Reforming Public Sector Unions

In the wake of the 2010 mid-term elections there are several state governors and legislatures exploring ways to limit the influence of public sector unions. This is occurring primarily in states that are newly under Republican control (26 states have Republicans controlling both state houses, 29 states have republican governors, and and impressive 21 states have both republican governors and republican control of both state houses, ref. State Politics & Right-to-Work Laws), but is also cropping up in states still under the control of Democrats.

The bipartisan nature of public sector union reform emanates from a simple fact that liberals are finally grasping: Public sector unions do not operate in the public interest, they operate in the interests of themselves and their members. The looming schism between Democrats who want to preserve social programs and infrastructure projects and the union special interests who want to preserve over-market pay and benefits for unionized government workers cannot easily be overestimated. It may eclipse the chasm between libertarians and social conservatives in the Republican party. Even the liberal New York Times recognized this, in an article published on January 17th by Monica Davey entitled “Budget Worries Push Governors to Same Mind-Set.”

Here are some telling excerpts from Davey’s article:

  • “John Kitzhaber, the new [Democratic] governor of Oregon, elaborately described the state, which needs to bridge a projected budget deficit of $3.5 billion, as an old house in need of an overhaul… ‘the cost of keeping this house is more than the family can afford'”
  • “In New York, Gov. Andrew M. Cuomo, another Democrat, sounded a similar call. “We must right-size the state government for today,” said Mr. Cuomo, who added that New York had no future if it intended to be ‘the tax capital of the nation.'”
  • “In California, the new Democratic governor, Jerry Brown, lists as one of his guiding principles (second only to his tenet to “speak the truth”) support for new taxes only if voters want them.”
  • “The rhetoric has grown very similar,” said Scott D. Pattison, executive director of the nonpartisan National Association of State Budget Officers. “A lot of times, you can’t tell if it’s a Republican or Democrat, a conservative or a liberal.”

It is surprisingly hard to find information on exactly what levels of unionization are permitted in various states, but an article by Kris Maher, published in the Wall Street Journal in June 2010 entitled “Bill Gives Public Workers Clout,” provides a good summary of how unions of public safety workers are regulated by state:

  • Only two states prohibit collective bargaining completely,Virginia and North Carolina.
  • Four additional states, Arkansas, Tennessee, Alabama and South Carolina permit collective bargaining if local employees choose to organize unions, but contract compliance is voluntary.
  • Eleven additional states, Arizona, Colorado, Kansas, Texas, Louisiana, Mississippi, Indiana, Kentucky, Georgia, West Virginia and Maryland permit collective bargaining if local employees choose to organize unions, and contracts are legally enforceable.
  • Four states permit collective bargaining by firefighters but not police.

In all states, what classes of public sector workers may engage in collective bargaining differs, so the above summary of how safety worker unionization is regulated by state provides an indication of how public sector unionization in general is regulated, but is by no means definitive.

Another New York Times article, this one by Steven Greenhouse, published January 3, entitled “Strained States Turning to Laws to Curb Labor Unions,” summarizes some of the “far-reaching, structural changes that would weaken the bargaining power and political influence of unions, including private sector ones.”

  • “For example, Republican lawmakers in Indiana, Maine, Missouri and seven other states plan to introduce legislation that would bar private sector unions from forcing workers they represent to pay dues or fees, reducing the flow of funds into union treasuries. In Ohio, the new Republican governor, following the precedent of many other states, wants to ban strikes by public school teachers.”
  • “Some new governors, most notably Scott Walker of Wisconsin, are even threatening to take away government workers’ right to form unions and bargain contracts.”
  • “Of all the new governors, John Kasich, Republican of Ohio, appears to be planning the most comprehensive assault against unions. He is proposing to take away the right of 14,000 state-financed child care and home care workers to unionize. He also wants to ban strikes by teachers, much the way some states bar strikes by the police and firefighters.”
  • “Mr. Kasich also wants to eliminate a requirement that the state pay union-scale wages to construction workers on public contracts, even if the contractors are nonunion. In addition, he would like to ban the use of binding arbitration to settle disputes between the state and unions representing government employees.”

In California, where public sector unions spend approximately $250 million per year on political activity (ref. “Public Sector Unions & Political Spending“), a bipartisan consensus may finally emerge to curb their power. But the power of public sector unions in California is so entrenched that several measures may be necessary to effectively combat their dominance.

A ban on collective bargaining, for example, would free government agencies from honoring agreements that were “negotiated” between unions and the politicians they elected – agreements that are bankrupting California – but the unions would still have the same amount of money to buy elections and control politicians.

An imposition of right-to-work laws would remove the obligation of employees in unionized workforces who opt out of union membership to pay “agency fees” which is where most of their money – especially the union’s “soft money” comes from for politics. But how many union members would quit and stop paying these fees? While many public sector union members are disillusioned with their union and its political agenda, most of them probably realize by now that they are reaping financial rewards far in excess of what they’re going to get in the private sector; will they continue to support their unions to protect their economic interests?

It may be that campaign finance reform that eviscerates the ability of public employee unions to engage in political activity at the scale they currently do is the ultimate solution. And a reform of that nature may also have to apply to corporate political spending to be politically palatable to Californians. Is that possible, is that desirable, and would that be the secret to forging a bipartisan consensus?

California Hospital Alleges SEIU Extortion

In a meticulously detailed press release issued on February 2nd, Prime Healthcare Services (PHS), the largest for-profit hospital system in California, announced they are victim of an extortion campaign by the Service Employees International Union – United Healthcare Workers West (SEIU) over the past year. What PHS is going through is a classic example of tactics the SEIU often employs with companies who won’t accede to their demands.

One of the contributing editors to Union Watch, Dave Bego, has written a book “Devil at My Doorstep” that chronicles his battles with the SEIU when they attempted to unionize the workers in his company. Throughout his book he emphasizes that what his company has gone through is consistent with a strategy of intimidation and extortion used by the SEIU whenever they encounter resistance.

Here are a few of the tactics imposed on Prime Healthcare Services by the SEIU:

January 2010 – Threaten to Tarnish Company Reputation
PHS rejected SEIU’s demands for a “quick” deal for SEIU members at PHS’ Centinela Hospital Medical Center so that SEIU could avoid a challenge from NUHW, an upstart union formed by disgruntled SEIU members.  SEIU initially threatened to expose “dirt” on PHS, disseminate reports based on Medicare data, and claim that these reports showed that Medicare patients were acquiring serious blood infections like septicemia at PHS’ hospitals even though SEIU knew that the Medicare data identified conditions present on admission; not hospital acquired conditions.

February 2010 – Make False Claims to Company’s Lender
The CtW Investment Group, an investment fund created by SEIU, falsely claimed that to Medical Properties Trust (PHS’ landlord and/or lender at several of its hospitals), that PHS’ hospitals did not comply with California’s earthquake safety laws, had infection control problems, had engaged in Medicare fraud, and faced potential losses of millions of dollars.  MPT conducted its own investigation and found the allegations to be baseless.

April 2010 – Make False Claims to SEC, Try to Derail Company Stock Offering
CtW sent a letter to the SEC, CtW repeating the false claims against PHS and urging the SEC to interfere with MPT’s planned stock offering.  In an April 16, 2010 letter to MPT, State Senator Ducheney, at the request of SEIU, repeated the false claim that PHS’ hospitals were not in compliance with California’s earthquake safety laws even though publicly available data demonstrated that the majority of PHS’ hospitals are seismically compliant through 2030 and PHS already has OSHPD approved plans to bring all of its hospitals to 2030 standards within the next two years.

June 2010 – Threaten to Put Company Management in Jail
SEIU threatened to put PHS’ top management in jail unless they accepted SEIU’s contract demands at Centinela Hospital Medical Center and agreed to a “neutrality agreement” for PHS’ other hospitals which would eliminate employees right to a secret ballot vote as to whether or not to be represented by the SEIU.

July 2010 – Publish Bogus Study & Enlist Support of Compliant Politicians
SEIU published a “study” about septicemia rates at PHS hospitals based on a number of faulty assumptions and manipulated data. Congressman Henry Waxman and Pete Stark relied upon SEIU’s bogus study to request that the Office of Inspector General (OIG) open an investigation into PHS.  At the same time, State Senator Elaine Alquist and State Assemblyman William Monning relied on SEIU’s bogus study to demand that California’s Department of Public Health (CDPH) investigate PHS and not issue any new hospital licenses to PHS.

October 2010 – Plant Bogus Study in Media
On October 11, 2010, California Watch published an article which repeated many of the false and misleading statements found in SEIU’s bogus study.  After California Watch’s article was released, PHS finally had the opportunity to review SEIU’s bogus study and confirmed that SEIU had manipulated data to achieve higher septicemia rates at PHS hospitals, failed to recognize other health systems, including those at which SEIU members work, with similar patient demographics had septicemia rates similar to those at PHS hospitals, and falsely claimed that the Medicare data used to generate the study identified infections acquired at the hospital.

December 2010 – Forces Company to Endure Investigations
As a result of California Watch’s article and requests from the OIG and/or CDPH, two Medicare accreditation agencies, the Healthcare Facilities Accreditation Program (HFAP) and the Joint Commission conducted unannounced surveys at 10 of PHS’ hospitals in late November and early December 2010 to investigate the allegations of Medicare fraud and infection control issues raised by SEIU’s study.  They found that there was no evidence to support the allegations of Medicare fraud, nor did they identify any serious infection control problems at PHS’ hospitals as claimed by SEIU.

February 2011 – Starts Over: Plants New Bogus Study in Media
The SEIU has now turned to a “study” about malnutrition rates at PHS hospitals and is encouraging California Watch to publish a story based on the new study.  Like its study on septicemia rates, SEIU’s malnutrition study is flawed and relies on the manipulation of data to arrive at desired results.

What PHS has endured at the hands of the SEIU is not unique. To read the complete press release from PHS, ref. “Top Rated Hospital System, Prime Healthcare Services, Stands Up To Union’s Extortion Campaign.”

Union Watch Highlights

The NLRB Is On The Offensive
James R. Grasso, January 31, 2011, The Metropolitan Corporate Counsel
When President Obama took office in 2009, one of the top priorities of his administration and the Democratic-controlled Congress was passage of the Employee Free Choice Act (EFCA). EFCA would have dramatically altered the labor relations landscape by removing an employer’s right to insist on a secret ballot election for a union to be certified as its employees’ collective bargaining agent. It would have also allowed the National Labor Relations Board (NLRB) to make such a certification merely upon a majority of employees in the proposed bargaining unit signing union authorization cards. However, the Senate Republicans were able to prevent EFCA’s passage and it has fallen off the political agenda. EFCA’s demise and the recent election results have lulled many employers into thinking that all is quiet on the labor relations front. Nothing could be further from the truth. (read article)

Michigan’s Public-Sector Unions Fight to Keep Bloated Benefits
By Jarrett Skorup, January 31, 2011, Mackinac Center for Public Policy
Between Gov. Rick Snyder’s call for a substantial business tax cut and a $1.8 billion state overspending budget gap, lawmakers are looking for places to save. Many both in and outside government are calling for lowering government employee benefits to private-sector levels, so not surprisingly public-sector unions are gearing up for a fight. The first offensive began with a media onslaught… (read article)

Breaking the cycle of failed government reform: Address public employee productivity
By Mark Haveman, January 30, 2011, Minneapolis Star Tribune
In the early 1990s, the Clinton administration launched the National Partnership for Reinventing Government, an effort to create a government that “works better, costs less and gets results Americans care about.” Management guru Peter Drucker was asked to critique the effort a few years later. The uninspiring results were predictable, he said, because the core issue wasn’t being addressed. Results would only come, he declared, from “a radical change in the way the federal government and its agencies are managed and paid.” (read article)

Pick for Labor Board Opposed by Business
By Melanie Trottman, January 28, 2011, Wall Street Journal
Some of the same business groups President Barack Obama is courting with his regulatory review and support for a corporate-tax overhaul said Thursday they would fight his renomination of former union lawyer Craig Becker to the National Labor Relations Board. Mr. Obama put Mr. Becker on the NLRB in March using a recess appointment after his nomination failed to get 60 votes needed to overcome a Republican-led Senate filibuster in February. That appointment expires at the end of this year. On Wednesday, Mr. Obama nominated him to a term that would expire in December 2014. (read article)

Tawdry details of Obamacare: White House quietly exempts pampered politicos, SEIU
By Dr. Milton R. Wolf, January 28, 2011, The Washington Times
Last year, we learned that the Department of Health and Human Services (HHS) had granted 111 waivers to protect a lucky few from the onerous regulations of the new national health care overhaul. That number quickly and quietly climbed to 222, and last week we learned that the number of Obamacare privileged escapes has skyrocketed to 733. Among the fortunate is a who’s who list of unions, businesses and even several cities and four states (Massachusetts, New Jersey, Ohio and Tennessee) but none of the friends of Barack feature as prominently as the Service Employees International Union (SEIU). (read article)

Unions make up 40 percent of employees exempted from Obamacare
David Freddoso, January 27, 2011, Washington Examiner
Yesterday, the Deparment of Health and Human Services announced it had granted more than 500 new waivers to Obamacare’s requirement that health plans have annual limits of no less than $750,000. This annual limit requirement climbs to $1.25 million next year and then to $2 million. The reason these exemptions from the law are needed is that Obamacare forces all health insurance consumers to over-insure themselves and pay high premiums as a result. Without the waivers, many companies, non-profits and unions would simply drop their health plans. As of 2014, the waivers will no longer be available — at least, that’s the way the law is written. It is worth noting that there are 166 union benefits funds now exempted from this requirement, which account for about 40 percent of the exempted workers. (read article)

States rebuff federal threat over union laws
By Sam Hananel, January 27, 2011, Associated Press
Four states are vowing to fight the federal government in a bid to preserve state measures that guarantee workers the right to secret ballots in union elections. Attorneys general from Arizona, South Carolina, South Dakota and Utah signed a letter Thursday pledging to defend changes to their state constitutions approved by voters on Nov. 2. “These state laws protect long-existing federal rights and we will vigorously defend any legal attack upon them,” the attorneys general said in a letter to the National Labor Relations Board. Earlier this month, the labor board threatened to sue the states, saying the constitutional amendments conflict with federal law. (read article)

Public Employee Unions: Public Enemy No. 1?
By Peter Brown, January 27, 2011, The Wall Street Journal
It’s a good bet that this year is going to be a tough one for public employee unions and their members, from tiny towns to the federal bureaucracy. Though they might not become public enemy No. 1, public workers are going to feel voters’ anger in their paychecks — and many will lose their jobs. They’re also likely to come under attack politically to an unprecedented degree. The general tenor of the anti-union rhetoric is that labor contracts are a drag on federal, state and local treasuries — and taxpayers are getting the short end of the stick. “We have a new privileged class in America,” Indiana Gov. Mitch Daniels told Politico. “We used to think of government workers as underpaid public servants. Now they are better paid than the people who pay their salaries.” (read article)

California Bucks Downward Trend on Unionization
By Aaron Glantz, January 26, 2011, The Bay Citizen
The percentage of workers represented by labor unions continued to fall nationally, but it actually climbed last year in California, according to a new report from the federal Bureau of Labor Statistics. According to the report, 18.6 percent of California workers had union representation in 2010, up from 18.3 percent the year before. New York had the highest unionization rate at 26 percent. Nationally, the percent of wage and salary workers who were members of labor unions was 11.9 percent, down from 12.3 percent a year earlier. (read article)

