Labor Advocate Online
KC Labor Newsletter
Week In Review, March 6, 2005
by Bill Onasch, webmaster, kclabor.org
A Fresh Start–For Shylocks
After some false starts over the past few years, it appears congress will soon pass, and the President will sign, a major "reform" of the bankruptcy law. Now this reform is not directed at the abuses by major companies such as United Airlines and Massey Energy, to name just a couple of many who have used bankruptcy to void union contracts and renege on pension obligations. No, this new legislation is aimed primarily at working people who have become hopelessly buried in credit card debt.
At one time in this country the greed of lenders was somewhat restrained by state usury laws. When I took out my first loan to buy a car Missouri law capped interest at eight percent. Pass book savings accounts at that time payed savers about two percent interest.
All that changed in the Seventies as growing national credit card companies claimed they could not operate within those constraints. Their arguments were bolstered by the double-digit inflation that ran rampant during the Ford and Carter administrations. Virtually every state repealed or gutted usury laws.
Today pass books savings accounts still pay about two percent. But the credit card companies have rates and fees that would have made Shylock blush. Preferred customers might start out with a nine percent interest rate. But if you are a day late with any creditor you can find your interest rates on all credit card accounts soaring to 30 percent. There is of course a hefty penalty for late payments themselves. You will most likely also now be assessed an annual maintenance fee. And, should your rapidly expanding interest exceed your credit limit, you’ll get stuck with another whopping charge for that–as well as being unable to make any further purchases.
Today’s economy lives on credit. It’s hard enough under normal conditions for middle-class wage earners to keep up with the debt needed to maintain even a modest life style. Miss some paychecks because of a layoff, or run into an unexpected medical expense, and you’re doomed to the never-ending merry-go-round of escalating interest and fees. The working poor, with less income and a lower credit limit, more quickly become saddled with unbearable debt.
Many who today file for bankruptcy have already repaid their initial debt, plus considerable interest, but still owe much more than they originally borrowed–and much more than they can pay. Present bankruptcy allows these debts to be erased after creditors have picked over any assets the bankrupt worker may own. Only a worker’s house, one car, and tools used for work, are exempt.
The new law will subject every bankruptcy petitioner to a complicated and unforgiving "means test." To be adequately represented in this process would require spending hundreds of additional dollars on a lawyer.
A worker who lost a 20 dollar an hour job and now toils for minimum wage could find themself ordered to pay a lug to their creditors for the rest of their life. No more "fresh start" for them.
This "reform" has bipartisan support.
House Rules In Vegas
"They're not making change, they're faking change. This just gives me another reason why this AFL-CIO doesn't work." So said SEIU president Andy Stern, commenting on the AFL-CIO executive committee meeting held in Las Vegas this past week.
News reports and official blogs made sure what happened in Vegas didn’t stay in Vegas as was so often the case with traditional gatherings of the penthouse residents in the house of labor. By all accounts the participants were testy, sometimes using the kind of colorful language they imagine their members use in the shop but that is frowned upon by the FCC.
Many expected this conclave to be an important milepost in a great debate leading up to the federation convention later this summer. Stern initiated this organized debate after the last executive meeting, launching the Unite To Win web site. Somewhat later, fed president John Sweeney authorized a similar AFL-CIO site. Both of these forums have attracted a broad spectrum of comments from leaders and ranks alike.
But this interesting discussion fueled far more heat than light in Vegas. The agenda centered on two proposals: 1) a call for a "rebate" of half of per capita dues payments to national unions for organizing purposes; 2) doubling contributions to supporting the Democrats over the next election cycle.
The rebate gimmick, advanced by an unlikely "reformer," Teamsters president James Hoffa, seemed not unlike replacing federal spending programs with block grants to the states. Little evidence was presented showing how this money would be translated into more effective organizing. Clearly a fifty percent reduction in federation income would gut the present structure.
This wrecking ball approach to labor’s home base, along with other proposals for consolidating and "streamlining" union structure, has justly raised concerns among Black trade union leaders and activists, summed up well in No Real Labor ‘Reform’ Without Blacks in the Black Commentator.
You would think that with 88 percent of the American working class unorganized there would be plenty of opportunity for all. But Stern and AFSCME president Gerald McEntee got into a heated fracas over 49,000 child care workers in Illinois. Stern accused AFSCME of bird-dogging SEIU’s decade long efforts by prematurely filing for an election for 20,000 of them.
Hoffa’s rebate scheme, supported by Stern, UNITE-HERE, the Laborer’s and UFCW, was rejected 14-8. But the majority demonstrated they weren’t just cheapskates. They approved the plan to increase political spending to support their Democrat "friends" to 90 million dollars.
Later, they all joined together in admiration with the new Democrat party chairman, Howard Dean.
Labor Party national organizer Mark Dudzic yesterday posted an interesting article on the Labor Party web site, The Debate Continues: A Revitalized Labor Movement Needs a New Vision of Politics. While wisely staying away from the momentous controversies that generated so much contention in Sin City, he does introduce some new proposals for discussion that merit attention. I will have more to say about this contribution at another time. The article also offers an opportunity for comment by sending remarks to firstname.lastname@example.org. Dudzic will be a featured speaker at the Future Of American Labor conference in Kansas City April 22-23.
As always much of this material is based on stories posted in the Daily Labor News Digest Monday through Saturday.
That’s all for this week.
Regards to all
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