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Posts Tagged ‘Unions’

Kudos to Governor Walker of Wisconsin. Republicans rarely have the intelligence or the fortitude to win battles that reduce the burden of government, but it appears that he is on the verge of prevailing in his effort to limit special privileges for government workers. Fugitive Democrats from the State Senate apparently are giving up on their plan to block the Governor’s reforms by hiding in Illinois.

I won’t fully believe it until they’re back in their chairs and casting votes, but at the very least Governor Walker is showing why it is important to stand up to greedy special interests. Let’s hope Republicans in Washington can display the same courage in their fight to trim a tiny amount of spending from this year’s spending – even if it means a government shutdown.

Here’s a report on the Wisconsin fight from today’s Wall Street Journal.

Playing a game of political chicken, Democratic senators who fled Wisconsin to stymie restrictions on public-employee unions said Sunday they planned to come back from exile soon, betting that even though their return will allow the bill to pass, the curbs are so unpopular they’ll taint the state’s Republican governor and legislators.

…The Wisconsin standoff, which drew thousands of demonstrators to occupy the capitol in Madison for days at a time, has come to highlight efforts in other states to address budget problems in part by limiting the powers and benefits accorded public-sector unions.

Sen. Mark Miller said he and his fellow Democrats intend to let the full Senate vote on Gov. Scott Walker’s “budget-repair” bill, which includes the proposed limits on public unions’ collective-bargaining rights. The bill, which had been blocked because the missing Democrats were needed for the Senate to have enough members present to vote on it, is expected to pass the Republican-controlled chamber.

He said he thinks recent polls showing voter discontent with Mr. Walker over limits on bargaining rights have been “disastrous” for the governor and Republicans and give Democrats more leverage to seek changes in a broader two-year budget bill Mr. Walker proposed Tuesday.

…Mr. Walker’s bill would prohibit bargaining over health care and pensions for about 170,000 public employees in the state and would allow public employees to opt out of paying dues or belonging to a union.

The bill also would end the automatic collection of dues by the state, and require that every public-employee union get recertified to represent workers through an annual election.

…Mark Jefferson, head of the Wisconsin GOP, said…even after Mr. Walker’s plan is passed, the state’s public workers will still have more collective-bargaining rights than most federal workers, who can bargain over working conditions but not pay and benefits.

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The showdown in Wisconsin has generated competing claims about whether state and local government bureaucrats are paid too much or paid too little compared to their private sector counterparts.

The data on total compensation clearly show a big advantage for state and local bureaucrats, largely because of lavish benefits (which is the problem that  Governor Walker in Wisconsin is trying to fix). But the government unions argue that any advantage they receive disappears after the data is adjusted for factors such as education.

This is a fair point, so we need to find some objective measure that neutralizes all the possible differences. Fortunately, the Bureau of Labor Statistics has a Job Openings and Labor Turnover Survey, and this “JOLTS” data includes a measure of how often workers voluntarily leave job, and we can examine this data for different parts of the workforce.

Every labor economist, right or left, will agree that higher “quit rates” are much more likely in sectors that are underpaid and lower levels are much more likely in sectors where compensation is generous.

Not surprisingly, this data shows state and local bureaucrats are living on Easy Street. As the chart illustrates, private sector workers are more than three times as likely to quit their jobs.

This helps explain why the unions are treating the Wisconsin debate as if it was Custer’s Last Stand. The bureaucrats know they have comfortable sinecures and they are fighting to preserve their unfair privileges.

The only bit of semi-good news for Wisconsin taxpayers is that state and local bureaucrats are not as lavishly over-compensated as federal bureaucrats.

This Center for Freedom and Prosperity video looks at all of the data and reveals a pecking order. Federal bureaucrats are at the kings and queens of compensation. State and local bureaucrats are like the nobility. And private sector taxpayers are the serfs that worker harder and earn less, but nonetheless finance the entire racket.

The video closes with a very important point that the right pay level for many bureaucrats is zero. This is because they work for programs, departments, and agencies that should not exist.

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After dozens of posts about overpaid government employees, I’m sick of writing about the topic. But what’s happening in Wisconsin is critically important in the fight for long-run fiscal sanity, so I’m reluctantly wading back into this fight. Simply stated, bureaucrats have figured out how to manipulate the system and they are bankrupting state and local governments.

Chris Christie is the first governor in a long time to stand up to these thugs and now the new chief executive of Wisconsin, Scott Walker, has joined the fight. But unlike Christie, who must deal with a hostile state legislature, Governor Walker has a GOP-controlled Assembly and Senate. As such, he has a chance to take much bigger steps in the right direction.

