Commerce and Community

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By Errol T. Louis
Health Care Security Needed
One of the most shameful and least-known government subsidies to private-sector businesses is the practice, followed by many companies, of providing skimpy or nonexistent health benefits to their lowest-paid workers – hotel maids, janitors, restaurant busboys and the like – who end up using Medicaid and other government-funded anti-poverty programs to pay for health care. In effect, taxpayers end up paying the tab for companies too stingy to offer a decent health plan.
Our city has 840,000 people who work for $11 an hour or less, which is below $23,000 a year. About half this group has no health insurance. In the event of illness, they end up in the emergency rooms of public hospitals or on the Medicaid rolls.
Researchers at Columbia University Medical Center estimate the public pays $466 million a year in health care expenses for low-wage uninsured workers – an expense that should be borne by their employers.
Some business owners say they would like to give health insurance to employees, but can’t do it and simultaneously stay competitive with rivals who refuse to provide the benefit.
It’s long past time New York City halted this race to the bottom. The Health Care Security Act, sponsored by City Councilwoman Christine Quinn and more than 40 of her Council colleagues, would require some local businesses to provide a baseline of health coverage, in a manner similar to New York’s prevailing wage laws.
The bill would cover about 9,300 businesses in five sectors that employ large numbers of uninsured, low-wage workers – construction, building maintenance, supermarkets, hotels and industrial laundries. These kinds of businesses, by definition, can’t pick up and leave New York, so there’s little threat they will flee to New Jersey or China if they have to pay health benefits. Approximately 60,000 uninsured workers would get health benefits for the first time.
“The goal is to take health care out of competition,” says Paul Sonn, a lawyer at the Brennan Center who has been working on legal issues related to the bill. Jobs with Justice, a labor coalition promoting the proposed law, has rounded up support from civic-minded business leaders like John Catsimatidis, the CEO of Gristedes.
The sticking point right now is the Bloomberg administration, which contends the proposed law would run afoul of the federal Employee Retirement Income Security Act, which limits state and local government involvement in employee benefit matters. Sonn says the administration’s lawyers are wrong, and that the city can order companies to spend a minimum amount on health benefits.
Politically, the ball is in Mayor Bloomberg’s court. In 2003, Hizzoner boasted of heading an administration that “essentially ended corporate welfare as we know it” – a claim that has taken a beating in light of city subsidies offered to corporations like Pfizer, Bank of America and the Hearst Corp.
There’s no better way for Bloomberg to redeem his promise than to order the Law Department to drop its objections to the Health Care Security Act and get behind the bill. At least 60,000 grocery clerks, chambermaids, busboys and other laborers – and their families – will thank him.
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Labor Split Makes Sense
Last month’s exodus from the AFL-CIO of the Service Employees International Union and the Teamsters at the labor federation’s meeting in Chicago capped a dramatic battle over the future of a shrinking, ailing American labor movement. It’s great news for working people.
Unions are not immune from the fundamental law of all organizations that compete in a capitalist economy: grow, change – or die. But organized labor has not been growing; only 12.5% of U.S. workers belong to unions today, down from more than 20% in 1983.
One exception to the national collapse in union numbers is the SEIU, which tripled its membership to 1.8 million over the past two decades and is leading a faction of disgruntled unions called Change to Win. The coalition now includes the laborers union, UNITE HERE, the United Food and Commercial Workers, the United Brotherhood of Carpenters and Joiners, and the United Farm Workers.
Collectively, they represent about 6 million workers – and, not insignificantly, $35 million a year in dues to the AFL-CIO. The coalition blames the AFL-CIO and its president, John Sweeney, for not fighting harder to unionize low-paid and immigrant workers such as security guards, day care workers and retail store cashiers.
Sweeney, the embattled 71-year-old AFL-CIO leader, hasn’t hidden his disgust at the bolting unions, calling their disaffiliation a “grievous insult” to working Americans. The comment is partly a personal swipe at Andy Stern, Sweeny’s handpicked prot‚g‚ at the service workers union. But the stakes are too high to let egos and wounded feelings get in the way.
America has never needed unions more. The flight of jobs overseas, the ongoing scandal of migrant farm labor, and the prevalence of companies that refuse to pay a living wage or decent health benefits make collective bargaining a necessity as well as a legally protected right.
Change to Win wants to spend $25 million a year to unionize new workplaces, more than triple the $7.5 million in Sweeney’s budget. The coalition also plans to merge small, ineffective unions into bigger ones to increase bargaining clout.
Sweeney prefers to spend money on traditional political action, like mounting drives to elect labor-friendly politicians. But that strategy doesn’t work: Labor put Bill Clinton in office, only to see him push for trade policies that made it easier for companies to move American jobs to Mexico.
The AFL-CIO old guard also claims that public dissension can only weaken the labor movement. They’re wrong.
Before the American Federation of Labor and the Congress of Industrial Organizations merged to become the AFL-CIO half a century ago, a healthy competition between the groups spurred a race to organize workers, and union rolls swelled. The new split might rekindle that competitive spirit, meaning the drama in Chicago could be the start of something big.