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Labor Issues
Monday, April 27, 2009
Practically the End of a Tough Legislative Session - Some Good Competitiveness Outcomes
Posted by Richard S. Davis on 4/27/2009 6:56:00 PM
It's important to take time to recognize that in a very difficult year, the Legislature accomplished some noteworthy things, foremost among them: balancing a budget without general tax increases. Critics may point at the heavy reliance on one-time money, including the federal stimulus cash, and the likelihood of another shortfall in the next budget. While that argument has validity, it's more important to note that lawmakers bought themselves - and us - another two years to transition to a sustainable spending level, we hope in a stronger economy. Tax hikes would have further hammered struggling families and businesses, delaying the recovery. Commend lawmakers for making the right budget decisions and avoiding new taxes.
Also, at the eleventh hour (literally), lawmakers adopted a clean unemployment insurance reform bill after the House receded from problematic amendments that would have led to a certain tax hike, particularly on mid-size Main Street businesses. Along with a balanced budget that did not rely on new taxes, UI reform has been a top WashACE priority. Thanks to all who contacted their legislators in the last few weeks!
Some other good things:
We'll have more on what did and didn't happen this session in the coming weeks. Facing considerable challenges, lawmakers were able to take meaningful steps to improve our economic competitiveness. That's no small accomplishment.
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Saturday, April 25, 2009
UI Reform Back to the House
Posted by Richard S. Davis on 4/25/2009 1:18:00 PM
The proposal will return to the House with the request that representatives drop amendments that would:
- Increase the amount of benefits paid to unemployed workers, up to $20 per week.
- Solidify
a state Supreme Court decision from last summer that said some
employees who quit voluntarily can receive state benefits.
The Senate bill is a responsible measure that protects the UI trust fund, brings state policy into compliance with federal law, avoids job destroying tax hikes, and restores unambiguous policy regarding employees who voluntarily leave their jobs. It originally passed the Senate in March on a 38-11, with bipartisan support. In the House, the amended bill passed narrowly, 53-45, Representatives should now quickly accept the Senate version.
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Saturday, April 25, 2009
UI Reform Back to the House
Posted by Richard S. Davis on 4/25/2009 1:12:00 PM
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Friday, April 24, 2009
Seattle Times Provides Good Final Hours UI Advice to Legislature
Posted by Richard S. Davis on 4/24/2009 12:14:00 PM
In the middle of an economic crisis, it makes no sense to make it more expensive to hire a worker.
Just such a measure, Senate Bill 5963, is now in the final steps in the
Legislature. The bill would make unemployment pay more generous for
workers who qualify for less than the $541 maximum weekly benefit — an
increase that is almost certain to trigger an increase in payroll taxes.
The Times editorial board points out that Washington employers already pay among the nation's highest unemployment taxes and unemployed workers here receive among the nation's most generous benefits,
WashACE has written a lot about this in recent weeks, most recently here. The Senate must reject the costly amendments placed on the bill in the House. As amended by the House, SB 5963 will cost the state good jobs.
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Monday, April 20, 2009
Excellent UI Editorial in The News Tribune
Posted by Richard S. Davis on 4/20/2009 12:49:00 PM
We hear that the state Senate may take up SB 5963 today. We've written a lot on the issue, urging the Senate to strip the House amendments and insist on their version of this vital legislation.
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Thursday, April 16, 2009
Business Urges Senate to Insist on Good Unemployment Insurance Reform
Posted by Richard S. Davis on 4/16/2009 12:19:00 PM
I can't do better than link to this Olympia Business Watch post by Jocelyn McCabe. WashACE worked closely with AWB, the Seattle Chamber, the Washington Roundtable and Enterprise Washington to write the state Senate urging them to insist on the Senate-passed version of SB 5963 and to reject the l ousy House amendments.
Jocelyn also provides a link to this great editorial in the Yakima Herald-Republic.
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Saturday, April 11, 2009
House Passes Lousy Unemployment Insurance Bill
Posted by Richard S. Davis on 4/11/2009 12:47:00 PM
Yesterday, the House passed an unacceptable version of unemployment insurance reform. Business groups, including members of WashACE, had urged lawmakers to pass Senate Bill 5963 as it came from the Senate. The House Commerce and Labor Committee had taken that good legislation and tacked on amendments that increased UI benefits, assuring future tax increases for employers, and weakened language clarifying when workers who voluntarily quite their jobs could qualify for UI benefits. The legislation passed yesterday, after a flurry of amendments and heated floor speeches, reflects the committee's work.
"The irony is that the day after the governor rolls out
her plan to make Washington more competitive and improve the state's
business climate, her allies in the House decide to raise business taxes
and she's nowhere to be found," said Condotta.
The bill now goes back to the Senate, where Senators should insist on their original bill.
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Wednesday, April 01, 2009
NFIB on Card Check and the Employer Gag Rule
Posted by Richard S. Davis on 4/1/2009 10:34:00 AM
I'm a bit late with this, but wanted to share a good op-ed by NFIB's Troy Nichols that ran last week in the Columbia Basin Herald.
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Sunday, March 29, 2009
Worker Privacy Act: A Wedge Between Labor and Democratic Leaders?
Posted by Richard S. Davis on 3/29/2009 1:15:00 PM
Last week in an apparently tense session labor leaders met with Gov. Chris Gregoire, Senate Majority Leader Lisa Brown and House Slpeaker Frank Chopp - the leaders who tabled the Worker Privacy Act after learning of an email that tied campaign contributions to legislative action. Most of the press coverage following the meeting focused on union concerns.
"This entire incident has severely strained labor’s relationship with Democratic leaders," said WSLC President Rick Bender . "We still consider their actions to have been a dramatic over-reaction especially after the Washington State Patrol and the Public Disclosure Commission quickly determined no legal or ethical wrongdoing. Democratic leaders offered no explanation at Wednesday’s meeting to counter assertions that their actions were anything but a pretext for blocking the Worker Privacy Act at the insistence of The Boeing Company.
Union considerations also factor heavily in what's being reported as an emerging split within the House Democratic Caucus.
Some members say the Democratic caucus is splitting into pro-labor and
pro-business camps. Those who consider themselves more pro-labor
complain that lawmakers aren't doing enough to address such issues as
climate change or worker rights.
But, Kris Tefft notes at Olympia Business Watch, labor scored two big - but we hope inconclusive - wins in the House Commerce and Labor Committee late last week.
The committee moved ESSB 6035,
the bill that would impose new restrictions and regulations on trade
associations that operate voluntary retrospective ratings programs in
workers' comp. It then amended and moved SSB 5963,
a delicate and heavily brokered effort to bring the state's
Unemployment Insurance tax system back into conformity with federal
law.
Watch for more on this in the coming days.
