The Death Knell of Public Sector Unions - and Liberalism?


The fracas in Madison, Wisconsin has overtaken the news cycle, eclipsing even the upheaval in Egypt and elsewhere in the Middle East.  And the reasons are not hard to discern.  It touches a chord in the country that resonates because the conflict on display there is the central issue of the day: spending, deficits, and the mounting debt that threatens to drown the various municipalities, states, and even the nation in a sea of red ink. 

Even more captivating to many Americans, struggling in this difficult economy, is the role of the public sector unions in the unfolding drama, which, after all, have, until now at least, been shielded from the impact of downturns.  As private sector unions have watched their numbers decline, public sector unions, perhaps, perversely, have only seen their memberships climb, a fact not gone unnoticed by many in the country.  Has a critical mass been reached?

Are working, taxpaying Americans in the private economy, facing uncertain times, no longer content to foot the bill for their compatriots employed by the government?

Like many states and the nation itself, Wisconsin is broke.  It is already $137 million in the hole, and the biennial budget for 2011-2013 faces a $3.6 billion deficit.  Governor Scott Walker has proposed a budget that will close the deficit without raising taxes.          

Currently, government workers in Wisconsin receive generous defined benefit pension plans with very limited personal contributions, while paying only 6% of the cost of their health insurance. 

Governor Walker would have them pay 5.8% of their pensions and 12.6% of their health insurance, well below the private sector averages where taxpayers generally pay 20% and 7.5% for their health insurance and pensions respectively.           Walker also calls for limiting teachers union collective bargaining to wages and benefits, but would delegate work leave rules to school administrators.  Wisconsin employs nearly 300,000 public sector employees.  If these changes aren't made between 10,000-12,000 workers will lose their jobs according to the governor.

The teachers unions, the Service Employees International Union, and the American Federation of State and County Municipal Employees have responded by sending thousands of protesters, busing many in from other states. 

The teachers are staging a "sick-out," calling in sick and forcing schools to close.  Some teachers are bringing students to the protest.  Doctors have been found handing out fraudulent medical excuses for teachers as well. 

 President Barack Obama has spoken out against Governor Walker, calling his proposals “an assault on unions.”  He has also "federalized" the issue by getting his old 2008 campaign PAC, "Organizing for America" as well as the Democratic National Committee involved in organizing the protests in Wisconsin and Ohio. 

Fourteen Democrats from the Wisconsin Senate have fled the state and are in hiding to prevent a quorum from being met, thus precluding a vote on Walker's budget bill. 

And, so, we find the battle lines clearly drawn, ones that are, I think, not favorable to Democratic interests. 

That is because it shapes up basically as public sector unions versus taxpayers, and teachers versus students and parents.  Do the Democrats, including the commander in chief, really want to make their stand here in Wisconsin?  It appears so.

There are any number of unflattering comparisons. 

The "Tea Party" movement, long derided by the left and the media, held many demonstrations, and so, of course unions are entitled to do so as well.  The difference is that the Tea Party protested government spending; they wanted balanced budgets and smaller government; they agonized over deficits and debt.  As such, it is probably the first populist movement that advocated for reduced government largess, cutting programs, and limiting spending.  The unions, of course, want the opposite; they want more debt, deficits, and spending; they are demanding that taxpayers continue providing them with extravagant benefits not available in the private sector, even as the Wisconsin state government faces massive deficits. 

Protesters in Madison and their supporters have also engaged in self-flattery, likening themselves with protesters in Egypt and elsewhere in the Middle East, as if Governor Walker was Hosni Mubarak or Moammar Kaddafi.  The difference, of course, is that Governor Walker and the Republican dominated state legislature were elected democratically.  Their ascension to political office and power reflects the will of the people.  And, as President Obama liked to say frequently during the Obamacare debates, circa 2009-2010, elections have consequences. 

What the unions and their supporters, not to mention the Wisconsin Democratic state senators who have fled the state, want is decidedly anti-democratic: they seek to prevent the democratic process from unfolding, by disrupting it through their take-over of the state house, through intimidation, and by Democratic legislators not showing up. 

The people of Wisconsin spoke during the last election.  The twenty or thirty thousand activists, unionistas, including many bused in from other states, do not reflect the will of the millions of people of the state of Wisconsin, who have already made their feelings known.