Chamber of Commerce Launches Attack on Unions
By Paul Bedard, January 25, 2011, US News
The election didn’t end conservative threats to public employee labor unions. A Texas GOP congressman this month proposed a 10 percent cut in federal workers. And for the first time, the U.S. Chamber of Commerce has launched an attack on public unions. Boss Tom Donohue, in his recent State of American Business address, said, “Some unions—particularly the public employee unions—are pushing an extreme agenda that extends well beyond representing their members in the workplace.” One beef: Teachers unions want to “perpetuate the status quo in our failing public schools.” (read article)

Unions Are Aided By Obama Picks Republicans Can’t Curb
By Stephanie Armour, January 21, 2011, Bloomberg
Business groups may find the expanded ranks of their Republican allies in Congress can’t stop President Barack Obama’s appointees from making it easier for unions to recruit members. The Democratic majority on the National Labor Relations Board may soon rule on cases that would give unions greater access to company property for organizing drives. The board may also push for speedier elections after workers petition for a vote, limiting companies’ ability to muster a defense. (read article)

Will NLRB Seek Shorter Union Election Campaigns?
By Steve Minter, Jan. 20, 2011, Industry Week
When 30% of employees at a facility sign an authorization card, a union can go to the National Labor Relations Board and petition for a secret ballot election. Typically, the election occurs within seven weeks after the NLRB accepts the petition. But comments attributed to Mark Pearce, an NLRB board member, have stirred concerns in management ranks that the board is attempting, in the words of Frank Saibert, an employment attorney with Ungaretti & Harris, to “achieve through rulemaking or adjudication what it could not get through legislation, particularly the Employee Free Choice Act.” (read article)

Iowa Governor Bans PLAs on Projects that use State Funds
January 19, 2011, Associated Builders & Contractors
In another victory for merit shop construction, Iowa Gov. Terry Branstad Jan. 14 signed Executive Order 69, which prohibits wasteful and discriminatory project labor agreements (PLAs) on any projects that receive state funds. The executive order, signed on the same day Branstad was inaugurated, repealed Gov. Chet Culver’s Executive Order 22, which encouraged state agencies to consider implementing PLAs on state projects worth more than $25 million. In addition to protecting state projects from government-mandated PLAs, this order also represents a repudiation of President Obama’s executive order encouraging federal agencies to require PLAs on federal projects costing more than $25 million.  The Culver order that Gov. Branstad repealed was modeled on and very similar to President Obama’s order. (read article)

Jack Dean is editor of PensionTsunami.com, formed to monitor developments in all three pension spheres nationwide — public employees, corporations and social security. PensionTsunami, like UnionWatch, is a project of the California Public Policy Center. Dean is a former newspaper editor and a past executive director of the Reason Foundation. He has been active in politics for more than three decades and currently serves as president of the Fullerton Association of Concerned Taxpayers.

Clark County Nevada Commissioner Confronts Firefighters Union

Best wishes to Clark County Commissioner Steve Sisolak who is still justifiably after firefighters over fraudulent sick leave.

Please consider Sisolak calls for investigation of firefighter sick leave:

In 2009, Clark County Commissioner Steve Sisolak began looking hard at Fire Department costs. He had received a deluge of angry calls and e-mails from constituents wondering why the unionized firefighters weren’t accepting salary or benefits reductions as the county dealt with budget cuts and the local economy continued its slide.

“Everybody was losing their jobs, their homes,” Sisolak said.

For much of that year, he was the only commissioner willing to criticize their salaries, benefits and retirement packages that averaged about $180,000 in 2009.

In retaliation, members of the union showed up at Sisolak’s public meetings to glare at him. He said he received death threats, which prompted county administrators to post park police at commission meetings. A city firefighter posted on Facebook that she’d like to shoot him.

This week brought a measure of vindication for Sisolak in his fight with the union after an arbitrator broke a stalemate in negotiations by deciding the county’s contract offer was better than the firefighter union’s offer.

Sisolak said he was happy. “I’m not done, though,” he added.

Late Thursday, he sent letters to the FBI, Metro Police, Clark County district attorney and others seeking an investigation into potentially criminal acts of racketeering and fraud by firefighters. Sisolak has long alleged that firefighters are abusing the sick-leave system to rack up overtime pay.

After reading the arbitrator’s 26-page decision, he is more determined than ever to have his suspicion investigated. He pointed specifically to one part of the decision:

“Some employees use sick leave as vacation, scheduling themselves to be ‘sick’ months in advance. This improper use of sick leave is evident from e-mails the (Fire) Department recovered,” arbitrator Norman Brand wrote. “Second, it appears some firefighters may deliberately call in late to turn the overtime opportunity into a callback/overtime opportunity.”

Callback pay is more valuable than overtime because it pays overtime plus a contribution to a firefighter’s pension.

In his letter, Sisolak said if more than one firefighter has been involved in sick-leave scamming, it might represent a violation of the federal RICO (Racketeer Influenced and Corrupt Organizations) Act.

About the author: Mike “Mish” Shedlock is a registered investment advisor representative for Sitka Pacific Capital Management. His top-rated global economics blog Mish’s Global Economic Trend Analysis offers insightful commentary every day of the week. He is also a contributing “professor” on Minyanville, a community site focused on economic and financial education. Every Thursday he does a podcast on HoweStreet and on an ad hoc basis he contributes to many other websites, including UnionWatch.

Union Watch Highlights

How Public Unions Took Taxpayers Hostage
By Fred Siegel, January 25, 2011, The Wall Street Journal
The turbulent years of the 1960s and ’70s are best known by the headline-grabbing civil rights and women’s rights movements. But there was another “rights” movement, largely overlooked, that has also had a profound effect on American life. The looming public-pension crisis that threatens to bankrupt city, county and state governments had its origins in those same years when public employees, already protected by civil-service rules, gained the right to bargain collectively. Liberals were once skeptical of public-sector unionism… (read article)

State Bankruptcy Is a Bad Idea
By E.J. McMahon, January 24, 2011, The Wall Street Journal
As states struggle with enormous deficits and exploding pension costs, some analysts are urging Congress to enact a law enabling states to declare bankruptcy the way municipalities can under Chapter 9 of the federal bankruptcy code. This is a bad idea. A state bankruptcy provision could create more problems than it solves. Bankruptcy proponents understandably worry that states such as California and Illinois are so deep in the hole they may end up petitioning Congress for federal relief. To forestall this possibility, the argument goes, even the threat of bankruptcy would give governors and legislators a powerful new weapon for forcing concessions from recalcitrant public employee unions. (read article)

Teachers unions on defensive as GOP lawmakers flex their muscle
By Sean Cavanagh, January 23, 2011, Education Week
Teachers unions find themselves on the defensive in states across the country, as governors and lawmakers press forward with proposals to target job protections and benefits that elected officials contend the public can no longer afford academically or financially. Many of those efforts are being driven by newly elected Republicans, who have traditionally drawn political opposition from teachers’ organizations – and did in last year’s midterm elections – but who made historic gains in those state contests. The GOP now controls more state legislative seats than it has in more than 80 years, and it has the majority in both lawmaking chambers in 25 states. (read article)

San Luis Obispo unions call economic study biased
By AnnMarie Cornejo, January 22, 2011, San Luis Obispo Tribune
San Luis Obispo police and fire union leaders are criticizing as biased a series of cost-saving proposals drawn up by a task force convened by City Manager Katie Lichtig. Matt Blackstone, president of the San Luis Obispo Police Officers’ Association, on Tuesday asked the City Council to launch an independent investigation into the consultant hired by Lichtig to oversee the meetings of the Financial Sustainability Task Force. (read article)

Public Employee Union Benefits Are a Fiscal Disaster
By Mortimer B. Zuckerman, January 21, 2011, U.S. News
State governments are in a huge hole, and they’re still digging. Thanks to the Great Recession, their tax receipts have suffered the greatest decline since the Great Depression: now 12 percent below pre-recession levels (adjusted for inflation). For their 2012 budgets, states face gaps hovering around $140 billion, and that’s on top of previous budget shortfalls of over $400 billion since the recession began. (read article)

Call The Unions’ Bluff — Or Perish
By Douglas MacKinnon, January 20, 2011, Investor’s Business Daily
It’s well past the time for federal, state, county and city leaders to grow a spine and call the bluff of the public employee unions. How? By ending all pensions for new-hire public-employees. Now. For years, these bloated, bullying and often corrupt unions have screamed to anyone who would listen, “You have to give our employees pensions because no one will take these jobs at these small salaries.” Really? Let’s find out. With unemployment at over 9%, hundreds of thousands of jobs gone from this nation forever and a worldwide economy that continues to teeter on the edge of disaster, I’m willing to bet all I have that if the federal, state or local governments advertised jobs paying $30,000 to $70,000 per year with no pension, millions of Americans would line up at the crack of dawn just for a chance to be considered. (read article)

The Union Threat to the Democrats’ Future
By Douglas E. Schoen, January 20, 2011, The Wall Street Journal
There is a crisis in state and municipal finance. That much is clear. What hasn’t been fully understood is that the fate of the Democratic Party is bound up in the resolution of that crisis. In the November midterm elections, the Democratic Party lost its congressional majority. The far graver threat to the party, though, is that its base is made up disproportionately of public-employee unions, liberals, trial lawyers and other special-interest groups. (read article)

Public-Worker Unions Battle U.S. Governors Over Benefits in Change of Role
By Martin Z. Braun and Holly Rosenkrantz, January 19, 2011, Bloomberg
To Scott Walker, Wisconsin’s newly elected Republican governor, public employees are the haves and taxpayers the have-nots. Halfway across the U.S., Jerry Brown, California’s Democratic governor, wants unpaid days off for some state workers to cut labor costs. Facing attacks from deficit-slashing officials on both ends of the political spectrum, government employees are fighting back. (read article)

Is There No End to the Cost of Government Union Benefits?
By Paul Hatfield, January 18, 2011, Village to Village
The size of local and state government benefit liabilities continues to pile up. The latest is the potential of $10 billion in health care commitments to LAUSD employees. What is just as disturbing is the surprise outgoing LAUSD superintendent Ramon Cortines expressed when he announced the “astronomical” estimate.  $10 billion did not magically appear yesterday.  Either Cortines does not read financial reports or information is being withheld from him – or both. Of course, he could have been sitting on this information to avoid an ugly confrontation with the unions. (read article)

Union campaign to boost image of public workers
By Sam Hananel, January 14, 2011, MSNBC
Union leaders plan to launch a multimillion dollar campaign to boost the image of government workers and fend off pay cuts and benefit rollbacks in states under fiscal siege. The scope of the effort is unusual in a non-election year, and it signals a growing concern that unions could lose significant clout in states where the political climate has changed with Republicans in control in many legislatures. “It’s a pretty unprecedented attack on public sector workers and workers in all industries,” said Naomi Walker, director of state government relations at the AFL-CIO, the nation’s largest labor federation. (read article)

Fighting public-sector unions, Part 1:
By Jeff Jacoby, January 9, 2011, Boston Globe
As resistance to public-sector unionism has intensified, many of the noisiest confrontations have been on the coasts. In New Jersey, freshman Governor Chris Christie has been locked in a battle royale with his state’s powerful teachers unions. In California, Oakland’s new mayor began her first full day in office by demanding that unionized police officers, who pay nothing toward their pensions, be required to contribute 9 percent of their salaries. In New York, federal prosecutors have opened a criminal investigation into whether Sanitation Department workers purposely paralyzed the city with a work slowdown during last month’s blizzard. In Massachusetts, Governor Deval Patrick infuriated public-safety unions by replacing costly police details with civilian flaggers at many construction and repair sites. (read article)

Arbitration’s intolerable bind, Part 2:
By Jeff Jacoby, January 12, 2011, Boston Globe
If there were a hall of fame for ideas that sound great in theory but are disastrous in real life, “binding arbitration’’ for government labor contracts would be a major exhibit. When contract talks between a union representing public employees and the state or local government they work for are deadlocked, many states require that the disagreement be referred to an outside arbitrator for a binding decision. Since strikes by public employees are intolerable — no one wants firefighters, teachers, or trash collectors walking off the job — letting a neutral third party hear both sides out and settle the issue can sound like a fair and practical way to resolve thorny issues. In fact, it’s anything but. Mandatory arbitration has turned out to be a rigged game — rigged in favor of government employees, and against the taxpayers who supply their wages and benefits. (read article)

Labor’s Last Stand?
By Mark Hemingway, February 2011, Reason Magazine
If you measured the strength of an organization by the size of its political donations, private-sector labor unions would be some of the most robust organizations in American society. The nation’s two most influential private unions, the Service Employees International Union (SEIU) and the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), spent $88 million between them trying to get Democrats elected in 2010. Seven of the top 20 most generous political action committees in the last election cycle were private-sector unions, with virtually all of that money going to support Democrats, according to Opensecrets.org. Over all, nine of the top 21 biggest political donors in the last two decades have come from organized labor’s nonpublic wing. (read article)

Jack Dean is editor of PensionTsunami.com, formed to monitor developments in all three pension spheres nationwide — public employees, corporations and social security. PensionTsunami, like UnionWatch, is a project of the California Public Policy Center. Dean is a former newspaper editor and a past executive director of the Reason Foundation. He has been active in politics for more than three decades and currently serves as president of the Fullerton Association of Concerned Taxpayers.

How Unions Harass Businesses to Unionize

Bob owns a small business that provides heating and air conditioning service and installation. He employs approximately 10 staff and workers and is located in Anywhere, USA. Bob has been in business for over 20 years, strong relationships with his employees, and enjoys a good reputation in the community. Bob has always focused on running the business, taking care of his family and being a good neighbor and respected member of the community.

Unfortunately, Bob has been so focused on these areas, that he has ignored changes occurring nationally — changes that could destroy the business he has built out of his own sweat and blood and eliminate his employees’ jobs. Bob has seen in the media many proposed changes in laws and regulations, especially in the labor arena, but he is so absorbed in his business and family that he failed to connect the dots and see the writing on the wall. He is much like an ostrich which buries its head in the sand when the deadly predator is about to pounce and devour the ostrich for dinner.

So Bob, the ostrich, is minding his own business and doesn’t realize that President Obama, through his radical agency appointees and executive orders has effectively created “Card Check,” albeit through big labor’s “corporate campaigns” process and the infamous Neutrality Agreement. All of a sudden, Bob receives a call from the local big labor boss (whom we will call Brutus) who wants to meet with Bob. Bob tells him that is not necessary since his people are all very happy and he treats them well. Brutus tells Bob that he misunderstands — that this has nothing to do with his employees and the meeting is important to the future of Bob’s business. Bob tells him he is not interested and hangs up. Over the next couple of weeks Bob continues to receive calls and e-mails from Brutus. Brutus insists on a meeting and tells Bob that it will be “bad for his business” if he doesn’t agree to meet with Brutus. Bob finally agrees to a meeting, and Brutus promptly states he wants him to sign a Neutrality Agreement, and that if he doesn’t agree to do so the union will attack his company. Bob, attempting to be fair, tells Brutus “let’s have an election” and both of us will live with the results. Brutus, knowing he cannot win an election, declines and insists that Bob sign the Neutrality Agreement, but Bob refuses.  Brutus then looks at Bob and says “We enjoy conversation but embrace confrontation. We will be attacking your employees, your customers, and you.” Bob leaves the meeting not understanding the consequences of Brutus’s words and the impending campaign against his company.

