Deceptive and Misleading Claims – How Government Unions Fool the Public

California’s public sector unions collect and spend well over $1.0 billion per year. When you have that much money, you can hire thousands of skilled professionals to wage campaigns, litigate, lobby, negotiate, and communicate. You can hire the best public relations firms money can buy. You can commission research studies that spin facts to support your agenda. You can silence voices of dissent, voices of reason, voices of reform, with an avalanche of misinformation. And it works.

Here, then, for what it’s worth, is a list of some of the biggest deceptions and misleading claims made by California’s government unions.

1 – Government unions are protecting the middle class.

FALSE. Government unions are protecting government workers at the expense of the private sector middle class. The agenda of government unions is more wages and benefits for government workers, and more hiring of government workers. To adhere to this agenda, failure of government programs still constitutes success for these unions. More laws, more regulations, and more government programs equates to more unionized government workers, regardless of the cost, benefit, or need for these programs. The primary agenda of unionized government has nothing to do with the welfare of the private sector middle class, whose taxes pay for it.

2 – Government unions are a necessary political counterweight to “Wall Street,” big business, and billionaires.

FALSE. When government is expanded to serve the interests of government unions, the elite and privileged special interests are relatively unaffected, and often benefit. Large corporations can afford to comply with excessive regulations that drive their emerging competitors out of business. When governments borrow to finance deficits created by an over-built unionized government, bond underwriters profit from the fees. Government pension funds are among the biggest players on Wall Street, aggressively investing hundreds of billions each year to secure their 7.0% (or more) per year returns. Billionaires can afford to pay taxes and fees – it’s the middle class taxpayer who can be overwhelmed by them. When powerful special interests want favorable legislation passed in California, they go to the government unions and make a deal. Government unions are the brokers and enablers of special interest cronyism. They are allies, not counterweights.

3 – Government unions represent and protect the American worker and the labor movement.

FALSE. For better or worse, government unions represent and protect government workers. Government unions and private sector unions have very little in common. Unlike private unions, government unions elect their own bosses, and their agencies are funded by compulsory taxes, not through profits earned by creating products and services that are voluntarily purchased in a competitive market. Moreover, government union members operate the machinery of government, giving them the ability to harass their political opponents under cover of authority. Private sector unions – properly regulated – have a legitimate role to play in American society. Government unions, on the other hand, exist to serve the interests of government workers, not the ordinary American citizen.

4 – Public employees are underpaid.

FALSE. In past decades, prior to the unionization of government, a public worker exchanged lower base pay for better retirement benefits and more job security. But today, not only have retirement benefits been greatly increased from what was normal back in the 1980’s and 1990’s, but in most cases the base pay of government workers exceeds the base pay for private sector workers performing jobs requiring similar skills. A 2015 study by State Budget Solutions estimated the total compensation of California’s government workers to exceed private sector workers by 31%. But these studies typically omit lower paid independent contractors who now constitute one in three workers. A California Policy Center study that examined 2012 data showed the average pay and benefits for California’s city workers was $124,058, county workers $102,312, and state workers $100,668. And this study did not take into account the value of additional paid vacation benefits, extra paid holidays, and generous “comp time” policies, which add significantly to the total value of annual compensation. Just how much public employee pay exceeds private sector pay for equivalent jobs is the topic of ongoing debate. But they’re not underpaid by any reasonable measure.

5 – The average public sector pension is only $25,000 per year (or some similarly low number).

FALSE. The problem with this profoundly misleading statistic is that this low average is the result of including participants who only worked a few years in state/local government, barely vesting a pension. Should someone who worked less than a decade (or two) in a job expect a pension based on a full career of service? When normalizing for 30 year careers and taking into account the uptick in retirement benefit formulas that rolled through California starting in 1999, the average state/local retiree in California collects a pension and retirement health benefit package worth over $70,000 per year. For a private sector taxpayer to collect this much in retirement, they would have to save at least $1.5 million. If public pensions weren’t so generous, these pension systems would not face severe financial challenges. Which brings us to the next myth….

