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
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
"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
"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
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  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
"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
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.