Tuesday, February 1, 2011

Blocking Reform: The Public Sector Union Monster

At a time when the private sector has lost around 5 million[1] jobs (or more)[2], and those still employed are accepting frozen salaries, canceled bonuses, and longer work days, jobs in the public[3] sector are booming!

Public sector unions have used their considerable political power to redirect taxpayers' money to preserve not only their jobs, but their generous salaries & benefits as well, all while providing poorer quality public services to the American people.

With the gap between pay & performance widening[4], unnecessarily costing American taxpayers billions of their hard-earned dollars, reining in spending on public employees is crucial to America's financial future.

Many relatively simple reforms, like the elimination of fixed payouts[5] for public sector pensions could help control these costs. So why don't these reforms happen?

The public sector unions stand in the way of changing the system.

A 2005 study[6] by the Employee Benefit Research Institute estimated that the average public sector worker earned 46% more in salary & benefits than private sector employees performing comparable work. Other - more recent -studies, such as the Cato Institute's "Employee Compensation in State & Local Governments" suggest that this gap is now as wide as 70%[7].

The official unemployment rate has hovered around 10% for the last two years[8], and the private sector loses more jobs each month, but public sector employment has grown. The jobless rate for government workers is under 3% (average government-sector unemployment rate for 2007-2009 was 2.76% according to the Bureau of Labor Statistics - not seasonally adjusted) and their salaries continue to rise.

When the movement among public-sector workers to unionize began gathering momentum in the 1950s, some critics observed that government is a monopoly not subject to the discipline of the marketplace, and allowing them to unionize would eventually give them the power to hold politicians & taxpayers hostage.

Since then, public-sector unions have successfully shut down schoolspolice & fire departments[9, 10, 11] and other essential public services, including entire transit systems, by going on strike to prevent common sense reforms that would rein in spending.

There are often no legal alternatives to public services, so many states[12] have outlawed such strikes[13]. But that has only pushed unions to organize political action committees, hire lobbyists and use their considerable muscle to elect sympathetic public officials.

Savvy public unions are now moving to crush the rise of anti-tax movements around the country.

And they've been successful!

In spite of high unemployment rates and huge budget deficits, states like California & New York[14] have already raised taxes to cover their promises to unions instead of making efforts to cut spending and live within their means.

In the private sector, an employer forced to pay too much for labor will eventually go out of business - but in the public sector, more union members just means more voters, more dollars for political campaigns and higher taxes to fund expanding wage & benefit payments to workers who are impossible to fire.[15, 16, 17]

Public Sector Unions have spent several decades successfully demanding unsustainable salaries & endless benefits at the expense of struggling tax-payers.[18] It's time for Americans to fight back, while simple reforms are still enough to secure our future.