The unions realize that their special privileges may disappear and they are engaged in a vicious fight to block reform. Other groups that get money and/or political support from the unions also are joining the battle against Wisconsin’s taxpayers. John Fund of the Wall Street Journal provides the key details.

Mr. Walker’s proposals are hardly revolutionary. Facing a $137 million budget deficit, he has decided to try to avoid laying off 5,500 state workers by proposing that they contribute 5.8% of their income towards their pensions and 12.6% towards health insurance. That’s roughly the national average for public pension payments, and it is less than half the national average of what government workers contribute to health care. Mr. Walker also wants to limit the power of public-employee unions to negotiate contracts and work rules—something that 24 states already limit or ban.

…Democratic reactions to these proposals have been over the top. In addition to the thousands of protesters who descended on the Capitol building on Thursday to intimidate legislators, so many teachers called in sick on Friday that school districts in Milwaukee, Madison and Janesville had to close.

…Why are national liberal groups treating Wisconsin as if it were their last stand? Partly for reasons of symbolism. Historically, Wisconsin “embraced the organized labor movement more heartily than any other [state],” notes liberal activist Abe Sauer.

…Labor historian Fred Siegel offers further reasons why unions are manning the barricades. Mr. Walker would require that public-employee unions be recertified annually by a majority vote of all their members, not merely by a majority of those that choose to cast ballots. In addition, he would end the government’s practice of automatically deducting union dues from employee paychecks. For Wisconsin teachers, union dues total between $700 and $1,000 a year. “Ending dues deductions breaks the political cycle in which government collects dues, gives them to the unions, who then use the dues to back their favorite candidates and also lobby for bigger government and more pay and benefits,” Mr. Siegel told me.

Just in case you’re wondering why unions are being so intransigent, Instpundit has a link to a website explaining that state bureaucrats get twice as much compensation as the tax-paying serfs in Wisconsin’s private sector. I can’t vouch for the specific numbers, but I’m sure the gap in the state is enormous, as is the case all across the nation. This video explains.

Let me close with a caveat. There surely are thousands of Wisconsin government employees who disagree with the thuggish tactics and absurd demands of the union bosses. My criticisms obviously don’t apply to those folks, but I would ask them to stand up and be counted. Write op-eds and letters-to-the-editor. Attend today’s Tea Party rally. The union bosses are using your money to do bad things, but you can use your time to do the right thing.

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This blog repeatedly has chronicled the huge discrepancy between the gold-plated compensation for government employees and the meager salaries and benefits of people in the productive sector of the economy, including a video conclusively demonstrating that bureaucrats are overpaid.

This message is now resonating all across the nation. Even the New York Times, as shown by the excerpt below, now realizes that taxpayers are sick and tired of paying exorbitant taxes to finance excessive pay for the bureaucracy.

But public awareness is only a small step in the right direction. What really matters is public policy. Will the bureaucracy be downsized? Will salaries be frozen for several years? Will absurd pension plans be replaced by 401(k) systems? And what will happen to unaffordable health plans for government workers?

We’re going to see some interesting battles at the state and local level. One of the many great things about federalism is we get an opportunity to see some governments do the right thing and some do the wrong thing. And as we watch states like California descend into bankruptcy, this teaches everyone about the policies that should be avoided.

But the long-overdue day of reckoning won’t happen if Obama and the other politicians figure out how to bail out reckless state and local governments. That’s already happened once, since funneling federal money to the states was one of main goals of Obama’s failed stimulus.

But sending more money to the states would be akin to providing an alcoholic with a case of booze. If House Republicans have any brains, they will make sure taxpayers in places like Texas don’t pay more to subsidize politicians and special interests in places such as Illinois.

Cross your fingers that they hold firm. In the meantime, let’s enjoy the change in the public mood. Here are a few passages from yesterday’s story in the New York Times.

Across the nation, a rising irritation with public employee unions is palpable, as a wounded economy has blown gaping holes in state, city and town budgets, and revealed that some public pension funds dangle perilously close to bankruptcy. In California, New York, Michigan and New Jersey, states where public unions wield much power and the culture historically tends to be pro-labor, even longtime liberal political leaders have demanded concessions — wage freezes, benefit cuts and tougher work rules. …a growing cadre of political leaders and municipal finance experts argue that much of the edifice of municipal and state finance is jury-rigged and, without new revenue, perhaps unsustainable. Too many political leaders, they argue, acted too irresponsibly, failing to either raise taxes or cut spending. A brutal reckoning awaits, they say. …Fred Siegel, a historian at the conservative-leaning Manhattan Institute, has written of the “New Tammany Hall,” which he describes as the incestuous alliance between public officials and labor. “Public unions have had no natural adversary; they give politicians political support and get good contracts back,” Mr. Siegel said. “It’s uniquely dysfunctional.” …In California, pension costs now crowd out spending for parks, public schools and state universities; in Illinois, spiraling pension costs threaten the state with insolvency. And taxpayer resentment simmers.

