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TUESDAY, JANUARY 25, 2011   (printable PDF version)
House panel passes balanced U.I. bill

On Friday, the House Labor and Workforce Development Committee chaired by Rep. Mike Sells (D-Everett) amended HB 1091, the governor's initial proposal for changes to the state Unemployment Insurance system, to balance proposed business tax cuts with a children's benefit to help families struggling with unemployment.

This change, supported by the United for Washington Families coalition of community and labor groups, is a win-win-win to help families, businesses and the economy, which are all suffering right now. 

Growing coalition backs balanced approach on U.I.

United for Washington Families, a coalition supporting the balanced approach of a U.I. tax cut coupled with a children's benefit, continues to grow and now includes:

Children's Alliance

Children's Home Society

Statewide Poverty Action Network

Northwest Harvest

WA Community Action Network

Food Lifeline

Welfare Advocates Group

WA Chapter of the National Ass'n of Social Workers

Lutheran Public Policy Office

ElderCare Alliance

Unemployment Law Project

NW Health Law Advocates

Legal Voice

National Organization for Women (Washington chapter)

Economic Opportunity Institute

One America

Main Street Alliance of Washington

Puget Sound Alliance for Retired Americans

Washington State Labor Council, AFL-CIO

Washington Federation of State Employees, AFSCME Council 28

Washington State Nurses Association

Machinists District 751

United Food and Commercial Workers Local 21

Washington Education Association


Washington Teamsters

Washington State Building & Construction Trades Council

Service Employees International Union Locals 775NW and 1199NW

Professional and Technical Employees Local 17

and various other local unions of UFCW; IBEW; IUOE; SMWIA; UAW; AWPPW; and others

The Washington State Labor Council congratulates and thanks Rep. Sells and the other Democratic members of that committee, all of whom voted to advance the improved HB 1091: Reps. Chris Reykdal (D-Olympia), Tami Green (D-Lakewood), Phyllis Gutierrez Kenney (D-Seattle), Mark Miloscia (D-Federal Way), Jim Moeller (D-Vancouver), Timm Ormsby (D-Spokane), and Mary Helen Roberts (D-Edmonds). In the face of opposition from business lobbying groups, none of the Republicans on the committee supported the amendment.

After Friday's committee action, the National Federation of Independent Business tweeted that the amendment's passage was a "poison pill." In shareholder-speak, a poison pill is a defensive reaction taken by a company to avoid a hostile takeover by a corporate raider. So in this metaphor, are we to understand that the NFIB is the corporate raider and legislators are defending the U.I. system from takeover?! Hmm.

What's clear is that business lobbyists, who have already testified that they consider the $2 billion in the U.I. reserves to be employers' money, consider the coupling of a $15/child per week benefit with their tax break to be a deal-breaker.

Under the amended HB 1091, the Employment Security Department estimates businesses would get $295 million in tax cuts between 2011 and 2017, and the 167,000 people who receive the children's benefit will get $202 million. And nearly half of the benefit's cost is paid for by $98 million in federal incentive funds. So HB 1091 actually spends almost $3 in U.I. Trust Fund reserves on tax cuts for every $1 spent on benefits. It's difficult to understand why this modest proposal to help struggling families at the same time we help businesses should be considered a deal-breaker. It shouldn't.

We call on all State Representatives and Senators on both sides of the aisle to reject reflexive opposition to U.I. benefits. Embrace HB 1091 as your opportunity to demonstrate compassion not just for corporations and small business owners, but for the families desperately struggling to keep food on the table and a roof over their heads. Amid this session's heartbreaking budget cuts to social services, these families need help now more than ever. Don't pass up this opportunity to demonstrate that compassion.

Check out the United for Washington Families fact sheet on this proposal for more information.

Aggressive Republican attacks on unions begin

So much for the spirit of bipartisanship and civility that prevailed at the session's opening. Now that bills are being introduced, it's clear that some legislators blame unions, not Wall Street, for what ails the nation's economy. And they plan to fix it (us, that is):

  • SB 5347 -- "Right-to-Work" -- Discouraging unions by banning union-security clauses. Sponsors: Sens. Dan Swecker (R-Rochester), Jim Honeyford (R-Sunnyside) and Mike Hewitt (R-Walla Walla).

  • SB 5349 -- Bans collective bargaining for state employees -- Sponsors: Sens. Honeyford, Swecker, Hewitt and Bob Morton (R-Kettle Falls).

  • SB 5345 -- Blocks bargaining over the contracting out of state services -- Sponsors: Sens. Swecker, Honeyford, Hewitt and Doug Erickson (R-Ferndale).

That's just a taste; there are more. These bills have little chance of passage in the Democratic-controlled Legislature, but they offer a glimpse of what our state might look like if anti-union Republicans took control -- and a glimpse of the right-wing extremism that's alienating voters and keeping them in the minority.

Back to the drawing board on workers' comp

Business lobbying groups and other proponents of last fall's Initiative 1082 to privatize workers' compensation spewed a laundry list of accusations about the high costs and inefficiencies of our public state-run system. Washington is one of the only states with a "government-run monopoly," they said, implying we were outliers that needed to get with the privatization and deregulation program.

In the end, voters decided to keep our public system public, rather than hand it over to the insurance industry (which is renowned for its low costs and efficiency. Chyeah. Right.) I-1082 was resoundingly rejected by a margin of more than 18 points.

