Archive for Labor Issues in Academia

Resistance Continues to Union Campaign for Labor History Curriculum in Public Schools

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A June 15 article by Stephen Singer, an Associated Press reporter based in Connecticut, reports on the continued campaign by labor unions (particularly teachers’ unions) to enact laws encouraging or requiring public schools to teach a biased version of labor history in public schools. Connecticut has been one of the states targeted for this legislation.

Unions Push State Legislatures for Labor History Courses – Fox News via Associated Press – June 16, 2014

Of course, California is the center of the push for labor history in public schools. As one of the few people who track this movement from a critical viewpoint, I’m quoted in the AP article.

Here are some of my writings on labor history requirements in public schools:

How Will Students Celebrate Labor History Month in California Schools? – December 31, 2012

Soon, a Whole Month to Subject California Students to Union Propaganda in the Classroom – – April 14, 2012

Opposition Letter to California Assembly Bill 2269 (Labor History Month) – April 12, 2012

Labor History in Public Schools: Unions Get ‘Em While They’re Young – article in journal Government Union Review – (Volume 21, Number 1) 2004.

Latest Scheme for Career Technical Education: School Districts Borrowing Money with “Social Impact Bonds” – Unions on Board

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On March 19, 2013, California State Senate Pro Tem Darrell Steinberg led a press conference to promote Senate Bill 594 (California Career Pathways Investment, also known as the High School Dropout Reduction & Workforce Development Bond Act of 2013) meant to encourage partnerships among school districts, corporations, and unions for career technical education in California K-12 schools and community college districts.

Senator Steinberg also promoted this bill on March 22 at Redevelopment Forum: Revitalizing our Neighborhoods in a Post-Redevelopment Era, hosted by the San Diego Foundation. SB 894 is apparently a serious initiative.

It establishes an unfunded mandate for K-12 school districts and community college districts to create a new pool of money called a “Career Pathways Investment Trust Fund.” These districts can borrow money for the program by selling “Social Impact Bonds” (a concept promoted by the “progressive” Center for American Progress) for which investors can earn “Career Pathways Investment Credits.” This will be overseen by a new state government board called the “California Career Pathways Investment Committee.” The appointments of the Assembly Speaker and Senate Rules Committee to this committee will likely be union officials.

Senate Bill 594 exemplifies the foolishness of governance in the California State Legislature:

  • bizarre and incomprehensible financing schemes
  • borrowing money (with interest) without consideration of cumulative debt service
  • unfunded state mandates
  • forcing the state’s local governments to create and manage another pool of money
  • inviting more corruption at local governments
  • creating another state government board
  • tax breaks to corporations for ambiguous purposes
  • intrusion of corporations and unions into the public school system
  • brilliant suggestions that freed-up funds from a few cuts in the state budget can be transferred to pay for it
  • lack of concrete evidence that there is a problem (in fact, testimony during the press conference suggested the big problem is a lack of jobs, not lack of training)
  • government solutions for something that could be handled by the free market if there was real demand

When Governor Schwarzenegger promoted his Career Technical Education initiative in 2007, he considered it worthy enough to propose paying for it out of the general fund through the annual state budget. His efforts were not deemed worthy of mention at the SB 594 press conference.

Here’s my March 20, 2013 article in about the press conference and Senate Bill 594: Businesses Can Make a “Social Impact Bond” with Unions – – March 20, 2013.

The Sacramento Bee posted an article on March 21, 2013 about Senate Bill 594, Steinberg Pushes Privately Funded Career Training Program, which quotes me as a skeptic:

But skeptics wonder how the career readiness programs would be funded.

“They need to stop coming up with new funds and new schemes paid for by borrowed money,” said Kevin Dayton, head of the consulting firm called Labor Issues Solutions. “New things like this are just a big distraction. If they want to do career education they should fund it in the general budget.”

I posted these comments under the article:

Do you want your K-12 school district or community college district to establish a “Career Pathways Investment Trust Fund” and oversee yet another pool of money? It’s a mandate.

Let’s create another state government board: the “California Career Pathways Investment Committee!” The appointments of the Assembly Speaker and Senate Pro Tem will certainly be union officials.

Do you want your K-12 school district or community college district to sell “Social Impact Bonds?” Who will pay the interest on these bonds? Who will make the money on the interest?

“Career Pathways Investment Credits” – how about just focusing on an efficient, responsible government with a simple tax structure?

As another comment indicated, “the State has funding for apprentices (it contributes about 5% of the cost to train an apprentice – the rest coming from employers)…”

I also mentioned this in my comment:

One is led to believe Senate Bill 594 is needed because California businesses can’t find skilled workers. But notice the nurses’ association representative says the problem is that trained nurses can’t find jobs in California and therefore need to move out-of-state. And is there really a shortage of skilled construction workers in California right now? Are there no longer 20%-30% unemployment rates in the building trades? Or is SB 594 for training disadvantaged union workers to build the California High-Speed Rail under the Project Labor Agreement?

Los Angeles Times columnist George Skelton wrote positively about the general concept of encouraging career technical education (he avoids the politically correct phrase and simply calls it “shop”), but his column (Reinvigorating ‘Career Tech’ a Worthy Goal – Los Angeles Times – March 20, 2013) also reveals that the supporters don’t understanding the funding scheme:

Steinberg’s legislation is a bit convoluted — at least the financing part — and needs much work…Steinberg is suggesting several financing methods, including tax credits and foundation grants. But the main money source involves bonds. The state would sell “workforce development bonds” — say, for $1 million a crack — to businesses in areas “with the greatest potential for high-wage job growth.” The bond revenue would pay for the career-tech programs. The bond-buyers would earn a rate of return based on a program’s results, as judged by some committee. “I’m not sure I completely understand it,” Zaremberg [Allan Zaremberg, President & CEO of the California Chamber of Commerce] told me. “Why don’t we just fund this out of existing resources? Is this not a priority? … like Zaremberg, he [Jack Stewart, President of the California Manufacturers & Technology Association] doesn’t quite grasp the bond idea.

Dan Walters is another California commentator who has written much over many years about the need for stronger career technical education programs in California public schools. (For example, see Technical Education Fight RagesSacramento Bee – November 19, 2007)  I look forward to reading his perspectives on Senate Bill 594.

New California Law for 2013: Labor History Month in Public Schools

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My article on Assembly Bill 2269, which establishes Labor History Month in California public schools, was posted on December 31, 2012 on See How Will Students Celebrate Labor History Month in California Schools?

AB 2269 was signed into law in September 2012 by Governor Jerry Brown.

I wrote about this bill on April 14, 2012 in Soon, a Whole Month to Subject California Students to Union Propaganda in the Classroom. Here is the letter I submitted to the author of the bill in opposition: Dayton Letter Opposed to Assembly Bill 2269 – Labor History Month.

There was very little press coverage of this bill, but here’s an excerpt from a short article (Jerry Brown Signs Bill Declaring May to be Labor History Month) in the Sacramento Bee on September 26, 2012:

Gov. Jerry Brown, like the Democratic-controlled California Legislature, wants schoolchildren to learn about labor unions, preferably when they are in school and aren’t too busy with other matters…

Labor unions have had a significant impact on labor conditions for workers nationwide. They are also major contributors to Democratic politicians and their causes.

