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Central Pension Fund

Strengthen Collective Bargaining to Preserve Affordable Health Care and Secure Retirements

During the coming year, political candidates will roam the American landscape running for a wide variety of federal, state and local offices from U.S. President to city alderman. As always, each will proclaim their dedication to protecting the “middle class” and preserving the “American dream.”

While each candidate’s definition of exactly who is in the middle class and what exactly is included in the American dream will differ by degree --- all will declare that working men and women are entitled to affordable health care and secure retirements. However, as always, they will disagree and debate vigorously on how to attain these goals. Candidates from the right will champion private health insurance and the privatization of Social Security; and candidates from the left will urge universal health care and the preservation of Social Security. And, while these debates go on, the public will continue to wait for a meaningful government response.

Lost in these debates will be the role that collective bargaining has historically played in establishing and preserving quality health care plans and secure retirement plans for working men and women. Where collective bargaining exists, political solutions and government programs are unnecessary. Collective bargaining permits employees to mutually agree with their employers on how available resources will be allocated to address the health care and retirement needs of employees, while maintaining employer competitiveness in the marketplace.

Unfortunately, for the last seven years the institution of collective bargaining has been severely eroded in the United States by decisions of the National Labor Relations Board (NLRB). This has been both unfortunate and ironic because the NLRB was established in 1935 to protect and preserve the institution of collective bargaining.

As shown by the International Union of Operating Engineers, when employers and employees utilize collective bargaining, government assistance is unnecessary to provide the American dream of affordable health care and retirement security. Sixty years ago, Local Unions of the International Union of Operating Engineers began to build the network of pension and health benefit plan, that now operate throughout the United States and Canada.

These plans do not rely upon the action of politicians or government programs for their vitality. They rely solely upon collective bargaining. And, while the National Labor Relations Board has done its best during the last seven years to undermine and dismantle the collective bargaining process, it still remains the most efficient mechanism for allocating the economic means of employers to the economic needs of employees.

It is through collective bargaining that union employees, as a group, allocate the economic package offered by their employers between wages and fringe benefits. Especially in recent years, as health care costs have spiraled and retirement security has eroded, workers have chosen to allocate more money to fringe benefits and less to wages.

For example, over the last 10 years the Central Pension Fund of the International Union of Operating Engineers has seen an average increase of 6% every year in the hourly contribution rates negotiated by its participating Local Unions. Likewise, in order to offset the unbridled increase in medical costs, members have continuously allocated a greater amount of their economic settlements to pay for their health benefits.

As the global economy produces more and more uncertainty and anxiety for American workers, the process of collective bargaining continues to deliver certainty and security.

So, if politicians in this election year cannot agree upon the proper role of government in delivering affordable health care and retirement security, let them at least agree to protect and strengthen the institution of collective bargaining so that employers and employees can resolve these issues on their own.

To do so will require a pledge to rededicate the National Labor Relations Board to its rightful mission of strengthening, not weakening, collective bargaining.

November 19, 2007