Free Markets, Free People

government unions


Union membership continues to decline

Yup, it is on a downward spiral.  When actually given a choice (you know, the thing the left claims everyone should have?), many people opt out:

Government figures released Wednesday showed union membership declined from 11.8 percent to 11.3 percent of the workforce, another blow to a labor movement already stretched thin by battles in Wisconsin, Indiana, Michigan and other states to curb bargaining rights and weaken union clout.

Overall membership fell by about 400,000 workers to 14.4 million, according to the Bureau of Labor Statistics. More than half the loss, about 234,000, came from government workers, including teachers, firefighters and public administrators.

Funny that.  We talk about monopolies, but monopolies don’t work when government doesn’t prop them up, and, as pointed out, when government withdraws its sanction and force, when real choice is allowed, people will opt out.

And, of course, it’s not just the government sector where unions are losing members:

But unions also saw losses in the private sector even as the economy created 1.8 million new jobs in 2012. That membership rate fell from 6.9 percent to 6.6 percent, a troubling sign for the future of organized labor, as job growth generally has taken place at nonunion companies.

Unions are an anachronism … they just won’t admit it yet.  And, for the next 4 years at least, they’re still going to have political power because of who is in the White House.

But as more and more states become right to work, and the jobless see employers migrating to those states, I think the “market” will take care of itself – if the government will let it.

~McQ


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”.

Got it. 

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?

And pensions?

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.

You think?

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?

But:

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.”.

Uh huh.

But remember, none of this is like Wisconsin.  And don’t you forget it.

~McQ


Collective Bargaining 101

One of our commenters recently asked for a explanation of what “collective bargaining” was and why it was a “bad thing” for government unions.

Here’s a vid from the Heritage Foundation that does a good job of explaining it:

 

 

~McQ


California’s fiscal crisis provides a stark look at the difference between today’s left and right

The situation in California is critical with government there facing a 19 billion dollar shortfall and the budget yet to be passed. It pits an admittedly "moderate" Republican governor against a Democratically dominated legislature and their differences on how to close that huge budgetary hole.

The lack of a budget is forcing furloughs and the possibility of the state again issuing IOUs instead of payments to vendors, etc.

Until the governor and legislature negotiate that budget, not much will change. And the fight is classic:

Schwarzenegger has proposed slashing spending to balance the state’s books, an approach rejected by Democratic lawmakers. Their leaders in the state Senate and Assembly are trying to draft a joint plan likely to include proposals for tax increases to rival the governor’s budget plan.

There it is. Where the governor sees government as having to yeild and reduce itself, the legislature views government – at the size and scope it now occupies – to be a nonnegotiable necessity and entitled to more taxpayer cash to preserve it as is.

Funny that the "conservative" position in this fight – i.e. the attempt to maintain the status quo – is that of the "progressive" party in California.

However, the cut spending/more taxes fight is, in a nutshell, the difference between the two parties right now.  I used to say there isn’t a dime’s worth of difference between the two (and on many issues that’s still true) but in terms of how to balance a budget, the “reduce government/ reduce spending” approach seems to now be solely owned by the GOP.

Whether or not they’ll actually do that should they again find themselves in the position of power to do so is obviously another question entirely. 

In the case of the Democratic party – they’re now a wholly owned subsidiary of government unions, and their pandering to these unions is both short-sighted and destructive.  The party that used to be able to claim the mantle of the working man’s party is now almost exclusively the government union worker’s party.  And of course that means keeping government large and well funded.

It’s going to be interesting to see how this fight comes out – but even with Schwarzenegger representing the GOP side of things, it is clear which side is the taxpayer’s friend.

~McQ

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Illinois – "let them eat cake"

Illinois seems bound and determined to take the title of "poster child for failed state government" away from basket cases Michigan and California.

Illinois is now billions behind in paying its bills. As Comptroller David Hynes points out:

“This is what the state owes right now to schools, rehabilitation centers, child care, the state university — and it’s getting worse every single day,” he says in his downtown office. Mr. Hynes shakes his head.