Also, see my article published in 2003 in the journal Government Union Review (Volume 21, Number 1): Labor History in Public Schools: Unions Get ‘Em While They’re Young

A Ten-Year Old Review of Another Class Warfare Film in the Oeuvre of Fred Glass, Producer of the Controversial New California Federation of Teachers Video “Tax the Rich: An Animated Fairy Tale”

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The California Federation of Teachers (CFT) released an eight-minute video this week called Tax the Rich: An Animated Fairy Tale. According to the California Federation of Teachers web site, the video is “narrated by Ed Asner, with animation by award-winning artist Mike Konopacki, and written and directed by Fred Glass for the California Federation of Teachers.” It argues the case for higher taxes on rich people in the context of a socioeconomic framework based on class exploitation.

A segment in the original release of the video depicted a rich man urinating on the poor to symbolize “trickle-down economics.” This imagery earned some negative news media attention (see links below), which probably explains why the original video is now labeled “private” and original web links to California union press releases about the video do not work (see dead links below).

I’m familiar with a much longer film produced by Fred Glass: the 1999 documentary Golden Lands, Working Hands he developed for California high school students. As seen in Tax the Rich: An Animated Fairy Tale, the same simplistic view of historical events from the perspective of class consciousness pervades this video, too. It also includes a cartoon (with a rap).

Here’s my report on that film, excerpted from my 2002 article “Labor History in Public Schools: Unions Get ‘Em While They’re Young” in the journal Government Union Review:

High school students may watch a 10-part video series written and directed by the California Federation of Teachers’ communications director, Fred Glass, who is also a union organizer and labor studies professor. Funded by the AFL-CIO, the California Labor Federation and several individual unions, the Golden Lands, Working Hands video series explains California labor history from the union point of view. Michelle Vesecky at the U.C. Berkeley Center for Labor Research and Education recognized the unprecedented achievement of this video in her article “Golden Lands, Working Hands: The History of the Future:”

Other states, such as Minnesota, Rhode Island, Wisconsin, Illinois, Massachusetts, Ohio, Iowa, Michigan, New Jersey, and Virginia have already developed labor history programs. However, Golden Lands, Working Hands is groundbreaking. No other state has developed a curriculum as comprehensive as the CFT’s multi-media project. Golden Lands, Working Hands will be the first of its type to have both its own textbook and an hour long video.

While Glass claims the video series is “politics-proof” because it mentions past episodes of corruption and discrimination in organized labor, he has a political goal: encourage young people to join unions or organize employees at their workplace into a union. “Students who go through the Golden Lands, Working Hands unit will be in the workforce within a year or two … It will give them the knowledge necessary to be able to say ‘Union Yes’ if they are working in a place where they have that choice.” According to Glass,

(T)he video explores a great deal of the events and issues in the history of California labor and takes us right up to the present, dealing with current issues such as mass corporate ‘downsizing,’ part-time and temporary employment, inadequate health care coverage, and the battle for a living wage. It shows how today’s labor movement is attempting to reinvent its tradition of standing up for working people, and how it continues to make history in theprocess.

Vesecky at the Center for Labor Research and Education makes the intent clear: “The CFT plans to raise awareness in future workers, future voters, and future policymakers. Through education, hopefully worker empowerment will result.”

A theme of the video series is that life was relatively good for American workers when unions were at their zenith, and now life is a struggle for American workers because unions represent a much smaller percentage of the workforce. The classroom guide for teachers to use in conjunction with the video series summarizes the 22-minute long final segment in the series – “Golden Lands, New Demands” – as the story of how “a new corporate regime ruthlessly replaces full-time ‘middle class’ union jobs with part-time, temporary, ‘disposable’ employment.” But the summary notes that not all is lost: “In response, a new organizing mood emerges among California working people grappling with the effects of the global economy, spurring struggles for full-time work, living wages, health care and dignity.”

California working people struggling for dignity in the last segment of the Golden Lands, Working Hands video series include bike messengers, hotel workers, janitors, and college instructors targeted by current organizing campaigns. Departing from history into the realm of contemporary union politics, the segment depicts four examples of union activism: the “Justice for Janitors” organizing movement of the Service Employees International Union; the AFL-CIO “Union Summer” program in which mainly young participants work in internships as part of organizing campaigns; the “Living Wage” campaign for municipalities; and fighting “anti-union” politicians and proposals such as California’s Proposition 226, a “paycheck protection” proposal on the June 1998 ballot. Perhaps with the intention of introducing students to the struggles of young workers, the video focuses on efforts of some San Francisco bicycle messengers to organize into a union with the help of the International Longshore and Warehouse Union. Bike messengers complain that they need a union because their work is dangerous, they get low pay, they don’t get respect, and rich multi-national corporations are taking advantage of them.

Although the video obviously is biased toward presenting the union view of history, one area in which the Golden Lands, Working Hands video series becomes excessively simplistic in its politics is when it relates the 1992 Los Angeles riots to the decline of unions. According to the video, in the 1950s unions provided good jobs and were a responsible agent to address community frustration about racism. In the 1990s, without strong unions or good jobs, rioting provided the outlet to address racism. For students too young to remember the riots or understand the complicated causes behind them, this explanation is grossly incomplete.

Like the labor history program produced by the American Social History Project, the Golden Lands, Working Hands program emphasizes collective viewing and discussion. “Group screening and interaction can, at least potentially, create the energizing connection of ideas shared among people, on the basis of which they can act,” Glass writes. Not only does the content of labor history question the benefit of individualism in the workplace, but the methodology of teaching labor history seems to reject individualism in the classroom as well. Obviously the gentle guidance of the teacher combined with the peer pressure of fellow adolescents will lead students to a preordained positive conclusion about unions.

Now that Labor History Week is in effect, the California Federation of Teachers plans to implement the Golden Lands, Working Hands program as part of the California high school history curriculum, using teachers’ union locals and an anticipated recommendation from a future California History-Social Science Curriculum Framework and Criteria Committee to “allow the more rapid dispersion of the curriculum throughout the state’s school districts.”

…Will the Golden Lands, Working Hands video series inspire young people to support unions? Although testimonials, video footage, and even a pro-union rap cartoon video are included in the video series to stimulate student interest in a potentially dry topic, watching and understanding the video requires close attention and a knowledge of American and California history that may be too difficult an obstacle for most students, even with the teacher’s use of accompanying lesson plans and classroom guide. The best target for the unions’ labor history curriculum may be students in Advanced Placement American history classes.

See the broken links to the California Federation of Teachers’ announcement Animated Fairy Tale Makes the Case for Fair Taxation and the California Federation of Labor’s Labor’s Edge Blog: Tax the Rich – An Animated Fairy Tale.

News coverage for Tax the Rich: An Animated Fairy Tale:

Ed Asner Defends Crude Union Video, Asks to “Piss On” Fox News Producer – Fox News – December 5, 2012

California Teachers Union Video Shows Rich Man Urinating on Poor to Make Taxes Case – Fox News – December 5, 2012

Ed Asner Blasts Rich People in New VideoWall Street Journal (blog) – December 5, 2012

Crass Warfare by Teachers’ OrganizationSan Francisco Chronicle (editorial) – December 5, 2012

Ed Asner Under Conservative Attack Over ‘Tax the Rich’ Teachers Union VideoHollywood Reporter – December 4, 2012

Sam Cook, One of the Intellectual Leaders of the Merit Shop Philosophy, Passes the Baton to a New Generation

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The Baltimore Metro Chapter of Associated Builders and Contractors (ABC) emailed a special announcement this morning (November 1, 2012):

One of the Chief ‘Architects’ of ABC’s Early Legal Battles, Passes

ABC’s first General Counsel, Sam Cook, played a role in ABC’s early growth

Sam Cook, one of ABC’s “Leaders of the Century” and author of the history of ABC, Freedom In The Workplace, passed away yesterday in Baltimore, Maryland. He was 91 years old.