There is also an unfavorable comparison between the cosseted, secure public sector versus the unsteady private sector, which, after all, pays the bills. 

Government workers enjoy guaranteed employment, gold plated health insurance, generous pensions, early retirement, and bloated salary/benefit packages far in excess of their counterparts in the private sector.   Private workers, on the other hand, face high unemployment, dismal job prospects, rising expenses, costly health insurance premiums, and far more limited pensions, if available at all. 

Then there is the "civility" issue, which loomed large after the Tucson massacre.  While the left and the media are content to lecture the rest of us on proper rhetoric and speech, they, apparently, can hurl slurs, slanders, and death threats at will. 

         And so we find our gentle colleagues on the left, the protesters in Madison, equating Governor Walker with the dictator de rigueur of the day, Hosni Mubarak, not to mention their usual standbys, Hitler and Mussolini.  There have been uncivil taunts, accusations, and threats by unionistas.  Protesters have camped outside of the homes of Walker and other Republicans.  And they have turned the statehouse into a left wing pajama party.  It has always been the left that has owned the most violent and disruptive forms of protest, and incendiary, “uncivil” speech. 

         The big bang origin of the public sector universe occurred in 1962 with the signing of Executive Order 10988 by JFK, which authorized federal workers to form unions.  Thus were the seeds of the modern Democratic Party and its unbreakable alliance with public sector unions planted.  Before this, the Democratic Party was tied with vanishing industrial unions, they tethered to the real world of the free market.  Not so, the public sector unions, who are tethered only to the taxpayers.

         With JFK's move, the National Education Association, SEIU, AFSCME, and others, grew to their current grotesque size, and with it, incredible power and influence within the Democratic Party.

         The vicious cycle was thusly made complete. 

         Forced union dues were laundered back into Democrat coffers, electing Democrats who would, of course, be beholden to their union benefactors.  Not only did public employee unions contribute heavily to Democrat causes and politicians, but they showed up on election day, voting, manning polling booths, transporting other voters, working the phones, and other get-out-the-vote efforts. 

         Democrat politicians, in turn, made sure that union demands were met including guaranteed employment, automatic raises, favorable work schedules, and extravagant benefit packages with gold plated health insurance, pensions and early retirement. 

         This, in essence, is the world JFK bequeathed us, replete with cities and states throughout the land facing massive deficits, unfunded liabilities, and bankruptcy. 

         It is in effect an elaborate money laundering operation flowing from taxpayer to public sector unions to the Democrat party. Union dues wind up in Democratic coffers and benefits, in turn, flow back to unions, financed by working citizens, an entirely corrupt system.  Wisconsin, New Jersey, Ohio, and other areas of unrest are only the tip of the iceberg as the taxpaying citizenry seek redress of this decades old imbalance between the public and private universes.

         William McGurn, writing in the Wall Street Journal, describes the coming class war between the public and private sectors.  In the past, unions from both spheres supported each other.  Private sector unions supported the public sector's right to collective bargaining.  Public unions supported private unions' opposition to NAFTA.  In the current recession and with many states facing rising deficits, this cozy relationship is being turned on its head.  Blue-collar workers in the private world realize that generous pensions and health benefits for public employees are coming out of their pocket.  They also recognize that rising deficits and taxes needed to cover public liabilities hurts their job prospects as companies flee high tax states for more business friendly climates elsewhere.  Workers in the private sector may no longer be counted on to support their brethren in the government realm.  The new class warfare, in other words, is not between corporations, the “rich,” or “Wall Street” and the working man, but between public and private workers, between government employees receiving higher salaries with generous health and pension benefits and private workers who pay for them.

         Jeff Jacoby, writing in Commentary, remarks that according to the Bureau of Labor Statistics, in 2009, for the first time, the number of government union members surpassed the number of union members in the private sector, 7.9 million (37.4% of the government labor force) to 7.4 million (7.2% of private sector workers).  These numbers indicate that the percentage of public employees in labor unions is five times that of unionized private workers.  Union membership in the private sphere crested in 1953 at 35.7% and has declined since.  Public sector unions, however, eclipsed that percentage years ago with no indication of lessening.  The reasons should be obvious. 