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Tuesday, March 24, 2009
PDC Clears Union Email; Governor Says She'd Have Vetoed Gag Rule Anyway
Posted by Richard S. Davis on 3/24/2009 12:31:00 PM
In this morning's Everett Herald, Jerry Cornfield reports that the Public Disclosure Commission will not pursue action against the union lobbyist who sent a controversial email that got the Worker Privacy Act legislation tabled for the session. You'll remember, that's the "not another dime" email, saying no more union contributions unless lawmakers pass labor's top priority, a gag rule on employers. After learning of the email, Gov. Gregoire, Senate Majority Leader Lisa Brown, and House Speaker Frank Chopp referred the email to the Washington State Patrol and killed the bill.
Stay tuned. Somehow, it doesn't look like this is over yet.
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Thursday, March 12, 2009
Worker Privacy on Life Support?
Posted by Richard S. Davis on 3/12/2009 6:02:00 PM
Worth noting: Nothing's dead while the Legislature's in session.
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Wednesday, March 11, 2009
Worker Privacy Bill Dead
Posted by Richard S. Davis on 3/11/2009 12:22:00 PM
The good news is that, according to multiple and mysterious reports this morning, the Employer Gag Rule is dead.
The bad news is that it was pulled from consideration, not defeated on its lack of merit.
Adam Wilson's blog more than implies that there may be more to this than unusually inept lobbying by, presumably, union backers of the bill.
My reporter senses are tingling here, because it's awfully convenient.
This was a major contention point between two powerful interests,
unions and business, and now it goes away through no fault of the
decision makers.
I'm not sure exactly how that works. Someone does something stupid and leadership magnifies to to avoid a tough vote? Maybe. But it seems like a stretch. Rather than speculate, I guess we'll have to wait and see.
Jerry Cornfield, who had a good account of the "contention point" in this morning's Herald, provides the saga's timeline, suggesting that while the investigation continues, hard facts may be in short supply.
UPDATE Jennifer Sullivan has a more complete account at the Seattle Times blog, including statements from the governor and legislative leaders, as well as the state patrol, which isn't saying much. She also reports that the state labor council scheduled and canceled a press conference, declining comment for now.
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Monday, March 02, 2009
Seattle Times Explains What's Wrong with the Employer Gag Rule
Posted by Richard Davis on 3/2/2009 4:23:00 PM
Well, everything is wrong with the so-called Worker Privacy Act. But the Seattle Times offers a concise argument against it. After they review the bill's legal flaws, the editorial touches on the negative message the bill sends.
A company should be able to tell its employees what it thinks about a contract offer or what union representation entails. The employees don't need to be shielded against what the boss thinks other than the shield they already have against his threats and promises. They can think the way they want and vote the way they want.
This bill is entirely one-sided: It restricts employers but not unions. It tilts the balance in a way that has not been done in any other state. And already Washington is one of the most union-friendly states. The Legislature should scrap this bill and focus on balancing the budget. See other comments at Olympia Business Watch.And then call your legislators and urge them to oppose this job killing legislation.
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Wednesday, February 18, 2009
Olympian Editorial on Union's Greed
Posted by Richard Davis on 2/18/2009 8:30:00 AM
A tough editorial yesterday in the Olympian newspaper. Oh, I'll say it, tough but fair. They note the different responses between the union representing the ferry workers and the state's largest public employee unions. The ferry workers volunteered to forego any salary increase. As the Olympian says, it's the right thing to do. Yet, Rather than follow the lead of ferry workers, union leaders for the largest state employee bargaining units have taken the governor to court in hopes of forcing her to send the negotiated wage contracts to the Legislature for consideration. By suing the governor in a time when thousands are losing their jobs, the unions look greedy and oblivious to the current economic climate in this state.
Right. Those are the same folks complaining about the nonexistent "all cuts budget."
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Tuesday, February 17, 2009
AG Opinion on Employer Gag Rule: Preempted by Federal Law
Posted by Richard Davis on 2/17/2009 3:44:00 PM
The Attorney General's Office has just responded to Sen. Mike Hewitt's request for an opinion on the legality of S.B. 5446. the so-called Worker Privacy Ace (we call it the Employer Gag Rule). As we've said all along, it's preempted by federal law. Or, as Deputy Solicitor Jeffrey T. Even writes in the "Brief Answer" section of the response: I conclude that the National Labor Relations Act preempts the provision of SB 5446 you ask about.
That provision is the crux of the union-backed initiative. Hewitt asked,
"Are provisions of SB 5446 propsing to prohibit an employer from communicating with employees regarding "labor and other mutual aid organizations" preempted by the Federal Labor Relations Act?
Here's the opinion. And here's Kris Tefft's post at Olympia Business Watch. This should be the end of it. May not be. But it should be.
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Friday, February 13, 2009
Senate Votes to Tap Unemployment Insurance Trust Fund
Posted by Richard Davis on 2/13/2009 1:20:00 PM
Yesterday the Senate voted to tap the state's UI trust fund to increase benefits (43-4) and provide highly conditional B&O tax relief to qualifying businesses (46-0). The Seattle Times' Andrew Garber reports on the votes. And, yes, they called it stimulus. TVW's Capital Record blog also has good links here. WashACE has a different set of UI priorities. We've argued previously that the legislature must act this session to adopt unambiguous language reinstating the ƒ?voluntary quitsƒ criteria and to achieve federal compliance without increasing UI taxes. We continue to urge the legislature to focus on these essential issues and not increase the risk of future UI tax hikes by dipping into the fund now. For background see this and this.
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Thursday, February 12, 2009
Governor Wins Round 1
Posted by Richard Davis on 2/12/2009 5:47:00 PM
A Thurston County Superior Court Judge today ruled that Gov. Gregoire had the right to scrap the collective bargaining agreements reached with public employee unions last fall. See here, here and here. Adam Wilson has the story here. Gregoire confused the process when she had her budget director serve as both the negotiator and the person who later declared that contracts for raises and health benefits were financially unreasonable, the judge said. But the governor does have the power to back out of contracts after the Oct. 1 deadline to finish talks, Hirsch said, noting the law separately requires the budget office to certify them as feasible. The union will appeal. See also this post by Jason Mercier at the Washington Policy Center. Update: Wilson has more. And, FWIW, returning the setting of public employee wages and benefits to the Legislature does make a lot of sense.
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Thursday, February 12, 2009
My Take on the Employer Gag Rule, Union Neutrality or Worker Privacy Act
Posted by Richard Davis on 2/12/2009 3:11:00 PM
Whatever you call it, it's unnecessary, unconstitutional, but not, as I write in this column, inconsequential. If they pass this bill, lawmakers send a resounding anti-business message to companies considering locating or expanding in Washington. Skewing public policy in favor of union organizers will not stimulate economic development.
