Reprint May 23, 2011
By David Bacon, May 20, 2011 Truthout
SAN JOSE, CA 5/17/11) Members of the city workers union in San Jose, the capital of California’s Silicon Valley, marched Tuesday to City Hall and packed the council chambers, in a growing confrontation with Mayor Chuck Reed over proposed budget cuts. Yolanda Cruz, president of Local 101 of the American Federation of State, County and Municipal Employees, spoke to a rally of hundreds of union members in a church behind City Hall. The union will fight, she said, not just the imposition of drastic service reductions, but also the Mayor’s threat to go to the ballot with a measure to require an election every time city workers want a raise or benefit increase.
“We will not be forced to pay for the city’s economic crisis with our bargaining rights,” she declared. Cruz was supported by the union’s national secretary treasurer, Lee Saunders. He compared Reed to Scott Walker, the governor of Wisconsin, who rammed a measure through that state’s legislature drastically curtailing public worker union rights. “They think they can bring Wisconsin to California,” Saunders thundered to an angry crowd. “That’s just not going to happen.” The church exploded in cheers. Later union members marched to City Hall for a second rally with community supporters. Cindy Chavez, former city council member and now executive secretary of the South Bay Labor Council, told union members that the rest of Silicon Valley’s labor movement would give them the same support public workers in Wisconsin received from unions throughout the country.
Local labor and community groups have backed Local 101 in previous conflicts with the city. In 1981 the union struck for nine days, and won the nation’s first contract provision guaranteeing women equal pay for work of comparable worth. At the time, women earned 18% less than men in sex-segregated jobs. The strike challenged sex discrimination that was pervasive throughout city employment. But even more, it was an indictment of the low wages and inequality suffered by hundreds of thousands of women who make up the vast majority on the production lines in Silicon Valley’s huge electronics plants. That fight earned the union respect from working women in the valley that has lasted 30 years.
Mayor Chuck Reed intends to put that loyalty to the test. San Jose has a projected budget deficit of $115 million for next year. He has announced drastic service cuts, including the elimination of over 400 city jobs. Citing a “fiscal emergency,” his threatened initiative on the November ballot would raise the city’s retirement age and cut the pensions of retirees.
Although a Democrat, Reed and Silicon Valley unions have had a rocky relationship for years. He was a member of the city planning commission and its business oriented Downtown Association before being elected to city council. Then, in 2006, he ran for mayor against Cindy Chavez, who was strongly supported by city workers and other unions. He won the election, and has since boasted of “moving at the speed of business.”
The city workers union has offered to take a 10% cut and make other sacrifices, according to Cruz, but she accuses Reed of promoting hysteria and blaming city worker pensions for causing the current budget crisis. “Reed has again chosen to blame workers in order to deflect attention away years of mismanaged spending by city leadership decisions that occurred both while he served on the city council for years and continue today under his watch as mayor,” she said.
Many union members held signs during the protest that said “Stop the Lies!” Cruz condemned Reed’s declaration of a state of emergency, the pretext for going to the ballot with his initiative, calling it “scare tactics and a campaign of misinformation about city worker retirement.”
In a pension analysis for Local 101’s members, Cruz explained that the pension “crisis” cited by Reed is not caused by excessive retirement benefits. “The major driver of current pension shortfalls is the stock market crash in 2007-09,” she said. “This flies in the face of those who would suggest that it is caused by ever increasing or overpromised benefits to employees.” The city’s pension fund, she explained, had an unfunded liability of $1.13 billion in 2009, but because of the recovery of the stock market, a year later it had dropped to $998 million. “Since then, the S&P 500 index has increased 30 percent. We estimate that recovering markets will eliminate nearly half of the unfunded liability during this fiscal year,” she predicted.
The city is also trying to prefund the costs of health benefits for retirees, and Reed has said that this will cost $400 million by 2015. “Few governments prefund retiree health care, and even fewer companies do,” Cruz explained. “This is akin to paying for two generations of retiree health care now, and doing so during the worst economic climate in 80 years. The city has lumped in these costs in a deliberate attempt to drive up the numbers and further alarm the public.”
Luis Matos, a city worker, expressed the anger of many workers at the rally over media reports that have alleged that municipal employees are overpaid, and unwilling to make sacrifices to solve the city’s budget crisis. “As a worker in City Hall, let me assure the mayor and the public that we do understand times are tough and there are many reasonable areas of reform that employees are willing to accept,” he said. We have agreed to give up raises in recent years and have seen more than 200 of our co workers get laid off. But lower level city workers the people who provide services directly to citizens in our community centers, 911 dispatch center, libraries and city hall are not the ones who are making the kinds of salaries and benefits that have been in the headlines.” Drastic cuts, Matos charged, “will mean trouble paying the rent and putting food on the table.”