Leadership Will Determine How Rapidly Union Power Grows by Jan Teague, President/CEO
I had a call this week from the media asking what I thought would happen under a McCain Presidency or an Obama Presidency and what would happen under a Gregoire Governorship or a Rossi Governorship. They were interested in what might be the retail industry's greatest concern for each leadership.
I decided that one of the main concerns is the tendency for unions to have their agenda more widely approved in a Democrat-controlled Congress and state Legislature. With all legislative and Congressional bodies under the control of Democrats who are heavily supported by unions, this is a very real concern.
Retail is a labor intensive business that hires people with disabilities, seniors, young people, and low-skilled wage earners. Unions have tried for years to figure out how to get the support of these workers and to unionize stores. Retailers do their best to offer salaries and benefits that match their sales and profits without unions. Unions have been turned down by employees because the membership dues exceed any potential benefits that the unions might be able to get for them.
Small retailers already struggle to compete with the current salary and benefit packages offered by larger retailers. Time and again, the small retailer trains the employee and then they move to a larger store with more pay and benefits. So unions now believe that the way to make progress is to radically change the laws that govern unionizing. Under a Democratic leadership, greater power for unions is a strong likelihood. Should this happen, retailers will have to pass on their new costs to consumers. That usually doesn't bother the Democratic leadership when they consider new laws.
How real is this concern over union dominance? The Wall Street Journal this week detailed what Obama's position is on various union issues. Under his leadership, the free speech rights of those who own a business would be trampled.
The Journal article outlined how Obama's pro-union agenda is the nation's most ambitious in decades.
According to The Journal, Obama favors or supports:
· A proposed pro-union federal law, the Employee Free Choice Act, which would remove the secret ballot in union elections and impose mandatory contract arbitration on employers. Under the Obama proposal, a union could pass around cards to employees asking whether they wanted to form a union. If a majority checked off "yes," there would be no vote of all employees on the question. Under current law, labor and management are required to bargain in good faith without an obligation to reach an agreement. Under Obama's proposal, if parties failed to come to terms within 120 days, the dispute would go to an arbitrator who could impose a binding two-year contract. Obama's proposal would shift bargaining power to unions because it often can take more than 120 days for employers and employees to work through the complexities of agreeing on contract provisions involving seniority, grievances, overtime, transfers and promotions.
· Barring employers from replacing striking workers. This is a right employers have held for some 70 years. Courts historically have overturned proposals to bar employers from replacing strikers. Obama has indicated support for overturning the employer right, but has been unspecific about how.
· The federal Public Safety Employer-Employee Cooperation Act, which passed the House of Representatives last year. It would force state and local governments to recognize union leaders as the exclusive bargaining agents for police, firefighters and other first responders. Public safety officers would lose their right to bargain directly with their employers.
· Raising the minimum wage to $9.50 an hour by 2011. It is scheduled to rise from $6.55 to $7.25 next year. Obama has said the minimum wage must rise so that workers can better support their families. But Census data show that minimum wage earners tend to be single, teenagers living at home or spouses providing a second family income.
Labor issues have not been a major part of John McCain's Presidential campaign, The Journal reported. But he has opposed the Employee Free Choice Act and the Public Safety Employer-Employee Cooperation Act. McCain also supports national right-to-work legislation that would repeal all current federal laws that authorize the firing of employees for refusing to join a union.
Any business owner struggling to control costs and keep from losing money or going out of business should be concerned about candidates who favor an historic power shift to unions. Consumers, too, ought to be wary of changing the current power balance between employers and employees.
While perhaps attractive to some on the surface, some of the pending legislation favored by Democrats promises to threaten the livelihoods of employers and employees alike while erasing long-held employer and employee rights.
Don't forget or neglect to vote
By this weekend, nearly half of all eligible voters in the state will have cast their ballots in Tuesday's elections.
If you have put off voting until today, now is the time to find your ballot and bone up on the candidates and their positions on the issues. It is particularly important to identify candidates you feel would best represent the wishes and needs of retailers working their way through a slowing national and regional economy.
The Washington Retail Association can help. It hosts a Website that outlines the backgrounds of candidates and their positions on issues of importance to retailers. To visit the site, click here. It lists all the candidates on your ballot and will allow you to review their voting records.
Every voice counts this Election Day and yours may be more important than ever.
State sales tax revenues are falling Research analyst urges spending restraint
Various states including Washington experienced the largest declines in sales tax receipts in the past six years, according to a new report that highlights growing state budget problems across the country. The decreases are further evidence of the slowing economy both regionally and nationally.
