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WISE, UNDERWOOD SPLIT ON LABOR ISSUES

The is the final installment in a series focusing on the

 

issues, records and platforms of West Virginia's candidates for

 

governor. Today's issue is labor.

 

 

Rep. Bob Wise and Gov. Cecil Underwood agree that

 

right-to-work legislation would be divisive in West Virginia. But they

 

disagree on most other issues affecting labor.

 

 

The Underwood administration pushed hard to dismiss $200 million

 

in Workers' Compensation lawsuits against big coal companies for debts

 

incurred by contractors who mined their coal.

 

 

Wise said, "Trying to dismiss them is like getting a house 95

 

percent built, then walking away from it. It makes no sense."

 

 

Wise backed a state law to hire construction workers living

 

within 75 miles of tax-funded construction projects. Underwood

 

vetoed a bill in 1998 that would have tested the idea.

 

 

In right-to-work states, workers may refuse to join unions and pay dues

 

even after a majority of their fellow workers vote for union

 

representation. Yet unions in those states must still handle grievances

 

for workers who do not pay dues.

 

 

"West Virginians often say, 'Thank goodness for Mississippi and

 

Arkansas,'" Wise said. "They have right-to-work. If you look at

 

  • tates with the lowest per capita incomes, at least half of them are
  •  

    right-to-work states. I see very little correlation between right-to-work

     

    legislation and economic development."

     

     

    Rob Blackstone, Underwood's campaign spokesman, said the governor is

     

    "probably more disposed to look favorably on [right-to-work legislation].

     

    But he recognizes political reality in West Virginia today. The

     

    divisiveness it would cause would prevent us from being productive on

     

    other issues. It is no part of his political agenda at this point."

     

     

    As a congressman, Wise consistently voted to raise the federal

     

    minimum wage. Underwood believes the wage is not a political issue

     

    on the state level.

     

     

    Wise said, "The only pay increases a large percentage of West

     

    Virginia's work force receives come when the federal government increases

     

    the minimum wage.

     

     

    "I remember working for a hospital for the minimum wage. The only

     

    collective bargaining agent I ever had was the U.S. Congress.

     

     

    "The minimum wage still purchases far less than it did 25 years ago. We

     

    are trying to encourage people to work, to get them off the welfare rolls.

     

    One way we can do that is pay livable wages," Wise said.

     

     

    The federal minimum wage reached a peak in 1968, when it was worth

     

    $7.67 in 1999 dollars. The minimum wage in 1999 was $5.15.

     

     

    Steve Shuklian, a Marshall University economist, said, "In 1999, 37

     

    percent of jobs in West Virginia paid below the wage necessary to lift a

     

    family of four above the [federal] poverty level with a year-round,

     

    full-time worker." That wage was $17,024.

     

     

    Workers' Compensation Fund

     

     

    The Workers' Compensation Fund has been a focus of political

     

    controversy for years. Many businesses complain premiums are too high.

     

    Workers often complain benefits are too tight.

     

     

    In May 1999, Employment Programs Commissioner William Vieweg stirred

     

    controversy when he worked with the Employment Programs Performance

     

    Council to dismiss 19 large coal companies from $200 million in lawsuits

     

    for overdue workers' compensation payments.

     

     

    Throughout his gubernatorial campaign, Wise criticized the

     

    Underwood administration for trying to dismiss lawsuits against

     

    major coal companies whose contractors were delinquent.

     

     

    "These suits are a chance to recover up to $200 million that could be

     

    used to help keep Workers' Compensation premiums lower for small

     

    businesses," Wise said on Saturday.

     

     

    "Second, the state already invested $3 million to prepare these

     

    lawsuits. If the governor thought there was a questionable legal issue at

     

    that point, he should have gone ahead and tried one of them."

     

     

    Wise said dismissal of the coal lawsuits also raises an ethical

     

    question. Underwood and Vieweg were both executives for Island

     

    Creek Coal Co., whose contractors owe $47 million, the biggest debt of

     

    all.

     

     

    "The legal canon of ethics requires a lawyer to avoid even the

     

    appearance of a conflict of interest. If there was even an appearance of a

     

    conflict, Underwood and Vieweg should have gone ahead and tried one

     

    of these cases," Wise said.

     

     

    Blackstone called Wise's campaign ads about the coal lawsuits "lies."

     

    He says taxpayers and small businesses bear the brunt of Workers' Comp

     

    costs related to the lawsuits.

     

     

    "That is just not true. For him to suggest that taxpayers are involved

     

    in Workers' Comp shows he does not know how state government operates or

     

    that he is lying on purpose. Taxpayers don't pay Workers' Comp. Businesses

     

    do," Blackstone said.

     

     

    Wise said, "Dismissing these lawsuits leaves important questions

     

    hanging in the air. Supreme Court Justice Margaret Workman stated the

     

    whole thing 'smelled like a rotting carp,' even when she voted to send the

     

    cases back to circuit court.

     

     

    "This sends a message: 'If you are big enough, you may be able to get

     

    out of meeting your obligations.' Small businesses then have to pay."

     

     

    Dan Page, Underwood's press spokesman, said the large coal companies

     

  • imply did not incur the debt.
  •  

     

    "The big coal companies that were sued never owed the money. Their

     

    contractors owed the money. The state failed to do its job to collect

     

    premium dollars owed by contractors."

