Monday, May 24, 2010

Entering Stall Buffet for the Death Spiral

This is a fascinating history of unions and when/how they began to get legal backing at state and local levels. We Americans say we don't like monopolies, but we sure have fallen all over ourselves awarding these workers a coercive government monopoly on working for the State. Now we all work to keep them comfy. Any risk brought on by their blackmail of politicians, we own. The real shame is, eventually, everyone pays. When their state fails, the rank and file will pay. No one gets away clean, except the former politicians and the union bosses - they took the money and ran.
"Municipalities around the state are also buckling under massive labor costs. One city, Vallejo, has already filed for bankruptcy to get out from under onerous employee salaries and pension obligations. (To stop other cities from going this route, unions are promoting a new law to make it harder for municipalities to declare bankruptcy.) Other local California governments, big and small, are nearing disaster. The city of Orange, with a budget of just $88 million in 2009, spent $13 million of it on pensions and expects that figure to rise to $23 million in just three years. Contra Costa's pension costs rose from $70 million in 2000 to $200 million by the end of the decade, producing a budget crisis. Los Angeles, where payroll constitutes nearly half the city's $7 billion budget, faces budget shortfalls of hundreds of millions of dollars next year, projected to grow to $1 billion annually in several years. In October 2007, even as it was clear that the area's housing economy was crashing, city officials had handed out 23 percent raises over a five-year period to workers. (See the sidebars on pages 22 and 26.)"
http://city-journal.org/2010/20_2_california-unions.html

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