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You wouldn’t expect any positive developments from California when it comes to schooling, but this video shows that parents now have the ability, for all intents and purposes, to fire the incumbent management of a government school.

I don’t think this is nearly as good as what’s being proposed in Douglas County, Colorado, but it’s a big step for a union-controlled state such as California.

And the parents of one failing school have pulled the trigger and are forcing good reforms.

2011 could be a very good year for school reform and improvement. That’s bad news for politicians and teacher unions, but great news for parents and kids.

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I generally focus on fiscal policy and I love low tax rates, so when I say that what happens on school choice in Douglas County, Colorado, may be more important to the future of the nation than what happens with Obama’s plan for higher tax rates next year, that should give you an idea of the critical importance of this education battle.

The union bosses at the National Education Association have been waging a vicious national campaign against competition and choice and have succeeded in limiting school choice to a handful of small systems (largely focused just on the poor) in places such as Milwaukee.

These are great success stories, but the government education monopoly won’t be broken until there is a big, highly visible, school choice success in a large, mostly white, jurisdiction. Douglas County is that example. Here’s an excerpt from a story in today’s Wall Street Journal.

The school board in a wealthy suburban county south of Denver is considering letting parents use public funds to send their children to private schools—or take classes with private teachers—in a bid to rethink public education.

The proposals on the table in Douglas County constitute a bold step toward outsourcing a segment of public education…

In 2002, the U.S. Supreme Court ruled in a case involving a voucher program in Cleveland that public money could be used for private religious schools as long as parents were not steered to any one particular faith-based program and had a “genuine choice” on where to use their vouchers. About 160,000 children in the U.S., mostly low-income or with special needs, use vouchers or scholarships subsidized indirectly by the state to attend private schools, according to the Brookings Institution in Washington, D.C.

…Douglas County School District board members are also considering letting students enrolled in public schools opt out of some classes in favor of district-approved alternatives offered at for-profit schools or by private-sector instructors. Students might skip high-school Spanish, for example, to take an advanced seminar in Chinese, or bypass physics to study with a rocket scientist, in person or online.

…The school board is dominated by conservatives, including several who won election last fall on vows to expand educational choices. “These days, you can build a custom computer. You can get a custom latte at Starbucks,” said board member Meghann Silverthorn. “Parents expect the same out of their educational system.”

…Douglas County, a swath of tidy cul-de-sacs and look-alike subdivisions, already boasts nine charter schools, two magnet schools and an online school as well as 65 traditional schools—all funded by tax dollars. Students receive high scores on standardized tests and a recent community survey found overwhelmingly positive views about the public schools. Fewer than 4,000 students in the district chose private or home schools last year, according to state statistics.

“But we will not rest on our laurels,” board president John Carson said at a recent meeting.

…The voucher plan…would give participants about $5,000, enough to cover 35% to 100% of tuition at local private schools.

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The President wants us to believe that the recent IPO for General Motors was a smashing success. And it was…if you believe that it’s a good idea to lose money (the direct cost of the bailout) and make the economy less efficient by misallocating resources (the indirect cost of the bailout). The always superb John Lott has a good explanation at Foxnews.com, and here is an excerpt.

Only the government would consider it a success to buy stock at $43.84 a share and sell it at $33. — But President Obama and those who supported his bailout of General Motors and Chrysler are claiming just that…  It simply doesn’t account for the over $50 billion in direct bailout funds and the tens of billions of dollars in other breaks President Obama gave the company and its unions. It also ignores that GM’s stockholders and particularly its bondholders had their wealth stolen from them when the government took over ownership of the company. Traditional property right protections were shredded by the Obama administration, making corporate investments in America riskier as a result.

By the way, Mickey Kaus is surprised that investors were willing to buy GM shares, but he hypothesizes that they were fools or that they expect GM to hollow out its American operations and build cars in China.

Either way, not a good way to squander the tax dollars of the American people. Another legacy of Bush-Obama statism. Way to go, guys!

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