At AWB's Legislative Day in Olympia (yesterday), Attorney General Rob McKenna said that his office has been asked for a legal opinion on the legislation (HB 1528 and its companion bill SB 5446). He didn't tip his hand. But I'd be surprised if his office reached a different conclusion than the U.S. Supreme Court did on California's similar law.
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Wednesday, February 04, 2009
Employer Gag Rule Bill Heard in House, Senate Yesterday
Posted by Kris Tefft on 2/4/2009 9:50:00 AM
Yesterday the House Commerce & Labor Committee and Senate Labor, Commerce, and Consumer Protection Committee held hearings on the labor unions' top priority, the so-called "Worker Privacy Act." Stopping this unnecessary, unworkable, and unconstitutional infringement on employers' rights is an equally top defensive priority of the employer community. Brad Shannon from the Olympian reported both sides of the story this morning. KPLU's Austin Jenkins put up a short broadcast piece as well. Finally, Niki Sullivan at TVW's new Capitol Record blog has a series of blurbs about the hearings, including the humorous (and spot-on) observation that House and Senate floor sessions routinely start with a prayer, which under this legislation apparently means the chambers could not require legislative employees' attendance at the sessions. AWB's message at both hearings yesterday was clear: in these extraordinary, almost surreal, economic times, when the focus must be on maintaining jobs and keeping Washington working, the Legislature should not waste its time with a bill that will not withstand legal challenge and which fosters a political atmosphere that unfairly slams employers at a time when we need jobs the most. If ever there were a time for business and labor to beat their swords into ploughshares and work together on job creation, this is it. And yet the agenda is consumed by the most divisive labor law bill the Legislature has heard in decades.
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Thursday, January 22, 2009
Rome burns; will legislators fiddle?
Posted by Kris Tefft on 1/22/2009 11:17:00 AM
That's the question surrounding today's reintroduction of House Bill 1528 and Senate Bill 5446, this year's version of the labor unions' notorious gag rule bill. Although deceptively titled the "Worker Privacy Act" and cloaked in talking points about rights to conscience and privacy in political and religious matters, the bill is designed to prohibit employers from effective communication about labor unions during an organizing campaign. It arms the employee with a new right to decide which meetings, communications, and valid job directives he or she will listen to, a right enforced by a new lawsuit against the employer with the threat of punitive damages. One problem: The bill would prohibit, with respect to unions, a constitutional free speech right that federal law explicitly protects. It's pre-empted. That's why no other state, despite intense national lobbying by the AFL-CIO, has passed this bill. The only state that came close, California, had their similar 2004 attempt struck down last summer by the US Supreme Court on federal pre-emption grounds. Undeterred, advocates have rolled out this bill again with fanfare, exaggeration, and caricature. But it's a needless diversion. In this challenging economy, with the state unemployment rate rising to 7.1 percent and the Legislature struggling with a projected $6+ billion deficit, lawmakers waste their time and the taxpayers' money considering a bill the core purpose of which has already been ruled beyond the authority of states to regulate. Cross-posted at Olympia Business Watch.
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Thursday, January 22, 2009
A new tax for an expanded paid family leave program?
Posted by Kris Tefft on 1/22/2009 10:36:00 AM
During the first week of the legislative session we noted the bill to repeal our state's unfunded, unimplemented paid family leave law, calling repeal the only responsible move for this troubled program in the midst of a recession. At the same time we predicted the program's remaining legislative advocates would likely push a new payroll tax to try and revive the idea in advance of its improbable October 1, 2009 start date. The Olympian's Adam Wilson has the story this morning: The paid-family-leave program that the governor suspended to save money could reappear, only bigger. It would be paid for with a 2-cents-an-hour payroll tax on most employees. Any such tax would have to be approved by voters, but the chairwoman of the state Senate Health Care Committee is confident that the pubic would approve it. . . . [Senator Karen] Keiser said a new bill that will be introduced soon will not only revive the program, but expand benefits to those caring for sick parents or other family members. She also said President Barack Obama has been supportive of similar programs, and some federal money might be available to finish Washington's computer system. We had this to say: "There wasn't the political will to pay for it with a payroll tax even in good economic times, in 2007," said Kris Tefft of the Association of Washington Businesses. "Now is not the time to consider a payroll tax, whether its on employers or employees," he said. "The nature of the program is its ultimate costs won't be borne by the worker even if they're taxed for the insurance premium." Businesses still would be saddled with the administrative paperwork, even as they and their workers grapple with a recession, Tefft said. Cross-posted at Olympia Business Watch.
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Monday, January 19, 2009
Preserving the Unemployment Insurance Trust Fund
Posted by Richard Davis on 1/19/2009 9:10:00 AM
They call it a "trust" for a reason. It's money held in trust so that it will be available to provide economic security for qualified unemployed workers. Remember Al Gore's Social Security "lockbox?" Same thing: Putting money away for a specific purpose and not dipping into it to fund other things, no matter how desirable. Right now, Washington has a healthy Unemployment Insurance fund, better than many states have and a rare bright spot in our cloudy fiscal landscape . It's a tempting target for policymakers looking for money to tap for economic relief and economic stimulus. Governor Gregoire has proposed taking $400 million from the trust fund to increase benefits and reduce business taxes. Senate Democrats also propose dipping into the fund for job training. The WashACE priority agenda includes reforming the state unemployment insurance system to prevent uncompetitive increases in employer costs. Several things drive that objective to the forefront. Here's how we say it on our one-page: Washingtonƒ?s unemployment insurance taxes are the second highest in the nation. Our workersƒ? compensation benefits are third highest. The federal government has determined that our UI policies are out of compliance with U.S. policy. Further, the state Supreme Court tossed out the legislatureƒ?s carefully negotiated language establishing clear criteria for determining when workers who voluntarily leave employment qualify for UI benefits. We urge lawmakers to adopt unambiguous language reinstating the ƒ?voluntary quitsƒ criteria and to achieve federal compliance without increasing UI taxes. Dipping into the fund jeopardizes the fund's integrity and backs away from the reforms we're supporting. Several recent articles do a good job of further expressing business concerns. See especially this Olympia Business Watch blog post by Don Brunell and Steve Mullin's' comments in the Seattle Times story.
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Friday, January 16, 2009
Stimulus vies with Sustainability in Deficit-plagued Opening Week
Posted by Richard Davis on 1/16/2009 9:43:00 AM
It's a theme-setting time, the first week of a legislative session. Beyond the pomp and circumstance, lawmakers work to make sure we understand that they understand the direness of the times. Gov. Gregoire delivered her second inaugural address, acknowledging the severity of the state's economic and fiscal problems and telling us what she intends to do about it. She echoes WashACE priorities with this: ...like our struggling families and businesses, we can and will tighten our belts, balance our budget and focus on basic needs ƒ? protection of our children, our schools and colleges, our public safety, our environment and our economy.