Washington led a sampling of 15 states with the largest percentage drop in sales tax revenues for the quarter that ended in September, according to the Center for Budget and Policy Priorities. The Washington, D.C. center works on federal and state fiscal policies with an eye toward examining impacts on lower and moderate income families and individuals.
Washington experienced an inflation-adjusted drop in quarterly sales tax revenues of 11.3 percent, the highest among 15 states able to supply the research center with data. The state also faces a projected budget shortfall of $3.2 billion, with estimates it could grow to $4 billion or $5 billion by spring. Despite the shortage of revenues, the state must by law adopt a balanced budget rather than generate a running deficit.
The center found that 39 states have publicly announced budget problems this or next year.
In a recent commentary, Richard S. Davis, coordinator of the Washington Alliance for a Competitive Economy, urged state elected officials to control spending, not raise taxes, to close the state's revenue shortfall.
"Although the recession has clearly deepened the budget hole, the problem began with overspending in the good years," Davis wrote. "Any discussion of 'spending cuts' should begin by recognizing the 33 percent hike in ongoing budget commitments over the last four years."
Washington businesses pay 51 percent of all state and local taxes, above the national 44 percent average, Davis wrote.
"Boosting the sales tax will depress consumption, hurting Main Street retailers and delaying the recovery," Davis wrote in The Everett Herald. "Further, it would add to the burdens on families struggling to maintain their eroding standards of living."
Giving the choice of raising taxes or controlling spending, Davis urged restraint in spending.
"It shouldn't be a difficult choice," he wrote.
Sources: Wall Street Journal; Everett Herald
State B&O tax unfair to small businesses and consumers, report finds
Washington State's Business & Occupation tax unwisely burdens new small businesses, adds to the price of merchandise and may discourage companies from moving to the state, a Washington Policy Center analysis has concluded.
The tax therefore reduces economic growth, jobs and business opportunities within the state, the center concluded.
The B&O tax on gross receipts is the state's second largest tax source. Besides revenues from property and sales taxes, B&O collections were nearly $2.7 billion in 2007, about 13 percent of the state's general fund revenues.
The B&O is the only business tax that has a "pyramid" effect, the report notes. In converting a log to lumber to build a house, for example, a logging company would pay a B&O tax on the sale price of the log to a mill; the mill would pay a B&O tax after selling the lumber to a distributor; the distributor would pay the tax on the sale of the lumber to a contractor; and the contractor would pay the tax on the sale of the home he builds.
"The tax has pyramided all the way down to the consumer - raising the price of the finished product, in this case, a house," Carl Gipson, the center's Director for Small Business, wrote in his analysis.
This tax is most burdensome on small businesses with limited funds, Gipson concluded.
Among the industries where pyramiding happens most are food manufacturers, oil refineries, aircraft and parts manufacturers and lumber and wood products manufacturers, Gipson reported.
The report reviews possible B&O tax reforms that would ease burdens from the tax.
House bill 1516, introduced last year, would provide a new business an exemption from paying B&O taxes during its first year of operation. The bill also would provide a business with fewer than 25 permanent, full-time employees an exemption from paying the B&O tax during its first two years of operation.
The bill's fiscal note concluded the exemptions would reduce state revenues $11.3 million in the first biennium, Gipson reported.
"However, the idea is that the cost to the state will eventually lessen as more business startups eventually state generating more revenue," Gipson wrote.
Source: Washington Policy Center
Retailers ask Congress for further economic relief
The National Retail Federation this week asked a Congressional committee to consider approving a second round of rebate checks for consumers later this year.
With consumer confidence sagging and retailers expecting the weakest holiday shopping season in six year, further economic stimulus is needed, NRF Vice President Rachelle Bernstein told the House Ways and Means Committee this week.
She cited record low consumer confidence levels, which the Conference Board reported had fallen to 38 in October, down from 61.4 percent in September and the lowest number in the index's 41-year history.
NRF research shows that consumers spent about 46 percent of the rebate President Bush and Congress approved earlier this year.
"Although our evidence shows that the taxpayer rebate payments helped consumer spending, additional stimulus is needed," Bernstein testified. "That stimulus could be accomplished in a number of different ways including more rebate checks, a nationwide sales tax holiday, a payroll tax holiday or other alternatives."
The NRF has urged Congress to conduct a lame-duck session after next week's election to address the issue. The House held a series of hearings on the subject the past two weeks.
Source: National Retail Federation
WRA studies improvements to doctors' exams in injury claims
Tammie Hetrick, the Washington Retail Association's Vice President of Retail Services, has been serving on a Business and Labor Advisory Group studying ways to improve the quality of medical examinations related to workers' compensation claims.
The coalition of business and labor leaders and trial attorneys is reporting recommendations to the Department of Labor and Industries, which oversees the process of getting injured workers back on the job.
