union dues a condition of employment.

Since Warren County’s right-to-work ordinance went into effect, Buchanon said, the county seat of Bowling Green has seen downtown development “skyrocket” with about $300 million in new capital improvements.

Commercial and residential development is booming, he said, as is the hotel business.

‘Big Gains’ Forfeited?

The Sussex County Council rejected its own right-to-work ordinance in a 4-1 vote Tuesday after County Attorney J. Everett Moore told members that the law would not prevail against inevitable legal challenges from unions.

Councilman Rob Arlett, an early proponent, was the only member of the all-Republican council to vote for the measure one week after union members packed the council chambers during a public hearing.

>>> Right-to-Work Advocate Blames Unions’ Legal Threats for Loss 

Elected officials in Seaford, however, took the unexpected step of passing their own ordinance Dec. 12 in a unanimous vote. The city of about 7,000 in southwestern Sussex County was once home to a 35-acre DuPont plant that created thousands of local jobs by producing nylon used in military parachutes.

Sussex is one of three counties in Delaware.

As mayor of Seaford, Genshaw said he wasn’t content to wait for the county to act and anticipated that the city’s own right-to-work law could attract businesses and opportunities to the site of the former DuPont factory as well as other parts of Seaford.

“When you compare right-to-work states with non-right-to-work states, it’s clear to me that this could mean big gains for Delaware,” Genshaw said in an October interview. “I talk to a lot of families who want their kids to stay in the area, but we need to create opportunities that have gone missing in recent years.”

Signs of Boom in Kentucky County

The capital investment and job growth flowing into Warren County, Kentucky, where the local right-to-work movement first took root, appears to bolster Genshaw’s argument.

As judge-executive, Buchanon, a Republican, is Warren County’s elected chief administrator, similar to a mayor. In previous interviews with The Daily Signal, he described how a broad cross-section of Kentucky residents came together to support right-to-work legislation in Warren County that passed in 2014.

For years, Warren County had been losing out to neighboring parts of Tennessee, Buchanon explained, because experts recruited by companies and other employers to identify potential work sites viewed right-to-work status as a critical factor in making a final determination.

At the time, Tennessee was a right-to-work state and Kentucky was not. Times have changed.

>>> Local Leaders Try New Tactic to Bring Right-to-Work Laws to Kentucky

Since passage of the ordinance in December 2014, Warren County has attracted 174 prospective new businesses, representing about $2.5 billion in potential investment, and 16,618 jobs have materialized, according to the Bowling Green Area Chamber of Commerce.

Buchanon estimates that Warren County now has more than 6,000 openings for blue-collar and white-collar jobs in a wide range of fields that include manufacturing, education, health care, retail, hospitality, construction, and engineering positions.

“We are growing our workforce as well, with inward migration, attracting workers from across the nation and from around the globe,” Buchanon told The Daily Signal in an email Tuesday.

A new University of Kentucky Medical School is under construction on the Bowling Green campus, and multi-unit residential apartments and townhouses are being built throughout downtown Bowling Green and on campus.

“The economy is growing to an historic level, and new people are moving into Bowling Green in Warren County every single day,” Buchanon said.

Some of the union members who turned out Jan. 2 outside Sussex County’s government office building to oppose a right-to-work measure, from left: Michael Burns of AFSCME, Jeff Taschner of the Delaware State Education Association, Michael Begatto of AFSCME, James Maravelias, president of Delaware AFL-CIO, and Kat Caudle of AFSCME. (Photo: Kevin Mooney/The Daily Signal)

Union Opposition in Delaware

In response to the action in Warren County, 11 other Kentucky counties quickly followed suit with their own ordinances, and the whole state went right to work in January 2017.

>>> Kentucky’s Right-to-Work Earthquake Reverberates Across State Lines 

A total of 28 states and the territory of Guam now have right-to-work laws. In addition to Kentucky, since 2012, Indiana, Michigan, Wisconsin, and West Virginia have become right-to-work states.

Despite the transformative influence of right to work in Kentucky, union leaders and activists who gathered to protest the proposed Sussex County ordinance in Delaware insisted that it would harm average workers.

That’s what James Maravelias, president of the AFL-CIO in Delaware, said in a Jan. 2 interview with The Daily Signal during a protest by labor unions at the Georgetown Circle outside the Sussex County administration building.

If passed, a countywide right-to-work law would lower wages for workers, Maravelias said.

Standing next to him, Michael Begatto, executive director of AFSCME Council 81, echoed that argument.

The state AFL-CIO president was joined by dozens of union members from the American Federation of State, County and Municipal Employees, the United Food and Commercial Workers, the Communications Workers of America, the International Brotherhood of Electrical Workers, and the Delaware State Education Association, among others.

During the Jan. 2 hearing, Sussex County Council members heard from county residents on both sides of the debate.

