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| Economy |
| Here's another reason why public sector unions should be banned |
| 2010-02-21 |
| It's baaaccckkkk! No, not the Terminator, California's seemingly interminable financial crisis. This time, state officials say they face a $20 billion gap between what they are spending and revenues coming into the state treasury. Given the power of the California public sector unions, including those representing state and local government employees, and public school administrators and teachers, this crisis shows no sign of being solved because the unions refuse to consider relaxing their death grip on California's rapidly shrinking legion of tax payers. But there is a silver lining here - California is pointing to an unpleasant but unavoidable truth that public officials across the country sooner or later must confront - the power of public sector unions must be broken. It's not only that public sector unions are driving many state and local governments into fiscal insolvency by forcing them to accept contracts providing compensation benefits that far exceed those in the private sector for comparable work and that cannot be paid for without crippling tax increases. As this developing situation in California demonstrates, public sector unions like those in our public schools and state and local governments also make it impossible to get rid of incompetents, and to manage public resources efficiently and effectively. Doug Ross has multiple links that bring together in one post the several major factors in California's returning fiscal crisis, including the fact thousands of incompetent public schools teachers and administrators cannot be fired, thanks to the union contract. See also this post from Ross on two incredible examples from New Jersey, including a retired public school teacher who paid in $62,000 and will get as much as $1.7 million in retirement, and a 49-year-old state worker who paid in $124,000 and retired with a pension and health benefits worth nearly $4 million! It's a lot late, but California's Gov. Arnold Schwarzenegger finally seems to have figured out that getting the Golden State out of its death spiral requires confronting the power of the public sector unions headon. Otherwise, the death spiral will take down America's former pearl on the Pacific. |
| Posted by:Fred |
| #23 I did public sector labor relations in California years ago. Bottom line is that the union model doesn't work in the public sector. It gives too much power to the unions: In the private sector, the strength of the union is economic - they can withold labor and cost the company financially. The company decides what it can afford and what it can't. In the public sector: a) there is no real financial penalty - the public management and elected officials don't have a financial disincentive - they don't have a profit motive and they aren't in competition with anything else, so they just raise taxes to pay for the union demands. Tax revolts are few and far between. The real kicker, tho, is that unions are well positioned to select the "management" they negotiate against. Other than the two main political parties, unions are the most effective at selecting and electing public officials. So public unions have a loud voice in picking their negotiation opponents, those opponents are well aware of the debt they owe the unions and there is no real financial disincentive to granting what the union asks for as long as you make the right noises and aren't too blatent about it. |
| Posted by: Mercutio 2010-02-21 23:48 |
| #22 Damn, hit enter too early. One other thing....most private employers got rid of their defined benefit plans because of the requirement that they continue to contribute money to them, no matter what is going on in their businesses. They can (and have during this recession/depression/whatever you wanna call it) reduce or even eliminate a contribution to a defined contribution plan whenever they want. That's the real reason private pensions are rare these days. |
| Posted by: Cornsilk Blondie 2010-02-21 20:33 |
| #21 No other government employee should be eligible. Let them save their money for retirement like the rest of us. Excuse me, AH, but if you think that all the money in my defined benefit plan was put there by my employers without any contribution from me, you don't know how public pensions work. I had money taken out of my check as a contribution to my defined benefit plans in addition to Social Security and my 457. I could not opt out of that defined benefit contribution any more than I could opt out of Social Security, and the rate of my contribution was determined by actuaries, not by me. The last amount taken out was a little over 8%. I believe that my plan has since raised the amount to around 10%, but since I haven't worked there for five years, I could be wrong. Since my last public sector employer just happened to be a public pension plan, I know that my experience was far from unique. Most other public pension plans also require a mandatory employee contribution. |
| Posted by: Cornsilk Blondie 2010-02-21 20:29 |
| #20 -- I think the military should continue to be eligible for defined benefit pensions, their situation is special. No other government employee should be eligible. Let them save their money for retirement like the rest of us. --- The private sector has just about done away with defined benefit pensions, since those pensions all presuppose a consistent & adequate revenue stream far into the future, nowadays a doubtful proposition. Why should the public sector continue an unwise policy? --- Public sector unions take some of the power away from the electorate, who should dictate the overall course of government. Their abuses of power are at least as bad as those of the old patronage/pressure days. |
| Posted by: Anguper Hupomosing9418 2010-02-21 19:45 |
| #19 Health care cost is exactly what is stopping me from retiring right now. Sometimes I wonder if I'll ever be able to retire. How does this differ from anyone in the private sector? Seems 2me that we all have more in common than not. Been talking w/the family tonight (they're all Democrats), and it's my gut reaction that O'Bumble is on to something with healthcare reform overall (not socialism). Reasonable folks are open to reasonable ideas. But is he listening? |
| Posted by: Gabby 2010-02-21 19:04 |
| #18 your military gets defined benefit as well. Rather than argue without facts "whether this is good or bad", I'd join you on the "at what level"? My retirement health benefits are supposedly paid, but there's no money funding that, so I'm not counting on that either, and if that's the case, well, I'll have to take care of that myself. No arguments |
| Posted by: Frank G 2010-02-21 18:38 |
| #17 Defined benefit is not necessarily a bad thing. It's just been abused. Low wages and decent benefits used to define public service. My first public sector jobs paid $4.35 and $6.14 per hour, and I was happy to get it. I knew at the time, I would have to work decades to get a decent pension. Now, after 25 years, I wondering if that's all in jeopardy. Public employees are not the enemy. We're just folks too. |
