Public Employee Unions
With all of the union strife in Wisconsin, Indiana and New Jersey, and indications of more to come, it might be time to shed a bit of light on unions as an economic unit.
First, let's get one important matter out of the way. I value freedom of association, and non-association, even in ways that are not always popular and often deemed despicable. I support a person's right to be a member or not be a member of a labor union. From my view, the only controversy regarding unions is what should they be permitted and not permitted to do.
According to the Department of Labor, most union members today work for state, local and federal government. Close to 40 percent of public employees are unionized. As such, they represent a powerful political force in elections. If you're a candidate for governor, mayor or city councilman, you surely want the votes and campaign contributions from public employee unions. In my view, that's no problem. The problem arises after you win office and sit down to bargain over the pay and working conditions with unions who voted for you.
Given the relationship between politicians and public employee unions, we should not be surprised that public employee wages and benefits often average 45 percent higher than their counterparts in the private sector. Often they receive pension and health care benefits making little or no contribution.
How is it that public employee unions have such a leg up on their private-sector brethren? The answer is not rocket science. Employers in the private sector have a bottom line. If they overcompensate their employees, company profits will sink. The company might even face bankruptcy.
Of course, if private companies can count on federal government bailouts, as did General Motors and Chrysler, they can maintain a comfy relationship with their unions. No such bottom line exists in the government sector. Politicians have every reason to grant benefits to their political allies, in this case public employee unions. They don't pick up the tab; it's unorganized taxpayers who face higher taxes.
Wisconsin's Gov. Scott Walker says that stripping the workers of collective bargaining rights, and limiting talks to the subject of basic wages, is necessary to give the state the flexibility to get its finances in order and spare taxpayers further grief.
Consider the cushy deal for many of California's unionized state and local police, fire and prison employees. They have what's called a "3 percent at 50" formula that determines their retirement check. It's based on 3 percent of the average of the three highest-paid years of the employee's career, multiplied by the number of years on the job. An employee with 20 years' service can retire at age 50 and receive 60 percent of his salary. Employees often boost their retirement income by putting in a lot of overtime hours during their last three years of service.
Temple University professor William Dunkelberg said in his recent CNBC article "Should Unions Have the Power to Tax?": "The 'employers' (taxpayers through their elected officials) have slowly lost their ability to determine the terms of employment offers. The unions now determine working hours, hiring criteria, the quantity of 'output' to be produced per day, the number of sick and vacation and holiday days, how their performance will be evaluated etc. No longer can the employer make an 'offer' for a job with requirements that fit the needs of the public institution."
Major states like California, New York, Illinois, Ohio and New Jersey — and the federal government — are on the verge of bankruptcy. Large cities like Los Angeles; Chicago; New York; Washington, D.C.; Newark; and Detroit are facing bankruptcy as well. Does that tell you something? It tells me that we can no longer afford to do what we've done in the past. We must make large cuts in spending. Spending on public employee salaries is just a drop in the bucket.
Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.
COPYRIGHT 2011 CREATORS.COM
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What nonsense! The reason that unionized public sector employees have better pay and benefits than non-unionized private sector employees is that the private sector employees aren't unionized. And that's the result of decades of union-busting, mostly by Republican politicians, but abetted by the "free trade" Democrats who've encouraged trade policies that allow companies to move jobs overseas to areas of the world (like China) where unions are illegal. This gave private companies leverage to force concessions in pay and benefits.
Comment: #1
Posted by: Geoffrey James
Tue Mar 1, 2011 6:06 AM
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Re: Geoffrey James
It is not nonsense!. Even at the height of union power less than 40% of employees were union workers. Yet all Americans enjoyed a higher standard of living in the 50s and 60s during that height. The unionized steel workers could not compete against the lower wages and higher production of foreign produced steel and their jobs are gone. The largest proponents of "free trade" were the democrats. Bill Clinton is the president that signed NAFTA and other free trade agreements. More companies dumped their Union works to face the stiff competition from foreign competition. Democrats have done more to bust the Unions than the GOP ever did. Don't believe me check out the Bureau of Labor Statistics at bls.gov. It is a little cumbersome to search it but it is really eye opening. As a struggling taxpayer who has managed to hang on to a job during these tough times. I am not sympathetic to public employees who have not had to face mass lay offs whining about having to contribute more to their pensions and health care premiums. The only other alternatives are to cut services and raise taxes. I am not sure we are going to even be able to avoid those, but before we ask more from the private sector employees it is time for the public unionized employees to start sacrificing first. I know for a fact that our union deals are hurting the local government. My neighbor worked a lot of overtime hours to double his salary in overtime to boost his pension and at the age of 55 makes over $75000 a year in benefits and stays at home while his wife works as teacher (with same retirement potential ahead for her at 50). Yet our local police department is having to let go officers to pay for these promised benefits but hey lets not ask them to contribute to the trough they are feeding from.