And this: When this recession ends, and it will end, we must be ready for a new economy. We need to preserve our education system to make sure we provide workers skilled in science, math, engineering and technology.
She also emphasized government reform, streamlining and rightsizing, promoting more effective use of technology and improving the state's competitiveness. And there were proposals that garnered legitimate criticism from business group, particularly her plan to dip into the state Unemployment Insurance Trust Fund to increase benefits and pay for tax relief. AWB president Don Brunell notes the major problem with that plan (stories here and here), ...Brunell warned it may set a dangerous precedent that could lead increased unemployment taxes in the long run. ... Brunell said his analysis showed that businesses could receive a tax break of about $40 each from the plan, an amount he called "pretty insignificant." Senate Democrats also unveiled their version of stimulus, also tapping UI funds. It's early and a lot of what we're seeing will evolve and, we hope, improve. There's still too much apparent confusion between relief and stimulus. At a time when we're seeing jobs disappear too rapidly, stimulating a new, gauzy green economy should take a back seat to retaining those good jobs that remain. (For a glimpse at the jobs picture, check out this frightening layoff ledger from the Seattle Times.)
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Wednesday, January 14, 2009
Paid Family Leave: On the Way Out?
Posted by Richard Davis on 1/14/2009 10:51:00 AM
Well, maybe not just yet. But with the economy tanking, a $6 billion revenue shortfall, and businesses across the state striving to find a way to survive the recession, it makes no sense to impose a new tax and mandate on employers. So, jettisoning the program would seem like an appropriate, practically inevitable. response to current conditions. AWB's Kris Tefft makes the case at Olympia Business Watch. AWB's position on paid family leave has always recognized the employees' need for time off and the challenges inherent in balancing work and family. We've supported flexibilty, incentives for paid leave, and streamlining existing leave laws. But the unfunded mandate of paid family leave has now become a check the state can't afford to cash. Right.
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Tuesday, December 30, 2008
SEIU Sues Governor Over Pay Hikes
Posted by Richard Davis on 12/30/2008 11:01:00 AM
Yesterday, the Service Employees International Union filed a lawsuit demanding that the governor withdraw her budget and submit a proposal that includes the negotiated pay raises for home care workers. (Stories in the PI, The News Tribune blog, the Olympian, the Columbian, and the Everett Herald.) In The News Tribune post, Joe Turner points out that the SEIU may have a better case than the state employees' union that filed a similar lawsuit last week.
The SEIU seems to be on more solid footing than the Federation. The collective bargaining law for them flatly says any contract approved by an arbitrator must be sent to the Legislature.
In its editorial today, the Everett Herald makes the critical point. Noting that the WFSE lawsuit seeks to allow the legislature to act independently on the contracts. The editorial says: Even if that happens, the only responsible course for the Legislature would be to freeze state workers' pay, sparing some cuts in other, more critical areas for now.
This economic downturn, and the budget problem, are the most serious the state has faced in many years. Everyone is taking their lumps. State workers shouldn't be exempt from that reality. Does anyone disagree?
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Thursday, December 18, 2008
Early Reactions to Governor's Budget
Posted by Richard Davis on 12/18/2008 2:09:00 PM
As she predicted, reactions to the governor's budget have been swift. While the scramble to understand the details will take us all a while, the broad brush strokes are enough to frame the likely debate. As we posted earlier today, Sen. Joe Zarelli likes the approach Gregoire has taken, saying it puts the process on the proper course. Zarelli is ranking Republican on the Senate Ways and Means Committee. His counterpart in the House, Rep. Gary Alexander, also likes the direction. I commend the governor for putting forth a balanced budget that does not raise taxes or fees. House Republicans have long believed that increasing taxes or fees is not the right approach while families are struggling with everyday expenses and workers are losing jobs. While there are certainly some details of her plan that we might do differently, the governor has offered a good first step in correcting the past four years of overspending.
Alexander and Zarelli both emphasize the importance of building early savings into the 2009 supplemental budget.
AWB president Don Brunell issued a brief statement.Noting that AWB continues to review the budget proposal, Brunell emphasizes the groups support for her decision not to raise taxes on families and employers. He adds: It is critical that Washington state look beyond the current budget woes and prepare for what happens after we emerge from this recession. Part of that discussion must include creating the conditions for a healthy business environment so that when we do emerge from the recession, Washington is positioned as a good place to create those jobs. As devastating as the economic conditions may be, the recession is an opportunity to reshape the way government operates and position our state to attract and retain businesses.
The largest union representing state workers call Gregoire's plan dead on arrival. They say that approvingly, looking for legislative support for tax hikes.
ƒ?Our biggest concern is that everything should be on the table and that includes tax loopholes and revenue enhancements,ƒ Federation Executive Director Greg Devereux said. ƒ?If the economic parts of our negotiated contracts that were ratified two months ago can be suspended, why canƒ?t a campaign pledge on no revenue increases be retracted?ƒ
Senate Majority Leader Lisa Brown has reservations as well. She calls reliance on $1 billion in federal assistance a "glaring flaw" and, pointedly, does not pledge to resist tax hikes. Brad Shannon notes her concern in his Olympian story, which includes Alexander's assessment that the estimated federal money is a "reasonable assumption." Today's Wall Street Journal story on the Obama stimulus plan adds weight to the Gregoire/Alexander position.
The broad parameters of the package are known already. It will include a tax cut designed to pump $50 billion to $100 billion into the economy almost immediately; about $100 billion in aid to state governments, primarily to temporarily assume more of the cost of Medicaid, in hopes of staving off benefit cuts or tax increases; and funding in five main areas: traditional infrastructure, school construction, energy efficiency, broadband access and health-information technology.
Finally, both the Evergreen Freedom Foundation and the Washington Policy Center have posted first impression comments on the new budget.
Update University of Washington president Mark Emmert says the proposed budget would "seriously harm" the UW.
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Wednesday, November 26, 2008
New Competitiveness Brief Looks at Labor Costs
Posted by Richard Davis on 11/26/2008 11:26:00 AM
In this new competitiveness brief, prepared for WashACE by the Washington Research Council, we examine several areas in which state policy may drive up labor costs. Citing several well-known studies of interstate competitiveness that find Washington a high-cost state, the brief examines unemployment insurance, workers' compensation, paid leave, and other issues that are likely to be considered in the coming legislative session. The cost of doing business has many components, but labor costs make up the largest variable. And within the larger labor cost picture, it is employment taxes and mandated benefits that make the big difference from one state to another. Washington already has among the highest average wage
rates in the country, so adding additional costs through taxes and regulation further threatens to let labor costs overwhelm the stateƒ?s competitive advantages.