The next thing Bob knows he is being contacted by the National Labor Relations Board, the Department of Labor, and the Occupational Safety and Health Administration, informing him that there have been multiple claims filed against his business. Additionally, his employees and customers are being harassed, sometimes publicly, sometimes privately.  Articles begin appearing in the local media about the alleged violations and Bob’s “mistreatment” of his employees. Splinter groups like the clergy’s Interfaith Workers Justice and Jobs for Justice are writing letters and conducting tribunals against his company.

Bob begins to lose business. Not knowing what to do, he hires an attorney. The attorney tries to fight the government charges but faces a losing battle in light of recent gifts to big labor. The legal bills continue to mount, and now there is the potential of heavy fines for every claim upheld against his company. Bob is living a nightmare, when all of a sudden an angel in the form of Brutus appears. Brutus once again sticks the Neutrality Agreement in front of Bob’s nose. He tells Bob that if he signs the Agreement everything will go away. The union will withdraw their charges and the fines will disappear. Bob, facing the loss of his business and financial collapse, eagerly signs the Agreement which forfeits his employee’s right to a secret ballot election and implements “card check.” Bob also has to provide the union with a list of all of his employees and their home address. Within a week Brutus returns to Bob and declares that a majority of Bob’s employees have signed union cards and he now wants to negotiate a contract. Such is the fictional story of Bob, the small business man. However, the chilling facts vividly come to life in the true story The Devil at My Doorstep.

What relevance does this have for the rest of the country and our future? Very simple. These atrocities are being committed every day across the country against companies of all sizes, and the number and intensity will increase with the backing of Obama and his supporters whose goal is to take control of this country, implement socialism and take away freedom of choice. Americans are facing a future bondage of forced unionism and government control for not only themselves but their children and grandchildren.

Today’s unions are no more than Gasping Dinosaurs who can only survive through the backing of government regulations designed to force private company employees into unionism or government-induced growth of public employee unions. In fact they are so desperate they will organize any company, from small businesses like Bob’s all the way up to major corporations. The bottom line for big labor is survival. They intend to accomplish this through money, power and politics, not the will of the people Big labor’s survival is integral to ultimate government control, as they are the indoctrinated foot soldiers of the Administration.

Such is the scenario that all companies face if big labor continues to receive a multitude of gifts from the Obama Administration in the form of rules and regulation changes. See blogs EFCA Through the Backdoor and Americans: Beware of Rogue NLRB As if these continuous attacks on American freedoms were not enough, this past week more gifts were bestowed upon big labor without so much as a whisper from the national media:

1.) The NLRB informed four states whose electorate had voted to approve amendments that protect the “Secret Ballot Election” during organizing campaigns that the amendments violated federal law and the NLRB would file legal charges against the states to enjoin them from enforcing the laws. See NLRB News Release and State Amendments and Preemption.

2.) The NLRB ruled that Catholic Institutions were not exempt from regulations because their purpose is secular and not religious Government Regulators May Not Recognize Catholic Universities as Religious.

3.) Harry Reid submitted a proposal to eliminate filibusters and pass all laws on a simple majority of 51 votes so he can pass “card check,” the Police and Firefighters Monopoly Bill, and others. (An online petition to oppose this action is located at this link: Please Send Your Senators a Free Action Fax IMMEDIATELY and Urge them to Oppose Harry Reid’s Latest Scheme).

4.) Unions want the NLRB to allow them to operate freely in employers’ buildings and offices because it is unfair that the Girl Scouts have such privileges and the unions don’t.  (See Will the Union-Controlled NLRB Kick the Girl Scouts Out on the Streets? and Union Bosses Scheme to be Girl Scouts’ Next “Tagalong” ).

This article deals with government regulation and interference with business and labor, but the same game is being played out with health care, energy, communications, gun laws and the financial markets, as detailed in When Will Congress and the Main Stream Media Wake Up? If you’re not afraid of where this country is headed under the Obama Administration after reading this article, you must truly be an ostrich. Any level headed person with an ounce of common sense would have to ask Who Is Running the Country? and is Obama a Puppet or Puppeteer? It is time for Americans to get their proverbial heads out of the sand and put an end to the historical numbers of changes being perpetrated behind the scenes before we become the second Weimar Republic. Read The Obama Conspiracy against Small Business.

About the author: David A. Bego is the President and CEO of EMS, an industry leader in the field of environmental workplace maintenance, employing nearly 5000 workers in thirty-three states. Bego is the author of “The Devil at My Doorstep,” based on his experiences fighting back against one of the most powerful unions in existence today.

Union Watch Highlights

State Of The Unions – Public Support for Labor Unions Hits a New Low
By James Surowiecki, January 17, 2011, The New Yorker
In the heart of the Great Depression, millions of American workers did something they’d never done before: they joined a union. Emboldened by the passage of the Wagner Act, which made collective bargaining easier, unions organized industries across the country, remaking the economy. Businesses, of course, saw this as grim news. But the general public applauded labor’s new power, even in the face of union tactics that many Americans frowned on, like sit-down strikes. More than seventy per cent of those surveyed in a 1937 Gallup poll said they favored unions. Seventy-five years later, in the wake of another economic crisis, things couldn’t be more different. (read article)

Easier to take pols’ anti-Walmart activism seriously if city pension plans owned less of its stock
Editorial, January 16, 2011, New York Daily News
The New York politicians who are stoking anti-Walmart fervor are not to be taken seriously for as long as the city’s pension system is a major shareholder in the retailing giant. City Council Speaker Christine Quinn has scheduled hearings on Walmart’s plan to open in Brooklyn. She has concerns, she says, about the company’s record on labor, treatment of female employees and impact on neighborhood shopping. Public Advocate Bill de Blasio goes further, asserting that Walmart has a “record of driving small businesses out of town and paying below-poverty line wages” and is a “proven job killer.” Meanwhile, the city’s retirement funds hold 6,808,859 shares of the retailer’s stock that were worth a whopping $373,199,042 at the close of trading Friday. (read article)

Detroit and Decay
Editorial, January 15, 2011, The Wall Street Journal
The city may abandon half its schools to pay union benefits. Detroit was once America’s fourth largest city, though today large sections of its inner core are abandoned to the elements, and monuments like Michigan Central Station are returning to dust. Another emblem of civic decline is a plan to desert nearly half of Detroit’s public schools so that it can afford to fulfill its teachers union contract. (read article)

Closed-door union negotiations hinder cutback in spending
By Brian Hughes, January 15, 2011, Washington Examiner
More than 80 cents of every taxpayer dollar spent in Montgomery County is essentially approved behind closed doors during negotiations with employees unions, an arrangement that leaves the public in the dark and hampers efforts to rein in spending, critics contend. County Council members, who have final budget authority, are targeting employee compensation and benefits — identified as the cause of the suburb’s massive deficits — for long-term savings. But they have little idea if County Executive Ike Leggett is following suit during ongoing talks with union negotiators. “It’s bizarre,” said Councilman Marc Elrich, D-at large. “We never see the bargaining. (read article)

San Diego’s Bid to Limit Pensions Meets Union Resistance

By Jen Lebron Kuhney and Craig Gustafson, January 14, 2011, San Diego Union-Tribune
City leaders presented a united front Friday saying they want to end San Diego’s ongoing pension saga by reaching a global settlement with labor unions that would cap employee pensions, save hundreds of millions in taxpayer dollars and eliminate a slew of lawsuits involving pension-related disputes. Mayor Jerry Sanders, City Attorney Jan Goldsmith and a unanimous City Council presented labor unions with a letter requesting to enter mediation over the city’s pension woes. The ambitious goal follows a legal opinion Goldsmith released earlier in the week that says the city can legally freeze the base salaries of its workers and, in effect, limit the size of future pensions. If implemented, workers could still get raises but any additional income they receive could not be applied toward pension calculations. Union leaders immediately criticized the proposal, but did not say whether they would agree to negotiations. (read article)

AFSCME exec says pay cuts dismay Nevada’s state workers
Associated Press, January 14, 2011
Union leader Vishnu Subramaniam says state workers were dismayed that their first correspondence with Gov. Brian Sandoval is to learn of 5 percent pay cuts across the board. The Republican’s office says the reduction will save about $380 million for Nevada. Continuing the suspension of merit and longevity pay will save another $211 million. Subramaniam, the chief of staff for the American Federation of State, County and Municipal Employees Local 4041, says the move means workers and the governor are “starting off on the wrong foot.” He says, “The real discussion needs to be on reforming the tax structure.” (read article)

Teacher’s Union Claims Member’s Scalp
By Kyle Olson, January 11, 2011, Townhall.com
The Grand Rapids Education Association, a local affiliate of Michigan’s largest teachers’ union, is attempting to pick off one-by-one 90-some members that have refused to pay their dues. About 18 months ago, the school board voted to no longer deduct dues from employees’ paychecks, which meant union members had to physically write a check to the union. Many saw it as their opportunity to protest the obnoxious behavior of union leaders during a previous contract negotiation period. The union president, Paul Helder, was particularly pompous during negotiations, claiming the union was fighting a “war on terrorism.” (read article)

Unions’ day of reckoning arrives
By Sherman Frederick, January 9, 2011, Las Vegas Review- Journal
As Nevada welcomes a new governor and prepares for the start of the 2011 Legislature, two concepts ought to dominate the political landscape. No, not tax increases and spending cuts. Try 401(k) plans and collective bargaining. Nevada needs to openly discuss instituting the former and outlawing the latter for public employees. And the sooner the better, because when the city of Chicago cries uncle about the spend-a-thon engineered by its union sweethearts, you know a budget apocalypse for cities, counties and states draws nigh. (read article)

Union bosses distort right-to-work facts
By Mark Mix, January 7, 2011, Indianapolis Star
Regular observers of the Hoosier Capitol in Indianapolis report there is a strong possibility state legislators will soon vote on legislation protecting the individual employee’s freedom to join or bankroll a union, or refuse to do either, without being fired as a consequence. Even before the new legislature convened, Rep. Wes Culver, R-Goshen, introduced House Bill 1028, which would prohibit forcing employees to join or pay dues or fees to a union as a condition of employment, thus making Indiana America’s 23rd right-to-work state. Rep. Jerry Torr, R-Carmel, and Sen. Carlin Yoder, R-Middlebury, have also introduced right-to-work legislation. (read article)

Now It’s Unions vs Girl Scouts
By Brett McMahon, January 7, 2011, Halt-the-Assault.com
One of the greatest benefits of being a business owner is the ability to not only create jobs and boost the economy, but also to be a source of positive impact in our community. My family’s business is not alone in this, as all across the country small business owners sponsor local little league sports teams, boost girl scout cookie sales, orchestrate food and clothing drives, and collect spare change for many causes, all from the premises of their private property. But now, thanks to some underhanded tactics by greedy union bosses, this all may be about to end. (read article)

Public-sector unions have had a good few decades. Has their luck run out?
Editorial, January 6, 2011, The Economist
The past 30 years have been dismal ones for the labour movement. In the American private sector trade-union density (ie, the proportion of workers who belong to unions) has fallen from a third in 1979 to just 7% today. In Britain it has dropped from 44% to 15%. Nor is this just an Anglo-Saxon oddity: less than a fifth of workers in the OECD belong to unions. There is one big exception to this story of decline, however: the public sector. In the Canadian public sector union density has increased from 12% in 1960 to more than 70% today. In America it has increased over the same period from 11% to 36% (see chart). There are now more American workers in unions in the public sector (7.6m) than in the private sector (7.1m), although the private sector employs five times as many people. (read article)

Labor scrambles to regroup
By Ben Smith and Maggie Haberman, January 5, 2011, POLITICO
On defense and on its heels after the Republican takeover of Congress and key statehouses, a divided labor movement is coming together for a new campaign that will attempt to go on offense against corporate America. In a central headquarters in Washington, the new union campaign will attempt, in particular, to prevent a split between public- and private-sector workers and to defend the public workers from sharp cuts to their pay, benefits and right to bargain collectively. The effort also hopes to co-opt the “reform” mantle to make the case that while workers are willing to give back some benefits, “shared sacrifice” — meaning taxes on the rich and corporations as well — should be the order of the day. (read article)

Jack Dean is editor of PensionTsunami.com, formed to monitor developments in all three pension spheres nationwide — public employees, corporations and social security. PensionTsunami, like UnionWatch, is a project of the California Public Policy Center. Dean is a former newspaper editor and a past executive director of the Reason Foundation. He has been active in politics for more than three decades and currently serves as president of the Fullerton Association of Concerned Taxpayers.

SEIU Snow Job!

It appears the SEIU has once again utilized the old “Persuasion of Power” trick, this time at the expense of New York City taxpayers. It was reported by government employees that the Sanitation Department’s Slow Snow Cleanup was a Budget Protest and that big labor bosses instructed union membership to slack off on the job in order to teach New York City politicians a lesson, because of proposed layoffs and cutbacks (See Big Labor’s Snowmageddon Snit Fit). The SEIU loves to utilize thuggery to achieve its goals — whether in slowdowns against government entities or by staging corporate campaigns against private sector employers. The objective in both instances is the same: “intimidate and humiliate until they capitulate.”

These “Gasping Dinosaurs” are desperate to retain membership. The recent economic downturn has exposed the inherent costs of public unions, and their destructive nature on the economy and government budgets. The SEIU’s latest shenanigans provide a glimpse as to their willingness to be destructive and disruptive to the welfare of the public. Imagine how bad it would be if the government is allowed to continue to push for more unionized mass transit, a stated goal of the Obama administration (See Disorganizing Labor).

Private employers have been exposed to these type tactics for many years, similar to those described in The Devil at My Doorstep. Government entities have largely escaped these tactics since Kennedy’s 1962 Executive Order permitting the organization of public employees, as corrupt political alliances and paybacks have allowed forced unionization of public employees and “cush” jobs for big labor bosses at the expense of the taxpayer (See New York City’s No-Show SEIU Snow Jobs).  Now, however, the consequences of this Executive Order are being brought to light by a struggling economy and the thuggery of big labor bosses.

It will be interesting to see what transpires this time as another major blizzard has New York City directly in its sites.

About the author: David A. Bego is the President and CEO of EMS, an industry leader in the field of environmental workplace maintenance, employing nearly 5000 workers in thirty-three states. Bego is the author of “The Devil at My Doorstep,” based on his experiences fighting back against one of the most powerful unions in existence today.

Wall Street & Public Sector Unions

One of the greatest misconceptions on the left may be the suggestion that “us” refers to workers (hopefully unionized workers), along with government programs and regulations, and “them” refers to big business, their friends on Wall Street, and their puppets in government. At the risk of merely presenting an opposing paradigm that is equally over-simplified, here are some alternative scenarios. The open-minded reader may find them instructive.

For over a decade, Wall Street has enjoyed an incestuous and exploitative relationship with public sector unions, because public employee pension funds have poured more new money into their equities markets than any other single source. This isn’t leveraged money or trading turnover, either, this is new money, cold hard cash that is transferred from the pockets of taxpayers into government payroll departments and turned over to the pension funds. In the United States each year, the pension fund contributions of 25 million government workers – at $10,000 per year each, which is probably a very conservative estimate – pour over 250 billion dollars into Wall Street.

