Europe Going South and East

indexWarsaw   The Organizers’ Forum delegation began our meetings at the Warsaw School of Economics with Dr. Jan Czarzasty who is a specialist in labor markets and provided us with a helpful context for understanding the major issues of Poland’s political economy. It was an education!

He noted early in his presentation to us, while responding to questions, that there had been a sea change in expectations and understanding of the whole European proposition. Coming into the European Union, there had been a notion that the eastern countries of Europe, like Poland, as well as the southern countries like Greece, Italy, and Spain would essentially move north and west in adopting classic European standards around social security, general welfare, workers’ rights, and other citizen-centered policies, but after more than a dozen years, it now seemed that Europe was moving towards the lower standards of the southern and eastern countries.

Poland has seen an out-migration of two million workers as economic itinerants booming out in construction and service industries with more than 800,000 workers in the United Kingdom, almost 200000 in Ireland, and 100000 in Norway and Sweden for example. Many continue to bounce back and forth, and remittances have become a substantial part of the economy, even after the global recession.

Meanwhile, the economy of Poland has improved, but everything is relative. Unemployment for example is a record low – 10% — which sounds awful, but is great when you consider it was 20%.

The social safety net continues to be frayed. Contributions to the state system are not matched by the government, except for the political astute and powerful farmers who have a separate pension system which is 95% paid for by the state. There was a second system, based loosely on the Chilean private IRA-type investment scheme, but the state recently unilaterally transferred all of that fund to the state system. Polish citizens who had put money in the privatization scheme refer to that move simply as “robbery.” Meanwhile the eligibility for retirement has been gender neutralized, but that meant raising everyone’s retirement age to 67 years.

The housing market, especially in Warsaw, is very tight. Part of the problem we learned from the professor came from the adoption of the British-system biased towards home ownership rather than doing more to protect and privilege renters. This has led to young people packing four and five in 500 square feet of space or so in order to afford the rents. Additionally, the more family friendly policies of other countries, especially around parental leave and child care have also driven many young families west as well. Jan described his students at the School of Economics as mainly middle-class and well-educated, but the combination of rental and labor markets leads to about half of every class migrating somewhere else in Europe for employment and opportunity.

Even while reporting all of this less than rosy picture, nothing about Warsaw fits with the image in our memory bank. The visual impression in Warsaw is still European and more modern than not. I can vividly recall when we attached an ACORN colleague to a trip for organizers sponsored by some foundation to Poland not long after the Solidarnosc movement in the 1980s. The descriptions were dire, calling up images of smokestacks, pollution, heavy industry, and almost a grim pre-industrial vision. Now, the names on the taller buildings include MetLife, Kia, and others. Auto manufacturers have flocked to the relatively lower wages here to locate their plants. People tell us, all evidence to the contrary, that things are better, there are more things to buy, and people are happier with the economy.

Poland is advancing on Europe and Europe is coming down to Polish standards in a great leveling of sorts where it is hard to predict either the bottom or the top these days.

The Plot Thickens in Internal Labor Battle in Ontario

header_about1Warsaw   Wow, mama, how can this be? I’m stuck in Warsaw with the Toronto blues again! I had noticed there was a readership spike on my blog on Saturday. A Saturday is not a big day for blog readers, friends, and as vitally important as microfinance and poverty is, it was hard for me to believe that people were beating the bush to my blog in anger at the money wasted on that strategy.

A note from my comrade and friend, John Anderson of Toronto ACORN, provided the clue. Seems that I had suddenly become the man that kicked the hornet’s nest, having written about the heated election battle within the Ontario Federation of Labour. I often kid my colleagues at ACORN Canada that when I even mention Canada, it’s like I tied a weight on my blog to the bottom of the sea. Writing about the bigger weights that were likely to drag current president of the OFL, Sid Ryan, down to defeat as various large unions, perhaps with help from the Canadian Labour Congress, lined up to push him underwater, it seems Brother Ryan had used my earlier blog as a diving platform to reveal an unprecedented level of the backstory of politics and intrigue that swirled behind the scenes on this election, and, interestingly, he did so on Facebook, saying essentially he was offering a better look at “the complete picture.”

Friends, I’m just a fly on this wall, not a credentialed voter, who was mainly attracted to Brother Ryan’s story because I had met him after he praised ACORN at our convention banquet in 2013 in Toronto and because the hardball machinations that are the daily fare of labor politics are rarely revealed so starkly as they were by the Toronto Star in their articles about the charges and counter-charges behind this leadership election in the huge Ontario Federation of Labour.