As labor attorney for ABC National and many ABC chapters and members for several decades beginning in the 1960’s, Sam was chiefly responsible for defending and advancing the merit shop philosophy during a period of unrelenting attacks on ABC’s existence. He contributed greatly to ABC’s remarkable growth nationwide during those years, enabling the merit shop philosophy to become a dominant force in the construction industry. In retirement, his book on ABC was hailed as a serious and critical analysis of the victory of free enterprise over autocracy, while at the same time reflecting Sam’s great humor and leadership insights.

Sam also founded the labor law practice at Venable Baetjer and Howard, Maryland’s oldest law firm, and was a recognized dean of the bar representing management in all aspects of labor and employment law. He was active in numerous civic and community affairs in Baltimore. He is survived by his wife Bernie Cook and two children.

A. Samuel Cook was one of the Ivy League-educated ABC leaders (along with John P. Trimmer and Dr. Herbert R. Northrup) who developed and articulated the intellectual principles behind the Merit Shop Philosophy adopted by leading construction contractors whose employees chose not to belong or be represented by a union. This well-defined philosophy is what makes Associated Builders and Contractors distinct among the nation’s major business associations. It’s the reason why I applied to work at ABC and remained with the organization for more than 17 years. I was able to interact with Mr. Cook, Mr. Trimmer, and Dr. Northrup in the latter years of their involvement with the fight for economic and personal freedom.

Here is a 2005 review of Sam Cook’s Freedom In The Workplace: The Untold Story Of Merit Shop Construction’s Crusade Against Compulsory Trade Unionism written on by David Denholm, president of the Public Service Research Foundation:

Freedom in the Workplace July 26, 2005

By David Y. Denholm

5.0 out of 5 stars

When I got a copy of “Freedom In The Workplace” by Samuel Cook, I put it aside thinking that it was a history of the Associated Builders and Contractors and that I would read it when I had the time.

I was sadly mistaken! When I finally did get around to taking a look at it, I wished that I had put it on the top of my reading list the moment it arrived.

This book is a sheer delight for anyone interested in labor unions. It is a history of the ABC but it is much, much more than that. It is a romp through the history of labor law and unionism (with a strong emphasis on construction) told by an excellent writer with much first hand experience. Sam Cook was the general counsel to the ABC during the tumultuous years.

It is lovable in parts when it quotes union bosses in dialect like, “as long as I’m da business manager ah dis Council in no way – an’ I mean, in no way – will Philly or da close counties become anotha Balimore.”

As if that weren’t enough, almost every page has a pithy quote from sources ranging from Sophocles “Nobody has a more sacred obligation to obey the law than those who make the law,” to Rodney Dangerfield “Sometimes life is a bowl of pits.” There must be almost a thousand of these little gems and they alone are worth the price of the book.

“Freedom in the Workplace” goes way beyond a history of the ABC. The chapter on “Bombs, Briefcases and the Cycle of Liberty” takes a broad philosophical view of the organized labor, politics and the future.

“Freedom in the Workplace” is extensively indexed, which is a great help to people like me who start reading a book from the index. But once I got started it was hard to put it down. It is also extensively footnoted and will serve as a reference for a wide variety of scholarly, legal and political interests.

If you are at all interested in labor unions, you owe it to your self to get and read “Freedom in the Workplace.” The people most in need of it, unfortunately, may not buy it so consider getting two copies and giving one to a construction union official or a lawyer who represents unions. Better yet, buy three and send one to the library at your alma matta. You can just bet that this book isn’t going to be high on the list for library acquisitions for most liberal academics.

The country’s state universities are loaded with professors who study, research, teach, and publish labor history from a pro-union, leftist perspective. Sam Cook and his work provided an important counterbalance, both in academia and in practical application in labor relations.

Unions Win Monopoly Control of Construction at Yet Another Community College in the San Francisco Bay Area: Contra Costa District Gets a Project Labor Agreement

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On October 10, 2012, leaders of the Contra Costa County Building and Construction Trades Council finally succeeded in getting the Contra Costa Community College District Governing Board to implement a Project Labor Agreement acceptable to union leaders for future district construction. The vote was 3-1.

This is perhaps the longest crusade ever in California for unions to win a government-mandated Project Labor Agreement. Union officials began targeting the district a dozen years ago, before voters authorized the sale of $120 million in bonds through the first Measure A in the March 2000 election. Voters narrowly authorized the sale of another $286.5 million in bonds by appoving a second Measure A in June 2006, but a tangle of circumstances preserved fair and open competition as the bidding policy of the district.

With the fall of this district to the unions, almost every community college district in the San Francisco Bay Area now requires construction companies to sign a Project Labor Agreement with unions in order to work on a taxpayer-funded project in those districts. Below is a status report:

Community College District (CCD) Year as PLA Target Year of PLA Enacted
Peralta CCD (Alameda County) 2004 2004, 2009
Chabot-Las Positas CCD (Alameda County) 2003 2006, 2010
Ohlone CCD (Alameda County) 2002 Not Yet
Contra Costa CCD (Costa Costa County) 2000 2012
College of Marin (Marin County) 2005 2008
Hartnell CCD (Monterey County) 2004 2004; rescinded 2004
Monterey Peninsula College Not Yet Not Yet
Napa Valley College (Napa County) 2004 Not Yet
City College of San Francisco (San Francisco) 2002 2005
San Mateo CCD (San Mateo County) 2002 2002, 2007
Cabrillo College (Santa Cruz, San Benito, Monterey Counties) 2004 Not Yet
Foothill-DeAnza CCD (Santa Clara County) 2007 2008, 2011
San Jose-Evergreen CCD (Santa Clara County) 2006 2011
West Valley-Mission CCD (Santa Clara County) 2005, 2008 Not Yet
Solano CCD (Solano County) 2003 2004
Santa Rosa Junior College (Sonoma County) 2002, 2005 Not Yet

Note that governing boards of several community college districts in Southern California have also required their construction contractors to sign Project Labor Agreements with unions. Why are community college districts such ripe targets for union control of taxpayer funded construction? Here are my theories:

  1. Most California voters aren’t even aware that community colleges have elected board members. There’s an obscure political vacuum to be filled by opportunistic unions and other special interests of the Left.
  2. Public accountability for board members is almost non-existent. News coverage is weak. Taxpayers are clueless, and students are too busy to focus on the elected leadership of their institution.
  3. Serving on a community college board attracts relatively erudite, ideological people who believe government and education can be useful and appropriate agents to change the world.
  4. For an ambitious politician dreaming of running for a solidly Democrat-controlled state legislative seat when the current occupant is termed out, it’s useful to show evidence of experience in education. Ambitious politicians, of course, also have to be active in enacting policies desired by the various interest groups that provide financial and organizational support in primary campaigns, including construction trade unions.
  5. People attracted to the community college board often respond to policy proposals based on emotion, feelings, and idealism – and not so much on financial analysis.
  6. The main campaign donors to community college board candidates are parties with financial interests in the district; that is, faculty unions and other unions. It’s difficult to find campaign funding for candidates who advocate fiscal responsibility.
  7. There are a lot of cultural disincentives for an advocate of minimalist government and fiscal responsibility to run for a community college board. These college districts are very political, and the political culture is very “progressive.” Boards like to pass resolutions about foreign affairs, global issues, and leftist bugaboos.

Are you an advocate of activist government in California and want to pursue a political career? Run for your community college district board of trustees. You’ll fit right in.