The way Wall Street seduced public sector unions into thinking they could ask for retirement benefits that, on average, are quadruple what the average private sector worker can expect from social security is the single biggest example of how Wall Street seduced the entire nation into believing they could enjoy a quality of life far in excess of what they actually were earning. Public sector union leadership can hardly be blamed for believing that their trillion dollar pension funds could earn 8.0% per year, forever, during an era when debt in general was exploding, asset bubbles were inflating relentlessly, and collateral-generated cash was inundating the economy. But now the party is over, and while the Wall Street barons smoke the proverbial cigarette and consolidate their winnings, public sector union officials are still doing their dirty work – intimidating politicians into raising taxes to continue feeding money into Wall Street pension funds that cannot hope to achieve 8.0% annual returns.

Who else has a vested interest in suggesting an 8.0% annual rate of return is feasible forever, with trillion dollar investment funds, other than Wall Street and Public Sector Unions? At least in the case of Public Sector Unions, their leadership believed this nonsense, and now find themselves backed into a corner. During the real-estate bubble boom, Wall Street suckered everyone, by lobbying for the left-wing policies of lending money to people who couldn’t afford to borrow the money, which built the financial house of cards, and by lobbying for the right-wing policies of deregulating investment banks, so they could collateralize the mortgage-debt house of cards into 50 trillion dollars of phony money. And when the whole ridiculous scam collapsed, Wall Street took all the money off the table, collected bail-out money, and turned the United States into a debtor’s prison.

The question now is what levels of turmoil and poverty will we have to endure as we struggle to reform Wall Street and roll back the delusional and unsustainable level of entitlements currently expected by Public Sector Unions. Here are some factors to consider as we hopefully move towards an economy based again on realistic and sustainable financial principles:

1 – “Big Business” has been just as victimized and suckered by a poorly regulated Wall Street as the public sector unions. Unlike these unions, however, big business didn’t collude with Wall Street to impose trillions of dollars of liability onto taxpayers in order to fund unsustainable and inequitably generous public sector employee compensation packages.

2 – The industrial products of corporate America, i.e. “Big Business,” create wealth. The financial products of Wall Street – properly regulated and at an appropriate scale – can assist in capital formation, liquidity, and economic growth, but that scale has been exceeded by an order of magnitude. At their current scale, Wall Street financial products are simply engines to expropriate massive amounts of wealth from the economy, producing nothing in return.

3 – Passive investments such as the giant, trillion dollar public employee pension funds, will not see returns of 8.0% (inflation-adjusted 5.0%) again for a generation. There is too much money out there chasing too few genuine investments. You can’t saturate an economy with near-zero interest rate credit, then expect trillion dollar investment funds to perform at high single digit rates of return. The spread is too big.

4 – Local public governments who issue bonds at tax-free rates of return of 5.0% or more to finance investments in their pension funds where they expect to generate rates of return that exceed 5.0% (notwithstanding the tax-free subsidy that is a further economic drain) are delusional. This practice of issuing “pension obligation bonds” is based on assumptions that are false. Pension obligation bonds will hasten a local public entity’s descent into bankruptcy, not alleviate it.

5 – Public sector bond holders and public sector pensioners represent the same phenomenon – non-productive members of society (passive investors and retirees) who have placed demands on the economy that can no longer be fulfilled. The level of bond interest rates is too high, the level of public sector pension benefits is too high, the amount of money tied up in these obligations is too high a percentage of our national wealth, and as a result, both of these groups are destined to see their returns and their benefits reduced – and the sooner this happens, the less severe the resulting economic hardship will be to the nation.

6 – There is NO comparison whatsoever between the “crisis” facing Social Security and the catastrophe facing public sector pensions. The U.S. is on track, within a generation, to be paying as much in absolute dollars to public sector retirees each year as they will be paying to social security recipients, despite the fact that social security recipients will be four times as numerous. Social security can be fixed with moderate adjustments: slightly lower benefits, slightly higher retirement ages, slightly higher withholding, and a slightly higher cap on wages before withholding ceases. Only the Wall Street / Public Sector Union axis has a vested interest in equating the moderate financial challenges facing social security with the totally insolvent public employee pensions.

7 – The solution to restore solvency to taxpayer-funded retiree benefit plans is to move to a pay-as-you-go system, where current workers support retired workers, not rely on passive investment returns. As noted in #6, this will be easy to achieve with respect to social security, but it is impossible to achieve with respect to public sector pension funds unless the benefits are dramatically reduced. And why shouldn’t they be? Public sector employees already make more in current wages and benefits – why shouldn’t they just receive social security like the taxpayers who support them? And why should the government invest taxpayer’s money into the equities market with public employees holding all the upside, and taxpayers holding all the downside?

In order to move back to a financially sustainable economy, the United States has a unique window of opportunity to reform Wall Street and reduce the benefits enjoyed by unionized public sector employees. This is because the United States still enjoys crucial advantages vs. the rest of the world’s national economies, a fact that grants us another decade or so to make some hard decisions and get back on track. But the beginning of that process depends on voters realizing that “big business” and Wall Street are not in collusion, they are in opposition. Big business creates products and wealth, and Wall Street, along with their henchmen in our unionized government entities – at least in their currently grotesquely overgrown versions – expropriate wealth and create nothing.

Union Watch Highlights

Labor’s Coming Class War
By William McGurn, January 4, 2011, The Wall Street Journal
Private-sector union workers begin to notice that their job prospects are at risk from public-employee union contracts. Jeffrey Brown of PBS’s “NewsHour” recently summed up the year’s economic performance by invoking the most overworked chestnut of modern American punditry: “the disconnect between Main Street and Wall Street” The notion that Wall Street and Main Street are fundamentally at odds with one another remains a popular orthodoxy. So much so that we may be missing the first stirrings of a true American class war: between workers in government unions and their union counterparts in the private sector. (read article)

Strained States Turning to Laws to Curb Labor Unions
By Steven Greenhouse, January 3, 2011, New York Times
Faced with growing budget deficits and restive taxpayers, elected officials from Maine to Alabama, Ohio to Arizona, are pushing new legislation to limit the power of labor unions, particularly those representing government workers, in collective bargaining and politics. State officials from both parties are wrestling with ways to curb the salaries and pensions of government employees, which typically make up a significant percentage of state budgets. (read article)

Lousy schools split some Democrats from union fold

By Steven Greenhut, January 2, 2011, Orange County Register
Democrats soon will have to decide whether they are the party of the idle rich – i.e., the party of retired government employees, many of whom spend 30 or more years receiving pensions that are the equivalent of millions of dollars in savings – or the party of the poor, the downtrodden and the working class. Fortunately, there are some Democrats who are serious about all that “helping the little guy” rhetoric, especially in the area of public education. In a recent article titled “Democratic schism opens on fixing schools,” the Sacramento Bee detailed the “growing chorus [of Democrats] arguing the party must move away from its traditional allegiance with teachers unions in order to improve chronically low-performing schools.” (read article)

Who Will Protect the People from the Unions?
By Daniel Greenfield, January 2, 2011, Canada Free Press
It is often forgotten that one of the causes of the evolution of the modern American urban union was the lawless suppression of workers by Democratic party affiliated political machines, and yet it did not take so very long before the union became an outgrowth of that same political machine. And having wiped out nearly every independent industry with which it was associated, the only unions still surviving are those in control of either municipal services or state subsidized service providers, particularly in the medical field. If the union began as a way to negotiate salaries and working conditions between employers and workers, the modern day union is often little more than governments and their union supporters bleeding the public dry in order to subsidize a political party and a union leadership that brings in the votes for that party. (read article)

Snowplow Slowdowns Might Become American Way
By Kevin Hassett, January 2, 2011, Bloomberg
Europeans have grown accustomed to seeing government workers shut down their countries when provoked. At this time of huge deficits from Washington to the smallest towns, government workers in the U.S. also face significant cutbacks. Americans may have had their first taste of what that will mean. New York City Mayor Michael Bloomberg and New York Governor David Paterson are both calling for an investigation of allegations that city workers intentionally dragged out the cleanup of the Dec. 26 blizzard as a way to protest cuts in the city budget. (read article)

New York Gov. Cuomo Plans One-Year Freeze on State Workers’ Pay
By Nicholas Confessore, January 2, 2011, New York Times
Gov. Andrew M. Cuomo will seek a one-year salary freeze for state workers as part of an emergency financial plan he will lay out in his State of the State address on Wednesday, senior administration officials said. The move will signal the opening of what is expected to be a grueling fight between the new governor and the public-sector unions that have traditionally dominated the state’s political establishment. (read article)

Union Snow Job in New York City Just Glimpse of Coming Blizzard
By Bret Jacobson, December 30, 2010, BigGovernment.com
The New York Post is reporting that unionized public employees were encouraged to slow the process of digging out of the recent snowstorm to demonstrate their labor leverage in hopes of grabbing more taxpayer largess. Think that’s shocking? Just wait til taxpayers finally start paying attention to the power public employees have over local, state, and federal budgets. California Gov. Arnold Schwarzenegger and former San Francisco mayor Willie Brown have already warned that 80 cents of every state dollar goes to public employee pay and benefits. Other states face similar figures. Shocking figures have shown public employee pensions twice as high in New York compared to their private-sector counterparts. (read article)

Federal workers: We’re not getting what we pay for
By Ralph R. Reiland, December 29, 2010, Pottstown Mercury
“Washington, D.C.’s, workers enjoy the highest salaries of any U.S. city, with a median household income of $85,198,” recently reported CNNMoney. It’s even higher for federal workers in the city, with an average wage last year for civilian government workers of $81,258 per person (not per household). That’s more than $30,000 more than last year’s average private-sector wage. Add the cost of benefits and pensions, and the average compensation gap between federal and private-sector workers jumps to nearly $62,000 per year — $123,049 vs. $61,051. That doesn’t mean they work the hardest or that they’re twice as smart. (read article)

As governments go broke, public employee unions must share the pain
Editorial, December 28, 2010, Washington Examiner
One need look no further than two Michigan officials — William Cooper, the city manager of Hamtramck, and Tom White, associate director for labor relations of the Michigan Association of School Boards — to grasp the seriousness of the financial crisis exploding across this country. Cooper told the New York Times that his city government “maybe” can pay its bills through March 1. Hamtramck has already cut what it could from its budget, reducing spending for parks, senior centers and road maintenance. Now city leaders say their only remaining option is to file a municipal bankruptcy. If Hamtramck is allowed to do that, according to the Times, at least another 30 Michigan cities will quickly follow suit, so state government leaders aren’t likely to permit such bankruptcy filings. (read article)

Isn’t It Time That Legislators Outlaw Collective Bargaining for Public-Sector Workers?
Editorial, December 27, 2010, Investor’s Business Daily
A guest on Fox Business Network said last week that public employee unions are bankrupting state governments. Isn’t it time that legislators outlaw collective bargaining for public-sector workers? Working for the government as a member of a union is an easy path to prosperity. On average, the yearly compensation for a public sector worker is, according to Bureau of Economic Analysis data, $67,812. In the private sector, that average is $59,909. Put another way, when measured as total compensation per hour, state and local government wages are 45% higher ($39.66) than private-sector wages ($27.42). (read article)

Adrain Moore Talks Unions vs. Volunteers on Varney & Co.

December 23, 2011, Fox Business News (watch video)

Opposing sides ready to battle over Ohio collective bargaining
By Jessica Alaimo, December 21, 2010, Newark Advocate
Incoming state leaders plan to target public employment laws in 2011, but on Thursday backers of the collective bargaining process promised to put up a fight. Officials from Policy Matters Ohio, a progressive think tank, argue states without collective bargaining have the same budget shortfalls as Ohio. They also defended the state’s prevailing wage law and say, overall, the state’s public employment laws are good for the economy. “The right of public workers to unionize is not driving the fiscal crisis of states,” said Wendy Patton, a senior associate with Policy Matters Ohio. (read article)

Jack Dean is editor of PensionTsunami.com, formed to monitor developments in all three pension spheres nationwide — public employees, corporations and social security. PensionTsunami, like UnionWatch, is a project of the California Public Policy Center. Dean is a former newspaper editor and a past executive director of the Reason Foundation. He has been active in politics for more than three decades and currently serves as president of the Fullerton Association of Concerned Taxpayers.

Lousy schools split some Democrats from union fold

Democrats soon will have to decide whether they are the party of the idle rich – i.e., the party of retired government employees, many of whom spend 30 or more years receiving pensions that are the equivalent of millions of dollars in savings – or the party of the poor, the downtrodden and the working class.

Fortunately, there are some Democrats who are serious about all that “helping the little guy” rhetoric, especially in the area of public education. In a recent article titled “Democratic schism opens on fixing schools,” the Sacramento Bee detailed the “growing chorus [of Democrats] arguing the party must move away from its traditional allegiance with teachers unions in order to improve chronically low-performing schools.”

We all know that many of this state’s larger school districts operate as efficiently as Soviet-era bureaucracies, and their educational product is the equivalent of the former Soviet Union’s consumer goods. There’s a reason for those dropout rates of 20 percent to 50 percent, a human tragedy when you consider the typical futures of the students who are cast aside by the current system.

This isn’t a slam on the many fine public schoolteachers, but it’s clear what happens when unaccountable bureaucracies, protected from competition and reliant on taxes rather than the free choice of consumers, produce things. Unions make it nearly impossible to fire the worst employees and create work rules that stymie innovation and reform.

The late Albert Shanker, longtime leader of national teachers unions, once famously said, “When schoolchildren start paying union dues, that’s when I’ll start representing the interests of schoolchildren.” Shanker was just being truthful about the purpose of unions. The rest of us need to be just as forthright about the need to tame those unions if we’re seriously interested in improving education rather than simply in seeking more taxpayer money to prop up the same-old failed, bureaucratic system.

The story in the Bee profiled former state Sen. Gloria Romero, who last year lost her bid to become state superintendent of public instruction to a union ally, Tom Torlakson, but who now heads the California chapter of a political action committee called Democrats for Education Reform. Romero is a tried-and-true liberal who understands that union dominance undermines traditional liberal values. Several years back, she was one of only a handful of state senators from either party to take on the police unions over their unconscionable protection of abusive officers.

It’s beyond me how Democrats can claim to be for education yet align themselves with those forces that oppose every serious reform that would help poor kids, just as I could never understand how Democrats could claim to stand for civil liberties even as they stifled open-government rules that would shine a light on police officers who abused people’s rights.

Democrats for Education Reform released a report in October, “Busting the Dam,” which succinctly captures the nature of the problem: “It is no secret that most of the efforts to reform K-12 public education systems in the last quarter century have been stymied by political gridlock. Although education pioneers like Teach For America and KIPP have demonstrated the tremendous potential impact of innovation, special interests (primarily but not limited to teachers unions) have built up symbiotic relationships with elected officials to the point that they are able to assert de facto veto power over the kinds of changes which could fundamentally alter the way education is delivered in our communities.”

That’s a politically careful way of spelling out what others have said more directly, with some Democratic leaders describing the struggle for education reform as the new civil-rights battle of our era. Conservatives have long championed market-based education reforms, but they have had little impact and they must now find new allies among the state’s dominant Democrats.

