Union Reforms From Multiple Places Including US Supreme Court

Union Reforms From Multiple Places Including US Supreme Court

At long last unions are on the run and losing battles in multiple places at once. Let’s take a look at some dates and headlines.

June 7, 2012 LA Times: 2 big cities OK cuts to worker pension costs

Landslide victories on ballot measures to cut pension costs in two major California cities emboldened reform advocates, who said they expect a flurry of copycat initiatives and increased support for Gov. Jerry Brown’s long-stalled push to curb the state’s obligations to its employees.

In San Jose, nearly 70% of voters Tuesday approved a plan that gives workers the choice between increasing their pension contribution to 13% of their pay, currently 5% to 11%, or switching to a lower-cost plan with reduced benefits. It also steeply cuts benefits for new hires and tightens rules for disability retirements.

In San Diego, where pension cuts already have been implemented, voters opted to eliminate pensions for new workers. By a 66% to 34% margin, voters Tuesday endorsed Proposition B, which provides newly hired city employees with a 401(k) program, but preserves traditional pensions for new police officers.

The San Diego measure also calls for a five-year freeze on “pensionable” pay levels and removes elected leaders’ ability to improve retirement packages without a popular vote. Leaders in both cities say voters were echoing a point that reform advocates have made for years.

June 7, 2012 Washington Times: Labor unions feel pain of pension reform votes in San Diego, San Jose

“San Diego’s victory isn’t just a win for San Diego taxpayers. It marks the beginning of the pension reform movement for our country,” declared Lani Lutar, president and CEO of the San Diego County Taxpayers Association. “Tuesday the voters sent a very clear message to elected officials: Put the taxpayers first. Use our money prudently, and stop giving away benefits we can’t afford.”

Pension reform advocates call it a crushing defeat, a rising trend, and just the beginning. According to the California Foundation for Fiscal Responsibility, with the victories on Tuesday 18 of 20 pension reform measures have now passed in California since 2010. They have won with an average of two-thirds of the vote, even in more liberal cities like San Francisco.

July 6, 2012 Mercury News: State will not override local pension votes, Senate leader Darrell Steinberg says

“I would not favor doing anything that would affect the voter-approved initiatives,” the Senate president pro tem told reporters Thursday, a day before the Legislature breaks for its summer recess. A spokesman for the Sacramento Democrat had said earlier that his boss “respects the will of the voters. … It is presumed that any local initiative passed this year will be grandfathered-in to the eventual pension-reform legislation.”

July 5, 2012 Union Watch – Steve Greenhut: US Supreme Court Slaps Down California SEIU Union Dues Collection Scheme

In Knox v. Service Employees International Union Local 1000, by a 7-2 vote, the high court slapped down the local – California’s largest state-employee union – for deducting money from employees’ paychecks and using it to fight against California campaign initiatives – without giving its covered nonmembers a chance to opt out of these political campaign contributions.

July 3, 2012 Town Hall – Gina Loudon: Labor Unions Suffer Defeat on Taxpayer Revolt

While the unions treat lawmakers in Sacramento, and most of the large cities like LA, San Francisco and Oakland like their concubines, having their way with them anytime they want, voters in the hinterlands, led by San Diego are not so compliant. In fact, voters in little El Cajon (pop. barely 100,000) showed big time el cajones by also becoming a charter city. A charter city differs from a general law city in that many of the day to day law making gets pulled from Sacramento to the local city council. Those laws include labor union laws. To date, voters in fully 122 California cities have voted to give Sacramento the bird.

The City of Vista passed their charter in 2007 on the prediction that taxpayers could save million of dollars on planned construction of two fire houses and other projects as charter cities could avoid being forced to pay Sacramento government-mandated wages or so-called “prevailing wages” on these projects. The measure passed by an overwhelming margin, but what did the unions do? Right. They sued. Today they lost.

In the matter of the State Building and Construction Trades Council of California (“Big Labor”) v. The City of Vista (“Little Taxpayers”), the California Supreme Court ruled today in favor of the taxpayers. Taxpayers in every charter city in California now have the ability to squeeze out from under the oppressive Sacramento mandated “prevailing wages” under which a plumber in San Francisco makes over $100 per hour in total compensation. The taxpayers in Vista will be able to have their fire houses and have millions left over to build more parks or other amenities. The alternative would have been millions of dollars to prop up insolvent union pensions. That is the real issue here.

With their losing streak running from Wisconsin to San Jose to San Diego, big labor should realize that the peasants are revolting. The animals on Orwell’s Animal Farm have seen that the pigs are their now masters, and they have met the new boss, who looks the same as the old boss. Their fate runs through Vista. So as the ink dries on the Vista decision, and more cities undoubtedly are contemplating enacting charters of their own, Sacramento lawmakers would be well-advised to make themselves scarce when big labor comes demanding more favors. Before Sacramento lawmakers try to do the unions’ bidding and pass special laws to harm charter cities, they may take a vista at the cajones of the voters that are in full rebellion.

July 6, 2012 Town Hall – John Ransom: Teachers’ Union Expelled from School District

The Douglas County School District, a suburban community south of Denver, Colorado, has decided to part ways with their teachers’ union in the absence of progress on a new contract which expired June 30th, 2012.

“The Board of Education finds and declares that the Collective Bargaining Agreements between the District and the Unions,” said the district on July 3rd in its formal resolution dissolving the bonds between the union and the district, “which had been effective from July 1, 2011 through and including June 30, 2012, are now expired and of no legal effect whatsoever.”

The dissolution between the district and the union is unprecedented and sources close to the union tell me that unions are pensively watching, worried that other districts around Colorado and the country could take the same action as Douglas County has.

We can only hope.


This my friends is what’s called progress. As Ransom suggests, we hope to see a lot more of it. I have every expectation we will. Indeed, I would like someone to take the entire issue of collective bargaining of public unions as well as prevailing wage laws to the US Supreme Court.

It is time to end the insane grip public unions have on US taxpayers.

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.

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