This is Not Your Father’s Labor Movement

As Secretary-Treasurer Liz Shuler reported at the last Executive Council meeting in Orlando, the AFL-CIO has undertaken an aggressive outreach program to young workers both in the labor movement, and outside, among activists and workers who have been devastated by the economic downturn. Young workers are the future of the labor movement; that is why we are hosting the first-ever national summit of, and for, young workers called “Next Up” on June 10-13, 2010 in Washington, D.C.

The “Next Up” young workers summit is an opportunity for our emerging leaders to share their thoughts and ideas about how the labor movement can attract and empower young workers. Participants will collaborate with their peers during a weekend of plenary sessions, breakout gatherings and work groups that will focus on mobilizing and capacity building; the 2010 Elections; the jobs campaign; coalition building; and the skills that are needed to implement the long-term young worker program in their communities.

We invite you to send your emerging leaders between the ages of 18-35 to take part in this exciting endeavor. The summit will be held at the Washington Hilton on 1919 Connecticut Avenue, N.W. Space is limited, and we want to ensure that we have a diverse group of participants and that every organization is represented. Therefore, please begin registering your delegates on April 22, 2010. We will accept registration on a first come, first served basis until Monday, May 3, 2010 at www.aflcio.org/NextUp . Once your registration is complete, you may reserve your hotel rooms online at www.aflcio.org/NextUp/hotel . The group rate is $159 plus tax. After the May 3 deadline, we will have limited availability for additional registrations until Friday, May 21. If you have any questions, please contact Amanda Pacheco, Assistant to the Secretary-Treasurer, at nextup@aflcio.org.

The summit will begin with a welcome reception on Thursday evening, June 10, at the hotel. This will be a wonderful opportunity for your emerging leader(s) to meet with you and your designated point person. Please save the date as we will send a formal invitation shortly.

Liz Shuler, Arlene Holt Baker and I would like to thank you for your support of the young worker initiative, and we look forward to an exciting and productive summit.

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AP-GfK Poll: Americans say US cars top Asian autos

By ALAN FRAM

WASHINGTON – After a long romance with foreign rivals, America’s love affair with the automobile is returning to its roots with a revived affection for U.S.-made cars.

Slightly more Americans now say the United States makes better-quality vehicles than Asia does, with 38 percent saying U.S. cars are best and 33 percent preferring autos made by Asian companies, according to an Associated Press-GfK Poll.

The survey suggests those numbers are largely fueled by a plunge in Toyota’s reputation and an upsurge in Ford’s. The poll was conducted in March, as Toyota was being roiled by nightmarish publicity over its recall of more than 8 million vehicles around the globe and allegations that it responded sluggishly to safety concerns.

Though the U.S. advantage is modest, it marks a significant turnabout for American automakers battered by recession and relentless competition from foreign manufacturers. When the same question was asked in a December 2006 AP-AOL poll, 46 percent said Asian countries made superior cars, while just 29 percent preferred American vehicles, reflecting a perception of U.S. automotive inferiority that began taking hold about three decades ago.

“Toyota’s problems are not to be minimized here,” David Williams, dean of the business administration school at Wayne State University in Detroit, Mich., said in explaining the attitude shift.

In both AP polls, Japan – home to brands like Toyota, Honda and Nissan – was by far the dominant Asian nation volunteered as producing the best cars. European autos – which include BMW, Mercedes Benz and Volkswagen – were called top quality by 15 percent last month, about the same as the 17 percent who said so four years ago.

Williams and others also cited a fresh look Americans are giving U.S. automakers, especially Ford and General Motors. Though GM and Chrysler went through bankruptcy last year and the federal government invested $80 billion to keep them afloat, GM has revamped its lineup with more fuel-efficient and crossover vehicles. Analysts say Ford revived its reputation by not accepting the taxpayer bailout and improving its vehicles’ gasoline mileage.

Highlighting the changing attitudes, 15 percent in the March poll said Toyota makes the best cars, down from 25 percent who said so in 2006. Moving in the opposite direction was Ford, cited as tops by just 9 percent in 2006 but by 18 percent last month.

Eighteen percent said GM cars were best, little changed from 2006. Chrysler – which continues to struggle – remained mired at 3 percent.

“They last,” Charlotte Flentge, 60, of Chester, Ill., a Chevrolet Cavalier owner, said of American autos. “You get a good American car, you know you have a quality car you can be safe in and not be afraid to put your family in.”

Those likeliest to say Asian-made autos are superior included men, the better educated and residents of Western states. U.S. cars were a strong preference for those age 50 and up and rural residents.

Overall, though, only 51 percent in last month’s poll expressed strong confidence that cars sold in the U.S. are safe, with owners of domestic and foreign cars giving similar responses. The 2006 survey did not ask that question.

“Toyota is leading the parade in reducing confidence in the safety of automobiles,” said Gerald C. Meyers, a former auto executive with American Motors and now a University of Michigan business professor. “I suspect that’s holding the number down a lot.”

Despite consumers’ altered views, the poll showed that allegiance remains strong to many makes. Well over nine in 10 owners of Fords, GMs, Hondas and Toyotas expressed satisfaction with their cars, with the figure slightly lower for Chryslers.