Hetrick reports that the task force is working on improving communications with doctors doing the exams to provide an objective opinion on injury claims. The aim is to improve the clarity of examination reports and better organize paperwork so that doctors can better assess patients and process claims more efficiently. . The group Hetrick is part of also is working on creating a survey injured workers would complete to offer feedback on the quality of their care by a physician.
Hetrick said there could be legislation proposed next session that would require examiners to be Board Certified and to re-apply every three years with the Department of Labor and Industries to be an approved examiner.
Active doctors and doctors who are retired do the exams to verify injuries, determine impairments and monitor recovery therapies. Hetrick said there has been consideration of not allowing retired doctors to do these exams.
Hetrick said WRA is opposed to removing retired doctors from the examination process because it would add to a backlog of case files.
"Labor and Industries also has not been able to find any evidence that a doctor who's retired can't provide us with the objective medical opinion and reports we need to do our jobs," Hetrick said.
A requirement that self-insured employers report to Labor and Industries about the dates and frequency of independent medical exams also is a possibility next year, Hetrick said.
Small business forums continue around state
The Washington Policy Center has begun a series of statewide small business forums.
The Washington Retail Association is a co-presenter of the series.
The forums aim to update small business owners on policy changes that affect their business operations. Attendees will hear from WPC research staff, hear a preview of the 2009 Legislative session and discuss how next week's elections could affect them.
The $25 cost includes a meal and forum materials.
The remaining locations include:
*Bellevue, Nov. 12, from 7:30 a.m. to 9:30 a.m., at Bellevue's Red Lion. *Central Washington, Nov. 13, from 7:30 a.m. to 9:30 a.m., at Wenatchee's Red Lion Hotel. Register through Wenatchee Valley Chamber of Commerce. *Tacoma, Nov. 18, from 7:30 a.m. to 9:30 a.m,. at Tacoma's LaQuinta Inn. Register through Tacoma-Pierce County Chamber of Commerce. *Vancouver, Nov. 20, from 11:30 a.m. to 1:30 p.m., at Red Lion at the Quay.
Shippers would pay a fee on imported cargo into the United States under a bill introduced last month into Congress by Rep. Laura Richardson, (D-California).
Proceeds from the fees could be used to make port infrastructure improvements, including security upgrades and for environmental mitigation, according to the Journal of Commerce and the Retail Industry Leaders Association.
The proposed fees in the bill are $25 per twenty-foot equivalent units and $50 per forty-foot equivalent units of cargo. The fees, under the direction of the U.S. Secretary of Transportation, would be in addition to fees the ports of Los Angeles and Long Beach plan to charge for environmental mitigation and infrastructure products.
To read more about the Richardson bill, click here.
The proposed bill would establish a national goods movement improvement account. A portion of the revenues would go to states where the fees were collected. Owners and operators of seaports and railroads could apply for money from the discretionary funds.
Rep. Ken Calvert, (R-California) also has introduced legislation for a national cargo fee. To learn more about this bill, click here.
Sources: Library of Congress; Retail Industry Leaders Association
Penney's to build "green" store
J.C. Penney has joined the green retail movement after beginning construction on a more environmentally sensitive store in Texas.
The 115,000-square-foot store, scheduled to open next summer, will cost about 10 percent more than normal to build but use an estimated 41 percent less energy than a similar-sized traditional store.
The new store features: · A reflective white roof and energy-efficient lighting. · Cotton insulation with material including recycled denim. · Plumbing fixtures that reduce water consumption by 20 percent.
The builder also will recycle unused materials rather than depositing them in a landfill.
Penney will seek the Leadership in Energy and Environment Design (LEED) certification for the new store. If successful, the Fairview, Texas store would become Penney's first LEED-certified store. The special certification is issued by the U.S. Green Building Council.
In similar news: · Best Buy said it plans to reduce greenhouse gas emissions by 8 percent per square foot across all its U.S. operations by 2012. · Safeway has opened its first solar-powered store in California. · Wal-Mart broke ground in Albuquerque this week on an environmentally-friendly 195,000-square-foot store. The retailer began experimenting with green stores in 2005, adding features such as radiant floor heating, photovoltaic skylights and wind turbines, which help save electricity costs.
Sources: Dallas Morning News; New Mexico Business Weekly
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The Washington Retail Association, WRA, is a 501 C 6 trade association formed to advocate for Washington State’s retailers at the local, state and national level. Since 1987, the WRA has protected Washington's retailers from unreasonable taxes, fees, regulations and legislation. The efforts of the WRA benefit all Washington state retailers and help fuel statewide economic growth.