This intra-Democratic battle is crucial given that the Republican Party has been shoved to the margins in California. Judging by the November elections, California voters apparently want this to be a one-party state, given Democrats’ clean sweep of state constitutional offices and the passage of Proposition 25, which gives the majority party the power to pass budgets with a simple majority rather than with a two-thirds supermajority. There’s not much the GOP can do other than watch from the sidelines.

Democratic political consultant Garry South wrote in a column recently that he had been offering Republicans advice for years – that they should nominate a more diverse slate of moderate candidates for statewide office. “This election year, the Grand Old Party took most of my free, unsolicited advice. … But in the end, it didn’t matter, every one got mowed down.”

Although I question a lot of South’s advice, I do agree with his conclusion: There is nothing Republicans can do at this point to become a viable statewide party.

That means solutions on all the big issues are going to have to come from the other side. Those of us on the right need to exploit this schism within the Democratic Party and side with reformers such as Romero.

Of course, the unions are gloating about their enhanced political power in Sacramento, with the election of Jerry Brown as governor. The Orange County Employees Association and Sen. Lou Correa (the Santa Ana Democrat who authored legislation that sparked a decade of pension-hiking), for instance, are hosting an inauguration party “celebrating the election of the People’s Governor.” I always associate talk about People’s leaders and People’s republics with places that have a decidedly authoritarian bent.

But while the union-dominated Left is celebrating, just maybe we’ll see the beginnings of a serious debate about union power, thanks to those Democratic politicians who are interested in reform. That’s a sliver of hope for the new year in a state that is starting to seem hopeless.

About the author: Steven Greenhut is the editor-in-chief of Cal Watchdog, an independent, Sacramento-based journalism venture providing original investigative reports and news stories covering California state government.. Greenhut was deputy editor and columnist for The Orange County Register for 11 years. He is author of the new book, “Plunder! How Public Employee Unions are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation.”

Bill Gates Stymies Randi Weingarten’s No-Show Offense in One-sided Debate

With a feeble offense (and virtually no defense), the union leader’s strategies help to keep American public education far from the goal line.

American Federation of Teachers President Randi Weingarten has done it again. She agreed to compete on a level playing field – defending the teachers unions’ version of education reform – and the results were not pretty.

A joint interview printed in Newsweek between American Federation of Teachers President Randi Weingarten and Microsoft’s founder-turned-ed-reformer Bill Gates ended with Weingarten on the losing end of the debate. This is not new, however, for the wrongheaded union leader. Last March, along with Rod Paige, former U.S. Secretary of Education, and Terry Moe, a senior fellow at the Hoover Institution and a member of Hoover’s Koret Task Force on K-12 Education, I debated Ms. Weingarten and two of her hand-picked team members in New York City.

Voting took place before and after the debate to see which side of the statement Don’t Blame the Teachers Unions for Our Failing Schools would carry the day. The results were embarrassingly one-sided — our team won by a landslide.

In this debate, Gates — as we did in New York – proceeded to demonstrate that the union leader could not refute solid, pro-reform arguments.

Kyle Wingfield summed it all up nicely in the Atlanta Journal Constitution, “Time and again, Gates exposes the complete emptiness of the positions held by Weingarten and her charges — and does so without coming across as attacking teachers themselves. Not once does Weingarten respond with anything we haven’t heard hundreds of times before….”

For example, Weingarten says that other countries are doing better than we are because, “They’ve spent a lot of time investing in the preparation and support of teachers.” Gates simply retorts, “…we spend more money by every measure than any other system… What are we going to do to get more out of the investments we make?”

Countering another serious charge, Weingarten pooh-poohs the notion that it is almost impossible to get rid of bad teachers. She says, “The reality is that managers (principals) don’t do their jobs.” She coos that teachers should be “counseled…out of the profession.”

Wrong. The reason it is almost impossible to rid the profession of its stinkers is because of serpentine provisions in virtually every union contract. It takes so much of a principal’s time and piles of district money – several years and hundreds of thousands of dollars per teacher in Los Angeles, for instance — to possibly get rid of a bad teacher, that administrators think it’s best to spend their time and limited money elsewhere. As to the laughable “counseled out of the profession” nonsense – is there any other profession where the poorest performers are “counseled out?” No. they may be warned and/or demoted and then fired. Period. It’s called accountability. What a concept!

Perhaps Weingarten is at her most absurd when she talks about building a good teaching staff and compares it to successful football strategies. She says, “Football teams do this all the time. They look at the tape after every game. Sometimes they do it during the game. They’re constantly deconstructing what is working and what isn’t working. And they’re jettisoning what isn’t working and building up on what is working, and doing it in a teamlike approach.”

She is correct in her football analysis. But what does that have to do with today’s unionized teachers? A football team will get rid of its poor performers after a few bad games. (No tenure in the National Football League.) If you are in your thirties and a rookie comes along who does a better job than you, you are gone. (No seniority in the NFL.) If you are the best wide receiver on the team, you will make more money than the others in the same position. (No unified salary scale in the NFL.)

Etc.

In short, as I wrote after the debate in NY, “I saw up close and personal what I have always felt — that the teachers’ unions are running on empty. The emperor is naked as a jaybird. Not only don’t they have anything to offer in the way of true education reform, they are the greatest impediment we have to ed reform. All the lofty words from teacher union presidents over the years about higher quality schools, teacher accountability, investing in education, etc. are nothing but empty rhetoric meant to lead the press and the public to believe that they really give a damn about children.”

Once again, Randi Weingarten has tried to engage the public by making her case that a unionized education is best for all concerned. And once again, she has failed miserably in her effort. Public education should really go the NFL route: have meritocratic work rules, pay good teachers more than mediocre ones, weed out bad teachers and stop automatically favoring teachers who have merely clocked more years on the job than others.

Unless we start doing things differently — and soon — America will continue to miss the playoffs, while other countries who have gone a different route will be vying for the Super Bowl.

About the author: Larry Sand is the president of the non-profit California Teachers Empowerment Network – a non-partisan,non-political group dedicated to providing teachers with reliable and balanced information about professional affiliations and positions on educational issues.

Union Watch Highlights

Organized Labor Battlefront Building In Illinois
By Rich Miller, December 27, 2010, Southwest Suburban News Herald
Organized labor is engaged in a furious multi-front legislative war in Illinois, and more skirmishes may be on the horizon. Trade and industrial unions are hoping to mitigate major damage from proposed workers compensation reforms. Teachers unions are trying to fend off what it considers to be some egregious education reforms. And public employee unions are warily eyeing a potential new battle against a well-known foe that their counterparts in other states have had to face in the recent past. Looking at the battlefield right now, you’d probably never know that the Democrats held onto power in last month’s elections. The same unions that pumped hundreds of thousands of dollars into Senate campaigns are now fighting the very people they helped reelect just a few short weeks ago. (read article)

Union Rollback
Editorial, December, 27, 2010, Investors Business Daily
A guest on Fox Business Network said last week that public employee unions are bankrupting state governments. Isn’t it time that legislators outlaw collective bargaining for public-sector workers? Working for the government as a member of a union is an easy path to prosperity. (read article)

Local Governments Caught in Pension Traps
By Chris Stirewalt, December 24, 2010, FoxNews.com
In a harbinger of what lies ahead for cash-strapped states, communities across the country are seeing their budgets busted by unsustainable pension obligations. The New York Times on Wednesday profiled the town of Pritchard, Ala., where the local government has suspended its pension fund and cut off retirees. Pritchard, now facing a legal struggle and possible dissolution over the decision, will not be typical. More typical will be the communities across the nation that are jacking up property tax rates into the stratosphere. (read article)

Where Unions Are, Americans Aren’t
By Diana Furchtgott-Roth, December 23, 2010, RealClearMarkets
The American people have been voting with their feet, the Census Bureau announced on Tuesday, leaving states with heavy union influence and choosing to live in “right-to-work” states with higher job growth where they cannot be forced to join a union as a condition of employment. But the National Labor Relations Board, now dominated by Obama appointees, is deaf to the preferences of voting Americans. It wants to do everything in its administrative power to tilt the playing field towards unionization-even if it means higher unemployment and lost jobs. (read article)

Taking On Public Unions Isn’t Just a Jersey Thing
By Josh Barro, December 22, 2010, RealClearMarkets
This fall, South Park ran an episode called “It’s a Jersey Thing.” In the episode, South Park residents react with alarm as combative, deeply-tanned figures from Jersey Shore and the Real Housewives overrun their quaint mountain town. Come January, a real Jersey-style wave will wash over much of the Midwest. But unlike on television, this wave is likely to be welcomed by the locals. In November, Republicans gained control of all levers of government in four large Midwestern states: Ohio, Indiana, Michigan and Wisconsin. And when the newly elected leaders there talk about how they plan to reform state government, they sound an awful lot like New Jersey Governor Chris Christie (R), placing reforms to employee relations and compensation at the top of their agendas. (read article)

Pension Reform Efforts Hit a Wall
December 22, 2010, Fox News (watch video)

Labor Relations Board rule would promote union rights
The Associated Press, December 21, 2010, Las Vegas Sun
Most private employers would have to display posters informing workers about their right to form a union under a proposed federal rule that is bound to please unions and draw the ire of companies trying to resist labor organizers. The planned rule, announced Tuesday by the National Labor Relations Board, would require businesses to post notices in employee break rooms or other prominent locations to explain a worker’s rights to bargain collectively, distribute union literature or engage in other union activities without reprisal. (read article)

House Republicans are ready for war against public sector unions
By David Weigel, December 21, 2010, Slate
In two weeks, Rep. Patrick McHenry of North Carolina will become the first chairman of the new House oversight subcommittee on TARP, Financial Services, and Bailouts of Public and Private Programs. In the meantime, he is thinking about New Jersey Gov. Chris Christie, who was on 60 Minutes this Sunday talking about the need to cut state spending and trim state employees and their pensions. (read article)

In Pleasantville, It’s Volunteers vs. Public Sector Unions
By Pete Peterson, December 21, 2010, City Journal
Sometimes the local government staff I have the great pleasure of working with say the darndest things.  Prior to giving a speech on civic participation for a group of city and county employees just north of San Francisco, I chatted with a county volunteer coordinator about her job. “It sounds like fascinating work,” I offered, “you must interact with a lot of different people on a variety of projects.” She responded affirmatively, “but,” as she demurred to a near whisper, “you have to be real careful that when you bring in a volunteer to help on certain jobs, that you don’t take work from unionized employees.” (read article)

Public servants feel sting of budget rancor
By Karen Tumulty and Ed O’Keefe, December 21, 2010, Washington Post
Here are two words you don’t hear much lately: public servant. More and more, when politicians talk about government employees – whether they are federal, state or local – it is with the kind of umbrage ordinarily aimed at Wall Street financiers and convenience store bandits. “We can no longer live in a society where the public employees are the haves and the taxpayers who foot the bill are the have-nots,” Wisconsin’s incoming Republican Gov. Scott Walker declared this month, as he raised the idea of stripping state workers there of collective bargaining rights. (read article)

Is the grass greener for federal workers?
Politics Section, December 21, 2010, The Washington Post (view chart)

Alabama Governor Signs Bill Ending the Practice of Deducting Union Dues From Paychecks
By  Linda White, December 20, 2010, WVTM-TV
Governor Bob Riley signed what he called some of the strongest anti-corruption laws in the country. Take a look at what some them will do:  Ban the practice of secretly funneling money to political candidates, through political action commitees, called “pac to pac transfers.”  They also limit what lobbyists can spend on public officials and requires them to register and file disclosures. Now a week old, Senate Bill 2 is being double and triple-checked by the legal departments of the state’s teacher unions.  SB2 ends the practice of deducting union dues from paychecks.  The unions say it’s political payback.  Governor Riley calls it an end to financing political activity by special interest groups. (read article)

Unions Push Public Pay Out of Scale
By Lanny Ebenstein, December 20, 2010, Los Angeles Business Journal
There is little question that the compensation, benefits and pensions of public sector employees exceed those of many private sector workers. Whatever the standard, compensation that is commonplace for hundreds of thousands of public sector workers in California is almost unheard of in the private sector. Consider, for example, the city of Los Angeles. Its memoranda of understanding with public employee bargaining units are posted on the city’s website. There are more than 80 types of clerical positions. The pay range for these is, on average, $43,600 to $53,200 per year. In general, after five years employment, a secretary will earn $53,200, well above what the private sector generally pays. (read article)

Experts weigh in on Alabama Ethics Reforms
By M.J. Ellington, December 19, 2010, Montgomery Bureau, Times Daily
Long after the newness settles on the package of ethics reform bills that passed the Legislature in the special session last week, analysts will still be assessing their impact. One political expert said two bills in the package will likely have the most visible effect. The two involve a bill banning government employee payroll deductions for organizations that engage in political activity, and a ban on transfers from one political action committee to another. (read article)

Jack Dean is editor of PensionTsunami.com, formed to monitor developments in all three pension spheres nationwide — public employees, corporations and social security. PensionTsunami, like UnionWatch, is a project of the California Public Policy Center. Dean is a former newspaper editor and a past executive director of the Reason Foundation. He has been active in politics for more than three decades and currently serves as president of the Fullerton Association of Concerned Taxpayers.

Illinois Democrats Confront Unions

A report posted online on December 27th, 2010 in the Chicago-based Southwest News Herald entitled “Organized Labor Battlefront Building In Illinois” offers a glimpse into what Democratic politicians in functionally bankrupt blue states are willing to consider. As author Rich Miller puts it, “The same unions that pumped hundreds of thousands of dollars into Senate campaigns are now fighting the very people they helped reelect just a few short weeks ago.”

Here are some of the unprecedented measures proposed by Democratic state lawmakers in Illinois, bitterly opposed by unions, that have a serious chance of being passed on to Illinois Governor Pat Quinn for signature:

  • Trade and industrial unions are hoping to mitigate major damage from proposed workers compensation and Medicaid reforms.
  • The teachers unions are preparing scorched earth tactics for the House’s education reform bill, which they say will all but take away their right to strike, severely limit their collective bargaining powers and impose new state standards for firing or laying off teachers.
  • The union focus has lately turned toward a proposed constitutional amendment in the House for a so-called “Taxpayers Bill of Rights,” or TABOR, which would limit state spending to the previous year’s levels plus the average percentage increase (or decrease) of per capita personal income over the previous five years.
  • There were also big majorities for pension givebacks this year in both chambers.

Still standing between these reforms – being proposed by Democrats – is the Democratic Governor of Illinois, Pat Quinn, who has been seen as the “stopper” by the unions whose gigantic campaign contributions put him into office. But even Quinn, who has proposed a $15 billion bond issuance and tax increases in order to continue to fund public employee compensation and pensions, may sign this assortment of reform legislation in return for tax increases.

This model, genuine reform in exchange for higher taxes, is something to watch for in Illinois, along with California and the rest of the insolvent blue states. An more sustainable model, however, would have to include cuts to pay and benefits to unionized government workers.

Alabama Governor Confronts Unions

In a process that is repeating itself nearly everywhere in the United States, public sector unions are being confronted by incoming Governors and state legislators who have correctly identified them as the principal cause of inefficiency, corruption, and looming insolvency. Alabama’s current Republican Governor Bob Riley has just signed game-changing anti-corruption legislation that will, among other things, prohibit state and local government payroll departments from withholding public sector union dues if any portion of those dues are used to fund political activities.