It's a thoughtful and timely analysis.
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Monday, November 10, 2008
Armageddon?
Posted by Kris Tefft on 11/10/2008 12:35:00 PM
That's how the US Chamber's labor policy official, Randel Johnson, describes the coming fight over card-check in the next Congress, with President-elect Obama in the White House. It's in a weekend New York Times piece, "After Push for Obama, Unions Seek New Rules" that's worth a read. (Cross posted at Olympia Business Watch)
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Thursday, November 06, 2008
A Blurb on Paid Family Leave in Washington
Posted by Kris Tefft on 11/6/2008 11:58:00 AM
As Don Brunell pointed out last month at Olympia Business Watch, rumors of the demise of the paid family leave program in Washington may be exaggerated. Sure, the program, enacted in 2007, has not made it out of the gates yet; true, there has been no funding source identified for its administration and benefits; yes, the law must be amended to actually specify a state agency to run it. And of course, Governor Gregoire did say in September the program is officially suspended, which makes its statutory roll-out of October 1, 2009, highly unlikely without a major inflow of cash next session. Today, in passing on his blog, Adam Wilson at the Olympian describes this: Meanwhile, the paid family leave program is still alive in statute, even if Gov. Chris Gregoire pulled the plug on its computer. Sen. Karen Keiser says she's working on a new bill to address funding now. Neither the Legislature nor the governor could agree on how to pay for benefits for new parents, although proposals have included general funds and a payroll tax. All Keiser would say is, "I donƒ?t think there are any surprises. The Senateƒ?s position on paid family leave is pretty clear." Senator Keiser is also on record, in a recent talk to the Washington Senior Citizens Foundation (here, 30 minutes into the video), minimizes the Governor's suspension of the program as a "a little bit of an interruption" and yet an "opportunity to revisit the idea of expanding family leave to parents and grandparents." Remember, the currently projected 3.2 billion + budget shortfall includes about $72 million for paid family leave next biennium. Will the Senate recommend a tax increase to cover that, or even, expand the program and add to it? (Cross-posted at OBW).
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Thursday, November 06, 2008
The National Election and Employment Law
Posted by Kris Tefft on 11/6/2008 10:16:00 AM
Yesterday at Olympia Business Watch I commented on the post-election alerts going out from the law firm and HR world about major anticipated changes in federal labor and employment law. This article is a notable example, in that it specifically focuses on two less sweeping changes the author thinks are likely to be first up: a bill related to the statute of limitations for filing pay discrimination cases, and another relating to the ability to unionize "supervisors."
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Wednesday, October 29, 2008
What Does the Strike Mean for Boeing's Future in Washington?
Posted by Richard Davis on 10/29/2008 12:12:00 PM
After the initial feelgood of a settlement, it's time for sober reflection on where Boeing goes from here. Take that literally ... because Boeing's going may be something we're confronted with unless things in Washington turn around quickly. The speculation is widespread. On the front page of today's Seattle PI, the headline sets the stage: "Boeing suppliers celebrate deal - but analysts have different take." Suppliers to The Boeing Co. rejoiced at the possible settlement of the Machinists' strike, in its 53rd day Tuesday, but several aircraft industry analysts said they view the strike more grimly. They warned that, whether or not it ends soon, the strike will help drive Boeing's assembly plants out of Washington to states where unions have less power. Ten years? ... the Machinists may have fatally damaged the employer-union relationship, said Richard Aboulafia, an aviation analyst with Teal Group Corp. "This strike was the straw that broke the camel's back, and I think Boeing is out of here," he said. "Given its history of labor relations and the attraction of a right-to-work state, the likelihood of them moving out of state is 90, 95 percent in the next 10 years." He said states where workers can't be required to join unions, particularly in the South, are making "tremendous efforts" to lure aerospace companies such as Boeing. "They're going to provide the same tax breaks and incentives as Washington state and a much better labor environment," Aboulafia said. Modern aircraft manufacturing uses fewer people and lighter equipment, making it more portable, he said. We cited Aboulafia in yesterday's post. Here's a copy of his October Letter for The Teal Group (my highlighting added). Compelling as I find his analysis to be, reporters seem have had little difficulty finding machinists' union members who dislike the settlement and sound prepared to dig in for longer. Granted, it's unlikely that the contract will be rejected, but quotes like these underscore the ongoing tension. From The News Tribune. ƒ?This contract is not as good as the one that we rejected in September,ƒ said Ruth Edwards, who picketed outside Boeingƒ?s Auburn parts plant Tuesday morning. ƒ?For all the time weƒ?ve spent out here, we should be getting something much better,ƒ said the 24-year Boeing veteran. ƒ?It looks like the union leadership has just thrown us under the bus again.ƒ Similar comments in the Herald of Everett. ... Tuesday afternoon, after reading the union's summary of the contract, many Machinists were inclined to reject the offer. That includes Rebecca Groves, her sister-in-law Jodi and her mother Pam, all materials handlers at Boeing. While the offer protects their jobs for the next four years, Pam Groves was worried about the future.
"I'd love to be back to work next week, but I just don't know yet," she said.
Even those inclined to vote for the contract sound dissatisfied. From The Seattle Times.
Joe Albanese, 44, who works as a parts deliverer in Everett, said he'll vote for the deal, if there are no surprises in the details, because the contract holds the line on parts outsourcing that could affect him directly. "They want to get rid of us," he said. "At least we've stopped them for four years."
TNT editorial writers also wonder whether the game was worth the candle, and go on to consider the consequences. But the frequency of these strikes ƒ? theyƒ?ve been recurring roughly every five years ƒ? bodes ill for the survival of aerospace manufacturing in this state. We hope the leaders of both the Machinists and Boeing are approaching these these negotiations with the future in mind. ... Boeing, more than most companies, operates in a ruthlessly competitive global marketplace.
And the company has options. The strike may be over ... the competition continues.
