Showing posts with label collective bargaining. Show all posts
Showing posts with label collective bargaining. Show all posts

Tuesday, September 6, 2011

Labor Day: Reality Check For The Unions

Oh the guilt.

For all us unlucky folks who aren’t part of Organized Labor, how can we not feel at least a little conscience-smitten? After all, we are taking full advantage of that end-of-summer holiday honoring “the working class,” aka Labor.
And nowadays, if your goal is to join a union, you would indeed be “lucky” to achieve that, since only 12 percent of the workforce is now unionized, and when you factor out the public-sector workers, that number plummets to 7 percent. Far from the heyday when nearly 40 percent of the nation’s workforce belonged to the union.
It would seem, then, that for the 9 out of 10 Americans who aren't considered "working people" ---which must mean they don't work --- every day is a holiday. So taking advantage of Labor Day just seems like another way to put the screws to the unions. 
But what else is new? Public sector unions have seen their pay scales, benefits, and pensions under constant attack recently from dastardly Republicans trying to stave off bankruptcy.  The nerve!
Think about it. For some teachers’ unions, that might mean giving up paying…absolutely nothing towards their healthcare, such as those in the Neshaminy district, where their Rolls Royce plan, courtesy of taxpayers, costs $27,000, per teacher, per year. How could any taxpayer or elected official be in favor of making teachers pay five or, God forbid, ten percent of that cost? Disregard the fact that for most in the private sector, contributing ten percent towards guaranteed healthcare in a virtually guaranteed job would be a dream, since they pay far more, if having coverage at all.
Far “worse,” some Republicans, in an effort to get their states back in the black, have made it possible for public sector union members to negotiate with their prospective employer individually, with  free market-type incentives allowing for a fair offer --- fair for the employee, and fair for the “employer” (the taxpayer).

An offer would be made --- salary, healthcare, benefits --- and the individual could choose to accept or decline it, just as it’s done in the free market. Accountability and efficiencies would increase, and unmotivated, bureaucratic sloths would be eliminated in favor of those willing to be good stewards of taxpayer money.

Sound simple and fair enough?  It is, and it’s called the elimination of collective bargaining, but union leaders have demonized all who support such a plan, instead fighting to continue a system that is completely broke.

And when it comes to retirement issues, voracious union opposition rears its head at any attempt to replace costly and antiquated pension plans --- which are draining government coffers at an exponential rate --- with 401k retirement plans for new public sector employees.

So why all the “unfairness” towards the public sector unions?

Because they are such an inviting target, and it’s just --- fun to attack them!

Or so many union leaders would have you believe. But the reality is entirely different.

Truth be told, it’s not the GOP that is putting the screws to the unions.  They just happen to be the ones cleaning up the mess, especially in states like Ohio, Indiana and Wisconsin. (Noticeably absent is Pennsylvania, where it’s Business As Usual).

For decades, unions have been reaping the rewards of promises that were ultimately empty and could not possibly be kept. But those Ponzi scheme “pay-me-later” deals, made between corrupt union bosses and gutless politicians (from both Parties) only interested in self-preservation, have now finally come due. It’s time to pay the piper, and kicking the can down the road just isn’t an option anymore. That  “strategy” is a dead end.

Math doesn’t lie. There is simply not enough money to continue paying such high wages and, in many cases, extremely lavish benefits and pensions.

*****

The way the system was originally intended, joining the public sector was a trade-off: while one wouldn’t make as much money as someone in private industry, he would receive a healthy pension and job security.  But all that changed, in large part because millions in union dues (taxpayer money, no less) were allocated to defeat any politician who dared cross the unions.

Now, many public sector union workers make more than those in the private sector, and their pensions are so extravagant that Wall Street-ers blush with envy.

But with the economy in shambles (and no, we are not headed into “another recession;” we never got out of the first one), tax revenue is down and the pension obligations are simply unaffordable.  The current system is unsustainable, and no argument can be made to the contrary.

Is it right? Don’t public sector union members deserve what they were promised?

Not to be callous with people’s livelihoods, but those questions are irrelevant. If there is not enough money, there is not enough money.  Unlike the feds, states and municipalities can’t print cash, so governments have to cut back and reform everything, including the big-ticket items like labor costs.

If they don’t, the alternative is far worse: bankruptcy.  And yes, municipalities can and are declaring. From Rhode Island to Alabama, the message is simple: agree to cuts, or risk losing everything.

