George Will: Illinois home-care workers should not be forced into unions - The Washington Post

The Democratic Party is the party of government because it embraces a proposition it has done much to refute — that government is a nimble, skillful social engineer — and because government employees are a significant component of the party's base and of its financial support through government employees unions. Franklin Roosevelt, architect of the modern party, believed unionization would be inappropriate in the public sector. Today's party, however, aggressively uses government coercion to create supposed "government employees" from whom unions can extract money, some of it for the party.

On Tuesday, the Supreme Court will hear arguments about whether the Illinois government's policy of herding home-care workers into unions violates the workers' First Amendment rights. It does.

http://www.washingtonpost.com/opinions/george-will-illinois-home-care-workers-should-not-be-forced-into-unions/2014/01/17/c58bf068-7ed3-11e3-93c1-0e888170b723_story.html

The Death Spiral

By one recent estimate, the total pension gap for the states is $2.7 trillion, or 17% of GDP. That understates the mess, because it omits both the unfunded pension figure for cities and the health-care promises made to retired government workers of all sorts. In Detroit's case, the bill for their medical benefits ($5.7 billion) was even larger than its pension hole ($3.5 billion).

Some of this is the unfortunate side-effect of a happy trend: Americans are living longer, even in Detroit, so promises to pensioners are costlier to keep. But the problem is also political. Governors and mayors have long offered fat pensions to public servants, thus buying votes today and sending the bill to future taxpayers. They have also allowed some startling abuses. Some bureaucrats are promoted just before retirement or allowed to rack up lots of overtime, raising their final-salary pension for the rest of their lives. Or their unions win annual cost-of-living adjustments far above inflation. A watchdog in Rhode Island calculated that a retired local fire chief would be pulling in $800,000 a year if he lived to 100, for example. More than 20,000 retired public servants in California receive pensions of over $100,000.
http://www.economist.com/news/leaders/21582258-it-not-just-detroit-american-cities-and-states-must-promise-less-or-face-disaster


Public employees should retire later. States should accelerate the shift to defined-contribution pension schemes, where what you get out depends on what you put in. (These are the norm in the private sector.) Benefits already accrued should be honoured, but future accruals should be curtailed, where legally possible. The earlier you grapple with the problem, the easier it will be to fix. Nebraska, which stopped offering final-salary pensions to new hires in 1967, is sitting pretty.

Why Federal Unions Have to Go

Finally, it's important to focus on the political stew that many IRS employees marinate in as members of the National Treasury Employees Union, which is headed by Colleen Kelley. Ms. Kelley has publicly vilified "extreme Tea Party elements," portraying their agenda as a threat to the IRS workers her union represents. In 2011, Ms. Kelley mobilized IRS employees to "lean on" members of Congress against tea-party-backed spending cuts, boasting that "anywhere there's an IRS service center, we have four to eight thousand" union members. When you have a union boss who demonizes private citizens and conscripts front-line IRS employees as boots-on-the-ground activists, you've got toxic culture from the ground up.
http://online.wsj.com/article/SB10001424127887323728204578517812641275502.html?mod=WSJ_Opinion_LEADTop

Way too many conflicts of interest, for starters.  

Kill 'Em (Government Backed Unions) All

"Overheated rhetoric is a hallmark of every campaign season. But the GOP's and Romney's positions on labor and collective bargaining-from support for a federal union-weakening "right-to-work" law to eliminating most public-sector bargaining rights-are genuinely to the right of where they were even four years ago. With unions now accounting for less than 12 percent of the workforce (down from 36 percent in the 1950s), it is now possible to imagine a country devoid of labor power, replaced by a corporate vision of "employee empowerment and workplace flexibility," as the GOP 2012 platform puts it."

http://www.inthesetimes.com/article/14076/romneys_9_point_plan_to_kill_unions

Amazing. Unions make the GOP enemy number one, and the GOP reciprocates. Imagine that. Too bad Romney wasn't more vocal with this plan, I'd have been donating from way back. There are few things more destructive to Americans and workers specifically than unions backed by a coercive Federal monopoly.

Blue on Blue

"As the blue social model decays, the coalition that was once united behind it is becoming increasingly splintered and parochial. Boies, known for representing Al Gore, waging antitrust battles against Microsoft, and fighting California's Proposition 8 in federal court, has impeccable bona fides as a liberal Democrat. But in the face of economic realities, he and other blue liberals are being forced to make fundamental choices about their values and goals. "

http://blogs.the-american-interest.com/wrm/2012/12/05/rhode-islands-blue 
-civil-war/  

As the negative unintended consequences of years of "Union Boss to Willing-And-Vote-Hungry-Political-Accomplice" cooperation unfold, it is clear who will be hurt - everyone but the union bosses and their former political operatives.  The citizenry will be stuck with a bill - how large is yet to be seen - and fewer services. The union members will be deprived of a benefit they exchanged their life energy to get.  I can see no good long term outcome, but that seems a very natural outcome from a use of coercion which amounted to "Let's take money from the citizenry at gunpoint, so I can keep winning my union leader job and you can keep winning your city/state leadership elections."