What Happened to the Pacific Research Institute? California Needs a Policy Institute That Inspires and Dominates Intellectual Discussion about an Alternative Way to Govern the State

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The leftist magazine Mother Jones published an article today (July 19, 2012) critical of the President and CEO and the operations of the Pacific Research Institute, a free market think tank based in San Francisco. I am an Adjunct Fellow in Labor Studies at the Pacific Research Institute, although I probably won’t be after I post this commentary on my Dayton Public Policy Institute blog.

Here’s my perspective on this matter.

Once innovative, creative, and on the cutting edge of policy initiatives, many American free market think tanks in 2012 appear to be developing into a stagnant, protective, incestuous club of interlocking directorates and eccentrics who enjoy socializing in urban intellectual salons. This culture will react strongly against any outside pleas to reform the remnants of their comfortable “movement.” No version of the Tea Party has yet emerged among free market-oriented intellectuals to topple the decaying edifice and energetically rebuild it with fresh thinking and ambitious strategic planning.

The Pacific Research Institute perhaps excels among the thousands of people and organizations in this country who are trying to make a living pontificating about Obamacare. But is there any unique angle or aspect about Obamacare that still remains to be chewed on? While bashing Obamacare attracts attention and excitement, even I’m tired of it – I change the radio station whenever a talk show host begins rehashing it. (I recommend reading the June 28, 2012 U.S. Supreme Court decision and dissent in National Federation of Independent Business v. Sebelius for fresh, thoughtful perspectives on Obamacare.)

Meanwhile, the State of California and many of its local governments are careening toward bankruptcy while most citizens of the state are wringing their hands in helplessness. Almost everyone in this state knows something is terribly wrong (even the union officials and the union-backed politicians know it), but the state utterly lacks a recognized free market organization with a message that can effectively subvert the entrenched, self-preserving syndicate of politicians, big corporations, unions, and media. Some sort of intellectual force needs to develop and advance a thoughtful, principled alternative to the current way in which the state is governed.

The people of California desperately need a strong, vocal, prominent free market policy institute that not only identifies the numerous economic and governance problems in the State of California, but also proposes audacious, concrete long-term solutions that ordinary citizens can understand and support. The Pacific Research Institute in San Francisco should have that role. It has not held it for many years.

My Early Background with the Pacific Research Institute

I first met a Pacific Research Institute policy analyst – former Director of the Center for Enterprise and Opportunity Katherine Post – in Washington, D.C. in the mid-1990s. I was surprised and impressed to learn that a free market think tank was based in San Francisco.

When I began government affairs work for Associated Builders and Contractors in California in 1997, the Pacific Research Institute’s Senior Fellow in Education Studies Lance Izumi was one of the first people I met in the public policy arena. In the early 2000s, the Pacific Research Institute recognized my professional expertise on complex and costly construction labor issues and designated me as their one and only fellow in Labor Issues. I saw Milton Friedman at the institute’s 25th anniversary gala in San Francisco in September 2004.

The Pacific Research Institute especially took an interest in my lonely work researching and exposing a taxpayer-funded union propaganda program at the University of California, established in 2000 with $6 million in direct funding in the California state budget signed by Governor Gray Davis. I worked extensively on this and other labor issues with the Pacific Research Institute’s former Business and Economic Studies Director Lawrence McQuillan (now chief economist at the Illinois Policy Institute) and also with its former Editorial Director Lloyd Billingsley (author of Hollywood Party: How Communism Seduced the American Film Industry in the 1930s and 1940s).

Selected twice by the Pacific Research Institute for its Golden Fleece Award, the University of California Labor Program was an especially appropriate state issue for the Pacific Research Institute to examine and expose. Other than my employer (Associated Builders and Contractors), no other prominent organization in California was taking a leadership role in publicly criticizing the University of California Labor Program, even as the Labor Program grew to serve as the intellectual foundation of the California Labor Federation‘s political agenda at the California State Legislature and at California local governments. (The Howard Jarvis Taxpayers Association did include the program in its lists of unnecessary, wasteful, inappropriate government programs, but it necessarily had to focus on a thousand other examples of California fiscal foolishness.)

While independent free market-oriented think tanks such as the Pacific Research Institute rely on corporations, foundations, and individuals to fund their policy research, the California Labor Federation and the State Building and Construction Trades Council of California simply obtained taxpayer funding to start and maintain what should have been their own self-funded research and marketing program. To add insult to injury to California taxpayers, the Labor Program was hosted at the University of California, so union officials and their academic sycophants could add a degree of credibility to their phony and biased reports, web sites, and news releases by stamping the respected UC logo and name on them.

Neither Associated Builders and Contractors nor I had any sort of written or unwritten financial agreement with the Pacific Research Institute for any of its research and exposure concerning the UC Labor Program. The Pacific Research Institute staff was outraged about the taxpayer funding for the program and filled a policy vacuum by investigating it and reporting on it for several years, thus providing a valuable service to California taxpayers and businesses.

In 2002, I Propose to the Pacific Research Institute That It Establish the Nation’s First Free Market-Oriented Labor Studies Center

Here are a few excerpts of my October 10, 2002 memorandum to Pacific Research Institute officials, entitled “Proposal for Labor Studies Center at the Pacific Research Institute.”

New Union Think Tank Challenges Free Market Economics in California

At the request of the California Labor Federation, the California state legislature has provided a total of $17 million in the past three state budgets to establish and operate a “Multi-Campus Research Unit for Labor Studies” at U.C. Berkeley and UCLA. With taxpayer funding and the academic credibility of the University of California behind it, this “union think tank” has quickly become a powerful political tool for organized labor.

An Orange County Register editorial describes this union think tank as “a thinly veiled payoff to organized labor activists.” As cited in the same editorial, Associated Builders and Contractors contends that “studies and papers produced by this union think tank lack academic merit but make useful propaganda for the unions to advance their political agenda at the state and local levels.”

Legislators and news media now regularly cite the dozens of studies already produced by the union think tank, including studies on living wage and the supposed negative impact on the poor that would result from the breakup of Los Angeles. Directors for the union think tank have essentially become the media spokespeople for the union political agenda, displacing the angry rhetoric of union lobbyists with the calm impartiality of supposedly thoughtful university intellectuals. As one union leader said when presenting a union think tank study during a recent Antioch City Council meeting, “It’s from a college. Written by a doctor.”

There’s a Vacuum Where Opposing Views Should Be Heard

California lacks a clear voice from the free market perspective on the immediate labor issues before state and local governments. Responses from industry representatives and elected officials to union initiatives have often been lackluster or even apologetic. Unions and their Democrat supporters portray industry positions on proposed legislation as self-interested and motivated by corporate greed, and there lacks an alternative source of information to back industry positions.

On the national level, many of the intellectual champions of free market economics against the unions during the union heyday of the 1950s and 1960s have retired or died … compared to the prolific union think tank, output is minimal.

Pacific Research Institute Can Fill the Vacuum and Provide Balance

For a few years now, I’ve seen the need for an intellectual operation in California to challenge some of the unions’ academic production that is blindsiding business associations and interest groups. For example, when the UCLA union think tank and the California Research Bureau simultaneously issued studies in the fall of 2001 to support a Project Labor Agreement (PLA) for construction of U.C. Merced, opponents of PLAs lacked opposition studies. Studies and comments against the union political agenda from outside the political world could provide some balance on labor issues in the media and in Sacramento.

I believe that creating a Labor Studies Center at the already established Pacific Research Institute could be a solution. I have not been able to identify a purely research-oriented free market institute for Labor Studies anywhere in the country.