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Tuesday, October 28, 2008
Boeing Strike Agreement Reached
Posted by Richard Davis on 10/28/2008 11:53:00 AM
Appropriately topping the news today is the tentative agreement between the Machinists' union and Boeing Company. Here are some links: Seattle Times, Seattle PI, The News Tribune, Herald of Everett, and Puget Sound Business Journal. The agreement most likely will bring to an end the 53 day strike. Like all strikes, this one has had costly consequences for the company and many striking workers. Both sides express support for the new contract and expect union members to ratify it in the coming week. The PI's James Wallace links to the IAM site for contract details. The four-year deal looks pretty good for the union. John Gillie summarizes neatly for The News Tribune. The union reportedly got more of nearly everything in return for a longer period of labor peace, four years, instead of the three the union had originally considered. Among the reported concessions, the company withdrew what the union had called ƒ?takeawaysƒ in the medical plan that in the original proposal would have added higher co-pays and fees to some of the medical plans it offers. The company also reportedly agreed to increase the pension formula from the $80 per year of service proposed in its September offer to $81 and then to $83 in the last year of the deal. The previous proposal included a 11 percent pay increase over three years. The new deal reportedly includes a 15 percent increase over four years, but gives a higher increase, 5 percent, in the first year of the deal. In addition, the new agreement includes an enhanced ƒ?signing bonusƒ of $5,000 for the first year and two $1,500 payments in subsequent years. Here's Scott Carson's comment. "This is an outstanding offer that rewards employees for their contributions to our success while preserving our ability to compete," Scott Carson, president and CEO of Boeing Commercial Airplanes, said in a statement. "We recognize the hardship a strike creates for everyone -- our customers, suppliers, employees, community and our company -- and we look forward to having our entire team back." While the end of the strike is something to celebrate, no one should assume that it also marks an end to the region's competitive challenges. Boeing's future here hinges on more than simply putting the strike behind them, as analyst Richard Aboulafia points out in today's Times. Earlier Monday, before news of the contract agreement, respected aerospace analyst Richard Aboulafia predicted the Machinists strike ultimately would drive Boeing from the state. "Aviation centers are almost impossible to create, but they can easily be destroyed. I think Seattle will be the next to go," Aboulafia wrote in his monthly newsletter. "This strike, following myriad others and with little hope of improved relations, will almost certainly precipitate a (Boeing Commercial Airplanes) exit." "Almost certainly" does not mean inevitably. But if Washington wants a strong aerospace cluster in its future - and the picture of this state without aerospace is a bleak one - policymakers have to act quickly.
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Tuesday, October 07, 2008
Boeing CEO Warns: Competitiveness is a "Big Deal"
Posted by Richard Davis on 10/7/2008 9:46:00 AM
The Seattle Times, Seattle PI and the Herald of Everett report on a lengthy memo from Boeing CEO James McNerney. (The link to the memo is from the PI"s James Wallace's blog, which also provides the union response and good reporting.) McNerney starkly frames the conditions facing the company: turmoil in the financial markets, emerging global competitors, invigorated old competitors, and more. He specifically focuses on the strike. The crux: Preserving our competitiveness has never been more important--or urgent.
The ongoing turmoil in the financial markets provides a timely reminder of why it would be gravely unwise for Boeing to agree to terms in any contract that would fundamentally restrict our ability to manage our business. Markets and business conditions can change quickly and dramatically. And we need to be able to react just as fast. U.S. auto companies, for one, all but fatally wounded themselves years ago by promising unsustainable wage and benefit levels and by agreeing to contract conditions (including job guarantees) that limited their flexibility to run their businesses in the face of intense global competition. Today, their market shares continue to fall, and their layoffs have grown by the thousands. The unrelenting reality is this: Jobs in today's global economy are created and sustained only through increasing productivity and customer-focused innovation.
I wrote on the strike earlier. It's making ugly times uglier. A bleak prediction, from the PI story. "The odds are heavy against the next new Boeing jet (after the 787) being built in the Seattle area," said Richard Aboulafia, vice president of analysis for the Teal Group, an industry consulting firm near Washington, D.C. Boeing came close to picking Alabama or North Carolina as the final assembly site for the 787 Dreamliner before deciding to build the plane in Everett. Boeing's history of bad blood with its biggest union was one of the issues that weighed on Boeing leaders at the time. "It is highly questionable if there will be any Boeing jets built in Seattle in 10 years," Aboulafia said. ..."For any union to feel enthusiastic about striking now, they have to have zero contact with the outside world," Aboulafia said. "On the other hand, they are the last union with any real power in this country."
As McNerney says, it's a big deal.
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Monday, September 29, 2008
State Unions Split on Contract - Does it Matter?
Posted by Richard Davis on 9/29/2008 4:46:00 PM
Members of the Washington Federation of State Employees voted to approve their new contract with the state. The Olympian's Adam Wilson notes: The contract covers 33,000 workers in state government, and set the tone for other union deals: 2 percent raises and an extra day off in each of the two fiscal years it covers.
The News Tribune's Joe Turner probably has it right. I wonder if the prospect of a $3.2 billion budget deficit for 2009-11 had any bearing on the rapid ratification of the contract. Workers may figure this is no time to dicker.
The Teamsters apparently are in a dickering mood.
Adam Wilson reports that at least one key legislator is willing to consider voting no on the deal. Rep. Hans Dunshee, the Democrat who is likely to take over as budget chairman, described the contracts exactly like this: "I think we canƒ?t eliminate any option at this point. Those are well negotiated and such, but we donƒ?t even know what the situation is in February. So at this point Iƒ?d say any option should be talked about."
Washington CEO thinks the tide is about to turn in Olympia and Thurston County. What do you think?
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Monday, September 22, 2008
UI Benefits for Boeing Strikers: Unlikely, Irresponsible
Posted by Kris Tefft on 9/22/2008 9:50:00 AM
Late last week it was reported that the machinist's union had advised its members on strike with Boeing to apply for state unemployment insurance benefits. This is an unlikely strategy, as today's Everett Herald points out, but it's also irresponsible. State law disqualifies striking workers from receiving UI benefits. And there's a sound reason why -- not only are the workers not technically "unemployed," but making employers pay higher UI taxes to fund benefits for their workers who are on strike makes the employer, in part, subsidize the strike. That upsets the balance that labor law strikes between negotiating parties. In the jargon of traditional labor law, a strike is an "economic weapon" the union uses against an employer to force them to the table. Resort to a strike is meant to inflict pain -- but on both sides, to incentivize bargaining, under conditions federal law regulates. Subsidizing the strike through UI benefits (and taxes) undercuts the incentive to bargain.
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Monday, September 15, 2008
Bellevue Teachers Strike Ends
Posted by Richard Davis on 9/15/2008 12:17:00 PM
Good news Sunday night. Members of the Bellevue teachers' union voted to end their illegal strike and return to the classroom, accepting a contract agreement that boosted pay and curriculum flexibility. While it's good that agreement was reached relatively quickly, the successful strike again demonstrates the toothless nature of the laws prohibiting public employee strikes. Two recent articles provide an intriguing frame for the dispute. Sunday's Seattle Times looks closely at the "push for perfection" that led to the now-controversial - or at least unpopular with teachers - common curriculum promoted by Mike Riley, Bellevue's acclaimed former superintendent of schools. It worked. A $1.9 million grant from the Bill & Melinda Gates Foundation in 2006 allowed the district to pay more teachers to write curriculum for six core subjects, post it to the Web and add supplemental materials. Teachers' daily calendars and lesson goals were posted. Some teachers created videos to reteach difficult concepts. Bellevue parent Susan Edmond remembers her daughter struggling with math three years ago as a freshman. She hadn't understood a teacher's explanation, but she went online and watched another teacher's video of the same lesson ƒ? over and over until the light went on. "That's the beauty. Everybody is doing the same thing. It lets parents partner with teachers to make the kids more successful," she said.
