Big Labor's Big
Secret
By ROBERT FITCH,
Op-Ed Columnist, NYTimes on the Web, December 28, 2005
AS most Americans are aware, our auto
industry is in a crisis.
Workers' wages are falling, and hundreds of thousands of jobs are being sent
offshore. America's largest parts supplier, Delphi, filed for bankruptcy
protection, and General Motors, Delphi's main customer, may too, if a threatened
United Auto Workers strike occurs next month. Meanwhile, Ford and its main
parts supplier, Visteon, seem to be skidding down the same road.
How did we get here? There are many causes: poor car designs, high
pension costs, increased foreign competition. But much of it comes down to
the overwhelming health insurance costs borne by the auto makers. This is
why the union's president, Ron Gettelfinger, has urged Congress to enact
sweeping health insurance reforms.
If the government paid everyone's health insurance bills, as those in Canada and
most of Europe do, Detroit's Big Three could save at least $1,300 per vehicle.
Profitability would return. With deeper pockets, the auto makers could
afford to pay their suppliers. Communities would be spared layoffs.
Of course, there are a lot of other compelling reasons to support a single-payer
plan besides helping the auto industry. Although it is by far the most
costly in the world, our health care system still leaves 43 million people
uncovered. The latest World Health Organization rankings listed America's
system 33rd, below Costa Rica and only two notches above Cuba.
Most advocates of universal health care focus on the opposition of Republicans
and insurance companies. But perhaps the most important factor keeping an
overhaul off the national agenda is one that few Democrats acknowledge:
most of Mr. Gettelfinger's fellow labor leaders don't support a single-payer
system either.
The reason comes down to simple self-interest. The United Auto Workers is
one of the few private-sector unions that doesn't run its own health plan.
Rather, most have created huge companies to administer their workers' plans,
giving them a large and often corrupt stake in the current system.
Opposition to a national health care plan is as much a part of the American
trade union tradition as the picket line. It goes back to Samuel Gompers,
the founder of the American Federation of Labor, who railed at early
Congressional efforts to pass a law mandating employer coverage as Britain had
done, which he said had "taken much of the virility out of the British unions."
This line of thinking led to the notorious decision in 1991 by the A.F.L.-C.I.O.'s
health care committee to reject a proposal that the federation support a
single-payer plan. The majority said a national system simply had no
chance in Congress, but others saw a conflict of interest:
government-supplied health care would put union-run plans out of business.
The deciding vote was cast by Robert Georgine, chief executive of Ullico, a huge
insurance provider created by the unions. A decade later, Mr. Georgine,
who was paid $3 million a year by Ullico, and several other company directors --
all heads of major A.F.L.-C.I.O. unions -- were investigated by a federal panel
for insider trading involving Ullico stock. Mr. Georgine and several
directors resigned, and this year he agreed to pay back $13 million to the
company.
Let's face it: union-administered health insurance funds provide irresistible
opportunities for labor leaders. First there's patronage: hiring
friends and relatives. Then there are the conventions, junkets and
retreats provided by the plans and the providers. And for those willing to
cross the line of legality, there's the chance to take kickbacks from health
care vendors.
Many officials are charged, but few go to prison, even when money allegedly
winds up in Mafia hands. Last month federal prosecutors lost a criminal
case in Brooklyn in which they charged that the Genovese crime family leaned on
two International Longshoremen's Association local presidents to, among other
things, choose a favored health vendor.
Evidently, the jury was convinced by the defense's argument that the union
leaders were under duress. Even Lawrence Ricci, the principal accused
Genovese figure, was acquitted, although he disappeared during the trial and
never testified. (His body was found last month in the trunk of a car in
Union, N.J.)
Despite shrinking membership, organized labor still has enough money and muscle
to get behind a campaign for national health insurance. Last month,
public-sector unions in California came up with tens of millions of dollars in a
successful campaign to defeat a ballot measure that challenged their right to
use union dues for political purposes.
The problem is getting American unions to fight for common concerns as opposed
to narrow institutional interests. It may just be that a broad-scale union
overhaul will have to precede one in American health care.
Robert Fitch is the author of the forthcoming "Solidarity for
Sale: How Corruption Destroyed the Labor Movement and Undermined America's
Promise."
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