Although my proposal sparked some interest at the Pacific Research Institute, especially after the October 2003 recall of Governor Gray Davis and replacement with Arnold Schwarzenegger, the Labor Studies Center was never established, and the country still lacks anything like it.

My Relationship Fades with the Pacific Research Institute

On August 30, 2009, the San Jose Mercury-News published an opinion piece written by me under my title of Adjunct Fellow in Labor Studies at the Pacific Research Institute. It exposed the documented behind-the-scenes politics leading to a decision at the highest levels of the University of California administration to divert $4 million from other purposes to the University of California Labor Program, which had its annual budget appropriation vetoed by Governor Schwarzenegger in 2008. This op-ed stirred up a lot of controversy.

But the Pacific Research Institute seemed to be retreating from important issues at the state level. I was quoted and cited as a source in a comprehensive report released by the Pacific Research Institute in March 2011 outlining weaknesses and proposing solutions concerning California’s public records access laws (Bringing More Sunshine to California: How to Expand Open Government in the Golden State). I was disappointed at how little attention the Pacific Research Institute received for this well-documented, thoughtful report about another policy arena in which California governance is failing.

Then the Pacific Research Institute laid off some people I knew, and subsequently a few others I knew left for other employment – some to other states. The Pacific Research Institute was ditching California policy issues, while its staff – highly informed Californian policy experts – was simply moving out of the state for better opportunities. (Good riddance, I’m sure many leaders in this state are saying about those departures as they eagerly anticipate the bounty from higher tax rates on the people who are left.)

I’m guessing the unflattering profile in Mother Jones magazine will not alter the priorities of the Pacific Research Institute. I’m now waiting for the emergence of a new free market think tank, based near the state capitol in Sacramento and influential in changing the hopes and plans of the people of California. It would be ideal to see the Pacific Research Institute revitalized to tackle this ambitious project, but I expect someone outside of the traditional culture of free market think tanks will need to start it from scratch.

A Small Electrical Apprenticeship Program Tries to Overcome Rigid State Government Control of Apprenticeship Programs for the Construction Trades in California

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UPDATE: On September 18, 2013, the Independent Training and Apprenticeship Program (I-TAP) lost its appeal to the U.S. Court of Appeals for the Ninth Circuit in Independent Training v. California Department of Industrial Relations. As the decision noted, “The panel affirmed the district court’s judgment in favor of the defendants in a suit seeking declaratory and injunctive relief on the ground that the California Department of Industrial Relations’ actions were inconsistent with federal Fitzgerald Act regulations governing the employment of apprentices on public works projects qualifying as ‘Federal purposes.'”

Construction trade unions are sometimes accused of misusing the government-regulated apprenticeship structure as a tool to control who, how, and how many people enter the construction workforce. Sponsors of proposed apprenticeship programs who aim to compete against existing union programs have long endured legal obstacles in states such as Washington, Oregon, and Nevada.

But as usual, California takes the prize for the best use of government to cut competition and freedom of choice in the marketplace. From 2002 to 2007, the U.S. Department of Labor threatened to punish – and then proceeded to punish – the State of California for failing to follow federal laws meant to encourage the construction industry to train the future American workforce through apprenticeships.

Now a California-based training program for apprentices, approved by the federal government in 2004 to train electrical workers, is suing the State of California because the state takes a very narrow interpretation of the federal punishment – so much so that the punishment is effectively meaningless. This apprenticeship program contends that its apprentices have lost a substantial number of opportunities to get on-the-job training on state and local construction projects as a result of this inappropriately narrow interpretation.

Background of How the State of California Has Traditionally Regulated Apprenticeship for the Construction Trades

California Labor Code Section 1777.5 outlines the statutory requirements for construction contractors regarding apprenticeship when these companies work on public works projects of $30,000 or more. These contractors must request apprentices from state-approved training programs. Contractors must employ these apprentices in a ratio not less than one hour of apprentice work for every five hours of journeyman work (with a few exceptions).

Because they are less than fully trained, apprentices are the only workers on a public works project to whom contractors can pay less than the full “journeyman” prevailing wage. For trades such as electrical inside wireman, the pay rate for apprentices increases in conjunction with the progress of the apprentice through classroom instruction and on-the-job training.

The state generally understands that a contractor is required to request apprentices from a program approved by the Chief of the Division of Apprenticeship Standards to train workers for that trade in the county where the work is performed. Contractors are required to make payments designated for “apprenticeship and training” in the state-mandated prevailing wage rate to the program or programs that provided the apprentices, or (if not enough apprentices are dispatched to fulfill the 5:1 ratio) to any program approved to train workers for that trade in the county where the work is performed, or to the California Apprenticeship Council.

Under California Labor Code Section 1773.1(a)(6), contractors are able to take a “credit” for the payments for apprenticeship and training against the total hourly state-mandated “prevailing wage” rate, provided that the amount paid to the program is reasonably related to the cost of the program. In other words, the state-mandated hourly wage to a worker is reduced by the amount paid for apprenticeship and training, but the contractor cannot pay an excessive amount to a training program’s trust fund.

When does the reasonable cost for apprenticeship and training become an issue? The state sets the standard employer payment amounts for apprenticeship and training based on the applicable union collective bargaining agreement for that trade in that geographical region, so a competing program not affiliated with that union might charge a contractor a different rate for apprenticeship and training than the amount designated in the applicable state-mandated prevailing wage rate.

Under California Labor Code Section 3075 (a), the Director of the Division of Apprenticeship Standards is authorized to approve three categories of apprenticeship programs: (1) those run by unions and their affiliated contractor associations through joint apprenticeship committees, (2) those run by non-union contractor associations through unilateral apprenticeship committees, and (3) programs run by individual corporate employers. Unions had a complete monopoly on apprenticeship training in the California construction trades until 1988, and they still monopolize apprenticeship training for many trades in many geographic areas.

Why the Federal Government Took Away California’s Authority to Regulate Apprenticeship for Federal Purposes

President Franklin Delano Roosevelt signed the National Apprenticeship Act (the Fitzgerald Act) into law in 1937. This law authorizes the U.S. Department of Labor to “formulate and promote the furtherance of labor standards necessary to safeguard the welfare of apprentices and to cooperate with the States in the promotion of such standards.”

California is one of 27 states that exercise an option to perform their own oversight and regulation of apprenticeship programs, rather than leaving it to the U.S. Department of Labor’s Office of Apprenticeship Training, Employment and Labor Services (OATELS). They are commonly called “SAC states” – that is, states with State Apprenticeship Councils.

In 1999, Governor Gray Davis signed into law Assembly Bill 921, a union-backed bill that amended California Labor Code 3075 in order to establish a stringent “needs test” that a proposed apprenticeship program or an apprenticeship program seeking to expand to a new trade or geographic jurisdiction must fulfill before the program can be approved or expanded.

Construction unions have exploited this language to block the approval of new programs or programs expanding into new trades or geographical regions, thus cutting competition in training and limiting the choice in comprehensive training programs for people seeking a career in the construction trades. The law also creates confusion about who has the authority to approve or reject applications for new or expanding apprenticeship programs: the Chief of the California Division of Apprenticeship Standards or the California Apprenticeship Council.

In response to this needs test, the U.S. Department of Labor in 2002 began the process of “derecognition,” or taking away the State of California’s authority to regulate apprenticeship for federal purposes. The California Division of Apprenticeship Standards under the Davis Administration and the union-controlled California Apprenticeship Council both challenged the derecognition process.