To Jermaine Johnson, a member of United Brotherhood of Carpenters Local 173 who said he also is a pastor with Prophetic Kingdom Ministries, right to work is “about defunding and dividing the ability of unions to negotiate on behalf of the worker.”

‘There Is No Pie’

But other residents spoke out ardently in favor of the bill.

Lyle Humpton, of Bridgeville, represented Master Interiors, a Delaware-based acoustical contractor that he described as an “open shop company” with 43 employees.

“There is a bigger issue here than just union versus nonunion,” Humpton told council members. “This is about freedom and liberty versus government intrusion.”

Kevin Burdette, a Milton resident who heads the KNB Associates business consulting company, told council members that a right-to-work law would create a “bigger pie for everyone,” including union and nonunion companies.

Burdette added: “Unless we get other jobs coming to Sussex County, there is no pie. Economic growth has occurred at higher rates in right-to-work states.”

David Stevenson, an economist with the Caesar Rodney Institute, a Wilmington-based free-market think tank, picked up on this point during his testimony.

In contrast to states that have right-to-work laws, Delaware has experienced anemic economic growth, diminished job opportunities, and falling household incomes, Stevenson told council members.

Over the past decade, Delaware’s economy has grown by 0.4 percent a year, he said, and in 2017, the state was one of only four that logged a rise in unemployment.

Contrary to what union leaders and members said in public statements, incomes rise just as fast in right-to-work states as in other states when the cost of living is properly considered, Stevenson argued:

You can’t compare wages in right-to-work states like Alabama or Georgia, where houses sell for a quarter of the price of [those in] California, without adjusting for cost of living. My own analysis shows real household incomes have grown just as fast in right-to-work states since 2000—2.1 percent—as in non-right-to-work states—2.2 percent.

‘Clear Legal Path’

Stevenson cited a 2015 report from The Heritage Foundation that shows right-to-work laws do not lower pay in the private sector.

Right-to-work states have equal rates of health insurance coverage subsidized by private employers, Stevenson told council members, adding:

In summary, worker pay, benefits, and safety are the same with or without right-to-work [laws]. However, faster economic growth will raise incomes through higher-paying occupations and a tighter labor force, putting upward pressure on wages.

It is certainly true that unions likely would challenge a right-to-work law in court, Buchanon told The Daily Signal, but the Kentuckian said that Sussex County officials, in his opinion, should have pressed ahead.

“Although I am not familiar with Delaware’s constitution or their laws, the federal courts were clear in their decision about the legal rights of counties as political subdivisions of the state,” the Warren County official said.

“The courts recognized counties’ rights and responsibilities to govern and make laws in the interest of protecting individual workers’ rights and freedoms, and for economic development and commerce,” Buchanon said, adding:

I believe that the unanimous decision of the federal appeals court in the Hardin County, Kentucky, decision established a clear legal path forward for counties in most every U.S. state.

This doesn’t mean that a union can’t file a suit. Certainly they have the right to file legal action, as everyone does. However, that doesn’t mean they can win, and in light of the federal appeals court’s decision, their suit would appear to me to be a waste of their time and of their members’ money.

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County Votes Down Right to Work as Attorney Warns of Union Lawsuits

GEORGETOWN, Delaware—Officials in one of Delaware’s three counties rejected right-to-work legislation Tuesday, shortly after the county attorney detailed his legal opinion and predicted a thicket of costly court challenges to the law from labor unions.

Councilman Rob Arlett, who has spearheaded the proposal, was the only one of the five Sussex County Council members, all Republicans, to vote yes on the measure.

“What we want regardless of the color of our shirts is we all want jobs, and we all want the best for our families,” Arlett said before casting his lone vote in favor of the right-to-work ordinance.

“We have to do something as a community and as a council to attract new industries, I think all sides agree to that,” he said. “The question before us today is, is this a tool in that toolbox as a community that we should consider?”

Right-to-work laws prohibit private sector employers from entering into agreements that make union membership and payment of union dues a condition of employment.

A total of 28 states and the territory of Guam now have right-to-work laws, with Kentucky, Indiana, Michigan, Wisconsin, and West Virginia making the move since 2012.

Delaware last month became the only state in the Northeast and mid-Atlantic with a local right-to-work law on the books. The city council of Seaford, not content to wait on the Sussex County Council to act, passed its own ordinance Dec. 12.

Sussex County officials had put off action Tuesday after dozens of union members turned out in force at government offices to oppose the legislation during a public hearing. The Sussex council then asked for a formal opinion from the county attorney, J. Everett Moore, pending this week’s formal vote.

Representatives of local union affiliates gathered before the hearing at a traffic circle outside the Sussex County Administrative Office Building. Members also packed the council chambers and watched the action from overflow rooms.

“My No. 1 concern is that right to work lowers wages,” Kat Caudle, a member of the American Federation of State, County and Municipal Employees, told The Daily Signal before the hearing.

“Workers should have the right to bargain for wages,” Caudle said, “and unions bring equality to this process.”

