Business, labor draw lines for battle

JEFFERSON CITY, Mo. -- From the moment the November elections put Republicans in control of the General Assembly for the first time in a half-century, pro-business interest groups have been giddy with delight. Finally, legislation long sought by Missouri employers would be heard in a sympathetic forum.

Though Republicans officially took over less than three weeks ago, the philosophical shift in the Legislature has already been seen, even in the smallest of ways. For example, when legislative committees were reorganized out went terms such as "labor," "regulation" and "environment" from panel names and in came "small business," "job creation" and "workforce development."

But of more importance to the business community than such cosmetic changes is that bills that made little headway under Democratic legislative leadership are already starting to move. In just the last week, hearings were held on bills to make it more difficult for some fired employees to collect unemployment benefits and scale back collective bargaining rights for state workers. Republicans also introduced legislation aimed at reducing "frivolous" lawsuits against businesses.

Organized labor groups have clearly seen the writing on the wall and don't like it.

Missouri AFL-CIO president Hugh McVey recently held a news conference in the Capitol in which he pledged to work with the new legislative leaders. However, he threw down the gauntlet when it comes to rolling back legal protections workers currently enjoy.

"Organized labor is committed to working with fair-minded business leaders to address issues regarding employment security and its funding mechanisms," McVey said. "We will not, however, succumb to the greed of those who wish to undermine Missouri's prevailing wage laws, project labor agreements or a worker's right to organize."

As a result of the power shift, business and labor organizations are poised to square off in one of the key interest group battles of the legislative session.

Business friendly

Nikki Stallion is vice president of Mac Con Co., a commercial and industrial construction contractor in Gordonville. Stallion said she is confident that GOP control of the Legislature will lead to much-needed reforms to make Missouri a more business-friendly state.

At the top of Stallion's wish list are changes to the state workers' compensation and unemployment benefits systems. Those goals are shared by two top business lobbying groups -- Associated Industries of Missouri and the state Chamber of Commerce.

Stallion, a board member of the Cape Girardeau Chamber of Commerce, said rising rates for workers' compensation insurance make it difficult for small businesses such as her company, which employees about 45 people, to stay in business.

"Our cost of operating has increased greatly over the last two years," Stallion said. "With the type of rates we have to pay, it is not encouraging to the economy and the retention of businesses in Missouri."

Stallion says her company's workers' compensation premiums have risen 139 percent since 1992.

That workers compensation rates are out of control is an article of faith in the business community. However, statistics provided by the Missouri Department of Insurance do not support that assertion for employers as a whole.

While average rates charged in Missouri at the end of 2001 rose 2.8 percent from the previous year and another 7.3 percent in 2002, rates today are still 13.7 percent lower than what they were at the end of 1993, when major workers' compensation reform legislation took effect.

Business leaders often cite workers' compensation as a contributing factor to the loss of 90,000 jobs in Missouri over the last two years. Given that overall rates are lower than what they were nearly a decade ago, McVey said that argument is a red herring.

"It has nothing at all to do with workers' compensation," McVey said.

Legislators are expected to consider changing the law so that workplace factors would have to be the primary cause of a worker's injury, not just one of several factors. As a result, fewer workers would be able to collect benefits.

Voting on drug use

With Republicans prevailing on a 7-5 party-line vote last week, a Senate committee sent to the full chamber a bill that would deny unemployment benefits to workers fired for violating companies' drug-free policies.

Stallion said there have been several occasions when her company had to pay benefits to workers discharged on grounds of drug use.

"In my opinion, it upsets the whole idea of benefits for unemployment," Stallion said. "I feel like the state of Missouri is telling people that is OK and that it will support their habit."

The state's unemployment trust fund is teetering on the brink of insolvency and may have to borrow $134 million from the federal government to stay afloat.

"The use of illegal drugs costs the unemployment system millions of dollars every year," said Jim Kistler, an Associated Industries vice president. "This is an important first step in reforming the system."

Rather than unemployment benefits going to drug users, McVey said the real problem with the unemployment system is that it is underfunded at a time when more Missourians are losing their jobs and need benefits.

Indeed, cases where drug use was alleged and benefits granted amounted to a minuscule 0.19 percent of the 292,554 disputed cases the Missouri Division of Employment Security handled in 2001. In all, the division handled just 1,633 drug-related cases that year and upheld benefits in only one-third. In most of those cases, employers challenged benefits but never offered proof, according to division officials.

Labor's friend

Even with Republicans running the General Assembly, the enactment of legislation coveted by pro-business groups isn't necessarily a slam dunk and could face opposition from Gov. Bob Holden, a Democrat.

A long-time friend of organized labor, Holden signed an executive order in 2001 that extended collective bargaining rights to many state workers. A state appeals court upheld the constitutionality of that order last month.

During his State of the State address this month, Holden put efforts to improve the state's economy and create jobs among his top priorities. Much to the disappointment of GOP leaders, however, he made no mention of their top issues.

Despite their comfortable majorities in both legislative chambers, Republicans lack the votes to override gubernatorial vetoes in party-line situations.

mpowers@semissourian.com

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