Nonetheless, since Brother Ryan has offered a more “complete picture,” admittedly from his up-close-and-personal perspective, and it gives an even wider lens on the pushing and shoving behind the scenes of hardball, big-time labor politics, I’m going to share it, so live and learn:

While this is a decent account [my blog on Hardball Politics and Hidden Cameras at the Ontario Federation of Labour] of some of the hardball politics at play within the OFL, it is by no means the complete picture. In addition to the 3 unions that tried to starve me out of office (OPSEU, ONA and Local 1 SEIU) by withholding one million dollars a year in union dues beginning 10 weeks after my election in Nov 2009. These three unions were joined in 2014, by 3 International unions USW , UFCW and IAM in a partial dues strike.I say partial because most of their membership did not follow their leaders edicts and continued to pay their dues. The USW leadership said they were prepared to ‘blow up” the OFL in order to get their way. They informed the OFL Executive Board in Sept 2014, their International President in Pittsburg, had approved their tactic of a dues strike against the OFL. Incredously, they said the reason for their dues strike was because they were concerned about the finances of the OFL. Their solution was to make matters worse .

*** note…it was discovered back in 2010, that these 6 union leaders were holding secretive meetings prior to OFL Executive Board meetings in order to plan their disruptive tactics.

In January 2015, a number of them wrote to CLC President Hassan Yussuf and demanded a meeting to discuss OFL finances. Over the remainder of the year several meetings were conducted – under the auspices of the CLC – with some but not all OFL affiliates in attendance and at which the OFL President or other officers were not invited. My own union CUPE Natonal refused to attend these meetings however they also refused to permit CUPE Ontario president Fred Hahn an OFL VP from attending.

So, what we were left with was a series of CLC sponsored meetings conducted initially with OPSEU, who are $2.9 million in arrears to the OFL and 3 other union leaders (USW, UFCW and IAM) all who had threatened to blow up the OFL by leaving and who were behind a dues strike in attempts to cripple the OFL. UNIFOR was also in attendance at all of these meetings and later the group was extended but never included the elected leadership of the OFL, despite the fact the agenda was the OFL. OPSEU left the group after a few meeting and told them they will not return to the OFL unless I’m gone as president.

I was informed by the CLC president that this group had decided to place a financial administrator in the OFL office in order to assist with the financial situation by getting those unions on a dues strike to start paying up and to get those unions outside the OFL to come back and begin paying their fair share of union dues.

Chris Buckley was appointed the CLC administrator in May , 2015 and quit in Aug, 2015 to run for president of the OFL. During this period the OFL affiliate arrears rose by 40%. The unions on a dues strike are still not paid up and the unions that left in 2010/2011 are still not paying. As of Aug 2015, they are close to $5 million in arrears.

I was informed in August, by Jerry Dias UNIFOR President, that he no longer supports me because if I run for president and win in November, then the International unions will leave the OFL and OPSEU won’t come back either.

I asked him how could he, and I, for that matter, submit to this type of blackmailing. These tactics, I told him, will destroy the Labour Movement. Give in to the blackmail just once and we all know where that leads us to. There will never be another independent president in a central labour body anywhere in the country once the blackmailers have their way.

Surely, this cannot be the future of the Labour Movement in Ontario or Canada.

Ryan ends with that question, though he writes it as a statement. You suspect he knows the answer already from his point of view.

More troubling to me is that this is how we spent too much of our energy in the labor movement as our numbers decrease globally along with our power and influence, all of which is devastating to our members.

Think about that assignment for many tomorrows.

Here Comes the Pope!


130919_FG_PopeFrancisLiberal.jpg.CROP.article568-largeWarsaw    The Organizers’ Forum is assembling in Poland.  There are Catholic churches everywhere, and they are huge, part of the legacy of Pope John Paul.  The news everywhere though is focused on the first visit of Pope Francis to the United States and what that really might herald.  Francis has thus far been a breath of fresh air in repositioning the Catholic Church on numerous issues, especially poverty and climate change.  It’s fair to ask how much change is really coming and what we can expect.

Long reports in The New Yorker and The Guardian make it clear that perhaps the biggest sea change will not be external or doctrinal, but a cleaning up of the Church’s financial scandals.  An Australian cardinal has been brought into the Vatican to clean house.  In a surprise for Rome, the language of finance is English and the new crew speaks it freely.  Reportedly an American woman financial wizard has also been brought in on the team, which is also a first.  The easing out of the past financial administration which had some of the tinge of the mob around it is not unimportant particularly in Italy where the financial footprint of the church is huge.  The Church’s real estate interest in Italy is estimated at 20% national and 25% in Rome itself.  The total global real estate portfolio has been estimated at two trillion dollars which is comparable to the GDP of Russia, India, or Brazil.  This is a mess worth attention.