Union Showdown?

We are heading for a showdown between public sector unions and
taxpayers. That's going to put Democrats in a very tough spot. Those
unions are the backbone of the Democratic political operation. But
their pensions are, in many places, simply not payable. Thanks in part
to the late 1990s stock market boom, and in part to really scandalously
bad accounting standards, politicians made a lot of promises they didn't
pay for. Those promises now can't be shed in bankruptcy, and all of the
possible deals--which including hiking taxes to "tax revolt" levels, or
shafting all the younger public sector workers--are bad for Democrats.
http://www.thedailybeast.com/articles/2012/11/07/is-demography-destiny.h
tml

This is a really interesting angle. It didn't show in Presidential
politics in Wisconsin, but it was a winner for the man to went mano v
union at the state level. Public sector unions are an abomination that
will hurt many, many people, starting with union members when they lose
pensions they were promised and planned to have. It's going to be ugly,
and it's a shame that the blameworthy - the union leaders and
politicians who made the ridiculous and unsustainable deals - won't be
there to pay for their incompetence.

Public Sector Collective Bargaining - Hurts All

Walker's solution is the only way to regain sanity in public sector unions.  The hangover from prior unsustainable contracts is hurting everyone - except the politicians and union leaders that made the deals.

"In San Jose, where the average cost of employing a city worker, including benefits, has soared to an extraordinary $142,000 annually, Mayor Chuck Reed had to fight long and hard for a ballot measure to reduce pension costs that was passed by voters in June. In the three years before the vote, the city had to lay off about 2,000 employees and cut back on parks, libraries and other services.
In Stockton, which declared bankruptcy in June, for every dollar the city spent on salaries, it spent another dollar on employee benefits. Facing unsustainable employee costs and an intransigent police union that was demanding the city pay retired officers about $300,000 for unused sick and vacation time, Stockton cut a quarter of its public safety forces and still couldn't meet its obligations.
No wonder that state and local government employment slumped nearly 6% in California from the beginning of 2009 through the close of 2011. That's nearly double the rate of decline among state and municipal workers nationwide in the same period."
http://www.latimes.com/news/opinion/commentary/la-oe-malanga-wisconsin-california-bankruptcies-20120717,0,5879241.story

And it's not just in Cali:
"
Last year, New York City taxpayers put nearly $2.1 billion into the cops’ $24.7 billion pension fund to pay for future benefits — up from more than four-fold from the 1999-2000 average. (Cops’ own contributions are $207 million, but they pay only 9 percent of the total.)
If pension costs for cops had “only” doubled in a decade, we’d have an extra $1 billion a year — enough to hire at least 5,000 cops.
One problem is that the pension fund isn’t earning the magical returns expected of it. It’s supposed to generate 8 percent returns a year — but has managed just 5.76 percent annually over a decade."

Read more: http://www.nypost.com/p/news/opinion/opedcolumnists/pension_tension_the_crime_spike_uTj1WEOOpb45LkkKEQQLiN#ixzz20tPseDEh

FDR Was Right

America's school year (about 180 days) is one of the shortest in the industrial world, and while middle-class children may leaven their summers with strolls through the Louvre, less privileged children experience "summer learning loss." Remediation requires the first few weeks of the fall term, which effectively further shortens the school year. And Chicago's school day is the shortest of any large US district.


The CTU wants a pay raise - 30 percent - proportional to Emanuel's 90-minute increase in the school day and 10-day increase in the school year. He has canceled a 4 percent raise and offers only 2 percent. He says benefits the CTU has won - e.g., many teachers pay nothing toward generous pensions they can collect at age 60 - could in just three years force property taxes up 150 percent and require classes with 55 students.

Read more:
http://www.nypost.com/p/news/opinion/opedcolumnists/chicago_school_war_R
AuUOrTARmYh7yThzlmvFP#ixzz1zmNvQodm


To counter demands for wage hikes from city workers in the 1990s, Stockton offered to extend their health insurance in retirement past age 65 - a benefit they embraced and assumed to be rock solid until the insolvent city's officials put it on the chopping block in a bankruptcy plan last week.


