[Note: The following articles are reprinted from the January-February 2007 issue of UNITY & INDEPENDENCE, a regular supplement to The Organizer newspaper.]
Andy Stern Rams Ahead with Corporate Partnerships in Healthcare Industry
By ALAN BENJAMIN
A few weeks ago, The Wall Street Journal ran yet another glowing article about SEIU President Andy Stern and his drive to press the unions to carry out "an attitude adjustment."
The Journal asked Stern if he thought the unions would ever be able to organize Wal-Mart in the United States. Stern's answer was revealing. "We have not been trying to organize them but to change their business model. A traditional organizing drive is not going to be successful because the laws are so tilted on behalf of a company as big as Wal-Mart, not to mention the fact that Wal-Mart has an emergency-response team that flies out of Bentonville at the moment the word 'union' is used in the store. I think Wal-Mart has the opportunity to create an entirely new model of worker representation. The question is, do they want partners?" (Jan. 22, 2007)
Working people across the country understand full well that corporate America, beginning with Wal-Mart, is on a search-and-destroy mission to dismantle the unions and lower their labor costs. If unions are to survive as instruments to defend the interests of their members and of the working-class majority in this country, they have to challenge all the unjust laws and return to the fighting stance and traditional organizing drives that built the unions in the first place.
Dr. Martin Luther King, Jr., and the Civil Rights Movement did not shy away from challenging the unjust Jim Crow laws because these laws were so tilted on behalf of a system of racism and oppression against Blacks. They did not seek to become partners with the Ku Klux Klan in the hope the Klan could be brought around to a new model of race relations in this country.
But isn't this what Stern is proposing?
"Healthcare Partnership" with Wal-Mart
In his interview with The Wall Street Journal, Stern explained his reasons for seeking healthcare partnerships with the employers.
"We must try to be partners with our employers, who have told us we should change and understand their competitive issues and try to add value, not create problems," Stern said. "Unions need to appreciate there are ways in which we add value and can be helpful. This is especially the case in relation to healthcare. The employer-based healthcare system is dead. It's a relic of the industrial economy, and it makes corporations unable to compete fairly when America is the only country that asks its employers to put the price of healthcare on the cost of its products."
These are not just empty words. Stern has been working overtime offering his "helpful" services to some of the most anti-union and retrograde sectors of Big Business in this country.
As we go to press, Stern and Wal-Mart have just announced a healthcare partnership "aimed at attaining universal healthcare coverage." The partnership also includes Intel Corp., AT&T Inc. and Kelly Services Inc., a temporary staffing agency. According to the Associated Press release of Feb. 7, "no specific policies were proposed to achieve this goal. Wal-Mart CEO Lee Scott said that Wal- Mart is not committed to spending more on healthcare or making any immediate promises to provide health coverage to more workers."
Labor activist Marnie Goodfriend of Labor Beat in Chicago lambasted Stern for "rubber stamping" Wal-Mart's empty-rhetoric support for universal healthcare. "Stern should be putting intense public scrutiny and pressure on Wal-Mart for its exploitative and degrading work conditions," Goodfriend noted, "not using Wal-Mart's paper-thin public support for healthcare to undermine his own campaign against the company."
It is hard to believe that just two years ago, SEIU leader Anna Burger publicly denounced the Congressional Black Caucus for organizing a joint fundraiser with Wal-Mart.
The Washington Post on May 15, 2005, reported that Burger wrote caucus members "to express SEIU's disappointment that the Congressional Black Caucus has given Wal-Mart an opportunity to fashion a false image as a friend of African Americans and of working people generally by organizing the April 27 joint fundraiser."
"As the largest employer in the world," Burger wrote, "Wal-Mart's labor relations model is now undermining standards for all American workers. The average salesclerk makes below the poverty line, and a majority of Wal-Mart workers cannot afford the company's health insurance plan. ... Wal-Mart has forced its more than 600 suppliers to shift operations overseas to exploit workers there at even lower wages while destroying good American jobs."
How true. At the time, SEIU was still part of the AFL-CIO and its campaign to organize Wal-Mart employees into genuine unions. But as Stern revealed in his new book, "A Country that Works: Getting America Back on Track," it was necessary for the SEIU to break with the AFL-CIO, "because of the failure on the part of the AFL-CIO to modernize its strategic approaches to employers in order to take into account their competitive business needs."
