My favorite thing about the protests surrounding state capitols (story) is that, in each state, thousands of unionized government workers are able to spend Monday-Friday, 9-5, demanding that politicians act on their behalf. How come the private-sector workers (e.g., the 67-year-olds working at Walmart who support the $100,000+/year pensions of retired 50-year-old former public workers) aren’t counter-protesting in similar numbers? Probably because they have to work! What better proof could their be of the superior situation of government workers relative to their private counterparts?
[I like the New York Times article because they cite just one example of a retired government worker. He is 50 and, the Times reports, has a pension of just $19,500 per year. The reporter did not seek out the Ohio equivalent of Bruce Malkenhorst, collecting $510,000 annually from the taxpayers of California (see this list of the 9111 California pensioners; see this Forbes magazine article for how Malkenhorst vaulted to the top).]
I think this fact, while completely lost on the media, who laughably compare these protests to what’s going on in the middle east, is not lost on the vast majority of private sector workers who watch these demonstrations on TV after a long day of work. There seems to be a groundswell of public opinion against public unions these days, and I think what we’re seeing here is a last gasp attempt at salvaging the unsalvageable. I hope the legislators stay strong, and recognize that despite the volume level in front of the capitols, union support is waning. Unions seem to do a wonderful job of protecting their senior members in the short term, while destroying the long term prospects of the union’s overall membership by destroying the hand that feeds them. Unions are a problem that will solve themselves in the long term. Just look at union membership numbers over time, and the writing is on the wall loud and clear.
Maybe the walmart employee you cite could afford to take time off and demonstrate if they had a union too. Maybe then he would also make more than $8.75 – $12/hr with no benefits. Of course, the CEO of walmart would never allow this – he needs to make his roughly $20 million per year (he makes his average employees’ yearly salary in less than a day).
Mike: It would be nice for the Walmart workers if they earned $200,000/year and had a guaranteed inflation-adjusted $100k+ pension starting at age 50. However, I don’t see how unionized teachers, prison guards, police, firefighters, etc. will help the Walmart workers achieve their dreams. The growth in percentage of U.S. private workers who were union members occurred prior to the early 1960s, i.e., during a period in which government workers were not permitted to collectively bargain for wages or benefits.
If the 2 million Walmart employees were able to tap into the CEO’s paycheck and reduce his pay to $0/year (probably they should, since the company’s same-store sales aren’t growing, though I guess you could argue that it isn’t Walmart’s fault if consumers are poorer than they used to be (if nothing else, Walmart’s middle class customers keep getting soaked with higher taxes)), each worker would receive $10/year more. If on the other hand, the Walmart employees were able to cut public employee salaries and benefits, the potential savings in taxes would amount to roughly 20 percent of their income (more than $4000/year).
[Why aren’t the Walmart workers already enjoying the kinds of salaries and benefits of public employees? I think we should look in the mirror. Who among us would pay 50 percent more to shop at Walmart compared to, say, Target? Even Bruce Malkenhorst, with his $510,000 annual government pension, probably would prefer to pay low prices rather than high.]
Phil – I agree there are always other places to look to cut – for example, by reducing our defense budget by 10% we could finance all sorts of wage increases / subsidized health care / etc for either public or private workers. But it seems war/defense is important enough to americans that we are OK with roughly 40 – 50% of our tax revenues going toward.
These huge pensions do seem outrageous. But they seem to be an insignificant % of total pension outlays, so perhaps it’s more of a sensationalist issue than a real one?
http://www.calpersresponds.com/myths.php/myth-public-pension-benefits-are-excessive
If a unionized teacher uses a paid sick day to protest, isn’t that actually fraud? And if a pile of unionized teachers use sick days to protest, and then back it up with ‘proof of illness’ in the form of fake doctor’s notes handed out by the union thugs, isn’t that conspiracy to commit fraud?
I’m not sure why the NYT would have sought out the “Ohio equivalent of Bruce Malkenhorst,” assuming such a person exists, which seems unlikely. Malkenhorst’s pension is a freak case.
It seems that for some bizarre legal reason, two families in the LA area have managed to gain and, for several decades, maintain exclusive control of a tiny “city” five miles south of downtown Los Angeles. It has only 92 residents, all of them family members of employees of the two families, though 44,000 people work there. And the families have milked it for all they can.
Seeking out an Ohio Malkenhorst is the sort of thing Fox News would do. Best left to them. Do you doubt that the 19K/year worker is more typical?
Mike: Thanks for the Calpers pension “myth” link. I think that they’ve rather cleverly disguised the fact that many of the folks receiving “$36,000 or less” might not have worked for the state for very long. They’re lumping in people who worked as state employees for 10 years together with those who worked for 30 years. Is it surprising that someone who had a no-skill job with the state from age 18 to 28 does not have an enormous pension?
California taxpayers who eventually pay off the $500 billion in currently unfunded liabilities (see http://articles.latimes.com/2010/apr/06/opinion/la-oe-crane6-2010apr06 ) aren’t going to be too comforted by the fact that there are quite a few pensioners who don’t get all that much.
Mark: Is there nobody in Ohio who collects a fat pension check? The first result that I found from a Google search was http://www.dispatchpolitics.com/live/content/local_news/stories/2010/10/31/copy/legislators-closely-tied-to-pensions.html (legislators who earn approximately $200,000 per year in combined checks from the state that include their pensions in excess of $100,000 per year).