"It was a balancing act," said Dwane Milnes, Stockton's city manager at the time. "The unions wanted retiree medical ... We said if you want to continue your medical for current employees and retirees, you'll have to do it through wage containment."

http://www.reuters.com/article/2012/07/03/us-stockton-bankruptcy-cause-i
dUSBRE8621DL20120703

FDR was right and these cases are hurting everyone involved - except the long gone politicians and politicians called union leaders, who made these rotten deals.

Doubling Down On Union Perversion

Step One: state politicians promise big pension and health care benefits to their unionized work forces, but don’t set aside enough money to fund those benefits when the bill comes due. This makes union leaders and unions look good, because they can point to the shiny new benefits they have negotiated with the politicians. Meanwhile, it makes the politicians happy because the unions support them with contributions and volunteers at election time, but because the unions don’t insist on full funding for the benefits, the politicians don’t have to raise costs or otherwise disturb the big majority of voters who don’t work for the government.
http://blogs.the-american-interest.com/wrm/2012/06/25/time-to-occupy-the-pension-funds/

Regular federally backed unions are bad enough - they punish workers by preventing those workers inside the union from having to compete for their jobs against workers outside the union - even if those outside could do a better job, or do the same job for lower cost, or both.  Some win, some lose, but the coercive monopoly on labor chooses which gets the bad deal.

A government union doubles down on this perversion - it empowers some workers to use political rent seeking to get the state to coercively extract tax money from other workers - and other "non-workers" as well - to send to the union members.  How could this possibly be considered even remotely justifiable?

Let state workers do what everyone else does - come to work if they think the pay and benefits are worth the life energy that must be exchanged to gain those benefits.  Why would such a group of "public servants" need a union?  Work for the state or get a better job - that's not a formula for injustice to "workers" it's natural law and the human condition.

But that's not as bad as it gets - it also feeds our current state of crony capitalism, in which profits may be had by feeding the political cycle much like unions do; backscratching all around.

Pension reform is about more than cutting benefits to realistic levels, and ensuring that politicians and union leaders have to stop the collusive scams. It is also about enabling pension funds to invest in safer investments and stop paying huge fees to hedge fund managers and investment banks — and because public pension funds are such large pools of capital, this would be an effective way to help bring Wall Street back down to earth.

The conclusion:
This is not a pretty sight, and the whole mess is a strong argument for those who believe that “regulatory capture” means that a powerful government ends up serving the rich and well-connected rather than helping working and middle class Americans. Transforming what ought to be a safe and reliable pension system into a Wall Street boondoggle is exactly the kind of thing a serious labor movement would fight. That the public unions are in effect fighting to retain the “freedom” to put worker pension money in high risk, high fee assets is an indication of just how intellectually and politically bankrupt much of the American public sector labor movement has become.

History 0f Public Sector Unions

There's a lot in this I'd never heard, but I still cannot fathom why anyone thinks having collective bargaining rights that give some of us the power to coercively extract wages and benefits from the others of us is a good idea. 

If people want the priviledge of earning their living from their fellow citizenry, let them do so.  If they are only willing to do so if they can use federal and state law to coercively extract wages and benefits from the ones they should be serving, they should just get a job they want. 
http://www.latimes.com/news/opinion/commentary/la-oe-mccartin-unions-20120117,0,2527319.story

Public Sector Unions, Predictable Outcomes

The Dills Act mandated that the state must negotiate collective-bargaining contracts with public-employee unions. This quickly turned the unions into the most powerful force in the state. The result was major increases in the pay and benefits for public-sector workers.
http://www.ocregister.com/opinion/public-325117-unions-sector.html

Even FDR could figure out this wasn't rational.

All The Ingredients

Krugman’s column is part of a much broader trend: the intellectual and economic underpinnings of the blue social model are in a process of accelerating and serial collapse.  I posted last week that the truly deadly threats to the public sector unions, the threats that doom them to long term decline, aren’t coming from people like Wisconsin governor Scott Walker; they are coming from blue state governors in places like New York and Vermont who recognize that their states simply cannot afford to give public unions anything like what they want.  The New York Times editorial board, one of the bluest groups in the United States, published an editorial the day before Krugman’s piece appeared that argued for deep changes in the way state workers are rewarded and managed.  Sez the Times:

"At a time when public school students are being forced into ever more crowded classrooms, and poor families will lose state medical benefits, New York State is paying 10 times more for state employees’ pensions than it did just a decade ago."

And why is this?  Well, continues the Gray Lady, there are several reasons, including this:

"[M]ost state employees pay only 3 percent of their salaries to their pensions, half the level of most state employees elsewhere. Their health insurance payments are about half those in the private sector."

