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When Bank of America and Wells Fargo tried to foist off expensive new debit card fees to customers earlier this year, the move touched off a consumer revolt that yielded 650,000 new accounts and infused some $4.5 billion in new business for credit unions in the space of a month. It also added momentum to the public banking movement, a grass roots effort encouraging states to consider laws that encourage publicly-owned banks that could revive community banks and open up the spigot for affordable and reliable small business and consumer credit.

Earlier this year, the big banks had wanted to recoup expected “losses” they would experience under new consumer protection regulations contained in the
Dodd Frank law that limited what they could charge merchants for using credit and debit cards. They also tried to create a consumer push back against the legislation.
Their plan didn’t work. According to consumer reports, bank customers are already saddled with an average of $327 a year in “hidden fees” just for checking
accounts from the big banks and the new fees felt like salt in a wound.

Combined with the bad publicity banks have earned with high-handed foreclosure practices and revelations about slap dash record keeping, America’s big banks
appear to be veritable billboards for arrogance. The unintended consequence of the planned fees was a stampede of customers who moved their accounts to credit unions.

The Federal Reserve says 30 huge companies dominate the banking and finance landscape and have for the past decade. These are the same companies that preyed on hapless homeowners; marketed high risk loans to individuals and small businesses that could not afford them; bet on the failure of their own customers
with credit default swaps; rigged bids in big credit deals; and enjoyed windfall profits. (Bank revenues increased by over 48% this year, and profits through
the 3rd Quarter of 2011 were up by more than $11 billion from the previous year.) These same bankers just couldn’t understand the lack of “loyalty” their customer
base demonstrated. Oh well, who needs customers when you’ve got politicians eager and willing to shovel trillions of dollars worth of welfare to bail you out when deals go south?

A decade ago, banks had to choose between either providing traditional banking services—checking and savings accounts, residential and commercial
loans—or selling insurance and investment and brokerage services. Passage of the Gramm-Leach-Bliley “Financial Modernization” Act enabled the big banks to become financial supermarkets. In 1990, according to the Federal Deposit Insurance Corporation, there were 15,162 financial institutions with assets totaling $4.6 trillion; in 2010, there were 7,657 with assets totaling $13.3 trillion. Less than half as many banks holding three times as many assets.

The Public Bank Movement

It’s pretty clear on Main Street that the movement to ginormous banks has been a key element in America’s financial morass. The disappearance of community banks with their connection to local businesses and ordinary depositors is deeply felt. Putting that egg back in its shell may not be possible, but the movement toward publicly-owned banks, with a chartered obligation to citizens of a specific jurisdiction has an appeal. In Oregon, activists have linked public banking or “partnership” banking to the “think local” concept. In legislative hearings around the state, supporters have pressed the issue with the
slogan: “buy local, eat local, bank local.”

The Public Banking Institute (www.publicbankinginstitute.org) is the focal point of efforts to get states to investigate the public option. So far, PBI has
established a presence in 32 states and has set up volunteers to coordinate state information and lobbying efforts in 24 of those states. PBI is recruiting volunteer coordinators in the rest of the states through its website.

Setting Up Public Banks

PBI reports that 14 states are actively considering legislation related to public banking; more are expected to pick up on the issue in the 2012 legislative sessions. PBI’s website points out that publiclyowned and managed banks offer substantial benefits, not limited to the obvious revival
of community-based banks with their connections to local businesses, entrepreneurs and homeowners. For example, they say, it’s no coincidence that North Dakota—currently the only state in the nation with its own bank—has weathered the recession with consistent economic growth, an unemployment rate of under 4% and without a state budget deficit.

For states groping for alternatives to persistent budget cuts and reduced services, state-owned banks offer the advantage of keeping assets—pension
funds, tax revenues, rainy day funds, capital improvement funds—within the state’s borders and out of the hands of the monster global banks (on Main Street and away from Wall Street).