Comment: #2
Posted by: Lynn
Tue Mar 1, 2011 6:41 AM
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"First, let's get one important matter out of the way. I value freedom of association, and non-association, even in ways that are not always popular and often deemed despicable. I support a person's right to be a member or not be a member of a labor union. From my view, the only controversy regarding unions is what should they be permitted and not permitted to do."
This is NOT a freedom of association issue. Name one unionized employee base that also allows non-union workers? I believe that to be a movie actor you MUST be a SAG member. If you want to write movies ot TV shows you must be a WGA member. Want to teach at a public shcool, better join your local teachers union. Want to work at a detroit auto plant, better going the local auto workers union. Pick up trash, become a steel worker, etc.. etc...
True, no one says you HAVE to work those jobs, but the people who choose to work those jobs have no choice but to join those unions. That is the problem with unions, they aren't voluntary at all.
This is a free market, no one dictates that consumer MUST buy something, or that demand MUST stay below a certain level. Therefore its absurd that the laborers who build that product MUST be payed a minimum amount (even if the product price or sales volume don't dictate that), or be limited to specific work hours, even if product demand requires more man-hours to meet production needs.
There are government programs in place (including the new health care reform bill that may or may not last), OSHA, etc.. that mandate most of the protections unions were created to fight for. Currently, employees are being taxed by the government to cover thinks like COBRA and OSHA and Social Security, yet at the same time, those in Unions are also forced to pay union dues so that the union can fight for things like health care, safe working conditions, and retirement pay. I don't really see the government relenting its control, so its time for unions to fall by the wayside.
And if you think unions ARE productive, I think the WGA strike a few years ago proves that's not always the case. They lost more money by not working then they ever would have gotten, even with a 6-cents per DVD royalty.
Comment: #3
Posted by: Nathan H.
Tue Mar 1, 2011 11:08 AM
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Re: Geoffrey James
Nonsense indeed. Union busting has nothing to do with it. It has to do with competition in the global economy. My wife is not a member of a union, but must pay union dues as a classified employee in the public school system in California. That union contributes exclusively to the Democratic party in elections, regardless of whether all their members agree. There is no competition in the public sector, hence unions maintain wages and benefits in excess of the value provided in many cases. The current disillusion with union employees, is the same disillusion people have with all entitlement programs. Someone, usually the taxpayer, has to foot the bill. During a recession, that bill becomes even more meaningful, and taxpayers (the customers) resist paying for the goods and services which are clearly declining in value. (Witness the sad state of education in America). I would be more sympathetic to the teachers in Milwaukee if their students were performing at a higher level, and they weren't staging a sick-in, paid of course, to protest the Governor's efforts at balancing a budget, or union busting, depending on your point of view. The students are the customers, and they are being ill served, in my opinion, by the teachers in this instance.
Comment: #4
Posted by: jay
Tue Mar 1, 2011 4:07 PM
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Such nonsense - the governmnet prints the money it pays us uniion folk. It can print all it wants and we deserve every dime we get. Unions can help all workers have very high salaries and lifetime benefits. We just all need to work together to beat down these rich business owners. They must be stopped, they abuse us and try to keep us poor and stupid. Uniions alows us to get vacation and benefits like sick days to use when we needs them.
Comment: #5
Posted by: Robert
Tue Mar 1, 2011 7:10 PM
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Re: Robert
This has to be the stupidest thing I have ever read if it was not intended as sarcasm.
Comment: #6
Posted by: Steve
Tue Mar 1, 2011 7:58 PM
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Re: Geoffrey James, I respectfully disagree with you. You could not be more wrong. I work on the ground for an airline in Chicago. I am a union employee in a big union town and the non-unionized employees (ticket & gate agents) make more money per hour than the we do. Their working conditions are better than ours. Their raises are based on performance of the individual rather than as an entire work group.
As for working conditions, you really need to open your eyes. It is the public sector unionized airport police that inflict penalties on the private sector unionized employee, by issuing tickets with stiff fines for minor infractions (like not having your I.D. badge on your outer most garment, between your neck and your waist with your picture facing out. This tax, and yes it is a tax because you have no forum to dispute the violations, and if you want to keep working you have to pay the fines. This is to help raise revenues for the city to help pay for the "hard working public sector union employees" in the city.