“This is not some esoteric budget issue; we are not paying bills for absolutely essential services,” he says. “That is obscene.”

Well not that obscene apparently, to the governor. In the midst of all of this, he’s decided now is a great time to give many on his staff 20% raises.

No, seriously – raises. How freakin’ politically tone deaf can you be?

Illinois Gov. Pat Quinn has handed out raises—some of more than 20 percent—to his staff while proclaiming a message of "shared sacrifice" and planning spending cuts of $1.4 billion because the state is awash in debt.

The Democrat has given 43 salary increases averaging 11.4 percent to 35 staffers in the past 15 months, according to an Associated Press analysis of records obtained under the Freedom of Information Act.

Remember all the jaw flapping that went on by Democrats about CEOs getting bonuses while their corporations were circling the drain?  Well here’s the governmental equivalent. 

And as if that’s not bad enough, the state is handing out 7% “cost of living” raises to government unions:

On July 1st this year, 40,000 or so AFSCME state employees happily collected a 7% percent “cost of living adjustment”. July 1st next year, they will get another 7%. In short, in 2 years, they will get a 14% raise. Even in good years, 7% is well over inflation.

Almost 6 billion in debt and unable to pay for “absolutely essential services” and yet handing out 7% cost of living raises to government union employees and up to 20% raises to staffers in the governors office?

Given that, how can anyone take Governor Pat Quinn seriously when he yammers on about “shared sacrifice”?  Why should they believe him?  The government aristocracy in Illinois has apparently completely removed itself from any sacrifice whatsoever.  They give new meaning to Marie Antoinette’s famous words – “let them eat cake”.

~McQ

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The growing power of government unions

The Arkansas Democratic Senate primary race pitting incumbent and Obama choice Blanche Lincoln vs. labor’s candidate, the sitting Lt. Governor Bill Halter did a lot more than point out a riff between labor and the White House. It demonstrated how powerful labor is and what sorts of money it can throw into the political arena to try to influence the outcome of specific elections.

But there is more to the story than that. Conn Carroll at the Heritage Foundation’s Morning Bell points out that for the first time in the history of the United States, there are more government union workers than there are private union workers. 52% of all union members now on the rolls of a union are “public servants” in some capacity or another.

And, as Governor Chris Christie of NJ has experienced, they’re a force to be reckoned with when trying to reform government.

The irony, of course, is that the institution that helped force changes within the private sector to the point that union membership is declining precipitously, is now the number one union shop in America. In the private sector regulation, cultural changes and competition driven compensation and benefit packages all but rendered unions moot. But within the government that helped force this change, unions flourish. And they don’t seem shy in wielding their power to further feather their own nest.

Indiana Gov. Mitch Daniels called government unions “the new privileged class in America.” Per Daniels government workers are now, on average, better paid than their private sector counterparts. And, of course, the sole purpose of unions is to protect jobs and secure better compensation and benefits.

That puts government unions at cross-purposes with any attempts to rein in the cost and scope of government at every level:

In Maine, the Maine Municipal Association, the SEIU, the Teamsters, and the Maine Education Association collectively spent hundreds of thousands of dollars to campaign against a ballot initiative that would have prevented government spending from growing faster than the combined rate of inflation and population growth. In Illinois, AFSCME Council 31 ran television and radio ads pushing for tax increases in their “Fair Budget Illinois” campaign. In Oregon, government unions provided 90 percent of the $4 million spent advocating two ballot initiatives to raise personal income and business taxes by $733 million.

Given the size and power of government unions, and the fact that that member dues are essentially paid by the taxpayer via member salaries, the argument could be made that taxpayers are subsidizing union activities which run counter to the tax payer’s best interest.

Don’t be fooled by the little spat in Arkansas between the White House and the unions. They’re joined at the hip and both know that the relationship they share is critical to the unions maintaining their grip on power, and the Democrats doing the same.

~McQ

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