Today’s News & Commentary — April 28, 2016

Labor leaders have weighed in to protect pensioners in the Puerto Rico rescue package being finalized in the House of Representatives, according to Politico.  The presidents of the SEIU and the American Federation of State, County and Municipal Employees, the largest trade union of public employees, met with House Democrats to remove from the rescue bill a provision that would prioritize bondholders before pensioners to receive payments in Puerto Rico’s debt restructuring.  Puerto Rico’s constitution currently contains a similar prioritization of creditors over pensioners.  In the current scheme, retirees—who have contributed 10 percent of their salaries to their pensions—may stand to lose almost 70 to 80 percent of their pensions.  Meanwhile, Republicans who want the current payment order worry that changing the order of priority would set a dangerous precedent in other states with large debt and major pension obligations: “Once a precedent of paying pensioners over bondholders is set, they argue, you run the risk of volatility in the municipal bond market—making it more expensive for cities and states to pay for infrastructure projects.”

Testifying before the House Oversight and Government Reform Committee yesterday, numerous employees of the Transportation Security Administration (TSA) reported facing workplace retaliation, according to the Washington Times.  “No one who reports issues at TSA is safe,” testified one manager-level TSA employee.  After reporting instances of sexual harassment, hazing, and various security violations by coworkers, this manager said that he was demoted by two pay grades and lost approximately $10,000 in annual wages.  Such issues have led to “tremendous staffing issues,” and the TSA is “losing about 103 screeners each week through attrition,” sald Rep. Jason Chaffetz, chairman of the House committee.  TSA’s employment issues have resulted in serious delays at the airport.  For instance, American Airlines confirmed that, between March 14 and 20, more than 6,000 passengers missed their flights due to TSA delays.  “When hardworking rank-and-file men and women are severely punished, yet their managers get off easy, it creates a morale problem,” said Chaffetz.  Low employee morale, in turn, compromises the ultimate mission of the TSA to protect the US transportation systems.

The New York Times editorial board published an op-ed juxtaposing McDonald’s “fat profits” with its “lean wages.”  Although McDonald’s Corporation reported a 35 percent increase in profit for the first quarter of 2016 and three consecutive quarters of increased earnings, wages have stayed “feeble.”  McDonald’s recent pay increase to at least $1 over the local minimum wage will help only employees who work at the 1,500 corporate-owned restaurants; their counterparts who work at 12,500 franchisees will not benefit.  And when McDonald’s does not pay its workers a fair wage, “taxpayers continue to pick up the difference between what fast-food workers earn and what they need to survive.”  Annually, $1.2 billion in taxes go toward public aid for McDonald’s employees.

The NYT Magazine released its “Money Issue,” focusing on the dwindling middle class in the United States.  One piece focuses on continually shrinking public employment opportunities, which once served as an important route to the middle class, especially for African Americans.  Since the recession, private employers have added five million jobs, while the government lost 323,000.  Another piece focuses on Worchester, Massachusetts—now an “unlovely, down-on-its-luck city of dead industry and collapsing buildings” that until the mid-twentieth century was an “engine” for economic betterment.