Voting no Tuesday were council President Michael Vincent, Vice President George Cole, and Councilmen Samuel Wilson and Irwin Burton.

Arlett at first moved to delay action but the other council members also rejected that.

Based on testimony and the public record, Arlett said, it is evident to him that “people want this.” He also recognized that “quite a few others [are] in opposition.”

“I believe in the power of choice and to me, if it’s worthy for six school districts in this county, why isn’t it worthy in the private sector?”

Six of the eight school districts in Sussex County are right-to-work entities in the public sector, with no requirement for teachers to pay fees to the union.

“That’s just a commonsense analogy,” Arlett said.

He also acknowledged differing legal opinions.

“That’s why there is a court system, to determine what is lawful and not lawful,” Arlett said. “On the merits of economic development … if it has the ability to attract jobs, then we should consider it and let the courts make their decision as they see fit. So, for that reason alone, based on the testimony and the record, I will vote in favor of this.”

But the testimony and opinion of Moore, the council’s attorney, carried the day.

Moore repeated his concern that Delaware’s home rule statute did not delegate authority to the council to adopt a right-to-work law. Sussex County would be drawn into legal challenges at both the state and federal level that could prove costly,  he said.

“My opinion is that a Delaware court is unlikely to uphold the ordinance in its current form,” Moore said.

The county attorney also warned council members that if they did go forward with the ordinance and accept pro-bono legal coverage from outside the state, they would need to confer with the State Public Integrity Commission, whose rules cover payment to government employees.

 Burton also spoke at length, saying he voted no because he was convinced by Moore that the county would incur legal costs that would detract from the council’s ability to perform its primary functions.

“If we adopt this ordinance, we will be in expensive, time-consuming litigation,” the council member said.

Burton credited Moore with providing a “thorough, extensive opinion.”

Given the need to attract new jobs, Burton said, his vote was “one of the hardest decisions” of his career.

Burton expressed concern that enforcement of a controversial ordinance would burden the county with additional costs.

“I’m a proponent of limited government and of keeping costs low,” Burton said. “This will cause an expansion of government and new costs.”

Despite voting no,  Cole said he favored the concept of right to work but was not convinced the council had the legislative authority to move forward.

“I wish there was a way I could vote yes,” Cole told fellow council members.

At least two lawyers in Delaware have disagreed publicly with Moore’s opinion that the state’s home rule statute doesn’t allow local right-to-work laws.

Theodore Kittila, a lawyer speaking for the Caesar Rodney Institute, a free-market think tank based in Wilmington, told council members last Tuesday that Sussex County has the authority to pass such a law under authority delegated by the 1970 statute. Kittila expanded on this point, citing several cases, in a written legal opinion that is part of the public record.

Kevin Fasic, a Wilmington-based lawyer who specializes in construction law, said during the council’s Oct. 24 meeting that a 6th Circuit Court of Appeals ruling opened the door for local right-to-work laws in Delaware and other parts of the country.

As The Daily Signal has previously reported, the U.S. Supreme Court turned away a legal challenge to the local right-to-work ordinance in Hardin County, Kentucky, permitting the 6th Circuit ruling to stand.

The 6th Circuit covers Kentucky, Michigan, Tennessee, and Ohio; Delaware falls within the 3rd Circuit, which has not ruled on the merits of local right-to-work laws.

If the 3rd Circuit were to rule in conflict with the 6th Circuit, the case likely would move up to the U.S. Supreme Court. But Fasic noted during the October meeting that the high court may have signaled its intention to uphold local right-to-work laws last year when it rejected a petition from labor unions challenging the Kentucky law.

But on Tuesday, Moore insisted the legal questions are not entirely the same.

“Because some other county has done this, doesn’t mean that we can,” Moore said. “We have to look at the underlying legislation.”

While the ruling out of the 6th Circuit “may influence” the 3rd Circuit, it doesn’t “control” either the 3rd Circuit or the U.S. Supreme Court, Moore told council members.

In New Mexico, Sandoval County has pursued its own right-to-work legislation amid intense union opposition. The County Commission is set to vote Jan. 14 on the bill.

Although union leaders also threaten to file lawsuits to block the Sandoval County measure, Forbes columnist Matt Patterson has noted that unions “almost always lose” such challenges.

Ken McIntyre contributed to this report.

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Unions Gave More Than $1.1 Billion to Democrats, Liberal Groups

From 2010 to 2016 alone, unions sent more than $1.1 billion in member dues to anti-Republican advocacy groups, a nonprofit union transparency organization says.

“For decades, union officials have betrayed working Americans by spending their dues dollars to advance a left-wing political agenda—without prior approval,” Luka Ladan, communications director for the Center for Union Facts, said in a statement.

“Big Labor is now the ATM of the Democratic Party, whether employees agree or not. The Employee Rights Act would hold union officials accountable to their members, not Democratic elites.”