Where there doesn’t seem to be enough progress yet under Pope Francis has been on the abuse scandals.  SNAP, the US-based Survivors’ Network Abused by Priests, continues to be a discordant voice on the Francis lovefest and perhaps with good reason.  They are demanding that past records of abuse all be opened which is unlikely to get much traction given the wide chasm between the Church saying it’s sorry, which Francis is spectacularly adept at doing, and their demand for it to come clean.  More troubling are the reports that though the policy in the United States has changed where accused priests are no longer just sent elsewhere and moved out of the line of fire, this policy has not become global and continues to be maintained in other countries.  Francis needs to step up on that front immediately.

Critics are also clear that the new policy of mercy on abortions and annulments in Francis call for jubilee and forgiveness in the coming year is much, much less than a policy change.  The mercy is based on individuals admitting to sin and asking for forgiveness, making it unclear that there will be a line at the confessional booth.

A friend pointed out to me that the Guardian reporter had noticed there was a cash machine in the Vatican now, which is certainly a sign of modernity.  Looking at the machine though the language it used was Latin, so we need to remember what we are dealing with here.

The good news remains the emphasis on the poor and immigrants, as well as Francis own personal humility.  For those of us riding that train, we have a new conductor and that is a relief within the Church.  An Argentine critic, Ruben Fufino Dri at the University of Buenos Aires cautions:

“Francis is a great showman.  His repositioning of the church is paternalistic. It is not a strategy for empowering its followers. This is by no means a revolution.”

That’s hardly a surprise to hear either.  The Vatican’s rejection of some of President Obama’s candidates for the meeting with the Pope, including gay and transgender representatives, is a good reminder of reality.  This is the Catholic Church, one of the great conservative institutions of the world, we must remember.

At the same time, Francis has opened a window, and we need to try to push as much air through in this moment as possible, especially for our people!  With the welcome to America, we need to welcome the Church to the 21st Century as well.

Studies Find Microfinance Does Not Reduce Poverty, Assets Do

Mega-MicrofinanceHamburg  Several years ago ACORN International did a research report that seemed heresy to many, but started from the simple proposition that since microfinance is debt, debt does not reduce poverty, therefore the value of microfinance was the same as buying a job through an employment agency: work at a steep price. For many the myth of microfinance will endure and millions of dollars will continue to support what are essentially public and philanthropic investments in banking startups, not for the poor, but for the managers of the debt fueled lending agencies themselves, many of which start as nonprofits and if able to prove out their finances at high interest, convert to for-profits.

Standing out on the ledge of prevailing economic development opinion, I took note of an article in the October 2015 Scientific American that looked at the work of a Yale University based nonprofit called Innovations for Poverty Action and its founder Dean Karlan, an economics professor there. He had become suspicious of microloans while working in South Africa decades ago and seeing people constantly returning to renew loans and understanding that it didn’t add up to getting out of poverty, but instead was little more than a debt treadmill.

At some length he says:

“Over the years microloans kept nagging at my colleagues and me. Fifteen years after my first study attempt in South Africa, we now have seven randomized trials completed on traditional microloans and one on consumer lending back in South Africa…These studies found some benefits of microloans, such as helping families weather hard times, pay off goods over time and make small investments in businesses. But there was no average impact on the main financial well-being indicators – income and household and food expenditures.”

In short maybe the loans didn’t hurt them, but neither did they help them, at least enough to get out of poverty. Furthermore, Karlan noted that these microloan programs were not reaching the poorest of the poor or what they term “ultra-poor,” people living on the purchasing power of $1.25 per day.

Not to just be a Debbie Downer, IPA’s experience argues for providing the poor with a “productive asset” to make a living, giving them training on asset utilization, providing them a direct stipend for daily living or what we used to call in welfare rights – More Money Now!, giving them health support and savings tools, and regular coaching like CEOs get.

It would cost money, but at least it would be money well spent, because monitoring has already established that health and hunger were greatly improved and the very poor were making real progress in areas as diverse as Ethiopia, Ghana, India, Pakistan, and Peru.

Sounds like that could be a way to go if we were really trying to get somewhere.