6 – California’s state/local pension systems are being reformed and will be just fine financially.

FALSE. Virtually every official post-reform projection among California’s 80+ public sector pension systems are predicting eventual financial health based on a huge, extremely risky assumption – that the average annual returns of these funds over the next few decades will exceed 7.0% per year. Common sense should tell any unbiased observer that ongoing 7.0% average annual returns are not a safe bet. If they are, why are Treasury Bills only yielding 3.0%? What are mortgage bankers only able to get 3.5% on 30 year fixed mortgages? Why are bank CD’s only offering 2.0%? The spread between equity returns and truly risk-free returns has never been this large for this long. Pension funds are basing future performance projections on past results. The problem is that over the past 30 years, interest rates have been steadily lowered to allow people to borrow more. This borrowing stimulated the economy, creating corporate profits and driving up the price of corporate equities. But interest rates cannot be lowered any further. We are at the end of a long-term credit cycle, and pension funds are just beginning to deal with the consequences.

7 – The teachers unions care about student achievement more than anything else.

FALSE. The evidence simply doesn’t support this assertion. Consider the reaction of the California Teachers Association to the recent Vergara decision, in which a Los Angeles superior court judge agreed with student plaintiffs who challenged three union work rules. The CTA criticized the ruling and announced their support for an appeal. What does the Vergara lawsuit aim to accomplish? It would take away the ability for teachers to earn tenure in less than two years. It would end the practice of favoring seniority over merit when deciding what teachers to layoff. And it would make it easier to fire incompetent teachers. These are commonsense, bipartisan reforms that the teachers unions oppose.

8 – Billionaires are trying to hijack California’s public education system.

FALSE. To the extent wealthy individuals have decided to involve themselves in education reform and private education initiatives, they come from a diverse background of political orientations. But all of them share a desire to rescue California’s next generation of citizens from a union monopoly on education. And unlike the unionized traditional public school, public charter schools and private schools survive based on the choice of parents who want a better education for their children. And if they don’t do a great job, the parents can withdraw their children from the failing charter or private school. Introducing competition to California’s unionized K-12 education system is a healthy, hopeful trend that gathers support from concerned citizens of all incomes, ethnic groups, and political ideologies.

9 – Proponents of public sector union reform are “anti-government workers.”

FALSE. This sort of claim is a distraction from the reality – which is that public sector unions have corrupted the democratic process and have been attempting to inculcate public employees with the “us vs. them” mentality that is the currency of unions. Sadly, the opposite is the truth – government unions alienate the public from their government, and, worse, alienate government employees from the public. They have created two classes of workers, government employees who have superior pay, benefits, job security and retirement security, and everyone else in the private sector. They know perfectly well that this level of worker comfort is economically impossible to extend to everyone. Government unions have undermined the sense of common rules and shared fate between public and private individuals that is a foundation of democracy. Those who oppose government unions recognize this threat. It has nothing to do with their support and respect for the men and women who perform the many difficult and risky jobs that are the role of government.

10 – Opponents of government unions are “right wing extremists.”

FALSE. The problems caused by government unions should concern everyone, and they do. Conscientious left-wing activists who favor an expanded role for government expect positive results, not failed programs that were created merely to increase union membership. They realize that unionized government is expensive and inefficient, leaving less money or authority to maintain or expand government services. Public libraries and parks with reduced hours and curtailed maintenance. Pitted, congested roads. After school recreation programs without reliable funding. Public schools where students aren’t learning and apathetic teachers are protected from accountability. Government has to be cost-effective, no matter how big or how small. Opponents of government unions can disagree on the optimal size of government, yet passionately agree on the problems caused by a unionized government.

This list of ten myths promulgated by spokespersons for government unions only begins to chronicle their many deceptions. But each of these myths offer strategic value to these unions – giving them the ability to put reformers on the defensive, change the topic of discussion, redefine the terms of the debate. Each of them has powerful emotional resonance, and each of them – along with many others – is continuously reinforced by a network of professional communicators backed by literally billions in dues revenue.