Obviously, it’s not fair.  The rank-and-file union member who worked hard his whole career was promised an unattainable bill of goods by now long-gone hacks who don’t have to answer for their irresponsibility. But as Jack Kennedy once said, anyone who believes in fairness in this world is seriously misinformed.

And before we hear the clamor that unions are being singled out and targeted, look at the private sector, which has experienced even greater losses. Pensions there have been battered too, with some retirees receiving just pennies on the dollar. And private industry job losses are hemorrhaging at a much higher rate than those in the public unions.  That’s not fair, either, but it’s reality. Deal with it.
So what now?

Instead of engaging in a full assault against politicians trying to clean up the mess left by their predecessors --- fighting for monies that just aren’t there ---, union leaders would do well to realize that the rules of the game have changed, and they are never going back to what they were.

Tone down the hype, stop the personal attacks, and come into the real world.  The new reality is that reforms of the public sector unions are imminent, and not because of political will or the (mistaken) perception that Republicans are anti-Labor, but because there is simply not enough money to fulfill those long-ago promises. There are no other options.

Failure to agree to common sense reforms will only result in a protracted battle that the unions cannot win, virtually guaranteeing an (unnecessary) level of pain and suffering to rank-and-file union members.

Union bosses would do well to remember that their job is to represent the best interests of their members, and it would behoove union members to hold their leaders accountable --- something they have not done particularly well over the years.  On three big issues that mattered to the rank and file --- defeat of NAFTA, defeat of Most Favored Trading status for China, and stemming job-killing and wage-depressing illegal immigration --- the union leaders have batted zero.

Only common sense and a genuine willingness to work together for fair solutions will resolve the difficult situation facing public unions, states, and taxpayers. 

While that will never be a perfect “union,” anything less will result in a Labor Day--- with no Labor.

An accredited member of the media, Chris Friend is an independent columnist, television commentator, and investigative reporter who operates his own news bureau, www.FreindlyFireZone.com

Readers of his column, “Freindly Fire,” hail from six continents, thirty countries
and all fifty states. His work has been referenced in numerous publications including
The Wall Street Journal, National Review Online, foreign newspapers, and in Dick
Morris' recent bestseller "Catastrophe."

Freind, whose column appears regularly in Philadelphia Magazine and nationally in
Newsmax, also serves as a frequent guest commentator on talk radio and state/national
television, most notably on FOX Philadelphia.  He can be reached at CF@FreindlyFireZone.com


Thursday, June 30, 2011

Gov. Onorato --- Err…Corbett --- Gives Unions A Sweetheart Deal

How this affects you: the new contracts for unionized state employees will cost $164 million as workers get an 11 percent raise, with no pension reform, while the private sector continues to get rocked.


In case you have been living under a rock, here’s a newsflash: we are experiencing one of the most severe recessions in our history, and there are no greener pastures in the immediate future.

So common sense dictates that with high unemployment, decreased tax revenues, large deficits, and, most significantly, massive pension obligations, governors would take whatever steps were necessary to ensure that their states, and its citizens, remain solvent, especially when it comes to negotiating public-sector union contracts.

That happened in places like Wisconsin, Indiana and Ohio, where true Republicans are in charge. Governors Scott Walker, Mitch Daniels and John Kasich took the heat and did what they had to do, reeling in the out-of-control taxpayer largess afforded to these unions.

But most amazing of all is New Jersey Governor Chris Christie’s remarkable success. Just last week, he pushed through a monumental union pension and benefit reform package that will save taxpayers over $120 billion --- and did so with heavily Democratic, pro-union legislative majorities.  So effective was Christie that alongside him at the bill-signing was the Senate President --- a longtime union member.

Contrast that to the deal just reached by Pennsylvania Governor Tom Corbett with the largest state unions. Instead of acting in the best interests of the taxpayers footing the bill, he simply continued the Rendell legacy of keeping the cash register door wide open.

It’s bad enough the Governor rolled over on all the sweeping concessions he was seeking, but he ended up giving the unions a sweetheart deal.

Over the next four years, unionized state employees will receive an almost 11 percent raise and a guarantee of no furloughs.  And remember, this significant bump is in addition to their three percent raise two years ago, four percent raise last year --- and three annual step increases which averaged 2.25 percent during that time. Cha-ching!

Must be nice to have such staunch advocates like Governors Rendell and Onorato --- sorry, I meant Corbett --- fighting for you.