Today, instead of organizing Wal-Mart workers into unions, Stern's goal is to "change Wal-Mart's business model" by doing exactly what Anna Burger accused the Congressional Black Caucus of doing two years ago - giving Wal-Mart an opportunity to fashion a false image as a friend of working people, when in fact Wal-Mart is one of its main enemies.
Any more doubts as to the nature of Stern's split from the AFL-CIO?
From the Business Roundtable to Safeway
The Wal-Mart partnership is only one of many so-called "healthcare partnerships" Stern has been building of late.
On Jan. 12, 2007, Stern announced the launching of a partnership with AARP and the Business Roundtable called Divided We Fail. Their purpose, as a press release puts it, "is to work together to urge action from political leaders to attain health and long-term financial security for all Americans."
The Los Angeles Times (Jan. 16) noted that, "two seemingly strange bedfellows, the president of SEIU and the director of the Business Roundtable, which represents the nation's leading corporations, have joined hands with AARP to overhaul healthcare along the lines of the Massachusetts Plan, the only comprehensive state proposal that has been enacted."
The Times continues, "Divided We Fail relies primarily on a requirement that individuals must purchase private health insurance. The state would redirect funding that had been used to cover hospital care for the uninsured to subsidize health-insurance premiums. The plan also levies a token fee on employers that do not provide coverage."
One month earlier, on Dec. 13, 2006, Stern joined up with Safeway CEO Steve Burd and Oregon Democratic Senator Ron Wyden to unveil the "Healthy Americans Act." The details of this plan are worth examining, as they illustrate everything that is wrong with all the partnerships that Stern is putting together with these giant corporations.
The Healthy Americans Act would mandate individuals to purchase private insurance - just as the Divided We Fail plan does - and it would slash and cap costs to business. Depending on size and income, businesses would be required to pay a tax of 2% to 25% of the average private insurance premium. The tax would be used to subsidize private insurance premiums for low-income people. (At this time, employers pay an average of 75% of health insurance premiums.)
Individual workers would then be required to buy private insurance. Employers who offered health insurance prior to enactment of Wyden's legislation would contribute lump-sum wage payments to their employees equal to the cash value of the health insurance they provided. In this scenario, the burden of rising healthcare costs is thus shifted from the employer to the worker. This means that the employee is now left to his or her own to buy their own healthcare insurance package.
This is a major shift of wealth from working families to corporations.
Don Bechler, chair of the California Universal Health Care Organizing Project and a former UAW and IAM negotiator, said: "The Wyden proposal is not something labor can support. It eliminates the collective bargaining tool for working people and leaves them to the mercy of insurance industry. It destroys the concept of defined benefits. It sells the plan with a capped wage payment to workers with no caps on insurance costs. It is a windfall for the employers and a new economic burden on workers. It is a plan that no labor negotiator should ever try to sell to the workers of America. I do not know why Stern is supporting this, but I would not want him negotiating my health plan."
SEIU Locals Resisting Stern's New Course
When Stern tells The Wall Street Journal that unions today need an "attitude adjustment" he is saying that unions need to abandon the traditional model of trade unionism based on the notion that bosses and workers have contradictory interests due to their respective roles in the sphere of production, and instead should seek "partnerships" with the employers aimed at helping their bottom line.
But SEIU locals across the country are resisting this new course.
SEIU Local 73 in Chicago announced Feb. 7 that its 100-member executive board voted unanimously to endorse and campaign for passage of HR 676, the "Expanded and Improved Medicare for All Act" introduced by Congressman John Conyers (D-Mich). This single-payer legislation is also known as the "United States National Health Insurance Act."
SEIU Local 73 represents over 25,000 city, state and county public workers, including school employees and bus drivers throughout Illinois and Northwest Indiana.
HR 676 would institute a single-payer healthcare system in the United States by eliminating healtcare insurance companies altogether and expanding a greatly improved Medicare system to every resident.
HR 676 would cover every person in the United States for all necessary medical care - including prescription drugs, hospital, surgical, outpatient services, primary and preventive care, emergency services, dental, mental health, home health, physical therapy, rehabilitation (including for substance abuse), vision care, chiropractic and long term care. HR 676 ends deductibles and co- payments. HR 676 would save billions annually by eliminating the high overhead and profits of the private health insurance industry and HMOs.
Isn't this what all SEIU members want and deserve? Isn't this what all union members and all working people in this country deserve?
