WSLC Legislative Update -- January 21, 2005

Last year's debate about what, if anything, government should do about the offshore outsourcing of Washington jobs included a lot of rhetoric about improving job training for the jobs we still have. But the legislature -- specifically the State Senate -- ignored a great opportunity to do just that.

Some upcoming HEARINGS

TUESDAY, Jan. 25—At 1:30 p.m. in House Hearing Room A, the House Health Care Committee hears a number of labor-supported bills on prescription drugs, including the pool-purchasing bill HB 1219, and three reimportation bills 1168, 1194 and 1316.

WEDNESDAY—8 a.m. in Room C, House Commerce and Labor hears HB 1308 regarding additional funding for prevailing wage programs; 8 a.m. in Senate Hearing Room 1, Senate Education hears two bills allowing for simple majorities to pass school levies and bonds.

THURSDAY—1 p.m. in Room 2, Senate Government Operation hears SB 5219 proposing to change primary election dates; 1 p.m. in Room 4, Senate Labor and Commerce hears SB 5090 privatizing the sale of liquor; 3:30 p.m. in Room A, House Appropriations hears various bills related to state employee pensions.

FRIDAY—8 a.m. House State Government hears an election overview in Room D.

Apprenticeship is the ideal solution. Unlike many training and retraining programs, apprenticeships are financed by the existing workforce and the employers that benefit from them. More than 10,000 apprentices are registered at our community and technical colleges, and earn the highest wages of any job-training program. Although those jobs may be economically cyclical, they cannot be outsourced offshore.

Thanks to an executive order by Governor Gary Locke, Washington has promoted apprenticeship opportunities for nearly five years via utilization requirements at major public works projects. At least 15% of the total labor hours on these projects must be performed by apprentices. When first enacted, construction industry lobbyists made dire predictions of higher costs and excluded contractors, but none of that has happened. (For one thing, the requirement is waived if not enough apprentices are available or in other extraordinary circumstances.) By all accounts, apprenticeship utilization requirements have been a tremendous success.

Now it's time to codify the executive order and make the standard permanent, which is what HB 1028 and SB 5097 would do. Sponsored by Rep. Steve Conway (D-Tacoma) and Sen. Jeanne Kohl-Welles (D-Seattle), both were heard in their respective labor committees this week. Apprentices testified how these life-changing programs provided them family-wage job opportunities they didn't previously have.

The Associated General Contractors, the Associated Builders and Contractors, and the Construction Industry Training Council -- all representing employers' interests -- testified against the bills. They claimed the bills would interfere with collectively bargained contract provisions, deter some contractors from bidding, yadda, yadda, yadda.

Randy Loomans, Education Director for the Washington State Labor Council, pointed out that each of these three organizations were signatory to apprenticeship utilization agreements with Spokane School District. In other words, they sing a different tune when they know their potential client is motivated to promote training and apprenticeship.

Responding to the argument that there aren't enough apprentices available, Loomans pointed out that every single project covered under the current executive order has exceeded the 15 percent requirement. For example, 24.9 percent of the hours worked on the Legislative Building repair and reconstruction project were performed by apprentices.

Last year, similar legislation easily passed the House but was killed without a vote in the Republican-controlled Senate by then-committee chair Sen. Jim Honeyford (R-Sunnyside). This year, voters wisely handed control of that body back to the Democrats. Look for both bills to be voted out of committee beginning next week. The WSLC urges both the House and Senate to approve these win-win bills as quickly as possible.

This week, Governor Christine Gregoire hit the ground running by launching a package of executive-request health care legislation. She also issued an Executive Order directing DSHS to return to 12-month eligibility review cycles, a move that will keep more than 19,000 children from losing health care coverage. Her legislative proposals include:

The Washington State Labor Council supports these important measures and congratulates Gregoire on her immediate leadership on this important issue.

Even more must be done. Large employers should not be allowed to abandon their employees and pass on enormous costs to taxpayers and the entire health care system. It's not fair that businesses that do the right thing and provide affordable health benefits must compete with such employers. Investing in employee health should be a requirement for large businesses in Washington, whether that coverage is provided through the employer or through a fee paid by the large employer to the state.

That's why the WSLC joins business, community and social service interests in a Fair Share Coalition that is supporting legislation called the Health Care Responsibility Act. It would require large employers who fail to provide affordable health care benefits to pay a fee to the state to create slots in the Basic Health Plan for their employees.

The WSLC also supports a Health Care Disclosure Act. This legislation would allow taxpayers to determine which employers are shifting the cost of employee health care coverage to the state. It requires the state to collect and disclose the employers of applicants for publicly funded health care programs like Medicaid and the BHP, as well as the employers of any person receiving uncompensated care in a hospital.

"Dead Peasant Insurance" is the unsavory industry slang for insurance policies taken out by corporations on the lives of thousands of their rank-and-file employees, usually without workers’ knowledge or consent. The practice allows corporations to earn tax-free investment income and is actively marketed by insurance companies as an "attractive, off-balance-sheet asset."

In one notorious example, Enron bought life insurance on rank-and-file employees at its Portland General subsidiary. The company was the beneficiary when an employee died and the proceeds went into a special compensation and benefits fund for Enron's top executives and directors.

Enron would have liked to take out policies on its Texas employees, but unlike Oregon, Dead Peasant policies are illegal in that progressive state. Of course that didn't stop one corporation from defying Texas law when it took out "Dead Janitor" policies on some 350,000 of its employees, including those in Texas. You guessed it: Wal-Mart.

"The practice is as widespread as it is little-known," wrote the Wall Street Journal. "Millions of current and former workers at hundreds of large companies are thus worth a great deal to their employers dead, as well as alive, yielding billions of dollars in tax breaks over the years, as well as a steady stream of tax-free death benefits."

This week, the Washington State Labor Council testified in support of HB 1033, sponsored by Rep. Steve Kirby (D-Tacoma), which would require notification and consent from the employee when their employer buys life insurance coverage on them.

But even if HB 1003 passes, important questions remain. While it makes sense that businesses would have an insurable interest in key employees critical to their operation, it's hard to imagine why a company should be allowed to profit from the deaths of wage-earning workers like janitors. It's also hard to understand why an employer can retain that insurable interest even after the worker leaves the company.

Washington is one of 17 states that does not require health insurance plans to offer the same level of coverage for mental health services as they do for medical services. HB 1154, sponsored Rep. Shay Schual-Berke (D-Normandy Park), would create that "mental health parity." A similar measure passed the House 64-33 last year, but was killed in the Republican-controlled Senate.

HB 1154 was heard and passed by the House Financial Institutions and Insurance Committee. Please call the toll-free Legislative Hotline at 1-800-562-6000 and leave a message urging your state legislators to support this important measure..