Despite the bribery scandals, the dancers, and the jokes about the millions of their members’ dues that Teamster bosses spent in Las Vegas last week at the union’s 28th international convention, delegates did accomplish one thing of note: The delegates passed a resolution that, among other things, calls for a “financial rescue package for struggling union pensions” (also known as the $165 billion union pension bailout).
Following the failure of Democrats (and a few Republicans, like new GOP-presidential hopeful Thad McCotter) to get taxpayers to shell out up to $165 billion to prop up union pension funds, unions have continued to bemoan the fact that they have been unable to dip their beaks into the public treasury as Wall St. fat cats did in 2008.
Meanwhile, as hundreds of union pension funds are listed in critical status, union bosses (including the Teamsters) continue to misleadingly blame the financial meltdown of 2008 for their ills. The fact of the matter is, many union pension funds were already underfunded before the economy tanked.
For example, the Teamsters notorious Central States Pension Fund (ironically, the same pension plan that helped build the Las Vegas strip) was estimated to be only half funded in 2007 when Teamsters president James P. Hoffa reportedly allowed UPS to withdraw from the fund in exchange for unionizing UPS Freight.
According to the New York Times in 2007:
The International Brotherhood of Teamsters announced last night that it had reached a tentative five-year contract with the United Parcel Service that calls for sweeping changes in the pension plan for many workers.
Under the accord, which covers 238,000 drivers and other workers, U.P.S. would be allowed to withdraw from the Central States pension plan, which was notorious for corruption in the 1960s and 1970s, but is now known for being underfunded.[snip]
Unhappy with the high annual expenses of paying into the Central States plan, U.P.S. obtained the blessing of the union and the pension trustees to withdraw, but to do so it must first pay $6.1 billion to shore up the plan.
Actuaries estimate that the plan is underfunded by 49 percent, and with the $6.1 billion contribution, will remain 30 percent underfunded.
Again, UPS’ withdrawal from the Teamsters’ Central States Pension Fund was nearly a year before the market meltdown that occurred as a result of the housing bubble bursting.
By 2009, the numbers had worsened for the Central States Pension Fund. Rather than being 47% underfunded, it was 65% underfunded. While this was, in part, due to market meltdown, it was also due to the payment moratorium the Teamsters gave its largest freight employer YRCW.
YRCW, which is one of the last remaining LTL carriers that the Teamsters control, has been struggling to survive for several years—a dilemma further exacerbated by the recession. As a result, with roughly 25,000 (post-layoff) union jobs at stake, the Teamsters agreed to 15% wage cuts and a pension payment moratorium, further causing a drain on the CSPF.
While the Teamsters did gain two seats on YRC’s board of directors in exchange for the union members’ concessions, the company is still not out of the woods as it a reported $68 million loss in the last quarter.
In the meantime, in Las Vegas last week, in addition to the Teamsters re-iterating their cry for a bailout, the union’s resolution also called for the “prosecution of the CEOs and other Wall Street players directly responsible for destroying the economy and the jobs, homes, and living standards of millions of Americans.”
Though the laudable (albeit unlikely) goal of prosecuting the “CEOs and other Wall Street players” has become standard fare among union bosses, here too, the Teamsters are missing the boat.
If they really want to prosecute those behind the bursting of the housing bubble, they need to look further South than just Wall Street. In fact, they need to look at their friends, the Democrats, in Washington.
But, of course, just like union bosses don’t want their members looking too deeply into their pension problems, they also don’t want Americans going after the real criminals who just happened to be union-bought politicians.
All in all, as the Teamsters bosses returned home from the town their pensions built, they’ll likely find that, behind all the glitz, gambling, and showgirls (not to mention The Joey Biden Show) their members’ money bought them, whatever happened in Vegas last week will probably stay in Vegas.
“I bring reason to your ears, and, in language as plain as ABC, hold up truth to your eyes.” Thomas Paine, December 23, 1776