         Public sector unions do not have to contend with market forces like the private sector.  They have only to remember their Democratic comrades come election time.  As government has grown, so has the number of government workers, at all levels, from 8.2 million in 1959 to 22.5 million in 2009. 

         Government workers also fare much better than their counterparts in the private sector.  In 2009, for example, state and local government workers received on average $26.01 an hour, compared with the average private sector salary of $19.39 an hour, 34% higher.  Public sector employees fared much better in fringe benefits, such as paid vacations, sick leave, health and life insurance, and retirement pensions, priced at $13.65 per hour or 70% more than the average benefits for private sector workers.  In addition, a much higher percentage of government workers than private sector employees received benefits such as life insurance or the traditional defined benefit retirements. 

         Federal workers did even better.  In 2008, including wages and benefits, federal workers compensation averaged more than double their private sector counterparts, $119,982 to $59,908.          

Recessions also seem to have little effect on government employees: While the private economy was shedding 8 million jobs between January 2008 and June 2010, the public sector labor force grew by 590,000.  After the "stimulus" bill, the number of public sector jobs grew by 400,000.

         Public sector unions are heavyweights when it comes to political contributions.  The SEIU, AFSCME, the NEA, and their state and local affiliates are among the biggest donors to the Democrat party and liberal causes in general, in particular, tax and spending initiatives. 

         In the last few years alone, in Oregon, Arizona, Washington, California, New York, New Jersey, and elsewhere, public sector unions have made multimillion dollar contributions for various liberal drives, along with bankrolling Democrat candidates.

         At the federal level, as Steve Malanga reports, AFSCME, the NEA, and the SEIU have ranked third, eighth, and tenth in contributions to national issues and campaigns over the last 20 years, having given $43 million, $31 million, and $29 million respectively.  Whereas large corporate and industrial entities may donate to both parties, 95% of public sector union contributions have gone to the Democratic Party.

Robert Barro considers collective bargaining for public sector unions a violation of federal antitrust laws rather than a "sacred right."  Teachers within a state or between states can conspire as to wages and benefits.  If, say, trucking companies or doctors within a state fixed prices and fees they would be in clear violation of antitrust laws.  He recommends restricting collective bargaining in the public domain and "right to work" laws.

Then there is the issue of collective bargaining, which the left considers a sacred birthright, far more important than the relatively minor cutbacks in benefits.  Should government workers even be allowed to form unions and bargain collectively in the first place? 

         First, most federal workers do not have collective bargaining rights.  In this light, President Obama's criticism of Walker sounds hypocritical.  Why condemn Walker's proposals as an "assault on unions," and not call for the same rights for federal employees?

           Kimberly Strassel reminds us that federal workers (some two million excluding postal workers and uniformed military) are prohibited from collective bargaining for wages and benefits.  Washington DC is a "right to work" region: federal workers do not have to join a union or pay dues; this based on laws passed by Jimmy Carter and a Democrat Congress (the Civil Service Reform Act) in 1978.

There are also 12 states that specifically prohibit collective bargaining for state and local workers (and another 12 states that limit it), which go well beyond anything Governor Walker is proposing. 

         So why are Walker's measures considered draconian when 12 states and the federal government already exceed his proposals by explicitly prohibiting public workers from collective bargaining at all? 

         Walker's bill would end collective bargaining rights for healthcare and pensions (already limited or banned in 24 states) and restrict pay raises to the Consumer Price Index unless approved by a referendum.  Walker's actions will maximize the ability of local governments and school districts to avoid layoffs. 

         His bill would also end the current system by which the government collects union dues from the paychecks of government employees, and then sends the funds to the union. 

         And that is good, for this strategy must surely rank as among the cleverest scams ever devised.          

         Unions would now be responsible for dues collection.  Individual workers can choose to pay the dues, or opt out, at an annual savings of as much as $1000.  Walker would require unions be recertified by a majority of all union members (not merely those who cast votes) each year. 

         Giving public employees greater choice must chill the bones of union bosses and Democrats alike. 

         Further, government workers are already protected by civil service rules: including "grievance procedures, merit hiring, just cause for disciplining and terminating employees."

