By Laura Fries
The first wave of globalization hit hard, taking American manufacturing and assembly jobs and washing them ashore on cheaper foreign land. The second wave is a little slower in coming, targeting a group of jobs that many assumed was safe: the fast-growing service and technology industries.
With competition from the cable companies that provide cheaper Internet services, and from the cell phone companies, which provide cheaper phone services, even telecommunications giants are stumbling. To make themselves viable in a global market, a company like SBC has to cut costs. And so they go after the second biggest cost in their company: providing health insurance for their workers.
It's a tactic that Jack Mock, 79, can't understand. He's been with SBC since 1943, a total of "40 years, 2 months, and 18 days," he says. Although Mock retired in 1986, he managed to make his way down to the local Communications Workers of America office on April 7 to participate in a march to SBC's corporate offices across the street. SBC is planning to cut health care benefits from retirees like Mock - and to increase the costs of health insurance for the rest of its workers.
The co-pay increase comes just two months after SBC quietly revealed to the Securities and Exchange Commission that its Chairman and CEO Ed Whitacre doubled his salary in 2003. Including base pay, bonuses, and other perks (but not stock options), Whitacre earned $19.5 million in 2003, up from $8.6 million in 2002.
In renegotiating the contract with the 100,000 workers represented by the CWA nationwide, SBC put a contentious offer on the table. Currently, union employees pay about 4-7 percent of their insurance costs, but SBC seeks to raise the cost of co-pays to about 12 percent. Retirees' insurance plans have been adjusted, explains company spokesperson Walt Sharp, independently of contract negotiations.
"What we have now is a changed environment," Sharp explains, where SBC's expenses for health care in 2003, topped $3 billion. Cable companies without unions have a "distinct cost advantage" over unionized companies like SBC, he continues, and to make themselves competitive, SBC is "requesting for employees to slightly increase their co-pay."
A slight increase that for some families could triple their medical bills.
The situation worries Jennifer Hernandez, 29. Her sister and brother-in-law work for SBC, and both her parents recently retired from the company - due to SBC's early retirement incentives (which is a fancy way of saying "layoffs").
"SBC always preached, 'We'll never abandon our retirees,'" and the workers have supported the company on its legislative issues, Hernandez notes, rapidly listing the indignities of the current situation. She's tired of working "mandatory overtime" for the "needs of the business" - and she wants to know who is going to care for her parents as they age. Her mother is facing $300 a month in medical bills: "Who is going to pay for that?" Hernandez asks.
Outsourcing is a thornier issue. Call centers and help lines for SBC's DSL services are provided by independent vendors, who have been outsourcing the tech jobs to India. (It's a common corporate solution - the Current's owner, Times Shamrock, outsources some of its software development to a company in India.) But the tech jobs are the "jobs of the future," the CWA notes, and the union wants them to stay in America. Ralph Cortez, president of Local 6413 takes the mic outside of SBC headquarters and shouts: "We've worked hard to build this corporation ... We created thousands of jobs for this company, and guess where those jobs are going?" The crowd replies without a pause: "INDIA!" It's the second wave of American job loss, and it's only beginning to crest.
Morton Bahr, national president of the CWA, has given SBC a "30-day notice of its intention to strike." Each local union will vote whether it will strike; the results will be announced April 29. As many as 100,000 of the company's 168,000 workers could strike.
National representatives of CWA and SBC agreed to meet on April 13 in Washington, D.C. to discuss a settlement. At presstime, the results of that conference were unknown, but Sharp, the company's spokesman, predicted a favorable outcome: "We're confident that we'll be able to reach an agreement without any work stoppage."
It's a situation that replays itself throughout the country, as jobs from the service and tech industries join their manufacturing brethren overseas, and companies beleaguered with rising health care costs try to cut corners. But to the protesters outside of SBC, it's not a new battle brought on by globalization, but a very old fight. As Aaron Benele, a retired cable-splicer, says: "These signs are pretty heavy, but we've got scars from carrying them before." •
Updates on the possible strike can be found on the unions' website at www.cwalocal6143.org/
By Laura Fries