Wednesday, November 16, 2011

Public Sector Unions / Fiscal Responsibility

Earlier this year, Wisconsin was ground zero for a major ideological fight over the economic future of not only the State, but also Cities, Towns, and School Districts across the state.  Almost all of these entities were in fiscal distress.  They were seeing their costs increase far faster than inflation while revenues were lagging far behind the cost increases.

A major factor of these cost increases were the result of the collectively bargained contracts between these entities and the public sector unions representing their employees.  Within these contracts were requirements that did reflected an arrogance and contempt towards the entity and the taxpayer who is responsible for funding these contracts. 

School Districts were required to only purchase health insurance for union teachers from the union itself as opposed to being allowed to purchase from other carriers or determine which carrier via competitive bid.  This created an effective monopoly for the unions - and they raised the costs of their products far beyond those of the free market - pocketing millions from the School Districts.  The fact that these excessive costs resulted in Districts running deficits, requiring borrowing or cuts to students / programs were immaterial to the union...they made money....lot's of it.

Public sector unions support and endorse the growth of government.  If government adds more employees, and all of those employees are required to be unionized, then the unions make even more money from the union dues that they pay.  To maintain membership loyalty, they demand and promote benefit and pension packages that are far more extravagant, comprehensive, and expensive than those available to workers in the private sector.  The unions don't have to worry about paying for these demands...the taxpayer pays the bill.  One of the major arguments in Wisconsin was the requirement that union workers pay 15% of the tab towards their healthcare and pension costs....while private sector workers generally pay a far higher percentage of the costs.  They thought this was 'unfair' to the union membership.  That this is unfair to the majority of the taxpayers is immaterial. 

Public sector unions further justify their existence by protecting their members from irresponsible management and management decisions.  The process to fire a teacher or public sector union employee working for a City or Town is almost prohibitive.  The fact that the employee is not meeting the performance requirements for their job is again immaterial to the union.  Their requirements and demands hamstring cities, towns, and school boards from ensuring efficiency or even rewarding superlative workers.  The overachiever and underachiever are all treated in a similar collective manner.

However, there is a real impact of the actions of not only public sector unions, but of those in government who see nothing wrong with supporting or pandering to these unions in order to get some of those taxpayer dollars recycled back to them as campaign or PAC contributions.

The recent reversal of the Ohio law which limited public sector union collective bargaining rights in addition to requiring the union members to pay more of their health insurance and pension costs has taken a state that thought it balanced it's budget and solved a fiscal crisis back into a fiscal crisis.  Either more programs and services have to be cut or taxes have to be raised on the residents of Ohio.  As this chart, from Big Government's post on the Union's of Ohio, demonstrates, Ohio already has endured significant tax increases - moving from a state with the 5th lowest tax burden to one that has the 7th highest tax burden in the country.

With all of this, why do we still have or support public sector unions?  What real purpose do they serve beyond using their wealth and power to get themselves more wealth and power at the expense of the generic taxpayer - or more accurately you and I?  According to Unions, they provide many their membership as well as to the taxpayer, because after all without the teachers in the teachers unions, who would teach your kids?  Administer and operate your government agencies like the Department of Motor Vehicles?  Or protect Police and Fire from being taken advantage of or placed in unsafe working conditions by elected officials?

Is it because of irresponsible management or the need to ensure that the worker has protections from an irresponsible employer (State, City, Town, School District), or from unsafe work environments?  Unlike 100+ years ago when workers first started to unionize to protect themselves from abuses, today our Federal, State, and often Local governments have Departments / Agencies and laws to protect workers. 

Today we have the Operational Safety and Health Administration (OSHA) at the Federal level looking out for America's workers...and many states have their own state version of OSHA.  Workers have the freedom to leave jobs that do not respect them - more so than in the 19th century or earlier. We have laws on the books that protect workers against discrimination...and a litigious society that effectively encourages aggrieved workers to sue their employers for real or perceived mistreatment.

As Ohio demonstrated the logical case for public sector unions is so lacking that in order to promote their agenda, they need to misrepresent the facts and use scare tactics to influence the electorate to vote to support them.  If someone doesn't look into the details of the case or ask questions, they don't know that the union is misrepresenting the case or is motivated for their own interests - not those of the 'general good'.

This conflict between limited and responsible government and public sectors that we've seen in Wisconsin, Ohio, and other states is not going to go away.  The Manhattan Institute makes the case that these conflicts will continue because of the ideological conflict between progressivism / socialism / statism and conservativism that is underway in this country. 

We need to understand the tactics and approaches of the public sector unions and their supporters.  We need to recognize and learn to ignore the use of scare tactics.  The scare is not from the loss of services or the abuse of workers that will take place - the scare that should worry us are the effects of the fiscal disaster that we rapidly approaching because we empower a collection of groups (unions) that have no purpose for existence except to suckle from the teat of the taxpayer and enrich themselves.

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