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AFL-CIO Feels the Heat From Key Democrats

February 06, 1985|Harry Bernstein

Rachelle Horowitz, political director of the American Federation of Teachers, said she was insulted by Pelosi's contention that labor was running an anti-woman campaign. "That was absolute nonsense and just more of the malicious labor-baiting that went on at the meeting," she said. Horowitz said a broader perspective is needed on labor's role in politics.

"First, those who did not want Mondale to be a candidate last year hold labor responsible for the fact that he was the party's nominee, and for his defeat. Yet everyone should know by now that what defeated him was not our endorsement--60% of the AFL-CIO votes went to him--but the economy.

"Mondale was defeated by the declining inflation rate and economic growth, the appeal of President Reagan to the selfish 'me-first' attitude of many Americans and his (Reagan's) personal popularity.

"Until the Democrats regain the economic issue," she said, "the election of Democrats will be a massive problem that will not be solved by organized labor hiding in some corner."

Obviously, those who want labor out of politics have failed so far and, in fact, indications are that the AFL-CIO is more determined than ever to remain an integral part of the Democratic Party's operations.

Problems at Akron

Union members at Akron discount stores were dismayed a few weeks ago when management insisted that they take pay and fringe-benefit cuts of as much as 50%. On Jan. 6, they voted to reject management's demand and strike if another round of bargaining talks didn't improve the company's offer.

Management held firm, and on Jan. 26 a majority of the 51 unionized members (of a total of about 100 employees) voted to accept the cuts. By last week, however, nearly half of those union members, several of whom had worked 20 or more years at Akron, had quit in protest.

Waltraud Lopez, who departed after 25 years at Akron, said that, while everyone was upset by the new pact, the majority voted for it because "they just wanted to go to work" and did not want a strike.

But Vince Schmeltzer, who quit after 23 years, asked: "How can we live on that kind of money?"

And a management executive, who contended that the cuts were necessary for the company's survival, said: "Don't quote me by name, but I guess you can't really blame them for leaving us."

The new pay scale is $4.20 an hour, down from a top of $7. Many fringe benefits, such as dental and vision care, several holidays and pay for employees on jury duty, were also eliminated. In addition, plans are being made for substantial cuts in the pension program.

A spokesman for the United Food and Commercial Workers, which represents the Akron employees, said the union tried to fight the company demands, but he asked rhetorically: "How do you strike a company that is almost going out of business?"

Akron recently agreed to sell up to 17 of its 20 store leases to Circuit City Stores, a fast-growing consumer electronics retailer based in Richmond, Va. Union leaders say they expect that Circuit City will try to operate without a union. Circuit City would not comment.

An Akron spokesman said the company will operate at least three of its own stores and hopes to expand the number to as many as 24 by the end of 1986. The economically troubled chain had been sold by Thrifty Drug Co. in December, 1982, to Hong Kong investors C. K. Chan and L. H. Chan.

Pension Fund Plan

Robert A. G. Monks, who recently left his post as administrator of the pension and welfare benefits section of the Department of Labor, has an innovative plan that he hopes will help to modernize the nation's business system as well as its pension funds, which now have reserves approaching $1 trillion.

In his government position, Monks helped set government policies and standards designed to ensure that pension fund trustees complied with laws regulating those funds.

But he says the trustees need private, not government, help to avoid inadvertent violations.

Perhaps more important, he suggests, is that, with some guidance, pension fund trustees can use their tremendous power to add a major dimension to the management of almost all corporations: long-range planning.

To achieve those goals, he proposes creation of a private, self-regulatory organization that would do for pension funds and the Department of Labor what the long-established Financial Accounting Standards Board does for the accounting industry. Such a private agency, he said, would cut down on the work of the Labor Department and reduce delays in the department's investigations.

In addition to helping pension fund trustees police themselves, Monks said, his proposed agency would allow pension fund trustees to meet the "really exciting possibilities" that go along with their control of funds that could, within 15 years, own an estimated 50% of the common stock of the nation's corporations.

"The most challenging goal possible for them as trustees is as long-term shareholders, to allow management to make long-term corporate decisions," Monks said.

"So long as we are stuck with the present perception of management that they must be held accountable for each quarterly earnings report and minute-by-minute stock prices, there will never be an adequate opportunity to turn to really important, long-term considerations of management."

Some critics may argue that Monks' proposed private agency might be too much like the old notion of letting the fox guard the hen house. But Monks stresses that the government would still be responsible for enforcing federal laws and that the agency would only help trustees understand and comply with the laws.

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