Boscov’s: Bailout or Boondoggle?

Submitted by David Hafer

As the global economy implodes, we are beginning to see the ramifications creep into our region as politicians scramble to provide taxpayer subsidized bailouts to their favorite financially troubled corporation.

The Snyder County Commissioners who value fiscal responsibility over political expediency deserve their constituents’ support. The important question the public should ask is why Boscov’s chain is so special that it deserves a $35 million bailout from the taxpayers of Pennsylvania.

Pennsylvania has no formal legal procedures for using tax money to bail out a failing retail business. With increasing budget problems, the state cannot afford to rescue every private business in trouble. We should ask why a small economically distressed county should provide collateral for a loan to a big corporate business that is failing through no fault of the county’s taxpayers.

The five million collateral in the form of Community Development Block Grant funds represents a critically important funding resource the county would lose if Boscov’s defaults on its loan. Considering the precarious state of the consumer economy, along with stiff competition from other chains, there is good reason to be skeptical of rosy claims that Boscov’s will return to profitability.

Loss of CDBG funds could impair the county’s ability to repair bridges and upgrade sewer and water systems forcing county officials to raise taxes or curtail services, prospects that would add to the hardships of residents already struggling to make ends meet.

Rather than propping up a failing retail store in an area already saturated with malls and big box stores, we should be looking at more productive ways to use public money to create jobs.

For example, reviving the region’s manufacturing economy. During the past decade, over 4500 manufacturing jobs, including 800 in Snyder County, have been lost. Industrial jobs provide substantially more in wages and benefits than dead end work in big box stores that pay minimum wage and import all their wares from China.

Bringing back manufacturing jobs will require substantial changes in the nation’s trade policies. Doing away with so-called free trade that siphons industries and jobs from Pennsylvania to the sweatshops of Asia would be a significant step in the right direction.

Changing trade policies may be a challenging task, but in the long run it will bring more economic benefits to our region than gambling away public money to save a retail dinosaur.

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The Employee Free Choice Act and Reestablishing Prosperity

This article is by John Enyeart!

The Employee Free Choice Act and Reestablishing

Prosperity

In January, Congress and President-elect Obama can lay the foundation for getting us out of our current economic crisis by passing the Employee Free Choice Act (EFCA).  The EFCA would allow workers to organize unions by signing authorizations.  Currently workers have to sign a petition, send that petition to the National Labor Relations Board, and then wait for the NLRB to schedule an election.  Between the petition drive and the election employers typically turn to a well-rehearsed set of intimidation tactics–such as sending threatening mailings to employees’ homes and firing union leaders–in order to frighten workers and prevent them from establishing a local union as their bargaining agent.  If passed, EFCA would also guarantee workers a contract within ninety days of organizing, and levy stiff penalties against employers who refused to recognize these new unions.

Like the Wagner Act, which guaranteed workers the right to organize in 1935, this measure will lay the foundation for a future round of American prosperity.  In fact, union membership went from a little over 3.5 million in 1934 to 13.5 million in 1943.  When the post-World War II economic boom occurred, workers were well positioned, because of their unions, to claim a larger share of the wealth their work produced.  By the late 1970s conservative attacks on organized labor, including the constant appointments of pro-business advocates to the National Labor Relations Board and state sponsored violence, saw union membership plummet.  Not surprisingly, because of this decline real wages have not gone up for the vast majority of Americans since 1976.

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