The Center said that the funds were sent to liberal and anti-Republican groups without members’ approval, to organizations such as Planned Parenthood, the Clinton Foundation, and the Democratic Governors Association.

Planned Parenthood received $805,100 and the Democratic Governors Association received $14,126,000. The Center for American Progress, a policy organization known for its liberal stance, received $6,279,591.

The Center for Union Facts says such use of member dues is inappropriate, since “40 percent of union household members vote Republican in any given election cycle.”

Currently, union authorities can spend funds from dues on political advocacy groups without receiving prior approval from members, and the Center says Congress needs to pass the Employee Rights Act, which would require union chiefs to procure permission from members before spending dues on  political organizations and causes.

“Roughly 80 percent of Americans—including those in union households—support the paycheck-protection provision and other [Employee Rights Act] reforms,” the  Center for Union Facts says.

More than $8,000 in union dues also went to left-leaning media organizations, including the Progressive and the American Prospect.

“The rights of American workers were under attack during the Obama presidency, and it is time to restore those rights and work to foster a pro-growth, pro-employee environment,” Rep. Phil Roe, R-Tenn., said May 25 in a statement when the Employee Rights Act legislation was introduced, adding:

This legislation will ensure individuals’ rights are upheld when considering whether or not they wish to join a union. The Employee Rights Act isn’t pro- or anti-union, it’s a commonsense measure to ensure a transparent and fair workplace.

 

The post Unions Gave More Than $1.1 Billion to Democrats, Liberal Groups appeared first on The Daily Signal.

Iceland’s Equal Pay Regime Will Hurt, Not Help, Women. We Don’t Need It.

Iceland this week took its equal pay law to a new level, as a law took effect requiring employers to prove they don’t discriminate against women in monetary compensation.

Contrary to ecstatic exclamations from the likes of Hollywood actress Patricia Arquette, tennis great Billie Jean King, and Sen. Bernie Sanders, I-Vt., both Iceland and the United States—like most developed countries—already require equal pay for equal work. These equal pay laws are enforced by employee complaints and litigation.

Yet Arquette, who fancies herself a crusader for women’s rights, breathlessly tweeted:

And Sanders, who ran for president in 2016, enthused on Facebook: “We must follow the example of our brothers and sisters in Iceland and demand equal pay for equal work now.”

Wrong. Again, laws in both Iceland and the U.S. already require this.

What Iceland actually did is ring in in 2018 with mandatory, government-enforced certification that employers pay men and women equally. Noncompliance results in fines.

“It’s a mechanism to ensure women and men are being paid equally,” Dagny Osk Aradottir Pind, one of the leaders of the Icelandic Women’s Rights Association, told Al Jazeera.

But is it?

Icelandic employers with 25 or more workers are required to obtain a “pay equality certification” from a government-approved certifier every three years.

The small Nordic nation adopted the law in June 2017 in an effort to root out even the small, unexplained pay gap that remains after reasonable factors are taken into account to explain the so-called raw wage gap.

That’s a knee-jerk policy response to a rather complicated problem, with far-reaching implications for Iceland’s economy.

The raw wage gap is simply the median difference in pay for full-time, year-round workers by gender. For U.S. workers, this wage gap meant women made 80.5 cents to every dollar men made in 2016, according to the U.S. Census Bureau.

After accounting for factors such as occupation, hours worked, education, tenure, and so on, the wage gap shrinks substantially. What remains is the “unexplained” wage gap.

In the U.S. context, about 5 to 7 percent of the wage gap is unexplained. In Iceland, the gap was similar, at 5.7 percent.

The fact of an unexplained gap does not necessarily imply discrimination. It simply means that researchers have not been able to quantify certain explanatory factors.

We know from polling that women exhibit a preference for compensation other than cash wages in the form of more flexibility or more time off.

But the value of benefits such as flexible and alternative work schedules and on-site child care are difficult—if not nearly impossible—to measure because their value varies significantly among individuals. A childless male, for example, would value on-site child care at zero while a female with young children would value it highly.

Other known data limitations include quantifying the importance of experience and job tenure by occupation and industry.

The right response to such limitations is not to make broad-stroke, unwarranted judgment calls. Instead, governments should allow workers to choose the jobs—including the pay and total compensation packages—they desire without imposing unwarranted conditions that could backfire against the very same people they intend to help.

After all, most developed nations already have strong laws in place to ensure equal pay for equal work.

Unfortunately, the European Social Policy Network, a group that  advises the European Commission on social issues, hasn’t considered that the remaining gender pay gap actually may be the result of women’s choices.

Author Stefán Ólafsson writes: “This 5.7% unexplained pay gap [in Iceland] is thus the gender difference in pay that can be attributed to discrimination against women.”

That’s shoddy social science at best and intentionally misleading analysis at worst.

The result is a law based on a faulty premise that imposes rigid pay structures across the Icelandic economy.