         Robert Barro considers collective bargaining for public sector unions an antitrust violation rather than a “civil right,” given that teachers within a state or between states, for example, can conspire on wages, benefits and work conditions.  If all trucking companies or doctors, say, within a state would agree on prices and fees, they would be in obvious violation of antitrust laws.  He recommends restricting collective bargaining and implementing “right to work” laws.      

         Reasons for opposing collective bargaining for public workers are compelling.

         First, when union representatives negotiate for pay raises or benefits in the private sector, they sit across the table with management, both of who have a vested interest in the success of the company.  If union demands are too great, it runs the risk of reducing the competitiveness of the company or even driving it out of business altogether.  In the public sector, the employer is the citizen/taxpayer.  Who represents his interests?  Who sits across the table from the public unions during negotiations?  Basically, it is the government, which has an interest in keeping unions happy.  There is little incentive by either the public union or the government "employer" to contain costs since the burden is borne by others.  In effect, the taxpayer/citizen, who is the actual employer, is not represented.  The public sector union sits on both sides of the negotiating table and hires its own boss, an intrinsically flawed and corrupt arrangement.

         Second, in the private sector, unions and owners have a vested interest in ensuring the company remains competitive or else lose sales and jobs.  Public workers, however, do not contend with market forces, since governments do not go out of business.

         Third, in the private sector, labor and management sit on opposite sides of the table.  Not so, in public unions where labor and management are on the same side, both pushing for greater pay and benefits, paid for by citizens in the private sector, who are themselves not represented.

         Fourth, government unions enjoy legal monopolies in vital public services such as police, fire, and sanitation, which only they provide.  If teachers, police, or transit workers, say, demand greater pay and pensions, or go on strike, they have the citizens over a barrel.  Consumers can hardly abandon public service monopolies even when they become inefficient and costly - as they can in the private sector.

         Fifth, when private sector unions bargain with their employers, they are seeking a more even handed allocation of profits (while ensuring the concern remains profitable).  Public unions, on the other hand, haggle with congenial politicians over taxpayer money, placing union interests in conflict with the public they supposedly serve.  The result, as we have seen, is mushrooming state government and out of control costs.    

         Sixth, and probably most convincing, is the corrupting relationship between public unions and their government benefactors, generally in the Democratic Party.  The existing arrangement in which government collects forced dues from public workers, sends the money back to the unions, who, in turn, provide campaign cash to the Democratic party is intrinsically unethical with obvious conflicts of interest. 

         Yet, it is this fraudulent relationship has become the backbone of the Democratic Party, and the vehement reaction by Democrats to common sense actions called for by Governor Walker to prevent bankruptcy and/or layoffs, reflects the threat they perceive in his effort to break this vicious cycle.          

Unfortunately, for Democrats and public unions, the taxpayer ATM is empty.

         Eliminating the government collection of mandatory dues that are then promptly delivered to public unions who in turn contribute to their favored candidates while demanding greater tribute (paid for by the unsuspecting taxpayer) breaks the political cycle that has brought us to this moment: massive unfunded public union liabilities and states and municipalities facing bankruptcy.                   

Indeed, taken together the states have an unfunded pension liability of $3.3 trillion, with another $574 billion including cities and counties within the fifty states. 

         It is this system that lies at the heart of political corruption in the country today. 

         While private sector workers face unemployment, higher taxes, and limited horizons, government employees enjoy lavish salaries, pensions, and healthcare benefits that are increasingly out of line with their private sector counterparts.  The public sector unions have benefited enormously from collective bargaining rights that began in the early sixties, much to the detriment of the private economy upon which they depend.  Governor Walker begins the process of scaling back their influence and restoring balance in the cost and size of state and municipal government. 

         In so doing, he protects working people who must pay the price for the extravagant benefits of their public sector lords while enduring lower wages and lost jobs due to higher taxes.

         It is not for nothing that such liberal icons as FDR and George Meany, the first head of the AFL-CIO, opposed collective bargaining in government.  FDR said that the "process of collective bargaining, as usually understood, cannot be transplanted into the public service."  George Meany believed that it was “impossible to bargain collectively with the government.”

         It is time for public sector unions to go. 

         They serve no legitimate role and work against the interests of the public they are supposed to serve. 

         If not constrained, the country can look forward to steadily increasing taxes, higher unemployment, insolvent government, and an economy in permanent decline.    














































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