-----
What is Schwarzenegger's Healthcare Plan and How Should Unions Respond?
On Jan. 10, 2007, California Governor Arnold Schwarzenegger announced a new state healthcare plan. Politicians and corporate heads immediately applauded the proposal and said it could become a model for "healthcare reform" in states across the country.
The response to this plan from the trade union movement varied sharply.
Art Pulaski, secretary-treasurer of the California Labor Federation (AFL-CIO), issued a press release that was highly critical of the plan. He stated, in part:
"The governor's plan shifts the responsibility for healthcare costs onto already overburdened workers and their families. This proposal will be a boon to insurance companies, but a bust for most workers. This plan requires all Californians to buy health insurance with no guarantee that it will be affordable or that coverage will be adequate. We are concerned that the plan creates an incentive for employers who currently provide healthcare to drop coverage and instead pay only a minimal tax.
"This is a plan that Wal-Mart can love and Wal-Mart workers will hate. The proposed employer contribution is so low that even Wal- Mart, a corporation known for its minimal employee healthcare coverage, already exceeds the requirements.
"The governor says his proposal eliminates the 'hidden tax' of the uninsured, but what he's proposed is a new tax on middle class families."
Deborah Burger, president of the California Nurses Association, chimed in on a similar note:
"Governor Arnold Schwarzenegger's plan as designed has major flaws, most notably forcing the uninsured to buy what for many will mostly likely be substandard, unaffordable health plans that primarily serve to further enrich big insurers.
"Some provisions in the governor's package are welcome ... but a plan that begins by criminalizing the uninsured with no controls on skyrocketing premiums and, at this point, no standards on what those health plans will include, is a train wreck waiting to happen."
Both Pulaski and Burger reaffirmed their commitment to ensuring the adoption this year of SB 840, the single-payer Kuehl bill. This bill was adopted last August by the California State Assembly and the State Senate, but it was vetoed by the Republican governor.
For his part, SEIU President Andy Stern, in opposition to many important SEIU locals across California, praised the Republican governor "for demonstrating the kind of leadership we are going to need if we are going to find a solution to the healthcare crisis. The governor's plan doesn't have all the answers, but it is a bold proposal with the proper goal: expanding health coverage and making quality care more affordable for everyone."
And Stern concluded: "All of us - businesses, healthcare providers, unions, and policymakers alike - need to work together if we are to fix the broken health system. As the largest union of healthcare workers, SEIU is eager to work with Governor Schwarzenegger and any other leaders who are committed to making quality care more affordable for every man, woman and child in America."
There was no mention in Stern's press release of his union's support for the single-payer Kuehl bill.
To help our readers fully understand what this debate over healthcare is all about, and how serious the abandonment by Andy Stern of basic trade union principles really is, we are reprinting below a leaflet that was distributed Jan. 15 at the Martin Luther King Breakfast in San Francisco by the California Universal Health Care Organizing Project. Readers, particularly SEIU and Change to Win members, will be able to judge for themselves if Schwarzenegger's plan is, as Stern argues, a bold proposal worthy of our support - or, rather, if it is a plan, as Art Pulaski argues, that Wal-Mart's CEO could love. - The Editors
-----
Statement by the California Universal Health Care Organizing Project
"Of all the forms of inequality, injustice in healthcare is the most shocking and inhumane" - Dr. Martin Luther King, Jr.
Today we celebrate the birthday of Dr. Martin Luther King, Jr. Healthcare was one of Dr. King's greatest concerns. All Californians desperately want to solve the healthcare crisis. Various solutions are being debated in Sacramento. This educational leaflet compares the proposed solution of Governor Schwarzenegger to SB 840 the California Health Insurance Reliability Act, which he vetoed last August. In August 2006, the California Legislature passed SB 840 in both the Assembly and the Senate. This sent a message across America that Californians want a great health insurance system minus the bureaucratic nightmare of the insurance industry.
SB 840 was co-authored by 45 of the 73 Democratic legislators. It was endorsed by over 500 organizations, including the California State Federation of Labor, AFL-CIO and the California State Council of the Service Employees International Union.
The central question to ask Arnold Schwarzenegger is why would he veto a bill that removes racial, gender, and class inequalities and instead support a plan that gives preferential treatment to the parasitic middle man insurance companies?
