Free Markets, Free People
New York Times: NY is not like WI
The NYT editorial board has decided it is time to rein in the compensation that government union employees get:
That huge increase is largely because of Albany’s outsized generosity to the state’s powerful employees’ unions in the early years of the last decade, made worse when the recession pushed down pension fund earnings, forcing the state to make up the difference.
Although taxpayers are on the hook for the recession’s costs, most state employees pay only 3 percent of their salaries to their pensions, half the level of most state employees elsewhere. Their health insurance payments are about half those in the private sector.
In all, the salaries and benefits of state employees add up to $18.5 billion, or a fifth of New York’s operating budget. Unless those costs are reined in, New York will find itself unable to provide even essential services.
So to review – government unions conspired to elect union friendly Democrats to the state legislature who in turn then granted, via “outsized generosity [with other people’s money]”, incredibly expensive benefits that cost those union members next to nothing.
Uh, yeah, I think that’s what has been said about Wisconsin as well. But in its very next paragraph, the NYT says, presumably so as not to seem too anti-union or anti-worker, that pointing this out isn’t either of those things, but that darn GOP is both:
To point out these alarming facts is not to be anti- union, or anti-worker. In recent weeks, Republican politicians in the Midwest have distorted what should be a serious discussion about state employees’ benefits, cynically using it as a pretext to crush unions.
The NYT provides one of the perverse joys I look forward too each day – trying to figure out how the editorial board will torture both the language and logic to come up with the positions it assumes. This is another example. What is happening in Wisconsin – almost precisely the same scenario – is anti-worker and anti-union because good old Governor Walker is one of them – a Republican.
But Governor Cuomo? Why the model of what it means to be a union friendly Democratic governor:
Gov. Andrew Cuomo has pursued a reasonable course, making it clear that he expects public unions to make sacrifices, starting with a salary freeze. He wants to require greater employee contributions to pensions and health benefits, with a goal of saving $450 million.
Negotiations begin this month, but so far union leaders have publicly resisted Mr. Cuomo’s proposals. If they don’t budge, Mr. Cuomo says he will have to lay off up to 9,800 workers.
Wait, what? Capitulate or he lays off 9,800 workers? Wow, that sounds pretty familiar. So that’s a reasonable course, but what Walker has proposed (do the same or he lays off 1,500 workers) is a “cynical…pretext to crush unions”.
By the way, in WI, government union workers are being asked to pay 12% of their health benefit costs, up from 6%. In NY, government union workers only pay 3%, far below the 20% private workers pay. And, NY government union workers have received pay increases every year (3%), to include last year (4%) in the middle of the downturn.
The average salary for New York’s full-time state employees in 2009 (even before the last round of raises) was $63,382, well above the state’s average personal income that year of $46,957. Mr. Cuomo’s proposed salary freeze for many of the state’s 236,000 employees is an important step to rein in New York’s out-of-control payroll. It could save between $200 million and $400 million.
Pay freeze? Huh. Reasonable in NY, not reasonable in WI?
In 2000, employee pensions cost New York State taxpayers $100 million. They now cost $1.5 billion, and will be more than $2 billion in 2014. Wall Street’s troubles are a big part of that. But so are state politics. The Legislature, ever eager to curry favor with powerful unions, added sweeteners to pensions and allowed employees to stop making contributions after 10 years.
Of course the salient question avoided by the Times (and the coverage in WI) is “which politicians were “ever eager to curry favor with powerful unions”?” In WI we know – they’re hiding out in IL. In NY? Well simply look at which party has controlled the Assembly for decades, including a supermajority now. It wasn’t that cynical union crushing GOP (they’ve held off and on slim majorities in the state’s Senate).
Ironically, the NYT points out why government unions are problematic and should be “crushed” without knowing it. But, and here’s the magic part, – apparently when the NYT makes note of that it has nothing to do with being “anti-union or anti-worker”, it is just pointing out “facts”.
It is also worth considering giving new employees the option to join what is known as a defined-contribution system, similar to the 401(k) plans widely in use in the private sector, and reducing the reliance on a guaranteed benefit system that has proved so ruinously expensive. The 401(k) system shifts the risk of a falling stock market to the employee instead of the state, but in the long run may be necessary to protect vital state services from economic downturns.
Nice … a device that has been in the private sector for decades, has been pointed out by critics of the defined benefit system for just as long as a means to drastically cut the huge benefit hole the states have dug themselves and the NYT finally gets on board. The horror, no? A quasi-privatized pension system that requires workers to contribute to their own retirement. What’s next, paying more for health care benefits!
Health care – another area the state has managed well.
Current state employees pay 10 percent of their health insurance premiums for single policies, and 25 percent for family policies, which is roughly in line with national averages for the public sector. But it is considerably less than most private workers pay — 20 percent and 30 percent, respectively.
And that has the state paying about $3 billion a year in health care costs with projections seeing that rise $300 to $400 million a year.
Opines the NYT:
If the state is unable to achieve the necessary savings in wages and pensions, it may need to seek higher insurance contributions for all state workers. That benefit is not protected by the state Constitution.
So again,let’s review. The NYT thinks wages should freeze, pensions need to be privatized, and government workers must contribute much more to their medical benefits/care, right?
Unlike Gov. Scott Walker of Wisconsin, Governor Cuomo is not trying to break the unions. He is pressing them to accept a salary freeze and a reduction in benefits for new workers. The unions need to negotiate seriously.
You have to laugh at this sort of nonsense.
But then there’s this, so you can again be assured that it is indeed the NYT spouting the nonsense:
We are also urging the governor to rethink his pledge to cap property taxes and allow a tax surcharge on high incomes to expire at the end of this year. That would bring the state an additional $2 billion this fiscal year, and $4 billion the following year — not enough to solve the fiscal crisis, but a serious down payment.
That’s right, the editorial board thinks solving it by increasing property taxes and taxing the “rich” is a wonderful idea.
And in an attempt to put a spin on the plea for more taxes:
The state’s middle-class workers will have to make real sacrifices. New York’s many wealthy residents, all of whom are benefiting substantially from a new federal tax break, should have to pay their fair share as well. That would bring the state an additional $2 billion this fiscal year, and $4 billion the following year — not enough to solve the fiscal crisis, but a serious down payment.
The middle class workers the Times is talking about are government union members who, on average, earn $16,425 a year more than the private sector “middle class” employees. The government employees would have to do something the average middle class worker in the state has been doing for decades – pay more for their benefits.
But, this gives the editorial board’s an opportunity to talk about its favorite method of problem solving – raising taxes on the rich and on property owners. And you have to love the language of class warfare – “the state’s middle class workers”, “fair share”, “wealthy residents” (they’re citizens, NYT, just like the middle class workers) and a “serious down payment” on solving the fiscal problem. Of course, not a word in the editorial about spending cuts.
Oh, and union, you need to “negotiate seriously.”.
But remember, none of this is like Wisconsin. And don’t you forget it.