In January 2007, a U.S. Department of Labor Administrative Review Board ruled that the U.S. Department of Labor has the right to “derecognize” California’s authority to regulate apprenticeship for federal purposes. The decision upheld an earlier Administrative Law Judge decision noting that the “needs test” in Section 3075 of the California Labor Code used by unions to prevent new or expanded apprenticeship programs “does not promote competition among programs, does not consider the needs of individuals seeking apprenticeship training, and limits training opportunities for apprentices.”

At the demand of the State Building and Construction Trades Council of California, the California State Legislature has stopped four bills that included a provision to repeal the needs test: Assembly Bill 2660 in 2006 (sponsored by Associated Builders and Contractors (ABC) of California), Assembly Bill 947 in 2007 (sponsored by the Schwarzenegger Administration), Assembly Bill 734 in 2008 (a bipartisan bill amended at the very end to eliminate the repeal provision), and Senate Bill 362 in 2012 (sponsored by ABC of California). (Note: I was State Government Affairs Director of ABC of California when these bills were introduced and considered.)

What’s the Practical Effect of Derecognition? The Independent Training and Apprenticeship Program (I-TAP) Seeks to Clarify the Meaning through a Lawsuit

The U.S. Department of Labor’s Office of Apprenticeship Training, Employment and Labor Services (OATELS) approved the Independent Training and Apprenticeship Program (I-TAP) to train apprentices on federal projects in January 2004. This unambiguously means that contractors can classify and pay workers dispatched from the I-TAP program as apprentices on purely federal projects. The workers would also be unambiguously classified as apprentices in states that have not exercised the option of preempting apprenticeship regulatory authority from the U.S. Department of Labor.

The ambiguity about the legality of I-TAP providing on-the-job training to its apprentices working on state and local government projects results from the meaning of “derecognition” and the meaning of “federal purposes” in a state that had long claimed statutory and regulatory authority over apprenticeship.

For a few years after the U.S. Department of Labor’s 2007 derecognition of California’s authority to “register and oversee” apprenticeship policies for federal purposes, electrical contractors requested apprentices from I-TAP, employed them on the job at apprenticeship rates, and made payments on behalf of the apprentices to I-TAP under the belief that the derecognition allowed them to do so. Officials of the California Department of Industrial Relations (DIR) made occasional preliminary inquires about contractors’ compliance with state laws when using I-TAP as a source of apprentices, but did not take further action after contractors justified their use of I-TAP on the new conditions resulting from derecognition.

But in the fall of 2010, the California Department of Industrial Relations threatened to assess back wages and penalties against a contractor – Gray Electric Company – for classifying workers dispatched from I-TAP as apprentices on school construction projects in Marysville and in Grass Valley. Gray Electric had requested apprentices from I-TAP, employed them on the job at apprentice wage rates, and made payments on behalf of the apprentices to I-TAP. The contractor argued that it could regard these workers as apprentices because the project received federal financial assistance and I-TAP was a federally-approved program.

To avoid further controversy, Gray Electric ultimately withdrew from its agreement to train with I-TAP. Then, a labor-management cooperation committee affiliated with the International Brotherhood of Electrical Workers (IBEW) submitted a wage complaint to the California Department of Industrial Relations because another electrical contractor – Harold E. Nutter & Son, Inc. – was classifying workers dispatched from I-TAP as apprentices on a Stockton school construction project.

Harold E. Nutter & Son, Inc. and the individual apprentice argued that because the federal government has “derecognized” the state under the federal Fitzgerald Act and thus deprived the state of its authority to regulate apprenticeship policies for federal purposes, contractors on federally-funded projects are legally permitted to pay apprenticeship-level wages and take credits against the prevailing wage rate for payments to an apprenticeship program, even if the program is only approved by the federal government and not the state.

The California Department of Industrial Relations disagreed and assessed back wages and penalties against the contractor (Harold E. Nutter & Sons, Inc.) for paying apprentice-level wages to its worker enrolled in the federally-approved I-TAP. It did not recognize the I-TAP apprentice as a legitimate apprentice for purposes of state law. It also disallowed payments for “apprenticeship and training” to I-TAP as valid payments under the state prevailing wage law that could be taken as a credit against the total hourly wage.

As a result of the DIR crackdown on contractors classifying I-TAP apprentices as journeymen on projects not exclusively funded by the federal government, several contractors have ended their agreements to train with I-TAP, and apprentices in the program have lost paid on-the-job training opportunities. Some have dropped from the program.

Time for a Lawsuit

On May 19, 2011, the California Department of Industrial Relations (DIR) was sued by three parties: an apprentice indentured in the Independent Training and Apprenticeship Program, an employer with an agreement to train apprentices in the I-TAP program (Harold E. Nutter & Son, Inc.), and the I-TAP program itself. The case is Independent Training and Apprenticeship Program et al. v. California Department of Industrial Relations et al.

This is an interesting case probing the meaning of the U.S. Department of Labor’s “derecognition” of the authority of the State of California to regulate apprenticeship for federal purposes.

The plaintiffs complain that when the DIR alleges a contractor has violated prevailing wage laws for using I-TAP apprentices, the agency does not take responsibility to determine if a construction project is receiving federal funding and thus falls under “federal purposes” under derecognition, but leaves it to the contractor to determine the sources of funding.

The federal financial assistance for the Grass Valley and Stockton school construction projects was provided in the form of “Buy America Bonds,” which are subsidized by the federal government throughout their tax-exempt status. But the plaintiffs in this lawsuit went even further, contending that the federal Fitzgerald Act in essence makes any policies providing “apprenticeship opportunities” as a “federal purpose.”

The Outlook for This Case, and How You Can Help

A federal district court sided with the California Department of Industrial Relations against the I-TAP plaintiffs. However, the I-TAP plaintiffs have appealed to the U.S. Ninth Circuit Court of Appeals.

Obviously there are numerous entrenched interests that don’t want to see the California Department of Industrial Relations (DIR) lose its regulatory control over apprenticeship training opportunities on the construction projects of state and local governments. In contrast, the I-TAP plaintiffs are alone, but they see this case as a higher pursuit of freedom of choice in training for workers and the improvement of apprenticeship training as a whole through greater competition.

I-TAP plaintiffs are looking for funding for their lawsuit, amicus briefs to be submitted to the court in support of their case, and any assistance or evidence that provides additional backing for their arguments. For more information, contact Carolyn Nutter, Training Coordinator for the Independent Training & Apprenticeship Program, at (916) 332-3332 or via email.

