State Workers to Feel the Economic Pain

Downsizing is all across the news reports, and all over America is talk about all of the fifty states having a hard time meeting their budget obligations. Governors are cutting corners where they can and still more cuts are needed. It’s the same scenario in privately run businesses as well. If the customer is cutting back and not visiting your business with paid orders then the only thing to do is cut back where you can save the most money the quickest way possible. Survival of the business aka state government service is the end objective.

That means layoffs and if the private sector is suffering that inevitable choice then the public works, government service, and government agencies must do the same. If taxes are not being paid into the state governments to keep up with the payroll of that state then they can’t pay out for services expected by its citizens. But is layoffs the only choice Governors have? I personally do not think so. Over at MSNBC courtesy of the Associated Press they have this thought on it…

Governors seek sacrifices from public workers
Money-saving measures include pay and benefit cuts, truncated workweeks

COLUMBUS, Ohio - Governors across the nation are seeking significant concessions from public employee unions in hopes of helping to balance their teetering budgets during the economic downturn.

From Maryland to California, Ohio to Hawaii, governors have asked or ordered state workers to accept furloughs, salary reductions, truncated workweeks or benefit cuts. They say the concessions are a better alternative to further job losses in the face of record-breaking unemployment.

Unions argue their members shouldn't be singled out and are even more vital in hard times — securing neighborhoods and prisons, educating children and providing social services to growing numbers of citizens. - MSNBC-AP

I’m personally a huge union workers supporter but I am also a realist that sees that the states can not be paying benefits and providing services when the money is just not their to do so. With the credit markets tightened to the point of a stranglehold on businesses, it isn’t like each state can go to the credit markets and float bonds till things pick up in the economy. Wall Street and the markets just do not work that way. States can also not rely on the federal government to support all of them with a total bailout till the point of if and when the economy starts to recover. That thought process is the way to total economic destruction far beyond the Great Depression of the early 1930’s.

Governors in all states need to look to the budgets they currently have and cut wherever is required. They must also negotiate with not just the unions that are the employees of the state but the suppliers of all items including benefits to the state first and foremost. If they have to combine bargaining power with adjacent states to gain far better rates, then so be it. It’s called demanding better terms from your suppliers. Be it health insurance, paper products, light bulbs, paper clips, or even new equipment for law enforcement. If you have ever known someone that has worked in the private sector in purchasing, its called getting the best terms and rates for your company and it is called competition. If one supplier isn’t willing to negotiate, you move on to another, and another till you get the price you need to maintain your business. Some people call it beating up your vendor but I like to call it the art of negotiation. Each participant knows the value of the deal and each person is looking to find the perfect price where both parties are happy. The purchaser is happy and the seller is happy. AKA, its business 101!

Each state in the union pays millions if not billions for gasoline and diesel per year for the fleets of vehicles they own, millions if not billions to heat or cool state run offices all across each state. It doesn’t take a rocket scientist to figure out that the energy suppliers need your base business to survive. Demand competitition from your current suppliers and then seek out alternative sources for the same products. Wind power, solar power, bio-fuels, and the list goes on.

There are still many investors in the market looking for state bonds that make sense. If a bond was floated from Massachusetts or any state just for the sake of paying salaries and maintaining a payroll the state itself could not maintain it would have little interest in the markets on Wall Street. If the same state came out with a bond based on putting 100,000 or 250,000 solar panels on state run offices that would save the state millions of dollars per month once installed that would never have to be paid to an energy utility for the next thirty plus years it would draw huge attention, and not just here in America on Wall Street, but around the world. The beauty of the “Purchasing Negotiation” is that you could demand that each unit purchased will not be paid for till it is installed and generating power. That should work out to a thirty to sixty day payment deal for the manufacturer if they take the initiative to hire qualified people and install each and every single unit on the state buildings. Something that they could and should take the initiative to outsource to mulitple companies across every single state. More jobs, more state tax income.

Those savings even with repayment of the bond could equal thousands of state jobs and services that are needed elsewhere. It is the initial investment that is needed and we have several Solar Power Panel manufacturers right here in the United States of America that could and would benefit with increasing the workforce to meet the demand of high tech jobs at good wages. Schott Solar of California has a manufacturing facility in Billerica, Ma and Evergreen Solar of Marlborough, MA has a facility in the former Fort Devens military base to name just two.

President Obama is on the right track with his renewable energy initiatives in the current bailout package and the states need to look at the thought processes behind renewable energy and apply the thought process in public buildings all over the nation. If solar panels on the roof are paying 10% to 30% of the energy needs then how many jobs does that save in the public sector? Same thought process goes to private businesses as well. Back in the mid 1980’s I worked in a wire and cable manufacturing facility, the building was about 300,000 square feet full of equipment that was all powered by the local electric utility. The monthly bill at the time for the power was over $30,000 dollars. Then you had to figure the cost to heat such a large facility by gas per month and the bill was even larger than the electric in the winter months.

Even with the current drop of the cost of oil, the largest bill for any business other than raw materials is the energy cost. Cut that cost down by going with multiple renewable energy systems and the probability that you never pay an electric bill or gas bill ever again is within reach! How many jobs is that bill paid to the electric or gas, oil, propane company worth every month to any business or a greater point, how much does that allow you to pass those savings onto your customer and get the business you could never touch before? Our economy is built on competition and innovation, we need to look at the innovations not just in the private sector but in each of our state governments.