Comment: #7
Posted by: Pete Bedrio
Tue Mar 1, 2011 8:42 PM
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Re: Robert
And when all our companies send all our jobs overseas in order to make money on the global economy because our bloated wages make are good more expensive? Then what are you going to do? Wake up that exorbitant wages and benefits are why so many of our manufacturing jobs went to China, India, Vietnam, and others. Try to go one month buying only Made in the USA, this goes for the grocery store too and tell us what you find. I tried to get made in the USA only for Xmas gifts. I could do it for the adults but if I wanted to get my nephews a present it had to be made else where.
Comment: #8
Posted by: Lynn
Tue Mar 1, 2011 8:54 PM
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there is one huge difference between public employee workers and private employee workers: The private employee workers provide income to their employers, and are paid from those earnings. Public employees provide no income to their employers and are paid from taxpayers' earnings--to which they did NOT contribute.
Comment: #9
Posted by: partsmom
Tue Mar 1, 2011 10:24 PM
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Thank you Mr Williams. I have never in my 55 years seen such childish behavior by politicians. Obama said "elections have consequences" YES THEY DO! So liberals and democrats, get back to work. You can run but you cannot hide from this mess. In WIsconsin, they have the opprtunity to right the finacial ship before they get inbto the trouble our state of California, which is totally hopeless and ful of mushhead liberal democrats, is in. All I hear on the left coast is raise taxes alot and cut a little ..... well, guess what, it doesnt work and coporations are flocking to Texas and othe states that know lower taxes fuel econmies through business expansion. Example of goofy economics, Goverment took trillions and $$ from who knows where ands threw it around ..... now no more money, the treasury is broke and the only reason the stock market is up is becuase of the tampering by the treasury and they cant do it over and over again..... pay now with rewriting these policies that are helping to bankrupt states while we still have hope to turn it around. Chinese and everyone else are laughing at us, take note.
Back to work Wisconsin teachers, your "clients" await you. Back to work Democrat congress, you lost the elections and there is a reason you lost. Enough of your political stunts. And since things are not going your way, head to the bathroom and when you see that person staring back at you in the mirror, ask he or she looking ack at you why things are not going well .... and change!
Comment: #10
Posted by: Gimmeyourreason
Wed Mar 2, 2011 12:00 AM
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There is a fundamental difference between government employee unions and private sector unions: you are forced to pay members of the former at the point of a tax collector's gun whereas you are not forced to support the latter.
Government union members derive their income from the coercive monopoly status of government. If you refuse to pay for a UAW built Ford and instead buy a Toyota, Honda, Kia, Mercedes, BMW, etc., no UAW member will come to collect your money at gunpoint. You can not refuse, under threat of violence, to pay for government services - and the pay of those who provide them.
Comment: #11
Posted by: dpearson
Wed Mar 2, 2011 8:01 AM
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While all of us public and private sector employees fight amongst ourselves over who has created our current economic collapse, the wealthy Wall Street financiers, real estate proprietors, and congressional deregulators who truly caused our economic debacle walk free in the streets. Two-thirds of our national wealth is held by the top 10% of earners, and you wonder why the boat is tipping? If the top 5% paid a fair portion in taxes we wouldn't be having this conversation.
Comment: #12
Posted by: Paul Wheeler
Tue Mar 22, 2011 6:08 PM
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The Union Movement has had an Important Role in American and Western History. It was an critical and necessary development in the industrial and now the information age for wages and benefits to improve. This Democratization of wealth has brought a standard of living heretofore unseen to our civilization. As well, the key components regarding work conditions, days off, vacations and the relationships between employers and employees represent a powerful statement about our society's willingness to mature, and have opened up innumerable markets which did not formerly exist. The Labor movement has had a profound and positive effect on modern quality of life.
That being said, I don't feel Public Employee Unions should be Lawful whatsoever. Quite Frankly, Management isn't breaking your back for a profit, and the Shareholders are Captive. As well, in States like mine (OR), the State Legislators, Public Employees, and the Judges who adjudicate any such Agreements are all enjoying the same pension system, which the aforementioned (captive) taxpayers are bleeding to provide.
I don't see how this is fair at all, Especially when these Unions are, as Walter said, the mightiest political force in play. With a Private Company, if the stock languishes, you can sell it. In the case of the State, you must pay more for a lesser dividend -- even as you abandon it, or flee.
Here in Oregon, the System no longer pretends to nurture private enterprise. These government agencies operate in a manner that shows no regard for the productivity that affords them. It's a Chicken and Egg conundrum.
The only solutions I see are either to abandon states in the grip of these unions, let them fold, or to develop a series of legal cases, seeking rulings that might constrain their political operations or that might give the captive shareholders options or recourse.
The trajectory is dire, and has been for at least a decade.
ward
Comment: #13
Posted by: Ward Fairbairn
Sun May 1, 2011 12:06 AM
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