Alabama’s political landscape is changing. Like states throughout the south and midwest of the U.S., Alabama’s state legislature turned Republican in the Nov. 2010 elections. According to Ballotpedia, Alabama’s State Assembly has transitioned from a 60-43 Democrat majority to a 66-39 Republican majority. Similarly, Alabama’s State Senate has transitioned from a 20-15 Democrat majority to a 22-12 Republican majority. But Governor Riley signed legislation put forward by Alabama’s Democrat controlled lame-duck legislature. Apparently Alabama’s Democrats have decided they’ve had enough of public sector unions.

It’s easy to read too much into this. Alabama’s Democrats may simply be feeling the winds of change and, those of them who squeaked back into office or weren’t up for reelection this time, wanted to avoid the wrath of an awakened electorate. But legislation like this, coming from a Democratic-controlled state legislature, is a sign of the times. Right-sizing the political influence of public sector unions, and right-sizing the pay and benefits of unionized public sector workers, is a nonpartisan cause that is sweeping America.

For more on Alabama’s new legislation, read “Alabama Governor Signs Bill Ending the Practice of Deducting Union Dues From Paychecks,” by  Linda White, December 20, 2010, WVTM-TV, or “Experts weigh in on Alabama Ethics Reforms,” by M.J. Ellington, December 19, 2010, Alabama Times Daily.

Union Watch Highlights

Brown, prison union walking hand-in-hand
By Dan Morain, December 19, 2010, The Sacramento Bee
Jerry Brown is preparing to dance with the ones who brung him, specifically 31,000 members of the California Correctional Peace Officers Association. Jilted by Gov. Arnold Schwarzenegger, the union cozied up to Brown by spending $1.4 million to help elect him. It was part of an effort to regain some of the dominance it once had in the Capitol and win a labor contract, after having operated without one since 2006. Brown has responded, giving union leaders VIP treatment at his invitation-only election night party in Oakland and flying to Las Vegas earlier this month to address the union’s convention. (read article)

State Budgets: The Day of Reckoning

By Steve Kroft, December 19th, CBS 60 Minutes
By now, just about everyone in the country is aware of the federal deficit problem, but you should know that there is another financial crisis looming involving state and local governments. It has gotten much less attention because each state has a slightly different story. But in the two years, since the “great recession” wrecked their economies and shriveled their income, the states have collectively spent nearly a half a trillion dollars more than they collected in taxes. There is also a trillion dollar hole iln their public pension funds. The states have been getting by on billions of dollars in federal stimulus funds, but the day of reckoning is at hand.  (read article)

Mutiny within ranks of San Jose’s police union in aftermath of Measures V and W
By Scott Herhold, December 17, 2010, San Jose Mercury News
A news flash today: Bobby Lopez, the voluble former head of the San Jose Police Officers’ Association, is leading a mutiny within the ranks of the union. Lopez, who lost an attempt to come back as POA president last month, is trying to get cops to join a chapter of a competing organization, the Fraternal Order of Police, Lodge 52. The movement led by the veteran sergeant prompted an extraordinary e-mail from the POA leadership that eloquently urged officers not to withdraw from the union. And the fracture between the two groups may tell you much about the current low state of morale among cops, who lost their fight to stop Measures V and W in November. Measure V, you’ll remember, weakens the binding arbitration system that has benefited cops and firefighters. Measure W opens the door to lowering pensions for new hires. When I reached Lopez Friday morning, he, as usual, pulled no punches in his critique of the current leadership. “It’s a simple enough thing,” he said. “I think the current regime has overspent, overcharged and underrepresented the guys I used to represent.” (read article)

Hardball in Wisconsin; Massive Defeat for Unions in Lame-Duck Session

By Mike Shedlock, December 17, 2010, Mish’s Global Economic Trend Analysis
In Wisconsin, governor-elect Scott Walker is in a showdown with state employee unions. “Anything from the decertify all the way through modifications of the current laws in place,” Walker said at a luncheon sponsored by the Milwaukee Press Club at the Newsroom Pub. “The bottom line is that we are going to look at every legal means we have to try to put that balance more on the side of taxpayers and the people who care about services.” Union supporters did not like the idea one bit and sought legislation in the lame-duck session that would tie Walker’s hands. (read article)

An interview with governor’s advisor David Crane on California’s public pension crisis
Interviewed by James Freeman, December 16, 2010, The Wall Street Journal
(watch video)

On June and November local ballots in California, unions lost 19 out of 20 contests
December 16, 2010, Ballot News
On its November 2 and June 8 ballots, California voters weighed in on a total of 20 local ballot measures that influence the pay, pension packages, healthcare retirement payments, and contract negotiation perogatives of labor unions. The pro-union/labor position lost in 19 out of the 20 contests.
* 5 measures about labor negotiations, pay rates and binding arbitration. The union position racked up a 0-5 score on these.
* 3 measures about Project-Labor Agreements. The union position went 0-3 on these.
* 12 measures about pension reform. These measures were a potpourri of different ways to rein in pension and retirement benefits. Three were advisory only. The only straight up loss for those advocating pension reform was the loss of the Adachi Initiative in San Francisco. (read article)

The tyranny of government unions
By D.C. Innes, December 15, 2010, World Magazine
If the corruption in little Bell, Calif., were merely an isolated case of bizarre circumstances, the rest of us could laugh and be glad we live elsewhere. But, sadly, Bell is a small picture of what is crippling the country. Bell is a “city” of 37,000 people and only 2.5 acres just outside of Los Angeles. Despite its small size and relatively poor populace, the city’s chief administrative officer was earning almost $800,000 a year. His assistant took in $376,288 annually, and the police chief was taking home $457,000. They’re now all in jail on corruption charges. What galls us is that while they were “officially” public servants, they were actually fleecing the public for inordinate private gain. But we are coming to understand that is what everybody who works for the government does through his or her powerful unions. In August, California Gov. Arnold Schwarzenegger told the nation through The Wall Street Journal that the public service employee union was bankrupting his state. He reported that “roughly 80 cents of every government dollar in California goes to employee compensation and benefits.” (read article)

Dems vs. unions: It’s on
By Charles Lane, December 13, 2010, The Washington Post
Next to the drama in Washington, the big political story in 2011 will be the struggle to rein in public-sector unions, whose pay, pensions and health benefits are bankrupting some of the biggest states in the country. Today’s Wall Street Journal contained a tough op-ed on public-sector unionism by Minnesota’s Republican Gov. Tim Pawlenty, a presidential hopeful. Neighboring Wisconsin’s ascendant Republicans may try to end collective bargaining for public workers in that state. But GOP moves against public employee unions, the core constituency of the Democratic Party, are no surprise. What’s really interesting, as I’ve written, somewhat obsessively, is the looming struggle between budget-cutting Democrats and the unions. (read article)

Ohio Gov.-elect John Kasich wants to overhaul collective bargaining law
By Reginald Fields, December 13, 2010, The Plain Dealer
Public employees who go on strike over labor disputes should automatically lose their jobs, says Gov.-elect John Kasich. “If they want to strike they should be fired,” Kasich said last week. “I really don’t favor the right to strike by any public employee. They’ve got good jobs, they’ve got high pay, they get good benefits, a great retirement. What are they striking for?” Kasich has made it clear that dismantling Ohio’s collective bargaining law will be a top priority of his administration. In particular, Kasich is going after binding arbitration rules often used to settle police and fire department salary and benefits disputes that he says are costly and bankrupting cities. That in turn drives up the state’s share of funding for local government budgets. “You are forcing increased taxes on taxpayers with them having no say,” Kasich said. (read article)

Government Unions vs. Taxpayers
By Tim Pawlenty, December 13, 2010, Wall Street Journal
When Americans think of organized labor, they might think of images like I saw growing up in a blue-collar meatpacking town: hard hats, work boots, tough conditions and gritty jobs. The rise of the labor movement in the early 20th century was a triumph for America’s working class. In an era of deep economic anxiety, unions stood up for hard-working but vulnerable families, protecting them from physical and economic exploitation. Much has changed. The majority of union members today no longer work in construction, manufacturing or “strong back” jobs. They work for government, which, thanks to President Obama, has become the only booming “industry” left in our economy. (read article)

Jack Dean is editor of PensionTsunami.com, formed to monitor developments in all three pension spheres nationwide — public employees, corporations and social security. PensionTsunami, like UnionWatch, is a project of the California Public Policy Center. Dean is a former newspaper editor and a past executive director of the Reason Foundation. He has been active in politics for more than three decades and currently serves as president of the Fullerton Association of Concerned Taxpayers.

Democrats vs. Public Sector Unions

It should come as no surprise that principled Democrats are realizing that public sector unions, through relentless demands for ever higher compensation and benefits for public employees, are crowding out the social programs and infrastructure projects that Democrats love. And it is no coincidence that in the cities and counties across America where Democrats still wield absolute power, they are in-turn controlled by powerful public sector unions. Democrats with genuine convictions now find themselves in the awkward position of confronting the unions who put them in power.

The fact that union reform in America is a nonpartisan issue has been covered here already in the posts “Los Angeles Mayor Confronts Unions,” “Nonpartisan Public Sector Union Reformers,” “Liberal Washington Post Attacks Unions,” and elsewhere, such as in our page of quotes by famous liberals on the problems caused by public sector unions, “UnionWatch is a Nonpartisan Effort.” Now the liberal Washington Post has come back at the unions again, in a new commentary entitled “PostPartisan – Dems vs. unions: It’s on,” by Charles Lane. Here’s Lane is his own words:

“What’s really interesting, as I’ve written, somewhat obsessively, is the looming struggle between budget-cutting Democrats and the unions. This is the contest that will determine whether Democrats can survive as a party with a broad political base at the state level, by putting the sustainability of vital public services ahead of the unions’ demands — or whether they will allow their public-sector union allies to drag them into a political death spiral of endless deficits, higher taxes, sluggish growth and declining services.”

What Lane doesn’t mention is the financial burden currently imposed by public sector unions not only spells the “political death spiral” of the Democratic party, but the economic death spiral of the United States. The failure of government to invest in infrastructure and necessary social programs because instead taxpayer money has to be spent on firefighters who earn more than doctors, and librarians who earn more than corporate executives, and police officers who earn more than engineers, and state college instructors – who turn in 6 hours of class time per week and take summers off – yet earn more than owners of small businesses – who work 365 days a year – guarantees the United States will not only become a totally insolvent nation, but also one doomed to chaos and ruin. Democrats and Republicans can go back to fighting over infrastructure priorities, and the definition of “necessary social programs,” after they’ve clawed back from the unions the financial wherewithal to fund them.

Most interesting in Lane’s commentary is his observation that even private sector unions are awakening to the unsustainable overreach of public sector unions. Lane points to the 100,000 member Building and Trades Council of Greater New York, a powerful construction worker’s union, whose chief has said “This is not about bashing public-sector unions, but without a fiscally sound environment, we will not be able to attract new businesses to the city; we’ll continue to lose business.”

To understand that public sector unions have emerged as unchecked, insatiable consumers of tax dollars, or that – in most cases – public sector employees receive total compensation grossly out of step with market norms, does not in any way constitute “public employee bashing.” The fact that Democrats across America are joining Republicans in calling for right-sizing public employee compensation ought to be proof enough of this.

Union Watch Highlights

Union dues bill: Payback?
By M.J. Ellington, December 12, 2010, Montgomery Times
Many legislators say a bill prohibiting payroll deductions for organization dues and political action committees is the key to the special session on ethics reform. Others say the Senate bill in Gov. Bob Riley’s ethics reforms package is payback to the Alabama Education Association which supported Republican Robert Bentley and derailed Bradley Byrne’s campaign for governor. Either way, the bill by Senate President Pro Tem Del Marsh, R-Anniston, has attracted more attention than any of the other six bills introduced last week in the special session on ethics reform. Area legislators say they heard from more constituents with opinions on the measure than any other so far. The question that lawmakers will weigh is whether it is right or wrong to allow public employees to authorize payroll deductions for union dues or political activities. (read article)

Union backlash growing in Montgomery
By Brian Hughes, December, 12, 2010, Washington Examiner

Montgomery County’s public employees unions are turning up the pressure on officials who vowed to cut back on the region’s most generous compensation packages for local government workers. “They’re really upset,” said Councilman Marc Elrich, D-at large, of the growing union anger. “At the end of the day, though, we’re going to have to do what we have to do. I don’t imagine we’re going to score any points with any of them.” A report from the county Office of Legislative Oversight identified ballooning salaries and benefits as the cause of Montgomery’s fiscal crisis, and in turn, County Council members said they would explore slashing salaries, benefits and the size of the work force. (read article)

AEA payroll deduction provides ethics controversy
By Jennifer Foster, December 12, 2010, Opelika-Auburn News

Wednesday’s public hearing on ethics reform revealed that of the seven pieces of Gov. Bob Riley’s ethics reform package, only one promises much controversy. The bill would prohibit the state from making payroll deductions from the paychecks of state, local and public school employees for political action committees. In other words, it would outlaw the funding system on which the Alabama Education Association has relied for so long. AEA Executive Secretary Dr. Paul Hubbert complained at the hearing that the move was political retaliation. Several teachers also spoke out against the measure. Of course, measures like these disrupt labor unions’ automatic funding mechanisms, so the unions can be counted on to vociferously oppose them at any and every opportunity. (read article)

In Tax Deal, Many Public Employees Will Pay More
By Davis Kocieniewski, December 9, 2010, New York Times
More bad news for government workers. At a time when state and local governments across the country are imposing furloughs and layoffs, and President Obama has frozen pay for federal employees, it turns out that one of the few groups to face higher federal taxes next year may be public sector employees. The proposal to extend the Bush-era tax breaks unveiled by Mr. Obama this week would offer a tax cut for most Americans. The deal would end the Making Work Pay credit, which gave a tax reduction of up to $400 to workers with low and middle incomes. That credit will be replaced by a 2 percentage point decrease in the payroll tax for Social Security for people of all incomes. (read article)

Are Republicans Trying to Bankrupt States?
By Daniel Indiviglio, December 8, 2010, The Atlantic
This certainly sounds like the sort of thing that political conspiracy theorists would talk about in dimly lit D.C. bars: are the Republicans secretly planning to force fiscally troubled states to declare bankruptcy? As crazy this might be to imagine, James Pethokoukis at Reuters actually makes the idea sound pretty plausible. The purpose would be twofold: to avoid a bailout of state governments and to stick it to public employee unions. As proof that this might really be on the minds of Republicans, Pethokoukis notes their staunch refusal to allow the Build America Bonds program to continue as a part of the new tax cut compromise. (read article)

Secret GOP plan: Push states to declare bankruptcy and smash unions
By James Pethokoukis, December 7, 2010, Reuters
Congressional Republicans appear to be quietly but methodically executing a plan that would a) avoid a federal bailout of spendthrift states and b) cripple public employee unions by pushing cash-strapped states such as California and Illinois to declare bankruptcy. This may be the biggest political battle in Washington, my Capitol Hill sources tell me, of 2011. That’s why the most intriguing aspect of President Barack Obama’s tax deal with Republicans is what the compromise fails to include a provision to continue the Build America Bonds program. (read article)

Orange County sheriff’s deputies move toward mandatory membership
By Tony Saavedra, December 6th, 2010, Orange County Register
The Association of Orange County Deputy Sheriffs has quietly launched an effort to make membership in the union mandatory — a potentially controversial effort given the hundreds of thousands of dollars the group spends on failed political campaigns. The association, which represents about 1,800 deputies and district attorney investigators, sent out ballots on Nov. 30, with a deadline of Dec. 14 for return. In a lengthy complaint sent to county supervisors, one union member railed about the association’s political action committee, which has funded candidates who fail at the polls. Financial disclosures filed with the county Registrar of Voters show that the AOCDS spent at least $412,286 on the failed campaign of sheriff’s hopeful Bill Hunt in the June election and another $607,704 in that election on supervisorial candidate Harry Sidhu, who lost in the November runoff to Shawn Nelson. “I do not support the candidates the funds go to and I do not believe my money should be used to make my association a special interest/lobbyist. It breeds corruption in politics,” said the letter signed by Bryan Stevens. (read article)

Jack Dean is editor of PensionTsunami.com, formed to monitor developments in all three pension spheres nationwide — public employees, corporations and social security. PensionTsunami, like UnionWatch, is a project of the California Public Policy Center. Dean is a former newspaper editor and a past executive director of the Reason Foundation. He has been active in politics for more than three decades and currently serves as president of the Fullerton Association of Concerned Taxpayers.

