Communication

Wise unions get back pay

Published: Saturday, April 17, 2010 at 3:30 a.m.

A federal judge has ordered Wise Alloys to pay about $1.25 million to employees whose cost-of-living compensation has been calculated inaccurately by the company since 2007.

Each of the 500 workers affected will receive about $2,500, union officials said Friday. The employees work at Wise Alloys' operations in Colbert County.

U.S. District Judge Lynwood Smith, in a 10-page opinion, ruled that Wise should have been following a 2008 arbitration decision on the matter, which states the workers' cost-of-living increase of 8 cents should be calculated on an hourly - rather than weekly - basis.

Smith ruled the arbitrator's decision should be followed by the company, which produces aluminum can sheets for the beverage industry.

As part of his decision, Smith ordered that Wise pay interest on the money owed employees affected by the arbitrator's decision.

The ruling stems from a grievance filed against Wise in 2007 by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union along with the International Union of Operating Engineers Local 320 and United Brotherhood of Carpenters and Joiners Local 1209.

In the grievance, the unions contended Wise was violating its labor contract by calculating cost-of-living increases on a weekly basis. The labor contract called for the cost-of-living increases to be used for offsetting the cost of health insurance premiums paid by employees.

The arbitrator agreed with the unions and ordered the company to adjust the health insurance premiums by $3.20 per week rather than 8 cents per week to reflect the cost-of-living adjustment.

The company disagreed and continued to adjust the premiums by 8 cents per week. The unions then asked for summary judgment in federal court requiring the company to comply with the arbitrator's decision.

Smith granted the request for a summary judgment and wrote in his ruling, "Wise Alloys must comply with the Nov. 21, 2008, decision of arbitrator Allen D. Schwartz, and must honor all terms of that decision on a prospective basis."

Wise spokesman James Reidy declined comment.

Local union officials also declined to comment, referring questions to their attorney, Richard Rouco, of Birmingham, who downplayed the significance of the decision.

"It's a fairly routine enforcement of an arbitration decision," he said.

Dennis Sherer can be reached at 740-5746 or dennis.sherer@TimesDaily.com.

Adds 16.6 percent average tax rate in third paragraph and Comments beginning in fourth paragraph.)

Taken from writer Ryan J. Donmoyer of Business Week on line.

Feb. 17 (Bloomberg) -- The average income reported by the 400 highest-earning U.S. households grew to almost $345 million in 2007, up 31 percent from a year earlier, Internal Revenue Service statistics show.

The figures for 2007, the last year of an economic expansion, show that average income reported by the top 400 earners more than doubled from $131.1 million in 2001. That year, Congress adopted tax cuts urged by then-President George W. Bush that Democrats say disproportionately benefits the wealthy.

Each household in the top 400 of earners paid an average tax rate of 16.6 percent, the lowest since the agency began tracking the data in 1992, the statistics show. Their average effective tax rate was about half the 29.4 percent in 1993, the first year of President Bill Clinton’s administration, when taxes were increased.

The statistics underscore “two long-term trends: that income at the very top has exploded and their taxes have been cut dramatically,” said Chuck Marr, director of federal tax policy at the Center on Budget and Policy Priorities, a Washington research group that supports increasing taxes on high-income individuals.

The top 400 earners received a total $138 billion in 2007, up from $105.3 billion a year earlier. On an inflation-adjusted basis, their average income grew almost fivefold since 1992, the data show.

Political Ammunition:

The data may provide ammunition for President Barack Obama and Democrats led by House Speaker Nancy Pelosi of California who say they intend to increase the capital gains tax rate and let tax rates for the highest earners increase in 2011.

Almost three-quarters of the highest earners’ income was in capital gains and dividends taxed at a 15 percent rate set as part of Bush-backed tax cuts in 2003, the statistics show. Of the 400 earners, 289 paid a total effective federal tax rate of 20 percent or less in 2007, the last year for which figures were available, the data show.

Bill Ahern, director of policy and communications for the Tax Foundation, a Washington research group that advocates lower taxes, said the 2007 data doesn’t reflect the current economic circumstances.

“In a good year like 2007, it’s not surprising to see that the owners and managers of the nation’s largest firms made a fortune,” Ahern said. “Notice that two-thirds of their 2007 income was in capital gains, which have dropped like a rock since then.”

The data were first reported by Tax.com, a blog run by Virginia publisher Tax Analysts.

Shutting Out Solis

President Obama has nominated his top appointees at a record speed -- far faster than his two immediate predecessors, but the confirmation process has been far slower for him. Even after a rocky transition, President Clinton had all but one cabinet nominee confirmed by the end of his first day in office; President Bush had all but one confirmed by the end of January, despite the lengthy 2000 recount. Some of Obama's confirmation problems have been a result of the nominees' own errors -- as with Timothy Geithner and Tom Daschle -- but others have been caused by nothing more than conservative obstruction. In particular, the widely praised Hilda Solis, currently a Democratic U.S. representative from California, is being blocked by Senate Republicans for her progressive views supporting American workers. "This is just harassment," said Scott Lilly, a senior fellow at the Center for American Progress. "I haven't seen anything that has been raised that looks like a truly substantive question about whether President Obama should have her serve him as labor secretary." After waiting 55 days since her nomination on Dec. 19, Solis will finally face a scheduled vote in the Senate Health, Education, Labor and Pensions Committee today.