But many teachers balked. [A district teacher] remembers a meeting at which teachers asked Riley when they could use their professional judgment to deviate from the set lesson plans. "Riley told us that the judgment had already been made and we were to teach the lesson as written," [he] said. Rob Prufer, a social-studies teacher at Newport High School, said Riley was an inspirational leader and a personal mentor to him, but he believes the superintendent began to view teachers as an obstacle to improving education.
Nonetheless, the district consistently ranks among the state's highest-performing public school districts. And as Marysville school board member Michael Kundu reminds us in this Everett Herald op-ed, we still have a long way to go. During the 2007-08 school year, only 39.7 percent of Washington's 10th-grade students met state standards in science. Fewer than half (49.3 percent) met math standards. While science percentages reflected a small (slow) increase over 2006-07 (science 36.4 percent, math 50.4 percent), and 2005-06 (science 35 percent, math 51 percent), math scores reflect a gradual decline.
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Wednesday, September 10, 2008
Thoughts on the Boeing Strike
Posted by Richard Davis on 9/10/2008 5:36:00 PM
In the Everett Herald this morning, I considered the IAM strike and its implications for Boeing and our economic competitiveness. Elsewhere in the Herald, the AP looks at the "pluses and minuses" of the strike. I don't see many pluses. What do you think?
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Thursday, September 04, 2008
Bellevue Teachers' Strike - Some Context
Posted by Richard Davis on 9/4/2008 4:09:00 PM
The brief note on the Bellevue School District this afternoon website pretty much says it all. Public employee strikes are illegal in Washington, but the union has nonetheless called the strike to apply pressure on the District in collective bargaining. Negotiations continue with the assistance of a mediator from the Public Employment Relation Commission. Information about the issues in dispute and the District's contract proposals can be found on the District website.
The Seattle Times doesn't address the legal issue, but makes good substantive points about why the strike is wrong.
First, they point out the economic reality. ... the district's offer of an 8.1 percent pay raise over three years and an additional $1 million in health-care benefits ƒ? allowing a third of the teachers to pay nothing and others to pay between $6 and $62 a month ƒ? shines amid recessionary gloom. Yet, the Bellevue Education Association demands 14.1 percent raises. The district must say no.
The news story in the Times points out that compensation in the Bellevue district is already among the highest in the state. There may be - and probably is - an argument worth making about improving teacher pay in high-cost districts, but it ought to be explored in a more comprehensive conversation that includes performance pay, increased compensation for math and science teachers, and the like. The editorial goes on to dismiss the union's demand for curriculum change. Union cries that the curriculum imposes a one-size-fits-all standard are wrong. Parents ought to know when their children are going to learn fractions. This provides a counterbalance to education reform's emphasis on assessment. Classroom dynamics are constantly changing. Some students come to class half-asleep, others alert and ready to learn. Bellevue has said time and again that teachers can adapt the curriculum to fit individual needs... Bellevue has spent the past five years creating the curriculum with a $2 million grant from the Bill & Melinda Gates Foundation ƒ? an organization known for vetting academic initiatives. Meanwhile, the district continues to be recognized nationally for its quality schools and its emphasis on getting all students into high-level classes.
Education Week provides valuable context in its examination of how teachers are faring in states hit hard by budget woes. Bellevue looks pretty good.
The episode is sadly reminiscent of the WEA's rejection of grant money to improve math and science education. In Bellevue, you have a curriculum that works. So the union demands it be changed? High-performing schools play a critical role in our state's economic competitiveness. We hope for a swift conclusion to this disruption of student education in Bellevue.
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Tuesday, August 26, 2008
Second Thoughts in NY (family leave) and Wisconsin (health care)
Posted by Richard Davis on 8/26/2008 5:07:00 PM
At Olympia Business Watch Don Brunell takes note of the New York legislature's adjournment without passing paid family leave. It was a matter of dollars and sense. There were many versions of the paid leave circulating around Albany. They were all very costly. Here is a sample of the proposals: - One would impose 12 weeks of disability insurance benefits for family leave on ALL businesses for employees of newborns, families adopting children and caregivers of sick parents, spouses and children.
- Another would provide 13 weeks of leave and would have increased the maximum disability benefit from $170 to $550 per week by 2010 and would have permanently indexed the benefit to one-half of the state's average monthly wage.
As for the proposal to pay for it. Workers would have to pay a mandatory 45 cents per week payroll tax...
In Wisconsin, support for the so-called "Healthy Wisconsin" program proposed last legislative session also seems to be waning. The State Policy Blog reports candidates are in "full retreat" on the pricey "universal health care" plan. Dollars and sense again. The blog links to this story in the Wisconsin State Journal. "The issue is money and right now, not many legislative candidates are talking about big, broad programs simply because we all understand that practically speaking, there's no money," said Jim Holperin, a new Democratic Senate candidate who praised the Healthy Wisconsin plan but said his focus was on reviving the economy.
Few would deny the importance of improving health care access and affordability, or for helping employees work through difficult times, but the lessons being learned in Wisconsin and New York (they're not the only places) should be heeded here.
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Thursday, August 21, 2008
More Paid Leave Mandates Coming?
Posted by Kris Tefft on 8/21/2008 2:59:00 PM
UP
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Friday, July 25, 2008
Civil Rights and Union Membership
Posted by Kris Tefft on 7/25/2008 1:14:00 PM
Richard Davis draws my attention this morning to an op-ed in the San Francisco Chronicle proposing that union membership be added to the federal Civil Rights Act as a protected class in employment. These "six little words" -- prohibiting discrimination in employment "on the basis of union membership" -- would, the author proposes, allow workers to "defend themselves" against "union-busting thugs." How? By filing lawsuits, of course. But is the proposal -- which if enacted, might go by its short title, the "Labor Lawyers' Full Employment Act" -- entirely without merit? Query whether the modest addition of just another ten words -- "or the refusal to join or financially support a union" would make it a fair compromise? (Cross-posted at Olympia Business Watch)
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Friday, June 20, 2008
Good Marks for Washington on new Milken Institute Index
Posted by Richard Davis on 6/20/2008 10:56:00 AM
The Milken Institute ranks Washington 5th on its 2008 State Technology and Science Index (h/t Bruce Ramsey). Massachusetts ranks first in the Milken Instituteƒ?s 2008 State Technology and Science Index, followed by Maryland, Colorado and California. According to the report, regional competition for technology industries has increased since the last release of the Index in 2004. Not only are states vying with each other for human capital and resources, but countries like China and India are increasing the competition on a global level.