Los Angeles Mayor Confronts Unions

As part of a continuing trend towards recognition by liberals alongside conservatives that public sector unions do not act in the public interest, Los Angeles Mayor Antonio Villaraigosa, a democrat, has delivered a blistering attack on the union representing public school teachers in Los Angeles.

Joe Matthews in Fox & Hounds Daily has published the verbatim transcript of Mayor Villaraigosa’s remarks in his post of December 8th entitled “Villaraigosa’s game-changing speech.” Because Villaraigosa, who has confronted the teachers union in the past, chose to deliver this speech in Sacramento at the Public Policy Institute of California conference for state legislators, his remarks signify a major escalation in his confrontation with the union. Here are some of Villaraigosa’s remarks:

“Over the past five years, while partnering with students, parents and non-profits, business groups, higher education, charter organizations, school district leadership, elected board members and teachers, there has been one, unwavering roadblock to reform: UTLA union leadership.”

“And partnering with civil rights organizations and the ACLU, we filed a lawsuit to take a stand against the practice of seniority-based layoffs, which were disproportionately affecting our poorest schools and students of color. At every step of the way, when Los Angeles was coming together to effect real change in our public schools, UTLA was there to fight against the change and slow the pace of reform.

When one considers the reforms Villaraigosa is fighting for – teacher accountability, management flexibility, financial transparency – it is easy to see a nonpartisan consensus forming. Like many Democrats, Villaraigosa’s background includes union organizing. But like many conscientious liberal politicians, he is realizing public sector unions have become a special interest that is not putting the needs of the public – especially, in this case, students – in front of their own agenda.

Nonpartisan Public Sector Union Reformers

Labor luminaries such as George Meany and FDR agreed on the dangers of a unionized government. More recently, prominent Democrats such as California’s former assembly speaker Willie Brown, or current San Francisco supervisor Jeff Adachi, have found themselves criticizing or confronting public sector unions. The reason is clear – private sector unions must be reasonable in their demands or they will bankrupt the companies they negotiate with, whereas public sector unions use member dues to elect the politicians they are supposedly going to “negotiate” with, and raise taxes to finance their demands. Now another democrat is stepping forward.

Joe Nation, who served three terms as a democrat in California’s state assembly, representing one of the most liberal areas in California, Marin County, has just published a commentary in the San Francisco Guardian entitled “Who will demand reductions in public employee benefits?” You will not find too many public sector union spokespersons agreeing with his statistics, or his sentiments. For example:

“A decade or two ago, total compensation for public employees, i.e., wages, salaries and benefits, including retirement, was comparable to that in the private sector. That is no longer the case. According to the Census Bureau, state and local government workers now earn nearly $40 an hour in total compensation, compared with $27 for workers in the private sector.”

“In the private sector, the average employer contributes just over 3 percent to a 401(k) plan. In California, state and local governments contribute as much as 33 percent to their employees’ retirements.”

Nation not only shares these figures – the article has too many to mention here, and they are well chosen – but he also debunks some of the misinformation being spread by the public sector unions and the public sector pension funds:

“Even with Social Security benefits, that private-sector worker will earn about $3,500 monthly in retirement, about one-half of similar public-sector workers. Note: CalPERS will argue that its average benefit is only $2,000 per month, but it fails to disclose that the figure reflects an average salary of $60,000 for about only 15 years of work.”

In Nation’s conclusion, he makes some comments that, along with statements others have made, start to demolish the familiar theme employed by defenders of public sector unions – that their detractors are just a bunch of country-club republicans. As he puts it, “How did we get to such an inequitable place? Quite simply, public employee unions have owned Sacramento (and many local governments) for at least a decade or two. And finances have never been a focus for Sacramento (or for Democrats or Republicans, who are equally to blame for this disaster).”

These are the statements of a nonpartisan, informed individual who has put the future of his state and his nation above peer pressure, or partisan politics.

Joe Nation’s commentary is not unique. Liberals are realizing alongside conservatives that public sector unions do not act in the public interest. Before resuming the debate as to what the appropriate role of government may be, the corrupting and financially unsustainable impact of public sector unions must be brought under control.

Union Watch Highlights

Recent reports on union activity from around the web through December 5th, 2010:

Collective bargaining may get tweak in Ohio
By Thomas Suddes, December 5, 2010, The Columbus Dispatch
Ohio’s public-employee unions should fasten their seat belts: They may be in for rough ride in 2011, thanks to the clout -and long memories – of Statehouse Republicans, and not just because public-employee unions threw everything but the kitchen sink at GOP Gov.-elect John Kasich and Republican General Assembly candidates. (read article)

Has this union lost its way?
By Tim Rutten, December 4, 2010, Los Angeles Times
Historically, the political influence of the Los Angeles Police Protective League — the union representing the city’s rank-and-file officers — has been a force in local affairs more often assumed in conversation than evident at the polls. Under its current leaders, however, the league has become far more assertive — with decidedly mixed, often confused, results, many of them flowing from the hiring of a high-priced political consultant who has unsuccessfully attempted to make the union a force in statewide politics. (read article)

Wayne County Michigan Imposes Huge Wage Cuts on AFSCME Union Workers
By Mike Shedlock, December 2nd, 2010, MISH’S Global Economic Trend Analysis
Wayne County Michigan, fed up with two years of failed negotiations on wages and benefits for public union workers, has decided to impose wage cuts on AFSCME union employees. The Wayne County News Release states “Wayne County will implement a 10% reduction the union refused to take in budget year 2009-2010, as well as the 10% reduction for the current 2010-2011 budget year.” (read article)

Police union wants L.A. to restore overtime instead of hiring more cops
By Joel Rubin and David Zahniser, December 1, 2010, Los Angeles Times
It came as little surprise this week that the influential union that represents Los Angeles’ rank-and-file police officers waded into the debate over hiring more police during a major financial crisis. What caught people off guard, however, was the union’s conclusion that the hiring should stop. Los Angeles Police Protective League President Paul M. Weber, in an interview and an opinion article submitted to The Times, called on the city’s leaders to suspend their current policy of hiring new officers to replace those who resign or retire. It is a stance that, on the surface, runs counter to the union’s traditionally staunch support for a larger police force. Instead, Weber said, the department should shrink itself in order to use its scarce funds to restore overtime pay that has been cut. (read article)

Have California Democrats Turned Their Backs On Social Justice?
A Conversation with Chris Reed, November 29th, 2010
(video)

Christmas Fight! Teamsters vs. Toys R Us
By Elizabeth MacDonald, November 22, 2010, Fox Business
Just in time for Black Friday, the International Brotherhood of Teamsters union and an environmental justice group have released a report they commissioned attacking the nation’s biggest toy seller, Toys R Us and Babies R Us, for allegedly selling “toxic toys.” (read article)

Union Drops Health Coverage for Workers’ Children
By Yuliya Chernovau, The Wall Street Journal, November 20, 2010
One of the largest union-administered health-insurance funds in New York is dropping coverage for the children of more than 30,000 low-wage home attendants, union officials said. The union blamed financial problems it said were caused by the state’s health department and new national health-insurance requirements. (read article)

Shakedown: The Continuing Conspiracy Against the American Taxpayer

Interview with Steven Malanga, October 19, 2010
(video)

Public-Sector Unions Choke Taxpayers
By John Stossel, October 19, 2010, Creators.com
“I thought unions were great — until at Chrysler, the union steward started screaming at me. Working at an unhurried pace, I’d exceeded ‘production’ for that job.” That comment, left on my blog by a viewer who watched my Fox Business Network show about unions, matches my experience. No one ordered me to slow down, but union rules and union culture at ABC and CBS slowed the work. Sometimes a camera crew took five minutes just to get out of the car. Now unions conspire with politicians to rip off taxpayers. (read article)

A Stink in El Segundo Over Cadillac Salaries

By Paul Teetor Thursday, LA Weekly, Oct 14, 2010
The debate over skyrocketing government-worker salaries got nasty in El Segundo when a homeowner published the six-figure salaries flowing to the small town’s cops and firefighters on his Gundo Blogger website — only to have a police captain track him down by phone at his UCLA job and chew him out. (read article)

Teachers Unions vs. Online Education
by Katherine Mangu-Ward, August-September 2010, Reason Magazine
I know a 3-year-old who’s a master of online multitasking. Give him an iPhone, and he’ll cheerfully chat you up while watching YouTube cartoons or playing an alphabet game. In 2010, toddlers start consuming digital information not long after they’ve started consuming solid food. Now take that kid, tack on a handful of years, and drop him into a classroom. A child who was perfectly content with a video stream, an MP3, and a chat flowing past him is suddenly ordered to sit still, shut up, and listen while a grown-up scrawls on a blackboard and delivers a monologue. And school is even worse for the older girls down the hall. The center of their universe is on social networking and chat sites, so spending six hours a day marooned in a building with no WiFi is akin to water torture. The same pre-teen who will happily while away hours playing Scrabble with her friends on Facebook dreads each Thursday afternoon, when she will be forced to laboriously write out a list of spelling words in silence alongside two dozen peers. (read article)

Jack Dean is editor of PensionTsunami.com, formed to monitor developments in all three pension spheres nationwide — public employees, corporations and social security. PensionTsunami, like UnionWatch, is a project of the California Public Policy Center. Dean is a former newspaper editor and a past executive director of the Reason Foundation. He has been active in politics for more than three decades and currently serves as president of the Fullerton Association of Concerned Taxpayers.

Unionizing the Transportation Security Administration

Earlier this month the Federal Labor Relations Authority ruled that 50,000 TSA workers are going to be permitted to vote on whether or not to join a union with full collective bargaining rights. To find out more about this, read John Fund’s November 26th Wall Street Journal commentary entitled “How to Make Air Travel More Infuriating,” or James Sherk’s November 29th Orange County Register commentary entitled “A unionized TSA will be even worse.”

Unionizing the TSA is not necessarily in the interests of public safety or national security, as John Fund notes, “after 9/11, Congress wisely decided to forbid TSA employees from coming under union work rules out of fear that it could compromise security. Imagine if every change in procedures had to be cleared with union shop stewards. While it is not easy to fire TSA personnel now, just think how difficult it will be to remove bad employees if they are covered by union job protection agreements.”

Similarly, as James Sherk writes, “Consider what happened four years ago, when unionized airport screeners in Toronto protested their contract by hand-inspecting every piece of luggage. Lines of passengers waiting to get to their flights piled up over Thanksgiving. Toronto authorities eventually rushed 250,000 passengers onto their flights – without searching them. Fortunately, none of those passengers were terrorists.”

The idea of permitting public safety employees – or any public employees – to unionize, is a relatively recent concept. Sherk explains a primary reason why unionizing the public sector is problematic when he writes “the founders of the modern labor movement thought that unions belonged only in the private sector. They wanted unions to win workers a greater share of business profits. But the government earns no profit. Government unions organize against voters and taxpayers. Even Franklin Roosevelt, America’s most pro-union president, opposed unionizing government. He considered unions obstructing public services intolerable.”

What is interesting here is that Sherk reports that even labor leaders, and pro-union politicians, used to draw the line at the public sector. This is corroborated in a recent article by Steven Malanga, published in the Wall Street Journal on May 14, 2009, entitled “Unions vs. Taxpayers,” where he writes:

“When the movement among public-sector workers to unionize began gathering momentum in the 1950s, some critics, including private-sector labor leaders such as George Meany, observed that government is a monopoly not subject to the discipline of the marketplace. Allowing these workers — many already protected by civil-service law — to organize and bargain collectively might ultimately give them the power to hold politicians and taxpayers hostage.”

If FDR and George Meany, two of the most respected union advocates in the history of the United States, had these concerns about unionized government, it is unlikely their sentiments will not resurface among today’s liberal elite.

Liberal Washington Post Attacks Public Sector Unions

In Monterey County, Maryland, the Washington Post reports the county government spends 80% of their budget on personnel costs – a not unusual percentage. In their November 27th editorial entitled “Taming Montgomery’s Unions,” they further report that in the past 10 years salaries for Montgomery County employees have gone up 50% and health and pension benefits have gone up by 120%. For perspective, note the rate of inflation in the U.S. for the 10 year period through 2010 is 28%, or 2.8% per year (ref. Bureau of Labor Statistics chart Consumer Price Index).

So if you are a unionized government employee in Montgomery County, Maryland, for the past decade your salary has gone up at 1.8x the rate of inflation, and your health and pension benefits have gone up at a rate 4.3x the rate of inflation. This scenario has played out across the United States, especially here in California, with the predictable result being looming bankruptcy for the affected government entities.

To address this challenge, the Post reports “council member Valerie Ervin (D-Silver Spring), who is set to become council president next month, has offered legislation that would require arbitrators in contract disputes between the county and the unions to give priority consideration to Montgomery’s budgetary and fiscal situation – in other words, its ability to pay. The bill would create a more level playing field for contract negotiations that unions have dominated for years based on their certainty that arbitrators would rule in their favor.”

This as well, adherence to unsustainable contracts in arbitration, is a story playing out across the U.S. But now that increasing debt is no longer an option, reality is bound to assert itself. Or will it? The Post editorial notes the unions have attacked Ervin’s proposal (note Ervin is a Democrat) in “venomous” terms.

The most interesting point to all this is the editorial position of the Washington Post, a newspaper with a well-earned reputation for taking a liberal perspective on events. As they write:

“If the current round of contract negotiations yields more unaffordable concessions to labor, the council should consider amending the county charter to scrap collective bargaining. Fairfax has managed well without it; Montgomery can, too.”

Public sector union reform is increasingly recognized as a nonpartisan issue. Liberals and conservatives may argue about what is in the public interest – big government vs. small government; they can argue on social issues, immigration, welfare, the environment. But none of those differences necessarily preclude liberals and conservatives agreeing on this: Public sector unions may not operate in the public interest. What the liberal Washington Post editorialized this week: “the council should consider amending the county charter to scrap collective bargaining,” is also playing out across the U.S.