According to the “Equal Pay Standard,” the basis of certification by Iceland’s government, companies are required to go through a pay assessment process that classifies jobs according to value created for the company and determines associated pay based on the position held in the company.

More flexible pay structures assess the value an individual brings to an organization and base pay on experience, tenure, education, and other factors related to performance.

The goal of Iceland’s Equal Pay Standard appears to be to pay all individuals performing similar roles the same, regardless of any distinguishing features or what that these individuals are able to negotiate for themselves. This will result in rigid pay structures, similar to the General Schedule classification and pay system used by the U.S. federal government.

By distorting the labor market, rigid pay structures will result in inflexible job requirements and work schedules that disproportionately hurt those who value workplace flexibility the most: women.

Rigid pay structures also will prevent businesses from attracting and retaining qualified employees. They will reduce economic growth as well as job and wage prospects for many workers.

The Trump administration recently reversed an Obama administration rule requiring employers to report detailed salary information by gender and other factors. The Labor Department intended to use this information to police employers who raised red flags in the agency’s data files for an unequal distribution in employment and pay scales.

The Obama administration rule would have reduced the availability of flexible work arrangements, which are especially important to working parents. It also would have led to less performance-based pay, such as bonuses, to encourage and reward excellence.

Billie Jean King tweeted of the news out of Iceland:

But what Iceland actually has done is go far beyond reporting requirements. Its government instead will approve or disapprove of employers’ payroll decisions, starting this year.

The resulting rigid pay structures for Icelanders likely will lead to more temporary and independent contractor-type work arrangements, since the law applies only to companies with 25 or more full-time, year-round workers.

In America, reasonable men and women should agree this is a bad idea to import here.

The post Iceland’s Equal Pay Regime Will Hurt, Not Help, Women. We Don’t Need It. appeared first on The Daily Signal.

Delaware County Stalls Right-to-Work Vote as Unions Protest

GEORGETOWN, Delaware—County officials put off action Tuesday on a right-to-work ordinance after dozens of union members turned out in force at government offices to oppose the legislation during a public hearing.

Members of the Sussex County Council asked for a formal opinion from the county attorney pending a vote that could come as early as Jan. 9.

Representatives of local unions affiliates gathered beforehand at a traffic circle outside the Sussex County Administrative Office Building.

“My number one concern is that right to work lowers wages,” Kat Caudle, a member of the American Federation of State, County and Municipal Employees, told The Daily Signal.

“Workers should have the right to bargain for wages,” Caudle said, “and unions bring equality to this process.”

Inside, union members helped fill the council chamber to capacity during the first formal hearing on the proposed ordinance and watched the action with others from overflow rooms. Council members questioned speakers over the course of nearly six hours.

Union members and supporters gather at Georgetown Circle just outside the Sussex County Administrative Office Building. (Photos: Kevin Mooney/The Daily Signal)

Besides AFSCME, unions represented included the AFL-CIO, the United Food and Commercial Workers, the Communications Workers of America,  and the International Brotherhood of Electrical Workers.

More than 30 speakers in a crowd of about 120 addressed the County Council, composed of five Republicans, both in support and opposition of the right-to-work measure.

Councilman Rob Arlett, who has spearheaded the proposal, asked the county’s legal counsel, J. Everett Moore, to provide a written opinion before the next meeting. Moore previously had cast doubt, in spoken remarks at an Oct. 24 meeting, on the council’s power to adopt a right-to-work law.

The Daily Signal later asked Moore whether he expected to deviate from his verbal opinion based on the state’s home rule statute. Moore declined comment.

‘We Want to Hear From Residents’

At the request of council members because not everyone would be able to speak, those in attendance raised their hands to indicate whether they backed or opposed the bill. The official count: 34 supported, 64 opposed.

To determine that speakers were county residents, something Arlett expressed concern about, they were asked to provide their addresses as well as names.

“We want to hear from our residents, and yes, we want to hear from others, but we need to hear from the people in this community,” Arnett said.

Right-to-work laws prohibit private sector employers from entering into agreements that make union membership and payment of union dues a condition of employment.

A total of 28 states and the territory of Guam now have right-to-work laws, with Kentucky, Indiana, Michigan, Wisconsin, and West Virginia making the move since 2012.

Delaware last month became the only state in the Northeast and mid-Atlantic with a local right-to-work law on the books. The city council of Seaford, not content to wait on the Sussex County Council to act, passed its own ordinance Dec. 12. Sussex is one of three Delaware counties.

>>> Delaware Town OKs Right-to-Work Law in Advance of County Action

Throughout the hearing Tuesday, union members disrupted other speakers and shouted out comments. Several times, council President Michael Vincent threatened to have individuals removed if they continued to act out.

In opening remarks, Arlett emphasized the need for a robust public hearing:

We are here today because the people in this county expect and desire jobs and to provide for their families, and as elected officials we have a responsibility. I don’t care what color shirt you are wearing, we all desire the same thing: to provide for our families. We all have dreams and aspirations. We are here to foster this.