Documents Related to Federal District Court Case

  1. 2011-04-18 I-TAP Complaint & Exhibits to District Court
  2. 2011-05-19 I-TAP Notice of Motion & Motion for Preliminary Injunction to District Court
  3. 2011-05-19 I-TAP Memo of Points & Authorities to District Court
  4. 2011-05-19 I-TAP Compendium of Evidence to District Court
  5. 2011-05-19 I-TAP Request for Judicial Notice and Exhibit A
  6. 2011-05-19 I-TAP Exhibits B C and D
  7. 2011-05-23 I-TAP Case – I-TAP Notice of Errata to Complaint to District Court
  8. 2011-06-27 DIR Opposition to Preliminary Injunction to District Court
  9. 2011-06-27 DIR Objections to I-TAP Evidence
  10. 2011-06-27 DIR DAS Director’s Declaration to District Court
  11. 2011-07-01 I-TAP Reply to DIR Opposing Motion for Preliminary Injunction to District Court
  12. 2011-07-01 I-TAP Declaration to District Court Rebut DAS Director’s Declaration
  13. 2011-08-15 District Court Order Denying Motion for Preliminary Injunction
  14. 2011-10-31 I-TAP Stipulation and Proposed Order

Documents Related to Ninth District US Court of Appeals Case

  1. 2012-04-20 I-TAP Opening Brief to Appeals Court
  2. 2012-06-22 DIR Brief to Appeals Court
  3. 2012-08-03 I-TAP Reply Brief to Appeals Court
  4. 2013-09-09 Ninth Circuit US Court of Appeals Decision I-TAP v DIR

Jack Up Those University of California Fees Some More! Looks Like the UC Contracting Guidelines Slipped in the California Budget Will Hinder “Maximizing Efficiency”

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The California State Legislature’s Democrat majority has approved a budget (Assembly Bill 1464) and sent it to Governor Jerry Brown. Presumably it still includes the language (including the typographical error) added at the last minute providing funding to the University of California with the condition that it operate under extensive guidelines meant to suppress the contracting out of services to private companies. (Apparently this language could even apply to contracts with non-profit organizations and volunteers in certain circumstances.)

How will this budget section affect basic operations of the University of California, such as custodial and janitorial services, hospital staff at UC medical centers, library staff, clerical workers, food service and cafeteria workers, pest control services, and landscaping? A January 12, 2012 report (required by law) entitled 2011 Contracting Out for Services at Newly Developed Facilities from the University of California’s Office of the President to the California State Legislature states that “campuses and medical centers view contracting out for services as an important supplement to existing resources.” The report mentions concepts foreign to state legislative leaders such as “maximizing efficiency,” “new methods,” and “best practices.”

Democrat leaders whipped that budget proposal through so fast in the past few days that it was hard for legislators, the news media, and interest groups to digest the contents. I don’t see many signs that people are picking up on my report from yesterday (June 14, 2012) revealing the new language in the budget about UC contracting. My report was linked on today at the top of the “Golden Pen” column, but I haven’t found any news reports or press releases on the web mentioning it.

As I reported yesterday (see my post “The delay…would frustration their very purpose” – Hasty Last-Minute Add-On to California Budget Clamps Down on University of California’s Contracting Out), the insertion even includes a typographical error – see lines 38-43 on page 580: “The services are of such an urgent, temporary, or occasional nature that the delay incumbent in their implementation under the UC’s regular or ordinary hiring process would frustration their very purpose.”

This language in the budget for the University of California already applies to K-12 school districts and community college districts in Education Code sections 45103.1 and 88003.1, which became law in 2002 through Senate Bill 1419. I couldn’t find any studies on the web that focused on the actual effects of Education Code sections 45103.1 and 88003.1, but I was able to find scattered documents showing that the laws indeed discourage educational districts from contracting out services, and unions do cite these laws to fend off contracting proposals.

Evidence to Suggest This Budget Provision Will Hinder the University of California’s Efforts to Control Costs and Maximize Efficiency for the Benefit of Students 

1. This May 26, 2010 letter (see page 13 of the PDF) from the Berkeley Council of Classified Employees, American Federation of Teachers Local 6192 states bluntly that Section 45103.1 “significantly restricts the ability of the Berkeley Unified School District to contract out for services normally and customarily performed by classified employees.” (And that is the perspective from supporters of the law.)

2. This June 29, 2011 report from the California School Information Services Fiscal Crisis and Management Assistance Team (FCMAT) to the Mono County and Inyo County Offices of Education explains on page 13 that “the most significant impediment to the formation of school transportation JPA will likely be Education Code 45103.1.” Here’s an excerpt:

Known as the California School Employees Association (CSEA) signature anti-contracting bill, this section is the codification of SB 1419 passed by the California Legislature and signed by Governor Gray Davis years ago. The bill does not specifically outlaw contracting, but places strict accountability on a district to prove that contracting is less expensive than using the previous classified employees. Although the formation of a JPA is not technically contracting for work, the CSEA perceives it that way, and has challenged the formation of JPAs using this regulation in some areas of the state. The threat of potential lawsuit has dissuaded some school districts from forming a JPA. The CSEA has closely monitored school transportation in some areas of the state, but not in other areas or services such as food service. The California Association of School Transportation Officials (CASTO) and the School Transportation Coalition are working with the CSEA towards an amendment of E.C. 45103.1 that allows school districts to cooperatively provide services for each other or use a JPA. Support for this amendment is moderate.

3. A July 16, 2010 opinion letter from Jerry Brown when he was Attorney General to Assemblyman Sandre Swanson points out how this law potentially restricts contracting out:

Or, to take another example, if a school district’s contract with a private nonprofit organization involved contracting for services in non-academic positions, such as clerical, maintenance, transportation, and cafeteria services, the contract might be inconsistent with or limited by Education Code section 45103.1, which prescribes the conditions under which a school district may enter into a new contract after January 1, 2003 for personal services ordinarily performed by classified employees of the school district.

4. Here’s “Inter-Office Correspondence” in the Los Angeles Unified School District dated August 20, 2008 from Omar Del Cueto, Executive Director of iDesign Schools, concerning MLA Partner Schools (a program previously called Mentor Los Angeles):

Does MLA reserve the right to subcontract any and all services specified in the MOU to any District, public or private subcontractor permitted by law? How about Food Services?

MLA and the schools are subject to subtracting limitations to the extent that they exist in collective bargaining agreements, Personnel Commission Rules, or the law. Particularly important is Education Code section 45103.1. Section 45103.1 places significant limitations on the ability to subcontract for services that are performed by classified employees. That section applies to food service employees.

5. In a December 8, 2003 decision, the Public Employment Relations Board noted that the Long Beach Community College District Police Officers Association “argues that Education Code section 88003.1 prohibits the District’s contracting out of police services.”

6. I recalled the heady early days of the Schwarzenegger Administration when I found a January 7, 2004 press release from the now-defunct “Coalition for Local Control of School Spending” praising new Governor Arnold Schwarzenegger for calling for the repeal of Senate Bill 1419 in his first State of the State address:

My proposal gets more money into the classroom and thus increases per pupil funding. First, we must give local schools the power to meet the specific needs of their own communities. This will give schools the freedom to spend the money as they — not Sacramento — best see fit to serve the children. Second, school districts are forced to spend an average of 10 to 40 percent more than necessary on non-classroom services. We must give local schools the freedom to be more cost efficient. One way to do this is to repeal SB 1419, the law that prevents schools from contracting out services such as busing and maintenance. This will free up more money for textbooks and other vital classroom needs.

7. Governor Schwarzenegger’s ill-fated California Performance Review identified Education Code Sections Sections 45103.1 and 88003.1 as impediments to reducing non-instructional costs in schools. Here are some claims from the ultimately ignored recommendation:

SB 1419 can effectively prevent school districts from obtaining needed services at all. For instance, one Bakersfield school in the desert did not have functional drinking fountains for students during hot weather because the custodian was busy and the school could not hire a plumber, pursuant to current law. At Santa Ana Unified School District, new computers are still in boxes because, “even though the computer firm said it would install the computers as part of its service without extra charge, even a free service violates SB 1419.” Theoretically, exceptions are available in the law for “work of an urgent, temporary, or occasional nature.” However, because of the difficulties in surmounting the legal hurdles under the new law, school districts may not even contract for services in these cases. The main obstacle to successfully implementing competitive sourcing of necessary services is opposition from labor unions who represent the district employees. At Reed Elementary School District in Marin County, community groups offered to hire additional groundskeepers for field maintenance (the fields are also used by community groups), but this type of partnership is prohibited by SB 1419. Community members reported that, “…even the district groundskeeper supported the partnership” that would have resulted in an additional groundskeeper being hired.

