Business Update with Mark Lacter

Unions protest at LAX and Walmart during busy travel week

KPCC's business analyst Mark Lacter says unions are trying to make their voices known during the holiday season.

Susanne Whatley: Mark, they've chosen to protest at two very busy places this week: LAX and Walmart.

Mark Lacter: Susanne, on Wednesday, members of the Service Employees International Union are going to be marching down Century Boulevard to protest a cut in health care plans for several hundred airport workers.  These are people who work for a company called Aviation Safeguards - they handle things like providing wheel chairs for passengers needing assistance to and from the gates.  The protest being planned isn't exactly a strike, but union leaders are hoping that it will put pressure on airport and city officials, not just for this particular company, but for other labor contracts involving other airport workers.  Of course, staging a job action on the day before Thanksgiving by tying up the major thoroughfare leading to LAX might not be the best PR move in the world.

Whatley: What does that tell you about the economy?

Lacter: Mainly, that the economy can be a very cold, very cruel place – and that if this contracting work isn’t done by Aviation Safeguards, it will probably be done by some other company offering the same low wages and poor benefits.  It also tells you that the economy is loaded with conflicting agendas.  Which leads us to the Walmart situation: This Friday, what we know as Black Friday, two labor groups tied to the United Food & Commercial Workers union are planning protests outside of Walmart stores all over the country.

Whatley: Didn’t Walmart file a complaint with the National Labor Relations Board?

Lacter: It’s accusing the union of violating federal labor laws, and the retailer does expect some of its employees to walk off their jobs, which could impact holiday sales.  Keep in mind, though, that organized labor has been trying for years to unionize Walmart - thus far without much success.  Locally, they've also tried to prevent Walmart from opening stores that are close to unionized supermarkets, also without much success.

Whatley: Sort of puts shoppers in a tough spot…

Lacter: Can't you just see customers on Friday getting out of their cars, looking at the demonstrations, and saying, "Oh, that's just terrible about their health care.  Now where's the Electronics Department?"  The protestors will probably find shoppers who are sympathetic with Walmart workers.  But if raising wages or offering better health care means higher checkout prices, they might not stay sympathetic.  Walmart and the other low-cost retailers are simply too important to the consumer and his or her own budgets.  And that's why union officials have such a hard time these days: it's not just working with management; it's influencing the public at large.

Whatley: On a related subject, I see that one of the big unions is opposing that proposed ballot measure for higher sales tax in Los Angeles.

Lacter: That’s right.  The Service Employees International, which is one of the city's largest public employee unions, said raising the sales tax to nine and a half percent is regressive – meaning that poor people would be stuck paying disproportionately more than rich people.  Union opposition could really upend this thing - traditionally, city officials rely on organized labor to support tax-related measures.  Council President Herb Wesson said that without the tax hike, the city would have to lay off 1,400 workers, 500 of them police officers.

Whatley: Is that the case or is that a bluff?

Lacter: Hard to tell, but this whole thing is really about city officials  wanting a quick way of bringing down L.A.'s huge budget deficit without being forced to institute some pretty drastic changes in the employee pension system.  That's why the union decision was somewhat surprising.  Pensions and health care costs are basically out of control, and they're eating into the funds that would otherwise be used for city services - everything from roadwork to 911 operators.  But the unions say they’ve already made some concessions and now they want their pension money.  Thing is, if the tax increase is turned down by the voters in March, which is what the union wants, you have to wonder where the city will come up with the $220 million deficit.  Has to come from somewhere.

Mark Lacter is a contributing writer for Los Angeles Magazine and writes the business blog at LA Observed.com.


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