Afterward, Arlett told The Daily Signal he wasn’t convinced the hand count was representative of his constituency, but said that with “one or two possible exceptions,” those who addressed the council were residents.

Unions Fear Lower Wages

Three of the four other members of the councilPresident Michael Vincent, Vice President George Cole, and Councilman Samuel Wilsondeclined to reveal their position in interviews afterward. Councilman Irwin Burton was not available.

Several union members and other right-to-work critics cited Moore’s previously expressed misgivings and rested their arguments on that verbal opinion.

Throughout the meeting union members who were present would sometimes disrupt other speakers and shout out comments. Vincent told those audience members several times that if they continued to act out they would be removed from the chamber.

That opinion is not part of the official record, Arlett told audience members.

“People are making reference to something that doesn’t exist,”  he said,

Arlett agreed to defer action as Vincent joined him in calling for Moore to submit the written opinion.

>>> Amid Union Opposition, Right to Work Advances in Delaware County

Nakeesha Armstrong, of Wilmington, belongs to Laborers Local 199, a union of construction workers based in Newark, Delaware.

Union members who spoke with The Daily Signal at the demonstration before the hearing warned that implementing right to work in Delaware would decrease wages, diminish the quality of health care coverage, and undermine the ability of unions to help workers negotiate fair compensation and benefit packages with employers.

James Maravelias, president of the AFL-CIO in Delaware, said in an interview that a right-to-work law would “lower wages” in the state.

Right-to-work states tend to have higher poverty rates and worse health care, Maravelias argued.

“If right-to-work is such a good idea, why aren’t these states more prosperous?” he said.

Union-Busting?

While Arlett and other supporters of the proposal tout right to work as a tool to produce more choice and opportunity, the demonstrators maintained it is anti-union.

Bill Prinsket, a retired physician who lives in the Sussex County town of Bridgeville, said the proposed ordinance is “just union-busting.” He challenged supporters to “name just two companies that didn’t come here because we don’t have right to work.”

Prinsket, who is active with the Sussex County Progressive Democrats, carried a homemade sign that read “Right-to-work is wrong.”

With him was Joe Campbell, also from Bridgeville, a retired member of United Food and Commercial Workers Local 27. Campbell said the proposed ordinance would “destroy unions and make wages go down.”

Kentucky stands out in the right-to-work cause because its counties established the legal right to move forward with their own ordinances in the absence of state-level action. The 6th U.S. Circuit Court of Appeals upheld a law passed in the state’s Hardin County in a unanimous ruling in November 2016.

At least two other lawyers in Delaware have disagreed publicly with the statement by the county attorney, Moore, that the state’s home rule statute doesn’t allow local right-to-work laws and that costly litigation would follow.

Theodore Kittila, a lawyer speaking for the Caesar Rodney Institute, a free-market think tank based in Wilmington, told council members Tuesday that Sussex County has the authority to pass such a law under authority delegated by the 1970 statute.

Kittila expanded on this point, citing several cases, in a written legal opinion that is now part of the public record.

Kevin Fasic, a Wilmington-based lawyer who specializes in construction law, said during the council’s Oct. 24 meeting that the 6th Circuit Court of Appeals ruling opened the door for local right-to-work laws in Delaware and other parts of the country.

The Legal Landscape

The 6th Circuit covers Kentucky, Michigan, Tennessee, and Ohio; Delaware falls within the 3rd Circuit, which has not ruled on the merits of local right-to-work laws.

If the 3rd Circuit were to rule in conflict with the 6th Circuit, the case likely would move up to the U.S. Supreme Court. But Fasic noted during the October meeting that the high court may have signaled its intention to uphold local right-to-work laws last year when it rejected a petition from labor unions challenging the Kentucky law.

Delaware state Sen. Bryant Richardson, a Republican,  recounted conversations with Seaford Mayor David Genshaw in which the mayor said lack of a right-to-work law discourages businesses from locating to Sussex County, and to Seaford in particular.

In an email to The Daily Signal, Genshaw said that regardless of how the Sussex County Council votes, his city will press ahead under its own right-to-work law.

“We are under a 30-day advertisement period that started on Dec. 12 and after that, it goes into effect,” the mayor wrote, adding: “Seaford moves forward looking to win new business for the people of Seaford.”

Meanwhile, the advance of right to work in Kentucky continues to inspire action elsewhere.

In New Mexico, Sandoval County has pursued its own right-to-work legislation amid intense union opposition. The County Commission is set to vote Jan. 14 on the bill.

Although union leaders threaten to file lawsuits to block the Sandoval County measure, Forbes columnist Matt Patterson points out that unions “almost always lose” in such court challenges.

The post Delaware County Stalls Right-to-Work Vote as Unions Protest appeared first on The Daily Signal.

How Big Is Your State’s Share of $6 Trillion in Unfunded Pension Liabilities?

