Oregon “Public Employee Choice Act” Aims for 2014 Ballot

Edward Ring

Director, Water and Energy Policy

Edward Ring
September 3, 2013

Oregon “Public Employee Choice Act” Aims for 2014 Ballot

An initiative that will permit public employees to not only opt-out of paying full membership fees, but actually allow them to opt-out of paying anything whatsoever to unions has been filed in Oregon. While public sector union membership is supposedly voluntary in most states that permit unionization of their public servants, the unions nearly always are able to still collect the lion’s share of the dues via the so-called “agency fee,” or “fair share” fee. Typically equal to about 75% of normal dues, this is the portion of dues the unions claim is necessary to fund collective bargaining. If a worker benefits from collective bargaining, so the argument goes, they have to pay the costs for bargaining, even if they aren’t members.

Here is the text of “Initiative Petition 9,” and here is the pending title and summary. The initiative is currently before the Oregon Supreme Court, facing a challenge by the unions to language used by their attorney general in the title and summary. Once released, proponents will have until July 2014 to gather the required 87,000 signatures. If these signatures are verified, it will appear on Oregon’s November 4th, 2014 ballot.

Predictably, the public employee machine in Oregon, firmly in control of both houses of the state legislature and all statewide higher offices including the Governor, is already revving up to obliterate this impudent overreach by “right wing extremists” and “out of state billionaires.” As reported by the Oregonian in an article entitled “John Kitzhaber tells organized labor he’ll fight Oregon measure aimed at public employee unions,” Oregon’s governor wants to make sure he’s on the side of working families. Here is a choice quote from Kitzhaber:

“A right-to-work state means you have a right to be exploited and ripped off and work at unsafe jobs and low wages and no benefits.”

The problem with this analysis, of course, is that Initiative Petition 9 only affects public sector workers. So if they are to be exploited, it would be Kitzhaber himself who would be doing the exploiting – or the citizens of Oregon, who he supposedly represents.

What drowns commons sense, however, is money. Lots of it. Here’s a back-of-the-envelope look at the financial power of public sector unions in Oregon:

With 52% of Oregon’s nearly 170,000 full-time state and local government workers unionized (and that percentage increases every year), and with annual dues ranging anywhere from $400 to $1,400, it is reasonable to estimate that approximately $70 million in dues revenue pour into Oregon’s government union coffers, year after year. How much does it really cost to send a few negotiators and attorneys into a room to renegotiate contracts every 3-5 years? The rest of this money is spent explicitly on politics, or indirectly on politics via massive “education” campaigns. And since when isn’t all the money spent by government worker unions – negotiating over how we run our public institutions – not political expenses?

It is probably not a stretch to estimate the discretionary income of public sector unions in Oregon, to be used either directly or indirectly on politics, at well over $100 million for every two year election cycle. This, in a state with only 3.9 million residents.

Here, moving on, is a back-of-the envelope estimate of how much these “exploited and ripped off” unionized government workers make in Oregon compared to their private sector counterparts:

According to the U.S. Census Bureau’s 2011 data for Oregon’s state and local government workers, there are 169,268 full-time workers earning an average annual base pay of $54,176. Using Bureau of Labor Statistics data plus U.S. Census “quick facts,” you can calculate the average annual base pay for Oregon’s reported 1,496,732 private sector workers at $44,150. But read on, because there’s much more to this story.

Taking into account self-employed private sector workers who collect zero benefits, and private sector workers employed by companies that aren’t in a position to offer comprehensive benefits, it is reasonable to assume the employer-paid benefits in the private sector probably don’t average more than 12% of base pay, making total compensation for private sector workers in Oregon average just under $50,000 per year.

In the public sector, however, just the pension benefits will cost the government (translation, taxpayers) at least 20% of annual compensation. Add to that the employer paid share of health insurance, dental insurance, vision insurance, life insurance, disability insurance, and retirement health care benefits above and beyond medicare, and you can easily estimate benefits worth 30% of annual compensation, bringing the total for public sector workers well over $70,000 per year. And that is a decidedly low-ball take on this.

Never forget the value of “personal time,” vacation benefits that top out at five weeks per year with pay, paid holidays, sick leave that accrues without limit, and of course, the “9/80” programs whereby salaried employees who show up a few minutes early, leave a few minutes late, and skip a lunch here and there can get every other Friday off with pay, under the premise they worked “nine hours a day for nine days.”

These are the “exploited and ripped off” employees that unions must rescue from slavering, unappreciative taxpayers. These state and local government workers are Oregon’s “exploited and ripped off,” “working families,” whose needs urgently require higher income taxes, higher property taxes, a new sales tax, and yes, of course, a carbon tax.

Proponents of Initiative Petition 9 must understand that if they are even lucky enough to put this measure on the ballot, the opposition is going to spend whatever it takes to defeat them. To counter brilliant obfuscations and heinous misrepresentations, smeared statewide by hundreds of millions of union confiscated taxpayer dollars, proponents will hopefully never forget two fundamental principles: (1) This is a nonpartisan reform that should be supported by anyone who cares about maintaining financially sustainable government services, (2) this is all about curbing the power of public sector unions, whose agenda is intrinsically in conflict with the broader public interest.

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Ed Ring is the executive director of the California Public Policy Center and the editor of UnionWatch.

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