The best way to analyze the Governor's plan is to compare it to SB 840.
Cost
SB 840 would save Californians $12 billion in 2007, Arnold's plan would cost an extra $12 billion.
SB 840 savings would occur by removing the middle-man insurance industry from healthcare and bargaining vigorously with the drug companies. The 12B figure is from the Lewin analysis of Kuehl's legislation.
Arnold's plan will use state funds to subsidize the insurance industry. We do not want welfare for the insurance industry, which has always tried to avoid the sick and insure only the healthy. The insurance industry should be removed from healthcare.
Bureaucracy
Arnold maintains the current bureaucratic nightmare of over 6,000 health insurance plans and 69 government programs.
SB 840 is a bureaucracy-buster as it reduces the bureaucracy from 6000 to 1. Most politicians want to cut bureaucracy. But not Arnold. SB 840 is the biggest bureaucracy-buster in history.
Comprehensiveness
SB 840 is extremely comprehensive and includes full coverage for mental health, dental, vision, and prescription drugs.
Arnold's program does not require employers to offer any minimum benefit.
Deductibles and Copays.
Arnold's minimum required coverage has $7,500 out-of-pocket costs for individuals and $10,000 out-of-pocket costs for families.
SB 840 has no out-of-pocket costs or deductibles. We think it is bad health policy to set up barriers to care.
Racial, gender, and class inequalities
SB 840 delivers great healthcare to everyone.
Arnold's plan maintains the current system in which different classes of people receive different classes of care.
Labor
Arnold's plan does nothing to remove the contentiousness at the bargaining table. All labor negotiations today revolve around healthcare. Arnold's plan leaves individuals on their own to bargain with insurance companies.
SB 840 removes healthcare from the bargaining table. SB 840 uses the collective bargaining of 37 million Californians to bargain for lower drug prices.
Business
SB 840 levels the playing for all business. Costs are known.
Arnold's plan maintains an uneven playing field. And Arnold's plan sets a new low bar for what business should pay. Businesses that currently provide healthcare spend slightly over 10% of payroll on healthcare. Wal-Mart spends 7%. Arnold calls for a minimum of a 4% payroll fee on some employers. This is a plan that Wal-Mart would love and should be called the Wal-Mart plan. Arnold's projected income from the 4% fee amounts to $1 billion in a state that is projected to spend $200 billion on healthcare in 2007.
Who pays?
Studies on SB 840 project an employer payroll tax of 8.1% of payroll after the first $7,000 per employee and a employee payroll tax of 3.8% after the first $7,000 of income. These figures reflect the current relationship between employers and employees.
Arnold's plan lowers the bar on employers to 4% with no capped rate for employees. Arnold's plan is in line with the three decades long shift of wealth from working families to the rich.
Choice of healthcare provider.
Arnold's plan allows insurance companies to limit choice.
SB 840 allows full choice of provider.
Cost controls
SB 840 uses an annual budget to pay for healthcare.
Arnold's plan allows insurance companies to raise rates. Insurance companies have no incentive to control costs in California. They actually have an incentive to have Californians spend more money on healthcare. Arnold proposes limiting the insurance industry's overhead and profits to 15 cents of every premium dollar. Ask yourself, would insurance companies want 15% of $200 billion or $300 billion dollars? The more money that Arnold directs to the insurance industry, the better for them.
On the hidden tax
Arnold talks of a hidden tax on current insurance premiums to cover the uninsured. Don't hold your breath for a rebate check from your insurance company.
SB 840 takes on the real hidden tax on healthcare, which is the existence of the middle-man insurance industry. Medicare has about a 3% percent administrative cost versus the proposed 15% administrative and profit cost of private insurance. I will take the government efficiencies any day over the insurance industry's, especially when the insurance costs five times as much.
Insurance Industry and Individual Mandates
SB 840 uses government to remove this bureaucratic, wasteful middleman. Arnold's plan uses government to enforce citizen-funded subsidies (individual mandates) for the insurance industry. You could label Arnold's plan "Leave no insurance company behind."
SB 840 is healthcare for Californians. Schwarzenegger's plan is welfare for his needy friends in the insurance industry.
If you like how Wal-Mart's CEO Lee Scott treats his workforce, you will love how Arnold treats the healthcare of Californians.
[Distributed by the California Universal Health Care Organizing Project. For more information, call 415-695-789 or email <dbechler at value.net>.]