Ramsey summarizes. The index had five components. Washington scored 4th on two of them: Technical Workforce and Risk Capital and Entrepreneurial Infrastructure. We scored 8th in two measures, Research & Development Inputs and Technological Concentration & Dynamism, and 16th in one: Human Capital Investment. Tech companies have been saying for a long time that Washington doesnƒ?t graduate enough scientists. We import them from elsewhere.
He says having other people pay for their education while we get the benefit of their brains may not be a bad deal, if we can sustain it. Strikes me as a risky strategy. We'll have more on this later.
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Thursday, June 19, 2008
US Supreme Court Strikes Down Cali Union Neutrality Law
Posted by Kris Tefft on 6/19/2008 11:23:00 AM
On a morning when our own state Supreme Court got it badly wrong on an important employment case, good news from the other Washington: the US Supreme Court struck down, 7-2, a California law imposing union neutrality requirements on employers doing business with the state. This long awaited decision, Chamber of Commerce v. Brown, ought to tamp down the top legislative priority of unions here in Washington to establish a broader prohibition on employer speech than what even California envisioned. Indeed, Governor Gregoire cited the pending decision of the court in this case as the primary reason for asking the labor side to withdraw its bill in 2008. Writing for the majority, Justice John Paul Stevens -- conventionally thought to be the most liberal of the high court justices -- held that the federal labor policy contained in the National Labor Relations Act (NLRA) preempts the attempt of California to impose a rule that prohibits employers receiving state funds from using the funds "to assist, promote, or deter union organizing." The NLRA preemption doctrine that captured the court's attention forbids states from regulating conduct "that Congress intended to be unregulated because left to be controlled by the free play of economic forces." Noting its view under prior case law that "Congress struck a balance of protection, prohibition, and laissez-fair in respect to union organization, collective bargaining, and labor disputes," the court determined California's law attempted to regulate within "a zone protected and reserved for market freedom." The court further elaborated on the inherent right of employers to engage in "free debate on issues dividing labor and management", that this First Amendment right is enshrined in the NLRA, and that it reflects a policy decision "favoring uninhibited, robust, and wide-open debate in labor disputes" involving "freewheeling use of the written and spoken word." The constitution, buttressed by the NLRA, provides this freedom; states cannot by legislation or regulation take it away. The state AFL-CIO proposal in Washington is broader than the invalid California law. It doesn't hinge on the receipt or use of state funds by an employer. It bluntly prohibits any employer speech about union matters if it can be viewed as a "required" communication -- in a staff meeting, perhaps in a company-wide e-mail, and so on. It is enforced (like California's statute) by a strong litigation deterrent attempting to make the state's judicial branch the ultimate referee of permissible workplace speech. But the high court was clear today: States are not free to regulate what Congress left unregulated in the NLRA. "When Congress has sought to put limits on advocacy for or against union organization, it has expressly set forth the mechanisms for doing so." The law "calls attention to the right of employees to refuse to join unions, which implies an underlying right to receive information opposing unionization." And the NLRA "expressly precludes regulation of speech about unionization" so long as the communications do not threaten or promise anything to the employee. Our state unions may be busy between now and the 2009 legislative session testing arguments to distinguish their proposal from California's overreach. But today's decision should put an end to Washington's union neutrality bill. (Cross-Posted at the Olympia Business Watch blog)
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Thursday, June 19, 2008
State Supreme Court Deals Blow to UI System, Employers
Posted by Kris Tefft on 6/19/2008 11:10:00 AM
In a unanimous opinion that is nothing short of astonishing, the Washington Supreme Court this morning bluntly erased a thoroughly negotiated, battleground tested, foundational component of our state's Unemployment Insurance system -- its statutory provisions governing "voluntary quits". The court held that the law didn't say what the Legislature, the Employment Security Department, the business community, and I'd say a vast swath of the labor community, have since 2003 understood it to say. That is, a negotiated list of ten "good cause" reasons for leaving work voluntarily while still maintaining eligibility for UI benefits is an exclusive list of reasons for voluntary quits. Voluntary quits are an issue in unemployment insurance because the historical purpose of the system is to provide a social safety net with partial wage replacement for a temporary period that an individual is unemployed through no fault of his or her own, and is able, willing, and looking for work. Allowing benefits for individuals who choose to quit work runs afoul of that purpose. But in a landmark 2003 compromise bill, the Legislature specified ten (and in 2008 added an 11th) clear reasons why a voluntary quit may still result in benefit eligibility. Things like relocation of a military spouse, protection of family from domestic violence, certain substantial reductions in pay or hours, and so on. This was the other half of legislation that fundamentally altered the collection of UI taxes from employers and addressed other benefit costs. It was part of a business-labor compromise brokered by then Gov. Gary Locke and set against the backdrop of serious economic competitiveness concerns and the state's efforts to win assembly of Boeing's new commercial airliner. AWB attempted to impress this point upon the court through an amicus curiae ("friend of the court") brief supporting the Employment Security Department. But the court stated: Amicus Association of Washington Business contends that the statutory list was intended to be exclusive and that exclusivity was "the finishing stroke of a multi-year public policy compromise between business and labor over the nature of the Unemployment Insurance system . . . and the eligibility for unemployment benefits for persons who voluntarily leave their job[s]." This may well be true. Unfortunately, we have not been presented with compelling evidence of this underlying legislative purpose by either of the parties. Instead, we discern no clear intent from the legislative history.
We thought the statute spoke for itself, but the court found it "awkward" and "ambiguous". So the court swept aside the statutory list, but opened Pandora's box: individualized assessments of a claimant's "compelling personal reasons" for voluntarily leaving work regardless of the statutory reasons. This will likely be an administrative nightmare for the Employment Security Department both going forward and, potentially, having to reassess benefit claims since 2003 that were turned down because the voluntary quit did not fall within one of the ten reasons. And this indefinitely expansive new universe of potential voluntary quit benefits will result in heightened costs to employers facing a downward trending economy (yesterday's news: state unemployment now over 5%) and a system where Washington's job providers already pay the second highest UI taxes in the country. The UI system has already become a hot topic for the 2009 Legislature because of a US Department of Labor determination that the Employment Security Department's tax collection system is out of conformity with federal law -- a problem the Legislature must fix. Now, on the benefit side, today's decision elevates the voluntary quits issue to a similar prominence as the Department, stakeholders, and Legislature figure out whether, and how, to pick up the pieces. (Cross-posted at the Olympia Business Watch blog)
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