Sunday, January 25, 2015

Unionized Government ... Who Works for Whom? ... The Correct Answer is Harmful to Our Nation's Health

Here's the question du jour: Does unionized government work for We the People, or do We the People work to pay for unionized government?

Public sector workers, including teachers and others, often are eligible to retire in their early 50's with substantial guaranteed pension and health care income benefits for the rest of their lives. And the number of remaining years for the rest of their lives may well last as long or longer than the number of years they worked. Nice deal if you can get it --- especially if the taxpayers will pay for it.

The problem is that these benefits at the local and state levels are underfunded by approximately $4 trillion currently, and probably much more than that. Future taxpayers beware.

Labor union membership falls in U.S. in 2014 tells the tale of two American work forces:

"The rate of U.S. union membership fell slightly in 2014, continuing a trend that suggests the labor movement will have to step up efforts to rebound from its decades-long slide.

See: Public-sector workers are nearly six times as likely to be union members.

Figures released Friday by the Bureau of Labor Statistics said the combined rate of private- and public-sector union membership was 11.1% last year, down from 11.3% the prior year. Membership in the private sector fell to a rate of 6.6% in 2014, from 6.7%, while public-sector representation rose slightly to 35.7%, from 35.3%.

Unions managed to collectively add about 41,000 members in the private sector, led by industries such as construction and leisure and hospitality, but it wasn’t enough to keep pace with total private-sector employment, said John Schmitt, a senior economist at the left-leaning Center for Economic and Policy Research."

Companies in the private sector compete with each other to get and keep customers. They must do so productively and profitably, or they cease to remain in business. Customers rule.

In the public sector, however, customers aren't in charge. Government officials negotiate with themselves when public sector union officials sit down at the bargaining table with their bureaucratic no-skin-in-the-game taxpayer paid public counterparts. The result over the years has been generous non-market based salary increases which contribute to later higher pension benefits as well as a non-productive, non-customer oriented workforce.

Then when the inevitable financial shortfall occurs down the road, taxpayers are asked, if not forced, to pay some more for this unionized government.

Unlike companies operating in the competitive private sector, school districts and similar government entities, cities and states don't cease to exist. That's why taxpayers will pay. This will all end someday, and it won't be a pretty picture.

Public employee unions are funded by taxpayers, and their members receive substantial pay packages which, taken as a whole and including retirement packages, are greatly underfunded.

The real 'bargain' is simple -- the public employees pay dues to the union which will be used in substantial part to elect public officials who will negotiate with these union officials to enrich public employees with pay and benefits unattainable in the private sector.

The effects of globalization are real in the private economy. We the People have worked hard to pay for unionized government, but sadly 'we ain't seen nothin' yet.'

The economy will underperform as long as the public sector is favored over the private sector.

That's my take.

Thanks. Bob.

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