United States: Obama’s federal wage freeze to become model

They are calling it Obama’s PATCO. US President Barack Obama is proposing a two-year wage freeze for 2 million federal workers.

When then-president Ronald Reagan fired 13,000 striking Professional Air Traffic Controllers Organization (PATCO) members in August 1981, he sent a signal to other employers that it was open season on unions.

Now, local and state governments will use the president’s position to justify their own layoffs and wage freezes. Private industry will do the same.

Obama’s move seems to have already emboldened other leaders to take a swing at unions. Ohio’s governor-elect John Kasich said he would rescind executive orders that granted collective bargaining to childcare and home care workers.

In Wisconsin, Governor Scott Walker called for tripling health care costs for public workers and ending their right to collectively bargain if they don’t agree.

One union stalwart told Labor Notes that Obama’s wage freeze sends exactly the wrong message: “It certainly sends a chill through me at my shop, where we took huge wage cuts in the last go-round, and I anticipated a fight to win back some of it when we bargain next spring.

“Now we have the head of the government … calling for a freeze, and even though I am not in a government job, he has pulled the rug out from under us.

“Employers at unionised companies will turn to union officials and say, ‘Your own guy is authorising this, how do you expect us to give you a raise?’”

What a way for Obama to repay all those union members who staffed phone banks, got out the yard signs and knocked on doors to elect him.

The move is pure political theatre in terms of reducing the federal deficit. The freeze would shave US$5 billion by 2012 from a $1.3 trillion deficit — a minuscule 0.4% savings.

Obama’s certainly not going after the real money. The banks — you remember, the banks we bailed out after they caused the economic crisis — have returned to paying multimillion-dollar bonuses.

Banks’ revenues (3%) are being outpaced by their bonuses (4%). Hedge funds and banks are paying hundreds of bonuses that average more than $500,000 — each.

In January 2010, Obama called these bonuses “obscene”. But he never found the political will or wherewithal to stop them.

So, while federal workers feel the freeze, bankers are warm and cozy.

What’s most disturbing about Obama’s slap for federal workers is that it’s part of a pattern. Education secretary Arne Duncan is in full “blame the teacher” mode, with his Race to the Top incentives that decimate unions and teacher rights.

Obama’s plan for a Social Security tax “holiday” will weaken our retirements permanently.

Obama’s bailout of Chrysler and GM car companies cut pay in half for future auto workers, obliterated their pensions and took away workers’ right to strike.

Obama saved the bankers and the auto execs, and slaps down federal workers, schoolteachers, auto workers, retirees—and the rest of us.

[Abridged from www.labornotes.org.]