Each of our states need to be creative budgetary wise and think long term when it comes to their energy needs. Payroll is not the biggest cost they have but it is the easiest to cut. Demand more long term economic thought process from your state Governor and Legislators!

Papamoka

Republican Walmart Deal For Detroit

I’m sorry but I am totally not in agreement with Republican’s when it comes to the Big Three Bailout that failed in the Senate today. Apparently, the only concession that Republican’s wanted was that Detroit Auto Workers agree to the same pay as Walmart workers! What concessions did Wall Street and the billions of greed laden bonuses were part of the discussion for $700 Billion by the banking industry? Do you read anything anywhere about pay cuts in the banking or brokerage houses? Yes, there are job cuts but nobody is cutting their pay down to subsistence levels. I’ll tell you what… NOT ONE big bank that will take the bailout money is going to trim pay scales! But if you are a Detroit Auto Worker you are supposed to put on a blue vest and be thankful while Republican’s break your legal union up simply because they can. This would not be the same outcome if Democrat’s fully controlled the Congress. Um, Democrats do control the Senate but apparently the leadership has no backbone to actually lead. If Jim Web of Virginia were Senate President it would have passed with no concessions.

Over at the New York Times they have this one last chance to slap the working class in the face by Republican’s with a screw you attitude towards the middle and lower classes of America. And in doing so they dump all of the problems they have refused to work on to fix on a new Democrat President…

U.A.W. at Center of Dispute Over Bailout
By MICHELINE MAYNARD
Published: December 12, 2008

DETROIT — Opponents of a Congressional bailout for Detroit auto companies and the United Automobile Workers union traded charges Friday over who was responsible for the defeat of legislation that would have provided temporary financing until the automakers restructured.

Senator Bob Corker, a Republican of Tennessee, suggested the fault lay with the U.A.W.’s president, Ron Gettelfinger, whose union declined to agree to allow wage concessions in 2009 as part of a deal.

But at a news conference Friday morning, Mr. Gettelfinger said the union feared that it was “being set up” by Mr. Corker, who he said was asking the union for concessions that were not sought from other participants in the talks.

Snip… Grab A Wrench to throw…

In a statement Thursday night, the union said it was “prepared to agree that any restructuring plan should ensure that the wages and benefits of workers at the domestic automakers should be competitive with those paid by the foreign transplants. But we also recognized that this would take time to work out and implement” using programs like buyouts and early retirement offers to bring in new workers at lower rates.

“Unfortunately, Senate Republicans insisted that this had to be accomplished by an arbitrary deadline,” the statement said. “This arbitrary requirement was not imposed on any other stakeholder groups. Thus, the U.A.W. believed this was a blatant attempt to make workers shoulder the lion’s share of the costs of any restructuring plan.”

In an interview Friday morning on CNBC, Mr. Corker suggested the union, not Republicans, bore the burden for the measure’s failure.

“I offered them a solution,” he said of discussions with union representatives. “Our caucus was 100 percent behind it. Do we own it, or does the U.A.W. own it?” – New York Times

There is more to this story than we are all reading and I think it comes down to the foreign automakers spread out over more states that are using that Congressional power of numbers to protect and defend their own interests. If the Big Three fail, then Toyota, Honda and every other foreign owned auto maker with plants in the United States wins. You will never be able to buy another American made car ever again! But the campaign war chest check cleared for the Congress members that shot this bill down. All of them Republican!

What is the real destructiveness of this loss is to the American worker across many industries. Republican’s have found a way to cripple a union and make them look like the guilty party. Good wages for good jobs are wrong in America for people punching the clock and working forty or sixty hours a week. The wet dream of the people that killed this bill is to have a nation of Walmart workers where your pay sucks, your benefits suck, and your opportunity to move up in life is less than the chance of winning the lottery. A nation of part time workers where the top of the food chain of the company hands out crumbs to the masses and feels good about the people eating cake.

This bills failure to pass just created several million new Democrat voters all over America that used to be Republican. With the possible bankruptcy of the Big Three Automakers comes millions of middle management and business owners that will see their own business forced into bankruptcy. Good paying jobs all across America will be lost because Senator Bob Corker of Tenn deemed it so. Democrat’s in Congress wanted to pass a bill to bailout the Big Three, Bob Corker and his Republican friends in the Congress killed it.

I do have this to say, Harry Reed should resign as Senate President. If he didn’t have the guts to politically deal with the Republican’s in the Senate then he has no clue as to how to do the job. How the hell is this going to pass once Obama is President or for that matter any tough legislation he needs passed for America? Nice knowing you Harry but you need to step down and let a real leader with backbone take over.

Hopefully, Walmart can keep opening up stores all across America to keep up with the number of JOBS Senator Bob Corker just put into the unemployment lines. Here is your smiley sticker, you can’t eat it or pay your mortgage with it but doesn’t it make you feel better? NOT!

Papamoka

UPDATE: MSNBC HAS REPUBLICAN MEMO ON KILLING GM AND THE UAW!

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