The Republican - Karen Spilka Champions Labor Issues, Pushes for Banking Regulation in Congressional Campaign

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By Shira Schoenberg

Ethan Snow, the political director of UNITE Here, a union representing hospitality, food service and textile workers, likes Democratic congressional candidate Karen Spilka because of her record as a labor lawyer and legislator.

"She's one of the few candidates I've seen who has a segment on her website devoted to her stance on labor issues. She isn't afraid to say the word 'union,'" Snow said.

Unions have formed the backbone of Spilka's campaign to win the 5th District congressional seat. In an interview with The Republican and MassLive.com, Spilka, a state senator, expanded on her stances relating to workers, including raising the minimum wage and using project labor agreements, as well has her intent to protect taxpayers by increasing financial regulations.

"I have support from 33 labor organizations, and I believe they're endorsing me because they know I'm a fighter, and I don't back down from issues," Spilka said. "I believe Congress is not working for working families right now, and the middle class is getting squeezed from all sides."

Spilka's stances generally favor labor. She supports the Employee Free Choice Act, a bill that would allow a union to form by collecting signatures from a majority of workers, rather than by ballot vote. She supports "fair trade," and wants to ensure that trade agreements include labor and environmental standards.

Spilka worked on a project labor agreement for the Deer Island treatment plant in Massachusetts in the late 1980s, in which the Massachusetts Water Resources Authority agreed to use only union labor. The agreement went up the U.S. Supreme Court and was upheld. Since then, there has been debate over the use of agreements requiring union labor on public projects.

Spilka said the Deer Island agreement "helped that project come in on time, under budget and high quality." She supports the use of project labor agreements in "the more circumstances the better."

Project labor agreements are opposed by the building industry which contends such agreements increase prices by reducing the pool of bidders. Greg Beeman, president of the Massachusetts chapter of Associated Builders and Contractors, said his group believes it is unfair to exclude a local worker from a project because he is not unionized.

"Out of fairness and economics, we think public jobs should be fairly and legitimately open to all workers and contractors that are qualified to be part of those projects," Beeman said.

Spilka supports raising the minimum wage and indexing it to inflation. She would tie the minimum wage to geographic location, so it accounts for the cost of living in each state. "I believe a minimum wage should be set that allows people to work one job and support their family comfortably," Spilka said. "We should have it so families don't need two or three jobs to make ends meet."

Raising the minimum wage is typically supported by labor, but opposed by business groups which say it will discourage companies from hiring entry level workers.

"She sticks up for us, stands with us and is seen as a strong candidate for labor," Snow said.

More broadly, Spilka echoes the campaign themes of Democratic Sen. Elizabeth Warren when she says she wants to "take on…the big banks, insurance companies, special interests and good old boys' network."

She would oppose Republican attempts to add exemptions to new rules regulating derivatives, which are included in the Dodd-Frank financial reform bill. She wants to pass a renewed Glass-Steagall Act, which would prohibit commercial banks from making certain types of risky investments. Warren, Arizona Republican Sen. John McCain and others have pushed for a new Glass-Steagall Act, saying it would end the era of banks that are "too big to fail."

She would push for a bill sponsored by U.S. Sens. Sherrod Brown, D-Ohio, and David Vitter, R-La., that would require banks with more than $500 billion in assets to hold 15 percent in capital.

"This way banks never have to rely on taxpayers bailing them out," Spilka said.

Economists warn that these measures are complex.

Ben Branch, a professor of finance at the Isenberg School of Management at UMass Amherst, said Glass-Steagall is a "blunt instrument" that would potentially make banks less profitable and would require them to stop activities that are not particularly risky -- such as advancing loans for initial public offerings and operating stock brokerage operations. It would eliminate competition between commercial and investment banks.

He said the Volcker rule, already passed as part of Dodd-Frank, is intended to accomplish a similar goal by prohibiting commercial banks from speculative investing. "What the Volcker rule is designed to do is pretty much the same thing as Glass Steigall would do but not as draconian," Branch said.

Similarly, Branch said requiring large banks to hold more capital could disrupt the system. To raise capital, banks would either sell stock -- diluting the value of existing shares -- or reduce assets, such as loans. "Pushing them to have a higher rate of capital to assets would tend to make them do less lending, which is not a good thing particularly in the present economic circumstance," Branch said.

Spilka stressed that the capital requirement would only apply to large banks. "Should they be allowed to empty their bank vault and risk it all?" she said. "If they keep at least 15 percent capital reserve, it would be enough to cover their losses, and we'd never have to bail out banks."

Other priorities for Spilka include investing in education, including funding for special education, early education and training in science and math. She also supports investments in transportation and infrastructure.

Spilka, asked about her focus on labor, said it is not only unions supporting her. "It's not just organized labor issues. To me, it's working families," Spilka said.

Spilka is facing state Sen. Katherine Clark, state Sen. Will Brownsberger, state Rep. Carl Sciortino, Middlesex County Sheriff Peter Koutoujian, Martin Long and Paul Maisano, in an Oct. 15 Democratic primary.

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