Compensation reform, pension reform, other fiscal reforms, reforming work rules, education reform – all these urgent reforms must first go through one powerful special interest that stops them in their tracks: Government unions. Reformers must confront not only the myths these unions promote, challenging and debunking them, but they must also redefine the role of government unions, if not question their very existence.

*   *   *

Ed Ring is the executive director of the California Policy Center.

7 replies
  1. john m. moore says:

    Govt. unions are fake in that it negotiates with govt. staff that is in favor of union control of all revenues.
    The govt. union system in Ca. is a Cartel-the made men are the central (state) union power applicators. Govt. employees are addicted to wages, pensions and other benefits that are mathematically unaffordable-it is their crack cocaine.

    Yet the press and voters have very little comprehension of the criminal nature of pension appropriation. It simply does not have the forensic accounting and more importantly the legal advice to comprehend how a Maddoff like scheme is batted around as if there is a solution, and like it just happened. No criminal conduct? Just review the Marin county grand jury report-felony after felony by lawyers and administrators who knew exactly what they were doing.

    Cities pursue bankruptcy and choose to leave unpayable pensions free from modification. Why don’t they? The local leaders fear the Cartel-PERS, county counsel, district attys, the state bar, the crack-heads on the legislative body, but most of all the safety unions. Ca. govt. unions are like the Columbian drug Cartel, and they don’t even need force because the Ca. cartel owns everyone involved. The reformers-pillow-fighters all.

    There is only one true pension reform: find and elect candidates in the majority who will negotiate until a standstill and then cut Agency salaries across the board by 30% until such time as all pension debt is paid off. Softies will say that employees will quit, whine etc. Good, that is simply part of the process of legislative bodies wresting control from the Cartel

  2. SeeSaw says:

    No. 5 – If you look at the list on TC you will see many retirees with close to the minimum vesting requirement getting about $5K to $6K per year. You will also see many retirees with 20+ years who are getting the CalPERS average–which is what an average is–the amount of outgo every year divided by the number of beneficiares–the important figure.

  3. Charles Sainte Claire says:

    Seesaw

    Many of these comments seem to indicate that anyone who gets more in retirement than they do is overpaid. After 40 years I got 81%.

  4. S Moderation Douglas says:

    Quoting:

    “Government unions and private sector unions have very little in common.”

    “Private sector unions – properly regulated – have a legitimate role to play in American society. Government unions, on the other hand, exist to serve the interests of government workers, not the ordinary American citizen.”
    …………………..
    How soon we forget. When I was just a lad, there were NO government unions. Private sector unions back then, according to many, did NOT have “a legitimate role to play in American society.”

    (Perhaps because they were not “– properly regulated –” ?)

    Properly regulated meaning they have now been nearly decimated, so we can concentrate our big guns on the public sector unions.

    I lost one of my first jobs (1971) when AFL-CIO tried to organize and the company management began laying off workers (by seniority) to get rid of those they considered instigators.

    Three weeks after being laid off, I came back to visit. My old supervisor was doing my job on the line. He was very apologetic about the lay offs until I told him I had found another job at 25% higher pay (10% of which was night shift differential.)

    Union job, of course. Not having any personal prejudice against unions, he asked if they had more openings and if he might get a job there. They did. He did.

    Damb unions!

  5. S Moderation Douglas says:

    “California’s public sector unions collect and spend well over $1.0 billion per year.”

    ¿ Could we show our work on that again ?

    “An article published nearly five years ago on UnionWatch, “Public Sector Unions and Political Spending,” estimates the total annual dues revenue of California’s public sector unions at $1.0 billion per year.”
    ………………………………..
    Public Sector Unions & Political Spending

    by EDITOR on SEPTEMBER 23, 2010 

    “Taking all this into account, the calculations that come out of this exercise are probably conservative – California’s 1.0 million unionized public sector employees times dues of $750 per year times one-third equals $255 million per year, over $20 million per month. This is what public sector unions are probably spending on politics, and for the many reasons detailed here, this number is probably quite low compared to reality.”