Union Watch Highlights

Recent reports on union activity from around the web through November 12, 2010:

Super-sized pensions, and a doomsday scenario
by Bob Sullivan, November 12, 2010, MSNBC
In New York, a 44-year-old firefighter retires with a $101,000 a year pension, for life. Near Chicago, a parks commissioner quits and begins collecting a $166,000 pension – a sum sweetened by $50,000 thanks to a one-time retirement year windfall of $270,000. And in California, a former city manager pulls down $500,000 in retirement checks every year. As outrageous as those sunset stipends may seem, they are merely the most visible piece of what critics of generous government pensions say is a ticking time bomb of debt that is threatening to bankrupt a number of states by the end of the decade. (read article)

Labor Board’s Recent Decisions Tilt in Favor of Unions
By Melanie Trottman and Kris Maher, November 11, 2010, Wall Street Journal
Unions are increasingly looking to the National Labor Relations Board to seek favorable workplace rulings, and the agency is showing a willingness to reopen matters previously decided in favor of employers. Union leaders pushed earlier this year to get two new Democratic members on the labor-relations board, saying they needed to level the playing field with employers after years of decisions by the Republican-controlled board that unions said hampered their efforts to organize workers. Union hopes of getting major new legislation to boost their organizing all but died with Republican gains in the mid-term congressional elections. The Employee Free Choice Act, which would make organizing easier by enabling unions to bypass secret-ballot elections, was already stalled in a Congress fully controlled by Democrats. Organizing is a critical issue for unions. In 2009, the national rate of union membership had fallen to 12.3% from 20.1% in 1983. The NLRB can’t overhaul labor law, but it can make rulings on a case-by-case basis and set broader policies through administrative rules that could give unions more leverage with employers. (read article)

Orange County GOP vs. Unions? Get Ready for Phase 2
By Frank Mickadeit, The Orange County Register, November 8, 2010
Republican Party Chairman Scott Baugh in January laid down what I coined the Baugh Manifesto, which said: If a candidate for local office wants the party endorsement, he or she can’t take money from public-employee unions. Now, Baugh says, comes Stage Two: Teaching local elected officials to hold their own in union negotiations. To that end, Baugh plans to hold a major conference this spring, bringing in lawyers and others skilled in the intricacies of collective bargaining under the Meyers-Milias-Brown Act. Baugh says council members tell him they at times feel out-gunned. “We have to educate public officials not to get trapped into negotiations.” Last week, he said, some Costa Mesa council members felt they had no choice but to extend a contract four years because the alternatives were either try to pull back on deal points and be accused of bargaining in bad faith (with legal implications), or hold firm, go to impasse and impose a contract (with its legal implications). “It takes an enormous amount of political courage to go to impasse,” Baugh said. The conference is intended to get officials who want to rein in pensions up to speed. (read article)

Influence of teachers unions in question
By Mitchell Landsberg, Los Angeles Times, November 7, 2010
These groups have been slow to come to terms with the push for reform. Some see them as obstacles to change, and even union sympathizers agree that their voice in the education debate has been muted. Teachers unions have a well-deserved reputation for exercising political clout. With a nearly unparalleled ability to raise cash and organize their ranks, they have elected school boards, influenced legislation and helped set the public school agenda in major American cities for decades. Now, that clout is in question. (read article)

Unions, secular whites part of GOP’s California problem
By John J. Pitney Jr., Orange County Register, November 5, 2010
Size matters. California has 37 million residents, or 50 percent more than Texas, the next-largest state. Any one of our state Senate districts has more people than South Dakota. And our state is geographically vast, covering 156,000 square miles and a dozen media markets. The Tea Party movement, which had supplied so much energy to Republican candidates in other states, could not take root in such soil. Though the movement had financial support from outside organizations, it was mostly a kitchen-table, word-of-mouth affair. As Douglas Johnson of the Rose Institute has written, “California’s electorate is simply too enormous to reach one by one.” Any serious get-out-the-vote operation in requires vast technical resources and an existing network that can reach from urban barrios to desert communities. The only group that can pull it off on a statewide level is organized labor, which backs Democrats. (read article)

Election adds pressure to change public pensions
By Stephen C. Fehr, Stateline.org, November 4, 2010
Six newly elected  governors are looking favorably at some form of 401(k)-style retirement plan for public sector employees, adding to the momentum building nationally for a shift away from traditional guaranteed pensions. Tuesday’s election was in some ways the first national referendum on the future of public pensions, the cost of which has been rising in many states, counties and cities and is crowding out education and other popular programs. (read article)

Defeat of Prop. B Cements Labor’s Power in San Francisco
By  Elizabeth Lesly Stevens, The Bay Citizen, November 4, 2010
As election results rolled in, it became clear that San Francisco unions had trounced Proposition B, a measure that would have required the city’s 26,000 employees to contribute more toward their pensions and benefits. Once the tally was complete, 57.5 percent of San Francisco’s voters had sided with the unions. Union leaders appeared surprised by the lopsided victory. Proposition B had been promoted by Jeff Adachi, the city’s public defender, and backed by former Mayor Willie L. Brown Jr., Eric Schmidt, Google’s chief executive, and Michael Moritz, a venture capitalist. Throughout the campaign, Adachi had argued that the city’s escalating employee costs would eventually force San Francisco to file for bankruptcy, like nearby Vallejo. (read article)

Unions struggle at polls
By Jon Miltimore, Watchdog. org, November 4, 2010
A series of pension measures and ballot initiatives went against public sector workers Tuesday in what proved to be a tough day for labor. In California, voters in seven cities — San Jose, Redding, Riverside, Menlo Park, Bakersfield, Carlsbad and Pacific Grove — approved measures seeking to reduce public pension costs, and a half-cent sales tax in San Diego that would have prevented public safety cuts also was rejected. Public safety unions in each municipality opposed the reforms, but efforts to defeat the measures failed in what was a big night for pension reform advocates. (read article)

AFL-CIO says it helped Dems in Election
By Robin Bravender, Poltico.com, November 3, 2010
Big Labor is patting itself on the back for softening the blow yesterday’s elections had on congressional Democrats. And for all the credit it’s giving itself in helping liberal lawmakers hang on, labor isn’t sorry for the role it played in ousting embattled Democratic Sen. Blanche Lincoln. Tuesday’s election, which gave Republicans a commanding majority in the House and more power in the Senate, was a disappointment to union members, AFL-CIO President Richard Trumka told reporters Wednesday. But the labor group’s grass-roots organizing prevented “even worse” results in states like Nevada, West Virginia and California, he added. (read article)

Secret union ballot measure gains approval in Arizona
By Associated Press, Fox11az, November 2, 2010
Voters have approved Proposition 113, an amendment to the Arizona Constitution that guarantees the right of a secret ballot for employees deciding whether to be represented by unions. The immediate effect is minimal because employers already can demand a secret ballot in such votes. Making the requirement a constitutional amendment is an effort to pre-empt proposed federal legislation that is stalled in the U.S. Senate. The federal legislation, known as the Employee Free Choice Act, would allow a majority of employees to create a union by signing a card. (read article)

The Democrats and the Union Label

By Andrew Kohut, October 22, 2010, New York Times
The good news for the Democrats these days is that union members are one voting bloc that continues to strongly back their party’s candidates — and by a solid margin in our latest national poll, which otherwise finds a double-digit Republican lead in Congressional voting intentions. The bad news is that labor unions have fallen out of favor with the broader public, including independents who will cast the decisive votes in this year’s elections.
opinion on labor unionsPew Research Center Views on Labor Unions. Positive views of labor unions have plummeted since 2007. The Pew Research Center this year found just 41 percent of the public said they have a favorable opinion of labor unions while about as many (42 percent) expressed an unfavorable opinion. In January 2007, a clear majority (58 percent) had a favorable view of unions while just 31 percent had an unfavorable impression.  (read article)

Jack Dean is editor of PensionTsunami.com, formed to monitor developments in all three pension spheres nationwide — public employees, corporations and social security. PensionTsunami, like UnionWatch, is a project of the California Public Policy Center. Dean is a former newspaper editor and a past executive director of the Reason Foundation. He has been active in politics for more than three decades and currently serves as president of the Fullerton Association of Concerned Taxpayers.

Union Watch Highlights

Recent reports on union activity from around the web through Oct. 26, 2010:

Unions the Real Big-Money Culprits This Election Season
By Mark McKinnon, The Daily Beast, October 24, 2010
The out-of-control big-money donors this fall aren’t the U.S. Chamber of Commerce types, as the White House would have you believe. Mark McKinnon on the real culprits—union gifts to Democrats. Team Obama’s message in the closing weeks of the campaign was completely eclipsed Friday by a union official who openly boasted in a story reported by The Wall Street Journal: “We don’t like to brag,” but “we’re the big dog” when it comes to campaign funding. Big as in $87.5 million. Big as in the biggest spender of any outside group—all meant to protect the interests of unions, the new “privileged class…” (read article)

Ask Unions Whether Foreign Money Is Pouring In to U.S. Elections
By Kevin Hassett, Bloomberg, Oct 24, 2010
Foreign money may be having a profound influence on the U.S. elections, more so than many people are aware. I’m talking about the tens of millions of dollars that flow each year from foreign sources to organizations with an immense stake in the course of U.S. politics. More groundless speculation about the U.S. Chamber of Commerce? No. This is real money going to American labor unions, an influx of foreign cash that is now harder to trace thanks to actions taken by President Barack Obama’s administration. This is the same Obama who is riling Democratic campaign rallies with warnings, backed by no evidence, that Republican “front groups” and even the U.S. Chamber of Commerce may be using money from foreign interests… (read article)

Four reasons to vote ‘yes’ and roll back the sales tax
By Jeff Jacoby, The Boston Globe, October 24, 2010
MY 7-year-old son knows better than to believe in the Tooth Fairy, but he was happy to act as if he did in order to cash in when he lost three teeth this month. He played his part convincingly, even slipping a note under his pillow asking if he could keep one of the teeth and still get paid for it. As I listen to the usual suspects braying for the defeat of Question 3, the Massachusetts ballot initiative to roll back the state sales tax from 6.25 percent to 3 percent, it occurs to me that they aren’t so different from Micah… (read article)

Unions are the big dogs of campaign spending

By Mark Hemingway, San Francisco Examiner, October 24, 2010
“Trying to discredit people and issues because some member of big business or another is on their side is very effective,” according to Washington Post blogger Ezra Klein. And liberals are right to note that corporate influence of our electoral system visits a host of ills on our democracy. However, big business is hardly the most ideological, let alone the biggest special interest, financing our elections. Guess which outside group has spent the most money on this year’s election… (read article)

Hard choices: Oregon state worker pay is a pivot point for budget showdown

By Ted Sickinger, The Oregonian, October 26, 2010
With Oregon’s unemployment rate stuck at 10.6 percent and the state facing a $3.2 billion budget shortfall, public employee compensation has become a fat target. With good reason: State officials say three out of four dollars from the general fund go to pay for compensation in one form or another – the people costs of providing public services. Without pay cuts, layoffs or service reductions, Oregon’s budget shortfall is simply unsolvable. Yet one fundamental question underlying the debate is whether Oregon’s public employees are overpaid… (read article)

Campaign’s Big Spender: Public-Employees Union Now Leads All Groups in Independent Election Outlays
By Brody Mullins and John D. McKinnon, The Wall Street Journal, October 22, 2010
The American Federation of State, County and Municipal Employees is now the biggest outside spender of the 2010 elections, thanks to an 11th-hour effort to boost Democrats that has vaulted the public-sector union ahead of the U.S. Chamber of Commerce, the AFL-CIO and a flock of new Republican groups in campaign spending. AFSCME, the public-employees union, has vaulted ahead of the U.S. Chamber of Commerce to become the largest campaign spender of 2010. Jerry Seib discusses how that could boost the Democrats? Plus, Neil King on the Republican wave sweeping Indiana. The 1.6 million-member AFSCME is spending a total of $87.5 million on the elections after tapping into a $16 million emergency account to help fortify the Democrats’ hold on Congress. Last week, AFSCME dug deeper, taking out a $2 million loan to fund its push. The group is spending money on television advertisements, phone calls, campaign mailings and other political efforts, helped by a Supreme Court decision that loosened restrictions on campaign spending. “We’re the big dog,” said Larry Scanlon, the head of AFSCME’s political operations… (read article)

The Chris Christie Clones
By Kim Strassel, The Wall Street Journal, October 22, 2010
Across the country, candidates are taking up the government-reform
mantra embodied by New Jersey’s new governor. Republicans are doing it; even some Democrats, too. It’s called the Chris Christie. “I want to be the Chris Christie of Connecticut,” declares GOP gubernatorial candidate Tom Foley. “Chris Christie is the primo example of how you turn around government,” says Scott Walker, vying to run Wisconsin. Mr. Christie’s reforms are a “road map” for California, pronounces Meg Whitman. “He tells it like it is, and it’s time for that,” says Iowa’s gubernatorial candidate Terry Branstad. In one long year, Mr. Christie, the governor of New Jersey, has gone
from little-known prosecutor to GOP rock star… (read article)

Abuse on the highways
Editorial, Daily Record, October 21, 2010
Many New Jersey residents may no longer be shocked by the abuses of our public agencies. However, that should not lessen the outrage. An audit by the state Comptroller’s office has found $43 million in waste at the New Jersey Turnpike Authority, which, by the way, increased tolls two years ago. Specifically, Comptroller Matthew Boxer found that $30 million in bonuses were doled out to employees without regard to performance. Some employees also got bonuses for shoveling snow or working on their birthday. State funds were also used to support an employee bowling league and all employees got free E-ZPass transponders to commute to work. Many of these perks are included in contracts with the 10 unions representing authority workers… (read article)

Unions Spend Big to Defeat Prop. B
By Elizabeth Lesly Stevens, The Bay Guardian, October 20, 2010
In just the first half of October, public unions poured $471,000 into their energetic campaign to defeat Proposition B, the November ballot initiative that would require increased pension- and benefits contributions from San Francisco city employees. Campaign contribution disclosures show the largest union donor for this period was the Police Officers Association, which contributed $200,000 on October 14. The second-largest donor was the Service Employee union, which gave $100,000 on October 13 and nearly $300,000 in recent months… (read article)

Card Checkmate; Voters in four states head to the polls to preserve honest union elections
Editorial, The Wall Street Journal, October 21, 2010
Big Labor’s dream to end secret ballots in union organizing elections has faded in the 111th Congress, but now the battle turns to the states. Citizens in Arizona, South Carolina, South Dakota and Utah will vote on November 2 on ballot initiatives to block union “card check” elections in their states. Card check laws are designed to replace elections with a system allowing a union to organize a work site if more than half of the employees sign a card approving the union. With less than 7.5% of private workers now wearing the union label, labor chiefs view card check as a way to give them a big new edge over management. Workers often vote differently in private than they do in public. Unions typically wait until they have cards from more than 50% of employees before seeking to organize a work site or business. Management can then request a secret vote under current law. And in about one third of the cases in which secret ballot organizing elections are then held, unions fail to get a majority, according to the National Right to Work Foundation. Card check exposes workers and their families to peer pressure and union intimidation. The four “save our secret ballot” initiatives… (read article)

Jack Dean is editor of PensionTsunami.com, formed to monitor developments in all three pension spheres nationwide — public employees, corporations and social security. PensionTsunami, like UnionWatch, is a project of the California Public Policy Center. Dean is a former newspaper editor and a past executive director of the Reason Foundation. He has been active in politics for more than three decades and currently serves as president of the Fullerton Association of Concerned Taxpayers.