     

     

    Together, Island Creek and A.T. Massey Coal Co. hired more contractors

     

    than anyone else. Together, their contractors owe more than $90 million

     

    for debts between 1987 and the mid-1990s.

     

     

    Yet other major coal companies, such as Arch Mineral Corp. and Ashland

     

    Coal, had few delinquent contractors. Unlike Massey and Island Creek,

     

    those companies routinely required contractors to prove they paid

     

    compensation premiums every three months.

     

     

    Wise also criticized Underwood and Vieweg for cutting

     

    employer premium rates by 8 percent for the fiscal year that began on July

     

    1. All four labor members of the Performance Council voted against

     

    Vieweg's proposal.

     

     

    In April, Jim Bowen, president of the West Virginia AFL-CIO, criticized

     

    Vieweg's predictions that medical costs would drop by 32 percent this

     

    year. Those predictions were based, in part, on plans to hire a private

     

    contractor to perform "utilization review" for medical expenditures.

     

     

    "They haven't even let the bids out yet," Bowen said. "Yet we are

     

    forecasting a 32 percent savings. It is amazing how we can do this. With a

     

    crystal ball, I guess."

     

     

    Wise called the 8 percent reduction "a political move partly

     

    based on reductions in health-care costs they have not achieved. Six

     

    months later, the agency still does not have a contractor or a plan to

     

    reduce those rates. That was a rash action."

     

     

    Page defends the rate reductions even though the agency is still

     

    working on paying off the $2.2 billion debt accumulated by 1995.

     

     

    "This administration has reduced that debt by $560 million, a 25

     

    percent reduction, in less than four years," Page said. "Lowering the debt

     

    is like lowering a mortgage. The Performance Council had the opportunity

     

    to grant rate relief to employers. One of the most difficult issues

     

    we have is high Workers' Compensation premiums."

     

     

    Wise said, "I want to lower Workers' Compensation premiums rates

     

    as fast as I can. But we got into trouble before by arbitrarily lowering

     

    Workers' Comp rates without showing lower costs."

     

     

    In July 1985, Gov. Arch Moore mandated an across-the-board 30 percent

     

    cut in Workers' Comp premiums. In four years, that action proved a major

     

    factor in creating a $2.2 billion deficit.

     

     

    Page said, "This is a balancing act. We are already eliminating the

     

    deficit at a rate far ahead of the 40-year predictions. This

     

    administration felt it was a good idea to provide rate relief. Both can be

     

    done at the same time. We also run the agency more efficiently and are

     

    very vigorous in pursuit of premium dollars."

     

     

    Page praised former Gov. Gaston Caperton and the 1995 Legislature for

     

    "setting the stage for reforms we have implemented. Investment income has

     

    also helped generate income that had helped reduce the deficit."

     

     

    West Virginia Jobs Act

     

     

    Wise and Underwood also disagree about a law to give

     

    local workers jobs on building projects funded with state tax dollars.

     

     

    Wise said he would have supported a "pilot project" law passed

     

    by the Legislature in 1998, but vetoed by Underwood.

     

     

    "I would have supported that law to study the impact of the 75-mile

     

    radius for hiring workers. I don't think we should have job sites like the

     

    West Virginia University Coliseum. It was a veritable United Nations with

     

    workers speaking several different languages."

     

     

    In May 28, the U.S. Immigration and Naturalization Service arrested 28

     

    workers without proper work visas employed by contractors at the Coliseum.

     

     

    Steve White, executive director of the Affiliated Construction Trades

     

    Foundation, said, "Look at the illegal aliens hired at WVU. In return for

     

    investing our tax dollars in projects, we should have the commitment that

     

    local workers get jobs. Our tax dollars finance low-wage workers brought

     

    in from other states and even other countries."

     

     

    Blackstone criticized an ACT television ad. "Their ads blaming the

     

    governor for illegal aliens is a distortion of facts and a lie. The

     

    governor's veto of that [1998] bill had nothing to do with WVU.

     

     

    "The ACT Foundation is out there trying to attack and attack and attack

     

    because Bob Wise cannot point to anything he has accomplished for

     

    West Virginia in 18 years."

     

     

    Page said the West Virginia Jobs Act "would have been counterproductive

     

    for West Virginia workers. It is likely it would have resulted in other

     

  • tates passing laws treating our workers the same way.
  •  

     

    "If you lived in the Eastern Panhandle, you might not be able to get a

     

    job in Maryland. This would open a dangerous can of worms. In West

     

    Virginia, about 85 percent of all people working on construction jobs are

     

    already West Virginians," he said.

     

     

    White said, "We are not keeping other workers out of our state. That

     

    law followed Appalachian Regional Commission recommendations, which

     

  • upport hiring people within 75 miles of a project. If a project was in
  •  

    Huntington, there would be a lot of workers from Ohio and Kentucky.

     

     

    "If other states passed similar legislation, our workers would be local

     

    workers in bordering communities in five surrounding states."

     

     

    Page said, "This administration has done everything it can to encourage

     

    investment that creates jobs. During the past four years, companies and

     

    employers have invested $4.5 billion in West Virginia and announced the

     

    creation of 37,000 jobs."

     

     

    To contact staff writer Paul J. Nyden, use e-mail or call 348-5164.

     

     


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