Communication Workers of America Remain a Thorn in Verizon’s Side
Communication Workers of America is seeking government intervention in order to protect union jobs at Verizon’s unprofitable wireline industry. If the union’s call for intervention prevails, it inhibits the growth of Verizon Wireless that CWA relies on to subsidize the worker’s it represents.
Since CWA’s two-week strike last August, it continues to use its political influence to publically tarnish the reputations of Verizon and Verizon Wireless in order to gain concessions rather than negotiate based on merit.
Now we observe CWA’s latest tactic in the nine-month contract dispute. CWA, along with several non-union allies Sierra Club, NAACP, Consumers Union, and the Consumer Federation of America, led a protest at Federal Communications Commission (FCC) headquarters. The coalition stands together against Verizon Wireless’ pending spectrum purchase from several cable companies. The deal involves Verizon paying $3.6 billion to acquire spectrum from cable companies including Cox and Time Warner. In addition, the companies also agreed to cross-sell each other’s services.
This is an odd deal for the union to disrupt when “Verizon officials describe its heavily unionized landline division as a laggard, while Verizon Wireless, a largely nonunion joint venture in which Verizon is majority shareholder, is hailed as the shining star, its hefty profits lifting the rest of the company.”
To complement their protest, CWA officials lobbied FCC bureaucrats “to impose conditions on the [Verizon cable] deal to ensure it is in the public interest.” Absent government meddling and FCC approval, CWA predicts doom and gloom. The union-led coalition of progressive special interest groups argue the deal will destroy jobs, raise prices, reduce consumer choice, and deepen the technological divide between cities and wealthy suburbs. CWA President Larry Cohen said, “This deal will freeze then diminish wireline buildout.”
CWA boss Cohen is right. Wireline buildout will diminish just not because of the Verizon Wireless cable deal. Over the past eight years, Verizon’s landline customer base has fallen from 55 million in 2003 to just 25 million today, a nearly 55-percent decline. The drop in consumer demand is the cause for decreasing investment in wireline, not the growth and investment in Verizon Wireless.
Yet, union bosses insist on keeping the same unsustainable contracts. Currently, Verizon CWA employees average total compensation of over $130,000 per year. Not to mention union members at Verizon never have been required to contribute to health care premiums, a contentious issue in negotiations for union officials and a primary reason for last summer’s strike.
Other than lavish benefits, the CWA contract contains several provisions underlying union inefficiency. One outdated union contract provision requires Verizon to dispatch two workers on service calls to certain parts of Manhattan. Another stipulates if union wireline technicians are dismissed for not showing up to work in the D.C. metropolitan area, they are eligible to receive up to 40 weeks of additional pay.
The sole purpose of CWA’s public posturing is to lobby the FCC to protect costly union jobs in the unprofitable wireline sector. It is clear CWA prefers to use government to combat business deals that benefit consumers than to actually perform its primary function of representing union members at the bargaining table.