8. When the legislature approved Senate Bill 1419 in 2002, it was opposed by the American Institute of Architects – California Council, the Association of California School Administrators, the California School Boards Association, the California School Bus Contractor’s Association, Cardinal Transportation Group, Inc., the Community College League of California, Durham School Services, First Student, Laidlaw Education Services, Los Angeles Unified School District, Orinda Union School District, and San Francisco Unified School District.

9. When Senator Bob Huff’s Senate Bill x8 61 to repeal SB 1419 was considered and rejected in 2010, the repeal was supported by the California Association of School Transportation Officials, the California School Transportation Association, the California Taxpayers’ Association, the Southwest Transportation Agency, and West County Transportation.

Yes, this section of the budget matters.

“The delay…would frustration their very purpose” – Hasty Last-Minute Add-On to California Budget Clamps Down on University of California’s Contracting Out

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Looks like there’s some sort of union effort to impose great administrative burdens on the University of California to prevent it from contracting out for services that could be done by UC employees. Look at the italicized (new) language on pages 577-581 of the newly-amended budget bill, Assembly Bill 1464, Section 17(a) of 6440-001-0001 “For Support of University of California.” The complete language is below.

My favorite line is 17(a)(2)(F), lines 38-43 on page 580: “The services are of such an urgent, temporary, or occasional nature that the delay incumbent in their implementation under the UC’s regular or ordinary hiring process would frustration their very purpose.”

Is this typo a subconscious expression of frustration with the budget process?

UPDATE: This language – newly added to the proposed FY 2012-13 California budget – is cribbed from California Education Code Sections 45103.1 and 88003.1, enacted through Senate Bill 1419, approved on a party-line vote in the legislature (Democrats in support, Republicans opposed) and signed into law by Governor Gray Davis in 2002.

The bill was sponsored by the California School Employees Assocation, supported by the American Federation of State, County and Municipal Employees (AFSCME) California, and authored by former Senator Richard Alarcon (D-Los Angeles). It is meant to restrict the ability of schools and community colleges from contracting out for services.

Opponents of Senate Bill 1419 argued at the time that the bill imposed “significant costs and administrative burdens by creating added state mandates that include the cost for the process of bidding and the requirement to hire someone if unable to contract out for services.”

Two Republicans have introduced bills to repeal the law since its enactment: (1) former legislator John Benoit (R-Riverside) introduced Assembly Bill 49 in the 2005-06 session (the bill was never considered in its original form and eventually became a vehicle for another proposal), and (2) Senator Bob Huff (R-Diamond Bar) introduced Senate Bill x8 61 in 2010, which was rejected by the Senate Education Committee on a 6-2 party-line vote (Democrats opposed, Republicans in support).

6440-001-0001—For Support of University of California


(a) Notwithstanding any other law, the University of California shall not expend moneys appropriated from the General Fund in the annual Budget Act to contract out for services currently or customarily performed by nonacademic employees to achieve cost savings in instances other than the following:

(1) If all the following conditions are met:

(A) The University of California (UC) or the contracting agency clearly demonstrates that the proposed contract will result in actual overall cost savings to the UC, provided that:

(i) In comparing costs, there shall be included the UC’s additional cost of providing the same service as proposed by the contractor. These additional costs shall include the salaries and benefits of additional staff that would be needed and the cost of additional space, equipment, and materials needed to perform the function.

(ii) In comparing costs, there shall not be included the UC’s indirect overhead costs unless these costs can be attributed solely to the function in question and would not exist if that function was not performed by the UC. Indirect overhead costs shall mean the pro rata share of existing administrative salaries and benefits, rent, equipment costs, utilities, and materials.

(iii) In comparing costs, there shall be included in the cost of a contractor providing a service any UC costs that would be directly associated with the contracted function. These continuing UC costs shall include, but not be limited to, those for inspection, supervision, and monitoring.

(B) Proposals to contract out work shall not be approved solely on the basis that savings will result from lower contractor pay rates or benefits. Proposals to contract out work shall be eligible for approval if the contractor’s wages are at the industry’s level and do not undercut UC pay rates.

(C) The contract does not cause the displacement of UC employees. The term “displacement” includes layoff, demotion, involuntary transfer to a new classification, involuntary transfer to a new location requiring a change of residence, and time-base reductions. Displacement does not include changes in shifts or days off, nor does it include reassignment to other positions within the same classification and general location or employment with the contractor, so long as wages and benefits are comparable to those paid by the UC.

(D) The savings shall be large enough to ensure that they will not be eliminated by private sector and UC cost fluctuations that could normally be expected during the contracting period.

(E) The amount of savings clearly justify the size and duration of the contracting agreement.

(F) The contract is awarded through a publicized, competitive bidding process.

(G) The contract includes specific provisions pertaining to the qualifications of the staff that will perform the work under the contract, as well as assurance that the contractor’s hiring practices meet applicable nondiscrimination standards.

(H) The potential for future economic risk to the UC from potential contractor rate increases is minimal.

(I) The contract is with a firm. A “firm” means a corporation, limited liability company, partnership, nonprofit organization, or sole proprietorship.

(J) The potential economic advantage of contracting is not outweighed by the public’s interest in having a particular function performed directly by the UC.

(2) If any of the following conditions are met:

(A) The services contracted are not available within the UC cannot be performed satisfactorily by UC employees, or are of such highly specialized or technical nature that the necessary expert knowledge, experience, and ability are not available through the UC.

(B) The services are incidental to a contract for purchase or lease or real or personal property. Contracts under this criterion, known as “service agreements,” shall included, but not be limited to, agreements to service or maintain office equipment or computers that are leased or rented.

(C) The policy, administrative, or legal goals and purposes of the UC cannot be accomplished through the utilization of persons selected pursuant to the regular or ordinary hiring process. Contracts are permissible under this criterion to protect against a conflict of interest or to ensure independent and unbiased findings in cases where there is a clear need for a different, outside perspective. These contracts shall include, but not be limited to, obtaining expert witnesses in litigation.

(D) The nature of the work is such that the criteria for emergency appointments apply. “Emergency appointment” means an appointment made for a period not to exceed 60 working days either during an actual emergency to prevent the stoppage of public business or because of the limited duration of the work. The method of selection and the qualification standards for an emergency employee shall be determined by the UC. The frequency of appointment, length of appointment, and the circumstances appropriate shall be restricted so as to prevent the use of emergency appointments to circumvent the regular or ordinary hiring process.

(E) The contractor will provide equipment, materials, facilities, or support services that could not feasibly be provided by the UC in the location where the services are to be performed.

(F) The services are of such an urgent, temporary, or occasional nature that the delay incumbent in their implementation under the UC’s regular or ordinary hiring process would frustration their very purpose.

(b) This section shall apply to personal service contracts entered into after January 1, 2013. This section shall not apply to the renewal of a personal services contract subsequent to January 1, 2013, if the contract was entered into before January 1, 2013, irrespective of whether the contract is renewed or rebid with the existing contractor or with a new contractor unless it has been significantly expanded.

(c) The University of California shall annually post both of the following on its Internet Web site:

(1) The number of, and contract amounts for, contracts entered into during the prior fiscal year, for services currently or customarily performed by nonacademic employees, to achieve cost savings.

(2) If compliance with (a) was required for the prior fiscal year, findings regarding how the University of California complied with that provision.