  1. Nutting, Rex. "5.1 Million Jobs Lost in This Recession Economic Report." MarketWatch. 3 Apr. 2009. Web. 01 Feb. 2011. http://www.marketwatch.com/story/job-losses-breach-5-million-mark.
  2. Isidore, Chris. "7.9 Million Jobs Lost, Many Forever - Jul. 2, 2010." CNN Money. 02 July 2010. Web. 01 Feb. 2011. http://money.cnn.com/2010/07/02/news/economy/jobs_gone_forever/index.htmM.
  3. Kotkin, Joel. "Cities with Job Growth Favor Public Sector Hiring - Annual Forbes.com Ranking Shows ‘awful Year’ for Employment in U.S." MSNBC News. 28 Apr. 2010. Web. 01 Feb. 2011. http://www.msnbc.msn.com/id/36805857/ns/business-forbescom/.
  4. Gillespie, Nick. "Even More on The Coming War Over Public-Sector Pensions - Hit & Run." Reason Magazine. 21 Feb. 2010. Web. 01 Feb. 2011. http://reason.com/blog/2010/02/21/even-more-on-the-coming-war-ov.
  5. Meister, Stephen B. "Facing the Pension Mess--Stephen B. Meister - NYPOST.com." New York News | Gossip | Sports | Entertainment | Photos - New York Post. 21 Dec. 2010. Web. 01 Feb. 2011. http://www.nypost.com/p/news/opinion/opedcolumnists/facing_the_pension_mess_2x9CfnClQRu9usCxH5E1eO.
  6. Employee Benefit Research Institute. ""Benefit Cost Comparisons Between State and Local Governments and Private-Sector Employers," and "Facts from EBRI: The History of Retirement Plans." | EBRI." Employee Benefit Research Institute | EBRI. Apr. 2005. Web. 01 Feb. 2011. http://www.ebri.org/publications/notes/index.cfm?fa=notesDisp&content_id=3302.
  7. Edwards, Chris. "Employee Compensation in State & Local Governments." Cato Institute - Tax & Budget Bulletin 59 (2010). Cato Institute for Policy Research. Jan. 2010. Web. 1 Feb. 2011. http://www.cato.org/pubs/tbb/tbb-59.pdf.
  8. St. Louis Federal Reserve. "Graph: Civilian Unemployment Rate (UNRATE) - FRED - St. Louis Fed." St. Louis Fed: Economic Research. Jan. 2010. Web. 01 Feb. 2011. http://research.stlouisfed.org/fred2/graph/?chart_type=line&s[1][id]=UNRATE&s[1][range]=5yrs.
  9. "Education: Biggest Teachers' Strike - TIME." Breaking News, Analysis, Politics, Blogs, News Photos, Video, Tech Reviews - TIME.com. 20 Apr. 1962. Web. 01 Feb. 2011. http://www.time.com/time/magazine/article/0,9171,873556,00.html.
  10. Reuss, Edward D. "The Police Strike." Home. 2000. Web. 01 Feb. 2011. http://www.nycop.com/Jun_00/The_Police_Strike/body_the_police_strike.html.
  11. "List of Strikes." Wikipedia, the Free Encyclopedia. Web. 01 Feb. 2011. http://en.wikipedia.org/wiki/List_of_strikes.
  12. "Restrict, Don'™t Outlaw, Teachers’ Right to Strike." Chicago Sun-Times. 28 Jan. 2011. Web. 01 Feb. 2011. http://www.suntimes.com/opinions/2878931-474/strike-board-illinois-teachers-behalf.html.
  13. "Strike Action." Wikipedia, the Free Encyclopedia. Web. 01 Feb. 2011. http://en.wikipedia.org/wiki/Strike_action#In_the_United_States.
  14. Farrell, Michael B. "California the Tax Increase Leader for 2009 - CSMonitor.com." The Christian Science Monitor - CSMonitor.com. 26 Mar. 2010. Web. 01 Feb. 2011. http://www.csmonitor.com/USA/2010/0326/California-the-tax-increase-leader-for-2009.
  15. "The Public Sector Unions: The Battle Ahead | The Economist." The Economist. 6 Jan. 2011. Web. 01 Feb. 2011. http://www.economist.com/node/17851305.
  16. Boniello, Kathianne. "Ex-Chancellor Joel Klein: It's Easier to Execute a Killer than Fire a Teacher" New York Post. 30 Jan. 2011. Web. 01 Feb. 2011.  http://www.nypost.com/p/news/local/joel_easier_to_ax_killer_than_teacher_qEu1o5d8AVDrQiqshS4B7M
  17. Associated Press. "NYC to Stop Paying Teachers in "Rubber Rooms" - CBS News." CBS News US. 15 Apr. 2010. Web. 01 Feb. 2011. http://www.cbsnews.com/stories/2010/04/15/national/main6399669.shtml.
  18. Reason Magazine. "How to Fire an Incompetent Teacher." Reason Magazine. Oct. 2006. Web. 01 Feb. 2011. http://reason.com/archives/2006/10/01/how-to-fire-an-incompetent-tea
  19. Walker, Gregg. "Union Should Quit Intimidating the Public ... or Pay the Price." The Lakeland Times. 31 Dec. 2010. Web. 01 Feb. 2011. http://www.lakelandtimes.com/main.asp?SectionID=10&SubSectionID=10&ArticleID=12422.
  20. Semmens, Patrick. "Video: Union Intimidation in Action." National Right to Work Legal Defense Foundation. 19 Oct. 2007. Web. 01 Feb. 2011. http://www.nrtw.org/blog/video-union-intimidation-action.

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