    $255 million, not a billion.

    ¿ Probably conservative ?

    According to the state controllers office, of the $10.5 million per month withheld for (state worker only) union dues, $2.2 million was “fair share” dues.

    “A billion here, a billion there, and pretty soon you’re talking about real money.”

    ___Everett Dirksen

  6. Ed Ring says:

    SMD – The quote you reference is estimating only the political portion of total union dues, hence the “times one-third” factor. What should amaze both of us is that almost nothing can be found on this topic, not that the estimate we made back in 2010 of TOTAL California public sector union dues revenue – approximately $750 million per year, is less than our current estimate of $1.0 billion per year.

    There are no comprehensive sources of information on how many public employees in California are unionized – paying either agency fees or full union dues, nor how much those dues are. You have to peruse literally thousands of union 990 forms, taking into account transfers between local, regional, state and federal affiliates, to begin to arrive at a more precise estimate. If you’ve got a better method, SMD, have at it and do us all a service. In the meantime, we’re comfortable with the $1.0 billion estimate.

  7. S Moderation Douglas says:

    Sure, but then you get these kinds of headlines:

    CAL PUBLIC SECTOR UNIONS SPENDING $1BILLION PER YEAR

    (Breitbart, May 3, 2015)

    “……California unions are overwhelmingly powerful because …….. California’s public sector unions collect and spend $1 billion,………union dues each year.”

    They link the source, but don’t mention the quote:

    “California’s public employee unions spend at least $250 million per year on politics. These are direct political expenditures for lobbying, campaign contributions, and independent expenditure campaigns.”

    As if the entire billion were political expenditures.

    Of course, with Breitbart I’m never sure if they’re intentionally misleading, …..or just not too Breit.
    ………………..

    Since we’ve already followed that link. (THE FINANCIAL POWER OF PUBLIC SECTOR UNIONS, California Policy Center)

    Quoting CPC:

    “Business interests outspend unions in federal elections by a margin of approximately 2-to-1, not 15-to-1, as frequently claimed by union spokespersons. But union spending is almost exclusively on behalf of Democrats, whereas corporate spending is almost perfectly balanced between Republicans and Democrats.”

    Source: http://californiapolicycenter.org/which-special-interests-are-partisan/

    Quote…

    Readers are invited to mull the implications of these findings regarding the top 100 political spenders of the last 20 years in America:

    1 – The corporate and financial sectors combined did outspend unions, by a ratio of almost exactly 2-to-1.

    2 – Unions spent 95% of their contributions on Democrats.

    3 – The corporate sector spent 56% of their contributions on Republicans, and the financial sector spent 53% of their contributions on Republicans. Their spending between the two parties was essentially nonpartisan.

    4 – Overall, among the top 100 political spenders of the last 20 years, Democrats collected 62% of the takings, and Republicans only collected 38%.

    It remains open to interpretation which party might be more beholden to special interests…

    Close quote…
    ………….

    This is what California Policy Center determined by “Parsing data from OpenSecrets.org, again, “a nonpartisan, independent and nonprofit research group tracking money in U.S. politics,” 

    The SAME open secrets.org that said:

    “The broadest classification of political donors separates them into business, labor, or ideological interests. Whatever slice you look at, business interests dominate, with an overall advantage over organized labor of about 15-to-1.”

    https://www.opensecrets.org/overview/blio.php
    …………..

    Wait…..who said that? Was that the “15-to-1, as frequently ….claimed…. by union spokespersons.”?

    Or was it the 15-to-1 …claimed… by the “nonpartisan, independent and nonprofit research group tracking money in U.S. politics,” ?

    No wonder I’m confused.

    Luckily, as Jesse Marvin Unruh said:

    “If you can’t eat their food, drink their booze, screw their women, take their money and then vote against them you’ve got no business being up here.”

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