And where does this leave us?

"In all, the salaries and benefits of state employees add up to $18.5 billion, or a fifth of New York’s operating budget. Unless those costs are reined in, New York will find itself unable to provide even essential services."  http://blogs.the-american-interest.com/wrm/2011/03/07/paul-krugman-gets-it-half-right/

Sounds like the makings of a death spiral to me ... for either the capacity of the state to provide any meaningful service, or for the ability of public sector unions to continue to extract compensation packages that are clearly unsustainable, and place the short term interestes of the public sector unionists above the long term interests of anyone, including those same public sector employees.

Krugman and the Times editorial board are both examples of something important in American life today: left-liberal intellectuals are increasingly able to understand that individual supports of the blue social model are crumbling.  But they are still so captivated by the blue model, so profoundly convinced that the Progressive movement’s solutions to America’s social ills in 1910 are still valid today, that they cannot yet look beyond the blue model to imagine a different and brighter future for the United States.

Alternatives to Coercion? Or Does Might Make Right?

Greater negotiating power? The effect of unions, to the extent they are effective at all, is to make it harder for people to find work in particular areas. Unions try to raise wages above what they would otherwise be. Employers respond by trying to substitute capital for labor or more skilled workers for less skilled workers.  You want negotiating power? Get educated. Get a skill. What keeps wages up in a world of 7% unionization in the private sector is that I have alternatives. So stay in school and study something serious that has value alongside whatever else you’re interested in. Or study something interesting that has little market value. But if you do that, don’t complain about your low salary and lack of a union.  The bottom line–you don’t need a union to protect you from your employer. You need alternatives–you need to have a skill that more than one employer values. If you have no skills, you are in trouble and the union won’t help you either except at the expense of other workers.   http://cafehayek.com/2011/02/the-alternative-to-unions.html

The narrative that would make anyone sympathetic to unions is that the poor worker is unprotected from an amoral, unsympathetic boss.  The worker's safety, ability to feed his/her family, and human dignity are all protected by the union.

The primary condition from which unions derive power is their backing by federal law, which allows them a coercive monopoly on labor with a particular business.  Once a union has achieved its status in the law, the owner(s) of a business no longer control who can be hired or at what compensation level.  That means if a worker wants employment from the company, he/she cannot agree to work at a lower price, or to perform the work at higher quality/output for  the same price.  In other words, the union does not protect its members from management, except by protecting its members from non-members, in other words, at the expense of 'workers.'  

The defining condition of unions is they protect members from non-members, using the coercive power of federal law.

link This was the conversation that prompted me to post on something that most of my readers would consider mundane and obvious.  So, next, I'll discuss their points - relationships between safety, risk, pay, options, and unions.

Public Employee Death Spiral

http://www.usnews.com/opinion/mzuckerman/articles/2011/01/21/public-employee-union-benefits-are-a-fiscal-disaster
Some 30 states face a structural budget gap, where ongoing expenses are not covered by revenues. California, for instance, projects a structural budget gap of over $20 billion in fiscal 2012, $22.4 billion in 2013, and $20.4 billion in 2014. New York's projected gap is $9 billion in 2012, $14.6 billion in 2013, and $17.2 billion in 2014.
States have shied away from making unpopular cuts in core services and state workforces beyond what they have already done. They sowed the dragon seeds in the fat years by buying off service unions with generous pensions, employee contracts, healthcare, pay, and benefits. According to a study by Daniel DiSalvo, a political scientist at City College in New York, state and local workers now earn an average of $14 more per hour in wages and benefits than their private sector counterparts. In general, the average state government worker reaps retirement benefits several times richer than a counterpart in the private sector, a critical reason why public pension costs have become unsustainable. For example, state and local governments contributed $3.04 per hour toward each employee's retirement in 2007, according to U.S. Labor Department figures, while private employers paid 92 cents an hour.

Even worse, "governments" don't pay for anyone's retirement, the citizenry does.  Private employers don't pay for retiree benefits either, the customers who buy their products do.  Viewed through that lens, it makes perfect sense that government employees are paid more - there's no competitive force holding their pay down.  In a private employers calculus, paying more than the other guy brings a comparative disadvantage in product pricing; the rubber actually meets the road somewhere. 

One might argue that the citizenry are paying for the private employer's retirement benefits also - but the key difference is that the arrangement is voluntary.  I don't have to pay a dime of a private retiree's benefits unless I am willing to pay the market price for the products the retiree's company sells. 

For the Children

http://directorblue.blogspot.com/2011/01/another-democrat-and-public-sector.html
Another indicator of the iceberg which awaits us ....