| Posted by: Gabby 2010-02-21 17:45 |
| #16 Frank, it's still a defined benefit plan. It should be converted to defined contribution. |
| Posted by: Nimble Spemble 2010-02-21 10:49 |
| #15 |
| Posted by: Threrert the Galactic Hero8099 2010-02-21 09:46 |
| #14 NS - my own muni gov employer has cut back the % of defined benefit pension by half for new hires, two years ago to 1.25%/yr |
| Posted by: Frank G 2010-02-21 09:41 |
| #13 That's good to hear. Too bad it's the only federal policy the states and municipalities haven't mimicked. |
| Posted by: Nimble Spemble 2010-02-21 09:15 |
| #12 At a minimum new employees need to be put on 401(k) instead of pension. New federal hires get very little in the way of a defined contribution plan now. They do have the equivalent of a 401(k) in the Thrift Savings Plan. |
| Posted by: lotp 2010-02-21 09:07 |
| #11 The next President should revoke Kennedy's EO allowing unions and then let the unions go air controller if they wish. They've got sweetheart deals. I wouldn't roll them back, except for the pensions. At a minimum new employees need to be put on 401(k) instead of pension. Otherwise, let them stay where they are but get rid of AFSCME and its federal counterparts. |
| Posted by: Nimble Spemble 2010-02-21 08:54 |
| #10 While Detroit crumbles and northern industry moves to China, "Right to Work" laws have saved much of the South. Nothing succeeds like success. Now if only the Gov't would get off Toyota's arse and let them resolve their re-call difficulties. |
| Posted by: Besoeker 2010-02-21 08:41 |
| #9 Under the old patronage system there was direct accountability. There were no 'laws and procedures' to hide behind. The accountability was transparent. If the 'public servants' screwed up, you fire the boss, you kicked your representative out of office. The old civil service system [pre-union] meant that as civil servants you made less than your counterpart in the public sector, however, you were protected from arbitrary firings. Now you have the worst of both worlds, ineffectual performance and the inability to remove along with expensive pay and benefits that usually exceed their public sector counterparts. With the Donks in charge in California, you have de facto patronage anyway. The simplest solution would just go back to the patronage system and remove the Donks ability to hide behind 'laws and procedures' to get rid of ineffectiveness and liability. As amply demonstrated there is no perfect answer. |
| Posted by: Procopius2k 2010-02-21 08:29 |
| #8 A first step is to pass "Right to work" laws across the board for private industry and public sector workers. A Right to Work law secures the right of employees to decide for themselves whether or not to join or financially support a union. Most of the states that don't have Right to Work laws are broke. Right to Work laws would at least somewhat neuter unions and their corruptive and damaging influences. |
| Posted by: JohnQC 2010-02-21 08:20 |
| #7 I don't necessarily disagree with that, just suggesting that a solution needs to address the political pressure/patronage issue as well. |
| Posted by: lotp 2010-02-21 08:18 |
| #6 However, like unions in the private sector they've grown fat and inflexible. Not quite, in private the private sector they've destroyed every industry they've infected. That's why the portion of union members in the labor force continually declines. As she rightly points out in the next sentence, unionized industries go overseas to remain competitive when faced with union cost pressures. So it is almost like when polio was defeated and the Mothers' March of Dimes had to find a new cause to raise funds for and they asked, what is the disease least likely to be defeated? Did the unions ever wonder, what is the industry least able to shift its jobs offshore? Because ultimately unions are gangs, legalized but still gangs, that seek to extort money from those with it, using whatever coercive means are necessary, including violence. They may have had a place when the folks who ran companies were thugs, however overblown the charge, but that time has passed. There is no place for unions in government. If we don't get them out of government they will destroy it. Because they are a parasite that will destroy its host. |
| Posted by: Nimble Spemble 2010-02-21 08:01 |
| #5 In theory such unions exist to counter patronage systems that dominated the civil service in openly corrupt ways for many decades in the 19th and early to mid 20th centuries. Therefore, in theory they serve the interests of the nation as a whole, which is scarcely treason. I don't think we'd be so unhappy about them if they were more flexible about getting rid of dead wood and if, as was the case for a very long time, the salaries people got were lower than or just at market value for their skillsets. However, like unions in the private sector they've grown fat and inflexible. And hurt competitiveness which is why industry went overseas in many cases. The equivalent needed here is to strip the government of unnecessary regulatory and other activities, reducing the size of the workforce and giving government managers both an incentive and the power to get rid of the deadwood and retain key contributors. |
| Posted by: lotp 2010-02-21 07:43 |
| #4 Public sector unions are treason, plain and simple. You are organized to promote your small group's interests against the taxpaying citizens of this country. How is that not treason? |
| Posted by: no mo uro 2010-02-21 07:18 |
| #3 Schwarzenegger finally seems to have figured out that getting the Golden State out of its death spiral requires confronting the power of the public sector unions headon Wrong. Schwarzenegger knew all along. It is the people of Caliphornia who haven't figured it out. They voted down referenda that would have dented union power and they keep returning union stooges to the state legislature. The smart ones are voting with their feet, so it's unlikely to get better until creditors stop buying their junk notes. |
| Posted by: Nimble Spemble 2010-02-21 06:22 |
| #2 Your "public service" is more like "self preservation" to me. I am disgruntled with all state and federal employees for this massive pay, bennies, unions, politics, and energetic destruction of our ability to provide for them. No virtue, no morals, just a job. It's all about what America can do for you. All of you are of shame. |
| Posted by: newc 2010-02-21 01:50 |
| #1 So, let me get this straight.... You work for the government for the perks and have a union to protect yourself against the public? That legally means you are not a "public sector" employee then, right? Public "servants" need unions to serve? WTF? Screw the union, and for that matter, screw public employees too. It is just too corrupt to support anymore. Nice pensions folks. |
| Posted by: newc 2010-02-21 01:47 |