Hey, Government Employee Unions: What’s Your Solution to the Problem of Unsustainable Public Sector Benefits?
Posted by Enrique on 06.13.2012
What democracy looks like
Since Wisconsin Governor Scott Walker handily won his recall election last week, numerous pundits have churned out some version of the "What the Wisconsin Recall Means for America and Obama." Some folks think Walker's win is bad for Obama. Some folks think the recall result was good for Democrats. Some say it all just means that big money still wins elections. Some say this is the end of public sector unions and that American voters are finally serious about reining in exorbitant government employee compensation.
As much as I would like to believe Walker's victory signals that America is ready to start cutting government (for reals this time!), I can't believe public employee unions are going away any time soon. However, given the fiscal trajectory that many U.S. states are on, combined with public employee benefit promises that simply cannot be kept, the day is coming that these unionistas are going to have to grow up and come up with an actual solution to this problem – there just isn't any money left to pay for your preposterous benefits.
The story so far…
Re: your heart. Eat it out. Love, Scott.
If you haven't been following the Wisconsin recall saga of the last year, here's the executive version. Republican Governor Scott Walker was elected in 2010 and went to work trying to close the state's $3.6 billion budget deficit. The centerpiece of his plan was asking public employee unions to kick in a little bit for their healthcare and pension costs and eliminate most collective bargaining privileges (and prevent unions from automatically deducting dues from members, which doesn't affect the budget but was a nice bonus). These manifestly sensible policies were treated as fascistic abuses of power by lefties and Democrat lawmakers, who were so beholden to their union puppet masters that many of them fled to bullshit Illinois in an attempt to avoid the reality that Wisconsin had run out of money.
Despite Democrats' worst efforts, the reforms went through and nothing happened other than communities all over Wisconsin saved tons of money. But because Walker went against the wishes of one particularly vile special interest group, we've had to deal with an irritating recall election targeting a politician because he kinda sorta kept a promise. The recall failed last week much to the chagrin of unionistas everywhere, and much to the delight of normal human beings. In fact, Walker increased his vote total in the recall election compared to his 2010 victory. It would appear that the people have spoken.
Still, the compulsion to avoid reality can be hard to resist. And I'm not referring to the lefties who are probably still in denial a week later. Well, I'm not referring primarily to them.
I'm referring to public employee unions themselves, most of whom can't seem to understand that there ain't no money left. It's not just an issue in Wisconsin. All over the U.S., states are facing budget deficits and unsustainable government employee benefit obligations. If the unions really care about the public interest as much as they claim, now would be a good time to offer to make changes to their typically obscene benefits.
Any yet, all over the country, it appears unions are not willing to support necessary reforms. Here are a few other examples of how reality is coming down hard on ludicrous public employee benefits.
At the same time Walker was winning his recall, the voters of San Diego and San Jose were voting overwhelmingly to cut pensions for city workers , which had grown out of control: "San Diego's payments to the city's retirement fund soared from $43 million in 1999 to $231.2 million this year, equal to 20% of the city's general fund budget…San Jose's pension payments jumped from $73 million in 2001 to $245 million this year, equal to 27% of its general fund budget."
Given how ridiculously those pension costs have escalated, you'd think the unions would be willing to make some reasonable concessions – you know, in the name of social justice. Well, think again: "City unions largely sat out Tuesday's elections, saying they are concentrating their money and energy for the legal fight ahead. Labor groups in both cities have already filed lawsuits, and a police union in San Jose filed Wednesday."
Faced with a massive budget shortfall similar to Wisconsin's, last year Michigan's Governor Rick Snyder signed legislation to make government employees contribute more to their health insurance benefits, bringing them more in line with the private sector: "Snyder's office reported that according to a 2009 survey from the U.S. Bureau of Labor Statistics, employees in the private sector in Michigan are responsible for, on average, 21% of the cost of their medical benefits for single coverage and 27% for family coverage. The state's public employees, however, cover on average of 10% for single coverage and 15% for family coverage."
The public schools in the city of bullshit Chicago are facing a $700 million deficit in 2013, despite the fact that teachers' automatic raises were cancelled last year. To address this, Mayor Rahm Emmanuel is proposing modest pay increases and longer work days: "The district has proposed a five-year deal that guarantees teachers a 2% pay raise in the first year and lengthens by 10% the amount of time teachers must spend at school, from 7 hours to 7 hours and 40 minutes. The union wants a two-year deal that reduces class size and calls for teachers to receive a 24% pay raise in the first year and a 5% pay raise in the second year. Chicago public school students have the shortest school day — 5 hours and 45 minutes — among the nation's 50 largest districts."
Naturally, the union has authorized a strike. These are people who don't even work during the summer. Christ.
Unions in Providence are apparently a little less stubborn than elsewhere: "Mayor Angel Taveras reached a tentative accord with union leaders and retirees that cuts pensions for workers including police and firefighters…It would permanently end 5% and 6% annual increases given to about 600 former firefighters and police, and cap all future pensions at 1.5 times the state's median annual household income."
These reforms were needed to prevent a $1 billion budget shortfall – and thus bankruptcy for the city. Of course, the unions still have to agree to these reforms, and they've threatened lawsuits before, so you never know…
Public employee unions haven't had a chance to threaten strikes and lawsuits over pension cuts, but that day is coming soon: "Like other pension funds across the country, South Carolina's faces a shortfall — in its case, an estimated $14.4 billion…Buoyed by a long-running bull market, state officials voted to give state employees a 2% cost-of-living adjustment in their pension benefits. The adjustment was tied to a decision to raise the projections of future returns to an exuberant 8% a year."
How will South Carolina public employee unions react when the bill for their pension benefits comes due? If history is any guide, they'll threaten lawsuits, go on strike, try to amend the state constitution, maybe even recall elected officials – anything but actually propose serious reforms to unsustainable public sector benefit schemes.
Throughout the last year of the Wisconsin recall, opponents of Scott Walker called him Hitler (yawn), called him a tool of the Koch brothers (double yawn), and said he was part of the Republican war on women (my yawn just wiped out a trailer park). At no point did they ever say how they would deal with the state's budget deficit.
In many states, public employee benefits are butting up against the reality of math – there just isn't money to pay for them any longer. So here's the big question for union members, supporters of "working families," and union puppets in the Democrat party – what are you going to do about unsustainable public employee benefits?
As long as you don't have an answer, the rest of us normal folks are going to vote to cut your benefits. What are you going to do?