Despite a solid year for investment returns, the unfunded liabilities of state and local government pension plans increased by $433 billion, the most recent estimate from the American Legislative Exchange Council shows.

According to ALEC’s report—which uses more appropriate assumptions on investment returns than the plans use themselves—state and local governments’ unfunded liabilities now exceed $6 trillion.

That’s a whopping $18,676 for every man, woman, and child, or nearly $50,000 for every household in America.

This is bad news for taxpayers in states and localities where government workers have been promised far more in pension benefits than politicians set aside to pay them. That’s because most states have strong protections for promised pension benefits, meaning there is little prospect of reducing a pension benefit or asking employees to contribute more to it.

Contractual or constitutional obligations for government pensions could mean that paying the pensions of retired government employees may take precedent over paychecks for current employees.

Moreover, some state constitutions prevent any changes to government employees’ pension benefits. That means current government employees can’t ever be required to contribute more to their pension plan than they did on the first day they were hired. And, actually, not a single term of their initially promised pension benefits ever may be altered.

Just imagine how detrimental it would be to private employers if they never were allowed to alter the benefits they initially offered their employees.

With an average funding ratio of only 33.7 percent across state and local pensions and every single state at risk of defaulting on pension obligations (as measured by Pension Protection Act standards, assuming a risk-free rate of return), taxpayers across all states face significant tax increases to pay for their governments’ unfunded pension promises.

Taxpayers in certain states are looking at greater risks and liabilities than others, however.

Taxpayers in Tennessee, Indiana, Nebraska, Wisconsin, and North Carolina, for example, must deal with the lowest unfunded liabilities per person, ranging from about $7,600 to $10,900.

Taxpayers in Alaska, Connecticut, Ohio, Illinois, and New Mexico, on the other hand, face the highest unfunded pension liabilities, ranging from about $28,100 to $45,700 per person.

 

Overall, the American Legislative Exchange Council estimates that pension plans have only about a third of the funds on hand—33.7 percent—that they need to pay promised benefits. Some states have significantly lower funding levels, which means they are at risk of running out of funds in the near future.

Once a state or local pension plan runs out of money, taxpayers have to fund the pension benefits of retirees as well as the contributions of current employees.

Connecticut, Kentucky, and Illinois have the lowest funding ratios, at 20 percent, 21 percent, and 23 percent respectively.

Already, Illinois spends as much on pensions as it does on welfare and public protection (that is, police and firefighters) combined, and nearly half of its education appropriations go toward teacher pensions. If the state’s pension plans reach insolvency, pensions could become its single biggest cost.

Some states have taken measures to improve the outlook for their pension plans, such as shifting new employees to defined contribution retirement plans, limiting future pension benefits, reducing unrealistic interest rate assumptions, and actually making the annually required pension contributions. But the rising tab for unfunded state and local pension liabilities shows most states have failed to address massive shortfalls.

One motivation for states not to address their pension shortfalls is the hope or expectation of a bailout by federal taxpayers. This would force taxpayers in more fiscally responsible states to pay for the financial recklessness of more spendthrift states.

Lawmakers in Washington need to send a strong signal to states that a federal pension bailout is not an option.

Rep. Brian Babin, R-Texas, has introduced a bill that would do just that. His legislation, called the State and Local Pensions Accountability and Security Act, would prohibit the U.S. Treasury and the Federal Reserve from providing any form of bailout or financial assistance to a state or local pension plan.

Unless state and local lawmakers know that a federal bailout is not an option, as Babin’s bill proposes, they will have little incentive to enact much-needed pension reforms now.

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Delaware Town OKs Right-to-Work Law in Advance of County Action

A small city in Delaware quietly has taken the unexpected step of passing its own right-to-work ordinance several weeks before officials in the surrounding county air a similar proposal.

The Seaford City Council voted unanimously for the right-to-work measure at its Dec. 12 meeting.

“We are superexcited about how the vote went,” Seaford Mayor David Genshaw told The Daily Signal in an email. “I have been surprised by the number of people who wish to support us.”

The Sussex County Council is set to hold a public hearing Jan. 2 on its countywide proposal to bar forced union membership. Seaford, a city of 7,000 residents, is in southwestern Sussex County.

“The mayor and the council members in Seaford showed real courage and leadership in pressing ahead with a decision that is in the best interests of their community,” Sussex County Council member Rob Arlett told The Daily Signal in a phone interview Monday.

“Right to work is all about choice and about bringing more economic opportunity,” Arlett said.

Right-to-work laws prohibit private sector employers from entering into agreements that make union membership and payment of union dues a condition of employment.

A total of 28 states are right-to-work states, with Kentucky, Indiana, Michigan, Wisconsin, and West Virginia making the move since 2012. The U.S. territory of Guam also is a right-to-work jurisdiction.

Arlett has championed a right-to-work law for Delaware since at least April 2015, when he raised the subject during a council meeting in response to a bill in the state General Assembly that ultimately died.

