Wisconsin, New Jersey, New York, Illinois, General Motors, unions and too much of a good thing

Here is a quote from a posted comment regarding an article in the NYT about the battle between state workers and the governor of Wisconsin:

“This is the state of affairs in this country: Wall Street and the banks perpetrate the largest financial fraud and economic meltdown in this nation’s history, and schoolteachers, prison guards and other civil service workers shoulder the blame.”

This is a scary point of view.  Do you think Wall Street had anything to do with the generous out of control benefit costs for state workers? Do you think Wall Street had anything to do with the mismanagement of pension funds at the state level (and not just Wisconsin)?  The fact is that these problems are the direct result of an unholy alliance between government employee unions and state politicians. In most, if not all cases, that is Democratic politicians, the very individuals who purport to stand for working families (mostly if they are members of an organization with a large PAC to spend). If you don’t believe this, look at the states in the most trouble, New Jersey, New York, California, Illinois… do you see a pattern here?

This is not hard to understand. If you get to elect the people who determine your pay and benefits you are likely to vote for the person who promises the best deal. If you are the person who is elected you are going to deliver on those promises so you get re-elected. Neither party gives a hoot about the long-term impact on state liabilities and budgets, the taxes needed to pay for the promises, the working families not part of this alliance who pay the taxes or much else.

The basic concept of promising more and more without regard to the long-term cost is alive and well at all levels of government.  And just as a point of reference, it is the same concept that greatly contributed to the problems at GM.

States should have addressed these issues long ago.  They should have compared state workers benefits with the general population of their state. They should have made gradual adjustments to the benefits to keep them on par with the private sector.   They should have installed a new benefits package for employees hired after a specific date long past.  In other words, as a famous politician likes to say, “it’s time these folks paid their fair share.”   States would be far better off assuring a competitive compensation and benefits package by placing greater emphasis on direct compensation.  Pay is more predictable than unlimited and uncontrollable obligations for pensions and other benefits, especially health benefits. 

Teachers, firefighters, police officers, etc. are not especially greedy or bad people, they are human. They are looking out for themselves as we all do. Many of these workers deserve special consideration in their compensation based on the nature of their work.  Often it is dangerous, requires special skills and dedication and are jobs most of us would not want.  However, none of that means they get a blank check.  Many responsible unions in the private sector have recognized the growing costs associated with employee benefits and the potential impact those costs would have on their members.  They have worked with employers to help manage these costs and avoid a future crisis.  Unfortunately, that is generally not the case with public employee unions

The job of the politicians is to look out for all the citizens and in that they fail miserably.

Related Articles

• Unions badgering Wisconsin’s finances? (politico.com)
• State Democrats absent for vote as Wisconsin budget protests swell – CNN (news.google.com)
• Teachers Union Protests Gov. Scott Walker’s Bill To Limit Bargaining Rights (huffingtonpost.com)
• Tea Party Members Confront Fleeing Wisconsin State Senators In Illinois (mediaite.com)