Demanding a Suspension of Remittance Fees During Disasters

_85611725_e26ea287-55ce-49b3-8ea6-b02ceba61ef7Newark   An 8.3 level earthquake hit Chile in recent days. The quake lasted three minutes. The tsunami carried boats from the port onto city streets along the coast. One million people were evacuated. Over 100,000 continue not to have electricity. Many are displaced. Amazingly, the death count has been relatively minor for such a tragedy with only eleven reported at this point. Many believe this may be due to progress in governmental response and the institution of tougher building codes since a 2010 earthquake killed over 500.

Several years ago when the tsunami hit Japan the focus was huge, damage immense, and attention riveting. Many are just coming back to their homes three years later in the worst impacted areas. Nuclear plants are still under observation and the existence of the plants themselves and the threats of climate change are heated debates.

In a global community what is the best response? Many will be moved to help, but families will feel special obligations whether it is Chile now, Japan then, Katrina ten years ago, or Aceh in Indonesia.

Sending money costs money. Big money. Even the Economist in a recent editorial and article chided the lack of progress by the G-8 and World Bank on reducing the fees to the 5% cap that was supposed to have been achieved years ago. They claim the average is 7.5% but that figure has little credibility given how much it leaves out of the calculations. There are regular reports of technological breakthroughs and new competitors, but many institutions have raised their rates claiming the costs of money laundering and terrorism legislation requires more scrutiny. The Economist called for reductions across the board, and ACORN’s Remittance Justice Campaign has long made that demand.

Can there be any better argument for reductions than disasters like Chile? A number of banks in Canada and the United States lowered or waived fees for transfers after the Japanese tsunami. Western Union and MoneyGram even said the right things for a bit. Where are they now?

Many are joining in a call for Western Union particularly to lead the way by reducing the cost of transfers to Chile during this crisis and time of displacement. Any of us that can need to raise our voices now.

ACORN and many other organizations have begun online petition drives among other tactics to get the message to the CEO of Western Union in Colorado to act now. Do whatever you can and sign the petition with us.

Zoning Payday Lenders Out of the City

1297704824352_ORIGINALNew Orleans    Payday lenders are weeds that crack the sidewalk. Payday lenders are “broken window” signposts advertising lower income neighborhoods and tending to push communities and families over the edge. There may not be an area in North America that has been more effective in using city zoning policies to aggressively root out payday lenders and their practices that cities in British Columbia where ACORN Canada has made this a signature issue. Meeting with the staff over recent days, one thing is crystal clear: we’re winning!

We’ve discussed the city bylaw or ordinance in the fast growing Vancouver suburb of Surrey in the past. There is a 400 meter restriction on opening a new payday lending storefront based on the distance from other financial institutions or other payday shops or check cashing stores. There also has to be a 400 meter distance between schools. ACORN organizers believe that it will nearly impossible for another outlet to be opened.

And, then there is Burnaby, another Vancouver suburb, where we are organizing, that responded to ACORN’s demands by doing an extensive study over the last more than six months on payday lenders and their value and placement in the community. The Planning Department’s report was a model of comprehensive, straight talk. They didn’t hedge their words. They made it clear that ACORN had asked them to do the study, and they were going to ask ACORN and other groups to help implement the results. I’m not going to lie: I loved that part!

Reading the report, the Planning Department puts one nail after another in the payday lending coffin. They reviewed the Surrey work and the steps taken by other cities in British Columbia. They offered an extensive review of surveys done by various groups including an ACORN/Stratcom survey establishing how small the client base for payday lending was – about 3% of the population – despite its predatory nature, and this 3% became a cornerstone for their recommendations arguing against proliferation of payday lending sites compared to customer base. They didn’t mince words on the relative interest rates allowed by law for payday lending which, despite many hard won ACORN reforms, are still usurious and confiscatory ranging between 500 and 600% if they were applied on an annual basis.

The recommendations almost seemed anticlimactic. Payday lenders and gold exchanges, a close cousin, would require a special zoning classification rather than being seen as “banking.” Existing stores outside of these currently fixed zoning districts would be seen as nonconforming uses, meaning they could neither be duplicated nor could a new store come in if an old one abandoned the site. The writing wasn’t on the wall, it was in the report. It would be next to impossible in Burnaby to open another payday lending outlet in the city, and the ones there now are on borrowed time.

In community organizing this is what we call a big win. Now the task is to duplicate this victory and the good work of the Burnaby Planning Department throughout British Columbia, Ontario, the rest of Canada, and, heck, maybe the world.