In October, Arlett formally introduced a bill to make Sussex a right-to-work county in the absence of statewide action.

The action in Seaford, where the five council members are nonpartisan and the mayor doesn’t vote, adds momentum to that upcoming vote, he told The Daily Signal.

“I have been surprised by the number of people who wish to support us,” Seaford Mayor David Genshaw says. (Photo: Kevin Mooney/The Daily Signal)

Three of his four colleagues on the all-Republican Sussex County Council have roots in Seaford, Arlett said, identifying them as George Cole, Irwin Burton, and council President Michael Vincent.

“They could take inspiration from the unanimous vote in Seaford,” he said. “The City Council is obviously responding to the needs of their constituents.”

After the Jan. 2 public hearing, the County Council may vote its right-to-work ordinance up or down, or defer action to a later date. The council also may amend the language.

“We are in the process of putting a team together and will probably do some sort of rollout [of the right-to-work law] in January,” Genshaw said. “Stay tuned.”

The western part of Sussex County, including Seaford, stands to benefit the most from a right-to-work law since the eastern part already boasts hotels and related businesses located along the beach areas, the mayor noted.

Genshaw expressed enthusiasm for right to work when The Daily Signal visited Seaford earlier in the year. The city was once home to a 35-acre DuPont nylon plant. The facility, which created thousands of local jobs, produced nylon used in military parachutes.

Warren County, Kentucky, started the trend toward local right-to -work measures when officials passed one in fall 2014. Other Kentucky counties quickly followed suit.

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Liberal Lawmakers Trying to Bail Out Private Pensions With Taxpayer Money

Last year, liberal lawmakers wanted to bail out the United Mine Workers of America’s pension plan to the tune of roughly $6 billion.

This year, they’re at it again, except on a larger scale. Under pressure from a few very large and politically powerful plans—including the United Mine Workers of America and the Central States Trucking Union—liberal lawmakers are seeking up to a hundred-fold increase in taxpayer bailouts for private, union-run pension plans.

Across the U.S., there are more than 1,300 union-run, or “multiemployer” pension plans. More than 90 percent of them have set aside less than 60 percent of what they promised to pay.

Private pension plans are a part of workers’ compensation. In the case of union-run or multiemployer pension plans, unions and employers together negotiate and manage pension plan contributions and investments.

Typically, workers receive lower paychecks in exchange for the promise of future pension benefits—i.e., a “secure retirement.”

Unfunded pension promises resulted, in large part, from reckless mismanagement. That mismanagement will leave workers more than $600 billion short of their promised benefits. Essentially, unions and employers have cheated their members and workers out of hundreds of billions of dollars in contracted compensation.

Instead of putting the unions and employers on the hook for their failure to make adequate pension contributions, many lawmakers seem willing to rob taxpayers to furnish those broken promises.

That would set a horrible precedent. Not only would it prop up failing industries that made reckless promises while penalizing those who have not—it would also cost taxpayers hundreds of billions, if not trillions of dollars.

It is absolutely unfair and reprehensible that unions negotiated and promised benefits that they did not then provide for, but taxpayers never had a seat at those negotiating tables. They should not be held liable for those unmet promises.

If they are, there will be little to stop current and future union-run plans from continuing to promise unrealistic benefits and then failing to fund those promises.

Unfair as it is for workers to receive less than their promised pension benefits, it is not unprecedented. That’s one reason the government created the Pension Benefit Guaranty Corporation (PBGC)—to provide insurance so that workers don’t lose all of their promised pension benefits.

When a private pension plan becomes insolvent, the PBGC pays out insured benefits—up to about $13,000 a year in the case of union-run pension plans.

But the PBGC itself is on tap to become insolvent within eight years. If that happens, it would be able to pay less than 10 percent of insured benefits.

Politicians that support bailing out insolvent plans argue that doing so will actually save taxpayers money, because it will prevent the plans from requiring PBGC assistance.

But that’s impossible. For starters, the PBGC is not taxpayer-funded, so taxpayers cannot be on the hook for its unfunded liabilities. And second, even if taxpayers were required to bail out the PBGC, it cannot be more expensive to provide a portion of promised benefits (the PBGC only insures benefits up to a maximum of about $13,000 per year) than it would be to provide 100 percent of plans’ promised benefits.

Instead of bailing out 100 percent of private union pension plans’ unfunded pension promises, lawmakers should focus on reforming the PBGC so that it can continue to provide pension insurance to workers’ and retirees whose pension plans have become insolvent—and to do so without a taxpayer bailout.

The magnitude of unfunded pension promises across the U.S. is enormous. There are over $600 billion in unfunded private union promises and more than $6 trillion in unfunded state and local government promises..

Lawmakers must not open the door to private and potentially public sector pension bailouts. Taxpayers who have their own retirements to save for cannot afford to pay for these broken promises.

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