After more than three years of austerity budgeting, still 48 of the 50 states continue to face gaping deficits (expected to reach $46 billion in the coming
year). Double-digit unemployment has choked off tax revenues to a trickle in most states. In the frantic search for a magic formula to replenish state coffers devastated by the longest and deepest economic disaster since the Great Depression, states under the control of conservative lawmakers and governors have attacked collective bargaining and initiated deep and permanent cuts to their budgets for education and public services—firing public safety workers and teachers, eliminating libraries, cutting transportation services, and reducing infrastructure investment to a bare minimum. Some states have turned to expanding legalized gambling. By now its clear: those ideas are proving inadequate for closing budget gaps and—in the long
run—unworkable.

Commercial Bankers Opposed

The American Bankers Association (ABA) opposes state banks, calling the concept a “socialist idea” and claiming that startup costs would run into the billions. Countering the ABA, PBI points out that most states already have more than sufficient cash assets that are now being managed by big commercial financial institutions, cash that would easily be convertible into a publicly managed bank. Using the generally accepted leverage ratio of $10 to $1, it would take just a fraction of those assets to set up a state or publicly run bank. Moving that money would not undermine the earning power
of these funds. It could, however, help make credit available to small, local businesses, something the big commercial banks currently refuse to do.

The AFL-CIO has declared the ten days following Thanksgiving (November 25 through December 4, 2011) as “Buy Union Week.” The action adopted by the AFL-CIO’s 25th Constitutional Convention also urges affiliated unions to use “all available means” to promote the purchase of union made gifts during the upcoming Holiday season.

Given the volatile state of the economy—marked by huge job losses, declines in take-home pay and increased costs—it makes more sense than ever to focus the purchasing power of union families on the goods and services that those families create. Supporting union made products helps keep good jobs in the community.

Consumer surveys indicate that Holiday spending will largely remain flat this year and that most of us will pay cash rather than add to our credit card debt. Still, the National Retail Foundation says that Americans will spend on average $704.18 on Holiday gifts and seasonal merchandise this year. All the more reason to specify “union-made-in-the-USA” gifts for friends and family—we’ll be looking for practical, quality gifts. Fads and gadgets won’t be big sellers this year.

Here are some suggestions for your 2011 Holiday shopping:

1. Visit www.unionlabel.org and click “Find Union Made Products and Services” in the yellow box at the top of the page to find ideas to start your shopping list.
2. Demand union made products and services when you shop.
3. When you find merchants who share your interest in union-made products & services, let us know who they are (e-mail us at: ulstd@unionlabel.org), and give them a copy of the “Thanks for Caring” certificate that is part of this package. (pdf)
4. When you wrap your presents, use the enclosed tag to let friends and family know you shopped union.
5. If you just can’t find a union source for the gifts you want to give, why not just give cash, and ask the recipient to spend it on union products or services.

Please contact us with your ideas for making “Buy Union Week” a big national success.

In Solidarity,

Rich Kline
President, Union Label & Service Trades Department (AFL-CIO)

buy union wk 2011.pdf

Economists will tell you it takes two elements to create a marketplace: supply and demand. Producers create the supply; consumers provide the demand. The phrase isn’t “supply and suggest or request” it’s “supply and demand.” Demand implies firmness, authority or power.

When we complain that we can’t find union-made goods to buy, we’re saying that the marketplace is failing us. We’re bringing the demand, but producers aren’t giving us the supply.

Something’s wrong with this picture.

Polls tell us that union members and their families prefer to support the products and services of union members. That doesn’t mean that every union member would buy union-made if they had the choice, but many would.

There are 16 million union members in the U.S. Let’s assume that every union member “influences” buying decisions of just three other people, on average: that might mean folks in their immediate family (spouses, children, mothers, fathers, aunts and uncles) or room mates, neighbors and friends.

Now, let’s do the math:

The average weekly wage for union members is $967, or $50,284 a year.

There are 16 million union members in America X 4 (the number  of people who are influenced, plus the union member = 64 million.