Among the brand loyalists is Vernon Harmon, 44, a police officer from Rock Hill, S.C., proud owner of a Toyota and a Mazda.

“I know people are going to say, ‘That guy, is he not watching the news?'” he said. “I know what’s going on. I still think Japan makes the best cars in the world. Period.”

With the U.S. trying to claw out of a recession, the poll showed that Americans’ taste for alternative-fuel cars is being tempered by economic realities. Such cars often cost more than similarly sized vehicles that run on gasoline.

By 61 percent to 37 percent, most said last month they would consider buying an alternative-fuel auto. That was a narrower margin than the 70 percent to 29 percent who said so in 2006.

Tellingly, people cited the environment and a desire to save money about equally last month when asked which would prevail in making their decision. Four years ago, with a strong economy, protecting the environment outweighed saving money, 47 percent to 34 percent.

“I’m concerned about the environment, but I don’t want to kill myself, I don’t want to go into bankruptcy,” said Kathryn Mershon, 47, of Henderson, Nev.

The poll also found that:

-Fifty-six percent own vehicles made by U.S. automakers, about the same as in 2006.

-Eight in 10 live in households with autos, including about two-thirds who have two or more cars.

-Six in 10 autos were bought used.

-About four in 10 say their dream car would be a foreign brand, compared with three in 10 wishing for a domestic car.

The AP-GfK Poll was conducted March 3-8 by GfK Roper Public Affairs and Media. It involved interviews with 1,002 adults conducted by landline and cellular telephones. The margin of sampling error was plus or minus 4.2 percentage points.

Associated Press Polling Director Trevor Tompson, AP News Survey Specialist Dennis Junius and AP writer Ken Thomas contributed to this report.

How a Republican Accounting Trick Is Destroying Unions, Pensions, and Public Institutions

By Bob Samuels

President, University Council – AFT

Posted: April 8, 2010 09:50 AM on the Huffington Post

In 2004, Republicans in Congress helped to pass a new accounting requirement that threatens to destroy public institutions, pensions, and unions. Here is how it works. Each public institution now has to put on its financial books the total liability for its pension and retiree health care plans. At first glance, this seems like a prudent law, but it was designed to undermine pensions by making them appear to be generating huge deficits. To understand this problem, we can look at the University of California, which has its own retirement plans.

Due to the 2004 accounting change (GASB 45), the UC system has been forced to declare on its books a multi-billion dollar retiree health care liability; however, the university is not actually spending these billions. For instance, in 2009, it declared a $1.5 billion retiree health care liability, but it only used $240 million to cover this account. Moreover, the university has now accumulated over $14 billion in its total retiree health care liability, and so when it tries to balance its books, it shows a huge deficit. In response to this expanding liability, the system has called to reduce benefits and increase the contributions that employees make to their own plans.

It is important to stress that the UC is not spending billions on retiree health care each year; rather, it being forced to predict how much it would need to cover all present and future retirees. However, since the huge accounting liability works to produce a fiscal deficit, the university fears that its high bond ratings will go down, and then it will have to pay much higher interest rates on its bonds, and virtually everything the university now does, is tied up with borrowing money.

Just like retiree health care, pension plans also have to put on their ledgers their present and future liability, and the result of this accounting change is that many pension plans appear to be approaching insolvency. Yet, once again, we need to distinguish between the accounting liability and the actual costs of the plans. While it is true that many pensions lost huge sums due to the global financial meltdown and highly questionable investment strategies, the dire position of their fiscal health has been greatly exaggerated.

It appears then that the Republican trick has worked. Politicians, employers, and the public are so afraid of the looming pension deficits that they are calling for the end of pension plans, while everyone is blaming public employers for allowing the unions to force the government into plans that will bankrupt everyone. Talk radio is full of diatribes against the public employee unions that have robbed taxpayers blind by negotiating huge retirement packages. This narrative helps the Republicans accomplish their plan to eliminate unions, get rid of pensions, and demonize public employees. Luckily, there are a few simple solutions to this problem.

The first thing to do is to simply get rid of the 2004 accounting rule, and have public institutions, like private corporations, just report their current pension and health care costs. This move would help the financial status of many institutions, and they could then take out loans or bonds to help finance the retirement costs they cannot handle. Moreover, by not putting billions of dollars of liabilities on their books, employers would be forced to present the true fiscal status of their institutions. For the truth of the matter is that many employers are using the huge retirement liability to declare fiscal emergencies, which in turn allows them to eliminate jobs, reduce pay, and downsize benefits.

The next thing to do is to limit special retirement deals and cap pension payouts. It turns out that at institutions like the University of California, top executives are given special pension packages, and now there are many people who will be drawing over $200,000 a year for the rest of their lives. Without a cap on payments, the poorest employees end up having to pay for the excessive pensions of the wealthiest employees.

Another important step is to make sure that institutions do not shift a lot of their investments into highly volatile areas like private equity, real estate, and financial derivatives. In many cases, a central reason for the underfunding of pension plans is that in the pursuit for high returns and increased commissions, money managers have pushed institutions into high-risk investments. Instead of concentrating on a steady income through treasury bonds, the people in charge of the pension portfolios have chased magical returns, and now the employees are paying the price, while the money managers are keeping their huge fees and bonuses. Clearly this whole system should be investigated.

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