Why Public Sector Union Reform is Nonpartisan

Why Public Sector Union Reform is Nonpartisan

An email was received today that appears quite sincere, and invites a response. Here it is:

“It is interesting your organization came about as a result of what you perceived to be unfairly high compensation granted to public employees, when your sense of fairness could just as easily have come into play during the many decades when public employees were routinely chided for taking jobs that paid so little compared to private sector jobs.

Do you think public sector jobs are easy compared to private sector jobs?  

It appears you operate out of a bias towards those already possessing the wealth and power.  Please consider giving those who work just as hard if not harder than the wealthy a chance to make it in today’s world.”

There are several assumptions this writer makes which must be challenged.

(1) Public employees were never “routinely chided” for taking jobs that paid less than private sector jobs. Up until about 20 years ago, the trade-off was clear: Government workers exchanged a lower salary for better benefits, a pension that was better than social security, and job security. This was a fair exchange, and the system worked just fine.

(2) Over the past 20 years, during the economically unsustainable internet bubble followed by the real-estate bubble, public sector unions stirred up envy among public sector employees, prodding them into demanding unsustainable increases to their compensation to match the private sector. Since these bubbles have burst, these unions use their nearly absolute power over California’s state and local politicians to maintain unsustainable levels of public sector employee compensation.

(3) You now have a situation where public employees have, in most cases, better base salaries than in the private sector, and enhanced pension benefits that now are about five times as generous as social security.

(4) It is absurd for anyone to compare public sector workers to the wealthy. Of course wealthy people will have more wealth than middle class workers. Public sector workers need to compare themselves to private sector workers. In California, the private sector worker makes, on average, about half as much in total compensation than the public sector worker. It strains credulity – and is downright arrogant – to suggest this entire differential can be attributed to superior education and skills.

(5) The people who are being denied a chance to experience upward mobility are the private sector small businesspeople who create jobs. These people personally carry legal liability and financial risk for their businesses. They work all the time. When the economy strains under the financial enslavement caused by the partnership of Wall Street banks with government debtors, private sector businesses can’t thrive, and their employees make less.

(6) The wealthy are not right-wing or left-wing. There is as much money donated to left wing causes by wealthy individuals as to right wing causes. The distortion in our democracy is not caused by wealthy individuals, who are ideologically diverse and whose contributions benefit both sides of political and economic questions.

(7) It is necessary to make a distinction between wealthy entrepreneurs who create products and services people voluntarily consume and which improve people’s lives, and wealthy bankers and financial middlemen who have used their political influence to overbuild their industry and become a drain on the economic health of America.

(8) The biggest source of funds to Wall Street bankers and financial middlemen, by far, is the deficit spending of governments. When a government issues bonds, the money goes through Wall Street. When a government pension fund expropriates taxpayer’s money, the beneficiaries are Wall Street brokerages.

(9) The agenda of public sector unions is perfectly aligned with the goals of Wall Street banks. Create bigger government payrolls and pay government employees more. Borrow money and raise taxes to accomplish this. Issue interest bearing bonds to cover deficits and transfer tax revenue into pension fund accounts.

Our sympathies are also for the middle class private sector worker who now has to pay half of their income in taxes (sales, property, income, and “hidden taxes” buried in every utility and telecom bill) so that middle class government employees can earn twice what they make, while Wall Street bankers get obscenely rich managing the government debt and government employee pension funds. And while having no bias against the wealthy, it is necessary to make a distinction between wealthy people who have earned their wealth through entrepreneurship, and those who are wealthy because they are part of the Wall Street cabal that enables and profits from the unionized government bias to tax, spend, and borrow.

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