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Public-Sector Unions Choke Taxpayers

"I thought unions were great — until at Chrysler, the union steward started screaming at me. Working at an unhurried pace, I'd exceeded 'production' for that job."

That comment, left on my blog by a viewer who watched my Fox Business Network show about unions, matches my experience. No one ordered me to slow down, but union rules and union culture at ABC and CBS slowed the work. Sometimes a camera crew took five minutes just to get out of the car.

Now unions conspire with politicians to rip off taxpayers.

Steve Melanga of the Manhattan Institute complains that politicians get union political support by granting government workers generous pensions and health benefits. After those politicians leave office, taxpayers are liable for trillions in unfunded promises.

"It's squeezing out all other spending," Melanga says. "Where are we going to get this $3 trillion dollars? ... When they're (government workers) allowed to retire at 58 and the rest of us are retiring at 60 and 67 — and by the way we're living to 80 — it's crazy. The public sector is the version of the European welfare state which, by the way, in Europe, they're actually rolling back."

John Gage, president of the biggest federal workers union, the American Federation of Government Employees, disagrees: "This thing about unions and the public sector and bankrupting America, that's very far from the truth. Yes, we have a problem with pensions. Basically because these pension plans haven't been properly funded."

Melanga's response: "Fund public-sector pensions at a level that we can afford, (and turn) the pension system into a defined-contribution system. Public-sector employee unions and states have refused to do that."

A defined-contribution plan is like your 401(k). Your pension benefits depend on how well your investments do. State and local unions, by contrast, have "defined-benefit" plans, which simply force taxpayers to send retirees a monthly check.

Gage doesn't like Malanga's suggestion: "Can you imagine working 30, 35 years ... and (with) what just happened with the (stock) market, suddenly you're left holding nothing?"

I don't think they'd be holding "nothing." Yes, the market crashed, but the Dow is still above 11,000.

Twenty-eight years ago, it was below 800. That's up more than 1,000 percent. Over time, 401(k)s provide a decent retirement.

When I said that we in the private sector have such plans, Gage responded, "Only because of the laws in this country which make it almost impossible for private-sector workers to organize and to have a union. ... (W)ithout unions, we'd have a 'race to the bottom.'"

But this makes no sense. Do all employers move to Mexico because wages are lower there?

But many viewers side with Gage:

Grover said: "Stossel's take on Unions is nothing but appalling. According to him, workers have no rights. Workers are the ones who make a company profitable, not CEOs. In Stossel's slanted view, worker's are dirt and don't deserve anything."

Jakob wrote: "Are you really this stupid? Do you really want to lower American workers' standards to that of Honduras and China, where democratic unions do not exist? Would you like for us to go back to a time in America before we had unions? When children worked in factories for 14-hour days and health and safety standards simply did not exist?"

These are popular views. But they are wrong. Factories are safer because of free markets. Companies want better workers and must compete to get them. Free markets create wealth that permits parents to send their kids to schools instead of factories. Unions once helped to advance working conditions, but now union work rules mostly retard growth and progress.

Many workers understand that, and that's why only 8 percent of private-sector workers still belong to unions. In the private sector, wage and pension demands are tempered by competition. If one company pays too much, a competitor takes his business.

But governments are monopolies. They face no competition and get their money by force. So they can conspire with public-sector unions to milk taxpayers. That explains the fix we're in today.

Something's got to give.

John Stossel is host of "Stossel" on the Fox Business Network. He's the author of "Give Me a Break" and of "Myth, Lies, and Downright Stupidity." To find out more about John Stossel, visit his site at <a href="http://www.johnstossel.com" <http://www.johnstossel.com>>johnstossel.com</a>. To read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.

DISTRIBUTED BY CREATORS.COM

Comments

3 Comments | Post Comment

John,

The only people in favor of unions any more are the union heads, the workers, and politicians that receive kickbacks. I've yet to see a union leader admit that the unions are sucking us dry. It's like saying 2+2=4 and the union guy would say no, it's 5. Seriously, 1+1+1+1 is 4 buddy. No it's not, it's 5.

My wife was part of a union years ago. In some cases it wasn't much better than a non-union job. The union dues all went to union heads, lawyers, negotiators, and crony politicians. One day, the company issued a statement that said, due to cost we are moving to another state that is more business friendly. They allowed anyone that want to go with the company to do so and only one or two actually went. After the move the dissolved the union so the company could profit properly.

Comment: #1
Posted by: Brian S
Wed Oct 20, 2010 11:28 PM

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"When they're (government workers) allowed to retire at 58 and the rest of us are retiring at 60 and 67 — and by the way we're living to 80 — it's crazy."

I'm a union firefighter, and eligible to retire at 53. And for good reason; firefighters don't tend to live until 80.

Unfunded promises? Complete bullshit. The Law Enforcement Officers and Fire Fighters 1 pension system has always been 100% funded. LEOFF 1 stopped adding members in the early 70's when LEOFF 2 was started. LEOFF 2 has far fewer benefits. LEOFF 1 will probably still have funds left after the last member has died.

Comment: #2
Posted by: Andy
Sat Oct 30, 2010 10:45 AM

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For as long as I can remember (I am 50), working in the public sector carried a stigma, most people didn't want public sector jobs, the feeling was you could make more money in a private job. Until there was a recession, when private employers cut back in the late 1980's I took my first public sector job at a pay cut. I was forced to join the union, when the shop steward asked me to fill out the form to deduct union dues, I said "what if I don't want to be in the union?, he said "we take the dues anyway and this is a union shop so if you want protection, you have to join".
The benefits were seen as a way to make up for being unable to match private salaries. I thought the fact that public sector had large pools of employees gave them the leverage to provide good benefits at cost effective rates.
Early retirement was seen as a way to cut salary expenses.

Comment: #3
Posted by: foyle
Sun Oct 31, 2010 6:48 AM

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