Sunday, March 8, 2015

The Politically Powerful Powerful Teachers' Unions ... Lessons that Citizens and Taxpayers in Chicago, the State of Illinois, and Everywhere Should Learn About 'Right-to-Work'

Government against government is an apt description of the situation when public sector employees, through their union leaders, bargain collectively with government officials. And these bargaining officials representing the government, aka taxpayers, are frequently ones the unions have heavily supported at the ballot box with political contributions made from membership dues collected from unwilling dues paying public sector employees. These 'unwilling' employees would prefer to keep their hard earned money and decide whether and how to spend it without having to turn it over to the unions instead. But alas, government say's they can't do that. They are not free-to-choose.

In my view, powerful public sector unions, and especially teachers' unions, are a huge factor in explaining our precarious and out-of-control finances in many big cities and states. There's no better example of this than what's going on in Chicago and the state of Illinois.

With the public sector employee unions having their way in large part due to a largely sympathetic, uninvolved and relatively uninformed voting public, the situation may get even worse before getting better.

By way of background, The Right-to-Work Advantage lays out the stubborn facts about union power, right-to-work legislation and the rights and freedoms of individual public sector employees:

"Wisconsin will . . . become the nation’s 25th right-to-work state . . . . No longer will the Badger State’s private-sector employees be compelled to join a labor union and pay dues as a condition of employment. Debates over this contentious public policy are usually cast as fights between pro-and antiunion forces—but the real divide is between those who oppose and those who favor faster economic growth.

Consider the economic benefits that right-to-work states enjoy. By nearly any metric they come out on top of their competitors. The clearest evidence is the disproportionate job growth in right-to-work states. According to data from the Bureau of Labor Statistics, from 2003-13 states with such laws increased their employment rolls by 9.5%—nearly three percentage points more than the national average and more than double the growth in non-right-to-work states.

These weren’t average jobs, either. They were good-paying positions with increasing wages. Personal incomes in those states grew 12% more than in states without right-to-work protections during that same 10-year period, according to a 2014 study by the American Legislative Exchange Council.

Labor unions try to rebut these statistics by pointing to their higher top-line wages and salaries. But these simple analyses fail to mention that those earnings are disproportionately in union strongholds in the Northeast, Chicago and on the West Coast, where the cost of living is more expensive than in the right-to-work South and Midwest. It makes sense that those areas would have higher nominal pay.

Once cost of living is considered, right-to-work states have 4.1% higher per capita personal incomes than non-right-to-work states, according to a 2013 analysis by the Michigan-based Mackinac Center for Public Policy.

These better jobs and growing incomes also lead to stronger economic growth. According to data from the Bureau of Economic Analysis, the economies of right-to-work states grew about 10% more than non-right-to-work states between 2003 and 2013. . . .

Yet even as convincing as these economic benefits are, they still pale in comparison with the individual freedom that right-to-work laws provide. Employees are allowed to earn a living without being forced to pay union dues and fees. The evidence shows that employees appreciate this right.

Consider Michigan, which in 2013 became the 24th right-to-work state. In the law’s first full year, total union membership fell by 48,000—even as total state employment grew.

Wisconsin’s government employees similarly left unions when given the opportunity in 2011. Nearly 70% of the state’s 70,000-member state employees union have since chosen to leave. The powerful American Federation of Teachers and the National Education Association saw their ranks decline by more than 50% and 30%, respectively."

Chicago Mayor Rahm Emanuel is a Democrat.  Illinois Governor Bruce Rauner is a Republican. Both are trying to bring order out of financial chaos. So far, so good.

Now the bad stuff. Chicago and Illinois politics have long been ruled by free spending unaccountable politicians bowing to the political pressures of public sector unions and aligned elected officials. These unions vehemently oppose the good government and fiscal responsibility being proposed by Rauner and Emanuel.

And where does President Obama, who just happens to come from Illinois, stand on all this? Well, don't hold your breath waiting for an answer to that question. My guess is he'll be AWOL during the heavy lifting, providing us with one more example of why politics sucks. ..........................................................................................

Let's begin with Governor Rauner in Blue State Turnaround Artist:

"Mr. Rauner feels he has a mandate. He won every area of the state except urban Cook County, and he says even liberals see the need to cut spending and reform the bloated pension system. . . . the budget mess is so acute, Mr. Rauner says, that the legislature simply must act. . . .

That doesn’t mean the governor’s proposals have landed without controversy. One involves changing the future pensions of government employees, who would very much like to keep the generous current terms. Under Mr. Rauner’s plan, benefits for current retirees would be maintained, but today’s workers would be given the option of a buyout—a lump sum that the state would deposit into a new 401(k)-style account. Employees who don’t take the buyout would have future benefits modestly reduced, though the portion of their pensions that has already been earned would be protected. . . .

Equally controversial have been the governor’s plans to reform government-union rules. A full 93% of the state’s government workers are unionized (the highest rate in the country, Mr. Rauner notes), guaranteeing a stream of dues money to Democratic politicians. “Everywhere I look inside state government, the unions have been running the process, dictating the terms, setting the work rules and setting the agenda inside government,” Mr. Rauner says. “The taxpayers, school children, businesses, homeowners, small business owners have been abused and left out of the process.”