And how do these pay raises compare to those in the private sector?  With such high unemployment and underemployment rates, do you really have to ask?  Most are receiving no raises at all, not even cost of living adjustments.  And those fortunate enough to still have a job have no choice but to hang on for dear life, praying they survive the next round of layoffs.  Making matters worse, many have to also shoulder ever increasing healthcare costs, if they have coverage at all.

In addition to substantial retirement benefits, state workers have guaranteed healthcare, too.  And while they will pay a bit more with this new contract, it’s still at a level way below many in the private sector.

It used to be that working in the public sector was a trade-off.  You wouldn’t make as much money as in the business world, but the benefits were good and contracts were guaranteed.  But all that changed as union contracts exploded upward --- at the expense of taxpayers.

Now, in many cases, unionized public employees make more than their peers in the private sector, and retire on pensions and benefit packages that would make Wall Street financiers blush with envy.  Of course, that has come with a price, especially in Pennsylvania, and now it’s time to pay the piper.  State pension obligations go through the roof over the next several years, as annual taxpayer-funded contributions to the two state pension funds increase exponentially, ballooning from $800 million now --- to billions per year.

The last Governor and legislature kicked the can down the road last year, but that only gets you so far, and, in the process, devastates the future of our children and grandchildren.

By caving in to the unions, giving them a contact that would be way too generous even in a strong economy, this Governor has chosen not to address the reforms necessary to keep Pennsylvania on solid ground, which will eventually lead to higher state borrowing costs and push the state closer to the abyss.

And while we’re on the subject of the state’s finances, let’s set the facts straight about the current budget. Reducing the budget by four percent is a good thing, but was inevitable after the loss of federal stimulus dollars.  Had he won the governorship, Dan Onorato would have signed a budget almost exactly the same as the one Corbett did.  For that matter, even Governor Spendell, who never saw a spending increase he didn’t like, would have been forced to reduce the budget to close the $4.2 billion budget deficit.

Which, in reality, is closer to $7 billion because no one in Harrisburg wants to address the real fiscal situation.  The budget, which is constitutionally required to be balanced, was passed last year on ghost revenue: $400 million from the tolling of Interstate 80 (which never got tolled);  $800 million raided from the MCARE fund (used to offset high medical malpractice rates) which, in all likelihood, will be ordered repaid by the state Supreme Court; federal Medicaid dollars that were budgeted to be $800 million but in actuality amounted to $595 million; and a $1.1 billion revenue shortfall after ten months of last year’s fiscal year. 

This shortfall seems to have simply vanished off the books.  Of course, do that with your own business --- and you go to jail.  So with the looming pension bomb and the real state deficit, it’s not a pretty picture for Pennsylvania’s future.

There was a way to address these issues and begin to reverse the state’s decline.  Governor Corbett could have mandated a situation whereby union members would negotiate with their prospective employer individually, and free market-type incentives would allow for a fair offer --- fair for the employee, and fair for the “employer” (the taxpayer).

So an offer would be made --- salary, healthcare, benefits --- and the individual could choose to accept or decline it.  Which is exactly how it’s done in the free market.  And for those who would claim it wouldn’t be “fair” to the state worker, you know what?  There would be a line a mile long of qualified individuals ready and willing to accept such an offer. Accountability and efficiencies would increase, and unmotivated, bureaucratic sloths would be eliminated in favor of those willing to be good stewards of taxpayer money.

Sound simple and fair enough?  It is, and it’s called the elimination of collective bargaining.  It’s something successfully implemented in other states, but was incomprehensibly taken off the table by Corbett three months ago --- while getting absolutely nothing in return. 

The result?  No pension reform, and a lucrative union contract that the Governor says will be a net cost to the taxpayers of $164 million (which means that figure can be safely doubled).

The Wall Street Journal just labeled Corbett as leader of Keystone Cops.  After this latest debacle, it’s hard to disagree.

Chris Friend is an independent columnist, television commentator, and investigative reporter who operates his own news bureau, www.FreindlyFireZone.com

Readers of his column, “Freindly Fire,” hail from six continents, thirty countries
and all fifty states. His work has been referenced in numerous publications including
The Wall Street Journal, National Review Online, foreign newspapers, and in Dick
Morris' recent bestseller "Catastrophe."

Freind, whose column appears regularly in Philadelphia Magazine and nationally in
Newsmax, also serves as a frequent guest commentator on talk radio and state/national
television, most notably on FOX Philadelphia.  He can be reached at CF@FreindlyFireZone.com