2011-02-27 Mexico Cable Shows US Resentment Toward Unions

Current time and date in Wisconsin:

Wisconsin? Yes, Wisconsin... WL Central has been covering all the protests worldwide. WL Central has been looking at countries regardless of whether there are WikiLeaks cables handy. And at 5:44 PM, hundreds if not more than a thousand people are in the capitol about to be removed by police.

Many of the people in Wisconsin are inspired by Egypt just like many others in the Middle East and North Africa have been moved to act. And, actually, it's not entirely true that there is nothing out there to color what is happening in Wisconsin, to illuminate the anti-worker anti-union politics that has been spreading throughout the states. If one looks at the following cable 06MEXICO2220, one can infer that the US government views workers that try to wield political power and unions which wage battles against governments as players that could threaten a country's economic stability.

In this cable, ten economic challenges that the next president of Mexico will face are outlined. One of them is "Taking On the Unions without Shutting Down the Country":

12. (SBU) Few major reform proposals will move forward without
some confrontation or deal with the unions representing the
affected industries. Unions gained power and influence over many
decades of working closely with the PRI, delivering votes in
exchange for unaffordable benefits for workers and untold riches
for union leaders. Due to union protections, for example, the
state-owned Mexico City electric utility (LyFC) has what is in
effect its own construction and manufacturing subsidiaries with
some 10,000 employees. LyFC retirees not only retire at full
salary, but also receive the same annual union-negotiated raises
that active employees receive. In addition to unions for government and parastatal employees - including the 1.2 million
strong teachers union - powerful unions exist for
telecommunications, transportation, and mining workers, among
others.

¶13. (SBU) When the PRI [Institutional Revolutionary Party] lost its absolute control over Mexican institutions, the PRI-controlled unions became juggernauts, and the threat of strikes in any of the major sectors they dominate is usually enough to force the government to back down on whatever reforms it may be contemplating. In 2004, for example, Congress passed a reform to the IMSS pension system in the face major marches and protests by IMSS employees that shut down parts of Mexico City for days - protests against a reform that only affected future employees. IMSS Chief Santiago Levy was forced to resign and a new contract was signed largely because the 300,000 plus strong union threatened to shut down the country's public health system. While few would argue against the need for worker protections, Mexico's unions have become a force against needed reforms and in favor of economic stagnation. The economy is especially harmed because heavily-unionized sectors (e.g. oil and gas, telecommunications, electricity, health) are controlled by one or few entities whose workers can literally paralyze the country. Labor market rigidity may actually be one of the biggest obstacles to economic growth in Mexico. Without labor market reforms that would make it easier and less costly to hire and fire workers, and limit their extremely generous benefits and severance packages,investment and industrial growth here WILL be handicapped.

The attitude of the diplomat who wrote this cable toward Mexico's unions is similar to the attitudes of US political leaders and pundits in the US media. This view is believed by a good amount of the American population -- the part of the population that could be called "the silent majority." Or, actually, that's what the US media would likely call it as they promote this idea that America needs "Davids" like Scott Walker to take on "Goliaths" like the Big Unions.

The diplomat calls for measures to make it "easier and less costly to hire and fire workers and limit their extremely generous benefits and severance packages, investment and industrial growth here will be handicapped." That is partly why Governor Scott Walker is pursuing the passage of legislation that would take away collective bargaining rights for workers in the state of Wisconsin. Republican Governor Scott Walker would also like to take away the political power that unions traditionally have had so that they cannot continue to influence what is and is not permissible in the state.

For businesses and corporations that support Governor Walker (e.g. Koch Industries, etc), Gov. Walker wants to make it so Wisconsin is open for business with little restrictions, without workers getting in the way and without workers continuing to hold a lot of power to elect Democrats instead of Republicans.

It may be a stretch to say that this cable has anything to do with the way that political leaders are trying to further decimate the working class in the US. Here's one more section to further make a case that this can be connected to the struggle in Wisconsin:

¶8. (SBU) Perhaps the weakest point in Mexico's longer-term budget picture is a public pensions system with enormous and growing unfunded liabilities which each year consume a greater portion of
the budget. The actuarial deficit (the money that would be
required to fully fund) of Mexico's pension promises to government
and parastatal workers is estimated at well over 100% of GDP (05
Mexico 1804, 922). Mexico's government workers, workers at Pemex
and the state-owned electricity companies, and employees of
Mexico's Social Security Institute (IMSS) enjoy extremely generous
pension benefits that can exceed 100% of final salary upon
retirement. These benefits are almost entirely unfunded and
payments to retirees now come out of annual budget appropriations.

9. (SBU) Without meaningful reforms, successive administrations will see less and less money available for other public needs. A
step was made in the right direction in 2004 when Congress
mandated that IMSS, whose workers have Mexico's most generous
pension system, could not hire new employees without fully funding
their pensions (04 Mexico 6089). This reform, however, was
thwarted by a new deal between the union and IMSS following the
resignation of longtime IMSS director and union opponent Santiago
Levy (Mexico 1655, 05 Mexico 6084). A reform to the government
employees' pension system (ISSSTE), whose actuarial deficit is
estimated at 45% of GDP, has languished (05 Mexico 184). A new
president will have to find a way to move pension reform forward.

Governments that have not fully recovered since the economic collapse in 2008, instead of calling for the criminals on Wall Street that were behind the collapse to be prosecuted, would like the ability to be able to declare bankruptcy and just walk away from funding the pensions. As with Mexico, the leaders and pundit class justifying why Gov. Walker is right think that the pensions are a large liability. As Robert Pollin and Jeffrey Thompson explain, there will be a huge impact on the pensioners and their families if states do what they really want, which a lot of this is building toward, and choose to walk away entirely from funding pensions:

For the states and municipalities to walk away from their pension fund commitments would leave millions of public sector retirees facing major cuts in their living standards and their sense of security. Something few Americans understand is that roughly one-third of the 19 million state and local employees—i.e., those in fifteen states, including California, Texas and Massachusetts—are not eligible for Social Security and will depend exclusively on their pensions and personal savings in retirement. In addition, public sector pensions are not safeguarded by the federal Pension Benefit Guaranty Corporation. Unlike Wall Street banks, state pensioners will receive no bailout checks if the states choose to abrogate their pension fund agreements.

In the context of the uprisings in the Middle East and North Africa, which WikiLeaks cables have revealed so much on, the Wisconsin struggle fits in because what people are responding to here is a state move to take away rights. They are responding to a state choosing to concentrate power. And they are opposing a step that if allowed will just make it possible for more and more concentration of power in the hands of the governor in Wisconsin.

What the protests are all about is opposing tyranny and as Gov. Walker moves in with police to remove them from the capitol (their Tahrir Square) and blocks access to WiFi and makes certain pro-union websites inaccessible and as the US media do not show what is going on (like Egypt State TV), this all seems really familiar. It's not familiar cause people are getting shot and killed and detained and tortured. The US does not have that level of repression. But it does have information repression, which is why it has come down so hard on WikiLeaks and its supporters.

So, their fight in Madison is as much a labor struggle as it is a struggle over information, another information war being waged between people and government.