But unlike failed tax initiatives that are treated with solemn deference and finality by state lawmakers, it's back to the drawing board in 2011 for business-backed legislative efforts to deregulate, partially privatize and cut business costs associated with our workers' compensation system.

Look. No one, including organized labor, thinks our state system is perfect. But we do think it's a model system compared to what passes for workers' compensation in other states. That's because great care has always been taken in measuring the benefits of cost-cutting proposals against how they affect injured workers and their families.

One of our state's challenges is the rising cost of injured workers on long-term disability. Pension rates have gone up and, as Gov. Gregoire points out, those 8% of the claims are responsible for about 85% of the system's costs.

Any day, Gregoire is scheduled to release her initial proposal for workers' compensation changes. We're told it includes quite a few good ideas, including some that organized labor can support. But we're also told it includes at least one idea that we simply cannot.

"Unlike 44 other states, Washington doesn't allow voluntary settlement agreements," complains Association of Washington Business President Don Brunell in his latest column timed to coincide with the release of Gregoire's proposed legislation. Why's Brunell gettin' all 2010 on us with the Washington Is An Outlier talking point? And what's a voluntary settlement whatsit?

We call it "starve-and-settle." This would allow employers to be absolved of all current and future claims against them in exchange for a lump-sum payment to an injured worker. In states that allow this, employers routinely appeal claims and drag out the process so financial pressures mount for injured workers’ families who have lost their source of income. After this lengthy claims-and-appeal process, a lump-sum settlement becomes difficult to resist for desperate families, even if it won’t cover their future medical costs, which are difficult to anticipate.

Starve-and-settle cuts costs simply by paying workers less than what they'd otherwise be entitled to. That is not in their best interest, or the state's.

A University of Washington study found that the best way to reduce long-term disability and pension rates is a combination of return-to-work incentives, comprehensive vocational retraining, and effective medical care. Injured workers getting medical treatment at a Center of Occupational Health Excellence return to work sooner, saving employers money. Pension incidence is reduced by 55% for those workers who receive treatment at COHEs. That's why the WSLC supports legislation to expand the availability of COHEs. That would address the problem, not just the cost.

Look for much more detail on the governor's workers' compensation proposal in the coming weeks.

Immigration frustration hits Washington

Frustrated with Congress' inability to pass comprehensive immigration reform, many states are trying to take the matter into their own hands. It has led to controversial measures in states like Arizona, forcing the federal courts to step in and protect basic human rights.

Washington state could be next.

HB 1272, sponsored by Rep. Bruce Chandler (R-Granger), would require the state Employment Security Department to verify the immigration status of each worker referred for a job in our state. Meanwhile, a ballot initiative (I-1122) was filed this month to require the state to check immigration status before issuing public benefits or a driver license, employers to check the status of all workers, and law enforcement to check the status of all charged with felonies.

There are many problems with these approaches.

  • The U.S. government has found that the accuracy of its own system for electronically verifying immigration status (called "E-verify") is unreliable and "remains vulnerable to identity theft and employer fraud." The system is also subject to long delays, especially if its inaccurate results are appealed.

  • Repeated studies over the past decade have found that such regulations and employer sanctions cause businesses to discriminate against people who "look or sound foreign," and cause pervasive discrimination against all workers of color.

  • Law enforcement agencies have traditionally opposed being dragged into immigration enforcement policies because it discourages immigrants—or people who fear they will be mistaken as illegal immigrants—from reporting crimes.

We could go on and on. Let it suffice to say that organized labor shares in the frustration over Congress' inability to act on this issue, but Washington must resist the temptation to enact state-level measures to address a federal problem. Such measures would create new burdens on state agencies, create more layers of administration, and ultimately, only serve to increase discrimination in our state.


Questions about anything you've read in the WSLC Legislative Update? E-mail David Groves or call me at 206-281-8901. 

PREVIOUS EDITIONS of the 2011 WSLC Legislative Update

Jan. 18 -- Businesses AND families are suffering -- Advocates for Washington families support balancing Unemployment Insurance tax cuts (price tag: $478 million) with a $15 children's benefit (price: $202 million) to help 170,000 struggling families, instead of enacting a proposed training benefit that might impact 1,900 people. While many in business lobbying groups remain dedicated to tax cuts without relief for our families, friends and neighbors, this may be one of the only opportunities our state legislators have to make positive change in 2011. That's why we remain hopeful that legislators on both sides of the aisle will set aside historic differences and embrace this win-win-win proposal that helps business, families and our economy. Plus, updates on paid family leave insurance and a referendum to temporarily suspend tax breaks we can no longer afford.

Jan. 13 -- Balance U.I. tax cut with aid for children -- A coalition of unions and other organizations is proposing an alternative more balanced approach to Unemployment Insurance changes that recognizes the shared struggles of businesses, families and communities. While we believe that Gov. Gregoire's initial proposal is a good start to this discussion, it is not the best path to economic recovery. Its modest improvements to training benefits fall short of what is needed to address the immediate needs of families in crisis and our state economy. We strongly believe MORE must be done for families struggling to put food on the table and keep a roof over their heads. Thanks to the relative health of the U.I. Trust Fund, this may be the only opportunity this year to do something positive for struggling families, while also avoiding a U.I. rate increase for employers.


Copyright © 2011 -- Washington State Labor Council, AFL-CIO