Union buying power

$50,284 X 16 million= $804,442,000,000—more than $804 billion! If you laid 804 billion single dollar bills end to end, the line would stretch for 750,000 miles, or more than three times around the world. That’s a long way! Just imagine how far that line would take us if we used it as buying power.

The failing U.S. market place

So, we have a marketplace of 64 million people, with more than $804 billion to spend and they want to spend it on union-made goods and services, but all they see are autos made in Asia, clothing, appliances, electronics, tools made in China.

Even worse is what our union buyers don’t and can’t see—billions of dollars worth of goods with parts and components from somewhere else. Most of the little gizmos inside your computers and cell phones are made in China. The tiny parts under the hood of your car are most likely from foreign sources. The ingredients for many prescription drugs are mixed in bulk in places like Asia and China. Do you like frozen shrimp? Catfish? Did you know that many of the frozen seafood products you see in your supermarket were raised “ranch style” in ponds in Asia.

Outsourcing services

When something goes wrong with a foreign-made product, you might get on the phone (or the internet) and try to find out how to fix it. If you end up talking to a live person, most likely, it will be someone in India who says their name is “Judy” or “George”. Nowadays, the folks who read your x-rays if you’re sick, are somewhere else.  Your banking and credit card transactions are recorded and maintained half a world away.

Okay, so the stuff you buy isn’t made union, and it’s not made here, and it’s not repaired here. So, how do you fix all that?

Discretionary spending

The average daily union wage is $193.40. Now, we understand that you don’t “control” every dollar of that daily wage. A lot of it is gone before you even get your check. One-third of it (say $63) is already earmarked for housing or rent; another 10 percent or so goes to taxes ($20); another $70 pays for insurance, medicine and groceries. But, that still leaves around $40 per day in “discretionary” spending—money you choose to spend on a daily basis. Maybe some of it goes for chewing gum, tobacco, refreshments, entertainment, a decent lunch, a kid’s haircut, clothes and shoes.

What about a ‘buycott’?

Suppose, just suppose, that everyone in your local union—maybe 500 people—decided that for just one day you’re not buying anything. No food, no gasoline, no coffee, no lottery tickets, nothing! Assuming you and everybody else in the local have $40 you could spend today—that’s $2,000 that won’t go into the local economy. There’s just one other thing: you’re going to have to announce it. And, maybe you should try to enlist some allies—from other unions, in your church, at the American Legion, or wherever groups get together who aren’t going to spend anything that day either.

Now, let’s add one more element:

Why not visit your local Home Depot, a department store, an auto parts dealer, a grocery store…

Hand them one of these cards: 

And tell them:

“I’d love to buy something here, but I just can’t find any of the products I need on your shelves that carry a union label. I can’t even find anything that’s made in America.

“If I’m wrong, would you consider setting up a display of union-made or American-made products?

“There are 16 million union members in America who earn more than $804 billion a year. Most of them feel the same as I do. Please pass these concerns on to your corporate headquarters.”

Remember the $804 billion. That’s power.

As James Carville once famously reminded candidate Bill Clinton: “It’s the economy, stupid.” Demonstrators in New York, Los Angeles, Washington and hundreds of other cities across the nation are emphasizing that point again. They are students, workers with blue and white collars, from the public and private sectors (including a smattering of bankers and lawyers), retirees, former homeowners and current homemakers. Although the media initially tried to ignore the demonstrators and later criticized the movement for its “lack of leadership,” the rest of America is getting the message.

AFL-CIO President Rich Trumka hailed the demonstrations, vowing that union halls and community centers would be open to demonstrators. He said the movement had “captured the imagination and passion of millions of Americans who have lost hope that our nation’s policymakers are speaking for them” and he applauded demonstrators for their “determination to hold Wall Street accountable and create good jobs.”

Tumka pointed out that union workers have spontaneously joined the demonstrators “to call for fundamental change” all across America, defining the protests as an expression of “frustration—and anger — about our country’s staggering wealth gap” along with the lack of jobs and “the corrupting of our politics by business and financial elites.” He said the 99% of the nation who “keep the country running are being robbed not only of income but of a voice.”