One of his first moves was signing an executive order banning public unions from collecting mandatory fees from workers who don’t want to join the union. . . .

Mr. Rauner has also proposed banning campaign contributions from government unions. “It’s already illegal today in Illinois for businesses or individuals who contract with the state to make campaign contributions to state politicians,” he says, but “it’s perfectly legal for government union leaders.

Why?” . . .

His reform proposals have earned Mr. Rauner comparison to Wisconsin Gov. Scott Walker, who in 2011 pushed through limits on public-union collective bargaining. Mr. Rauner hasn’t gone that far for state workers, but he has offered a plan to let local voters determine what the workers they employ can and can’t bargain for. “I want them to decide if they want forced unionization in their government entities and their schools,” he says.

Mr. Rauner also wants to let local governments decide on what would essentially be local right-to-work zones. Illinois is surrounded by right-to-work states . . . .

But the biggest—and first—priority, he insists, must be to change the way Illinois does business. “We’ve got massive debt, massive deficits, high unemployment,” he says. “People think, ‘just raise the income-tax rate.’ Guys, that is not going to fix our problem. We’ve gotta grow.”

And now we'll turn our attention to Chicago politics where Rahm Emanuel and the Trials of Progressive Payback has the story:

"Chicago has a habit of electing its leaders for life, and few expected Mr. Emanuel to be an exception. But having failed to win a majority in the Feb. 22 election, the mayor will now face Jesus “Chuy” Garcia —a county commissioner, former alderman and former state senator—in an April 7 runoff....            

The opposition’s choice, Mr. Garcia, is a self-proclaimed progressive . . . backed by powerful teachers unions. . . .

The teachers unions are among the challenger’s main bankrollers, contributing roughly half of the estimated $1.5 million he has raised. Mr. Garcia has also tied his campaign to a plan that would take the power to appoint Chicago’s school board out of the hands of the mayor; those positions would be elected instead. This would allow the union to use its considerable largess to back school-board candidates sympathetic to its aims. The hilarious twist here is that Mr. Emanuel spent a lifetime burnishing liberal credentials, but has now acquired a Scott Walker-esque reputation for union busting.

Part of the mayor’s troubles stem from the dissatisfaction of progressives, who expected a better deal from President Obama’s former chief of staff. Before the first votes were even cast, had lent Mr. Garcia its Chicago email list. Democracy for America, a group founded by former Democratic presidential candidate Howard Dean, is also sending emails for Mr. Garcia. The Progressive Change Campaign Committee is raising money under the headline “Defeat Corporate Democrat Rahm Emanuel.” It seems as if every teachers union in the country is focusing off-year election efforts on Chicago to teach Mr. Emanuel a lesson.

President Obama might be getting the message. Though the president cut an 11th-hour ad for Mr. Emanuel before the initial election and made appearances across Chicago, the White House has nothing on the schedule for the runoff. . . .

Chicago voters are left to pick between two unappealing candidates who are battling for the measly one-third of the electorate that hasn’t checked out completely. (Voter turnout in the first round was 34%). On one hand, there’s Mr. Emanuel, who admittedly inherited a financial mess created from the second Richard Daley to hold the mayoral title, but who seems as hapless now as the day he took control. On the other hand, there’s Mr. Garcia, a man who has many progressive dreams and no idea how to pay for them, and whose best quality is simply that he isn’t Rahm Emanuel.

Local Republicans—the few of us willing to admit our party affiliation in public—couldn’t script a more depressing outlook if they tried. In a city that is perilously close to bankruptcy, besieged by waves of violence and facing an uncertain future, the two factions fight it out over whether pension contracts should be extraordinarily generous or simply generous.

What will happen in the April runoff is anyone’s guess. The lesson for Chicago residents like me is that maybe it is time to move somewhere else."
And we'll finish with quotes from "The Right-to-Work Advantage" referenced above:

"That so many members dropped their union membership at the first chance demonstrates that they were being forced to give some of their money to organizations they did not support. Before right-to-work laws, their only choice would have been to quit their jobs.

Right-to-work also ensures that individuals are not forced to support political candidates or causes they disagree with. While 38% of union household members voted for a Republican candidate in the U.S. House of Representatives in 2014, an analysis by the Center for Responsive Politics revealed that more than 90% of union political spending backed Democratic candidates. Giving employees the freedom not to contribute financially to unions ensures they won’t be forced to unwittingly support politics and policies they don’t support.

Unions are still free to organize employees in right-to-work states. . . . The only difference is that unions can’t coerce them into joining.

Right-to-work is right for everyone—and not only in Wisconsin."

Summing Up

Fiscal responsibility and powerful public sector unions aren't a good mix for either cities or individual states. And of the public sector unions, teachers' unions are the most expensive and powerful of all.

In the end, paying the bills isn't optional. And the right to receive a quality education at a reasonable cost to taxpayers should exist for everybody.

That's my take.

Thanks. Bob.

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