“(if nothing else, Walmart’s middle class customers keep getting soaked with higher taxes)”
Yeah! I can’t stand the way Obama keeps raising taxes! The IRS tax rate on a single person earning $50,000 was only 25% in 2008. Then in 2009 it shot up to 25% and for 2010 it’s up to an outrageous 25%.
Mark: I was not referring to income tax. The folks who shop at Walmart don’t pay a lot of income tax. They do pay sales tax, property tax, payroll tax, alcohol tax, gasoline tax, etc., however. These taxes are not set by our Nobel Peace laureate, but rather by local and state governments. Check http://en.wikipedia.org/wiki/Sales_taxes_in_the_United_States for example and search for “increase” to see some recent changes. The search misses the 1% increase in California sales tax that became effective in 2009.
A quick Google search for property tax stories finds ones such as http://polhudson.lohudblogs.com/2011/02/23/new-yorkers-paid-5-percent-more-in-property-taxes-in-2010-than-2009/
[Separately, I would point out that a constant tax rate on a fixed nominal dollar income is actually an increasing tax rate thanks to the miracle of printing money and consequent inflation. A person earning $50,000 per year would, within the memory of quite a few living Americans, have once been considered rather rich (e.g., $50,000 in 1960 = $372,000 today, despite the constant cooking of the CPI to make it less frightening). If we leave the current tax brackets in place, it won’t be too long before even the poorest Americans are subject to the maximum income tax rates.]
Your headline is misleading. Government workers aren’t taking days off to protest how overworked they are.
They are taking off to protest the purposed elimination of their collective bargaining rights. Pension and wage issues can be negotiated without dragging employees down to the Walmart level.
Here is one teachers explanation, albeit a biased one:
http://www.cnn.com/2011/OPINION/02/23/berstein.labor.unions/index.html
Jim: Thanks for the link to that teacher’s article. He says “only three of the top 10 spenders in the most recent elections were unions”. Given that unions represent only 11.9 percent of working Americans, and most of those are government workers, I would say that occupying 3 out of the top 10 slots is a staggeringly disproportionate amount of influence. Where are the big-spending groups representing the other 88 percent of working Americans? Where are the big-spending groups representing the interests of the poor and/or unemployed?
He says “Public employees, especially teachers, are usually better educated than their peers doing equivalent work in the private sector, but usually have lower salaries.” http://www.ets.org/Media/Education_Topics/pdf/TQ_full_report.pdf shows the average SAT verbal score was 515 for folks becoming teachers and the math score was 506. http://professionals.collegeboard.com/testing/sat-reasoning/scores/averages says that the average for all Americans taking the SATs was 501 verbal and 516 math. So a teacher who earns $10,000 per month for working 6-hour days (and don’t forget that half-day off every Wednesday) is statistically likely to be right in the middle of the bell curve of what is rapidly becoming one of the worst-educated nations on Earth.
An average SAT score and a bachelor’s in education makes this guy “better educated than [] peers … in the private sector”? If that’s true given a definition of “peer” as someone who gets paid $100,000/year, God help the U.S. private sector. It isn’t clear if the author of the CNN article, when saying that teachers aren’t as well paid as private workers, has adjusted for the 6-hour/day, 9 month/year schedule. It also isn’t clear if the author has adjusted for the fact that teachers, after working for three years and earning “tenure”, cannot be fired for incompetence. An insurance policy against the consequences of personal laziness or incompetence cannot be purchased commercially so it is hard to know what it might be worth, but surely it has some value.
I think your phrase “dragging employees down to the Walmart level” is interesting. The Walmart employee earns his money from a voluntary exchange of hard work for cash generated by a private tax-paying company. That company’s cash comes from consumers who voluntarily come into Walmart as opposed to going to Target or some other retailer. Neither Walmart nor the employee are able to coerce anyone into giving them cash. A government worker, on the other hand, has “customers” who are forced by law, backed up by guns when necessary, to deal with the worker. The government worker’s cash is extracted involuntarily, again backed up by guns and prison, from taxpayers who may have preferred to obtain their services from some other source. The Walmart employee may not enjoy the comfortable material lifestyle of a government worker, but I don’t think it is fair to say that he or she occupies a lower level of society or morality.
[As noted earlier, I would be delighted if all Americans, on average, could earn as much as government workers currently earn. Sadly, given that government workers can be paid approximately twice as much as private sector workers (see http://www.downsizinggovernment.org/overpaid-federal-workers and http://www.cato.org/pubs/journal/cj30n1/cj30n1-5.pdf for the state and local workers only), this would only be possible if America were to become much wealthier, which does not seem to be happening, and if government workers did not somehow manage to collect any of the new wealth for themselves.]
Unlike private workers, public workers have an advantage going for them (but maybe not for too long) and they are taking advantage of it.
When a private entity cannot meet a workers demand — imposed on them through the union or a higher power entity — it will eventually bankrupt the private entity (unless if you are “too big to fail” and Uncle Same loves you) and with it, any benefit they may have.
When a public entity cannot meet a workers demand — imposed on them through the union or a higher power (what’s over the US government?) — the nation will bankrupt and with it, any benefit we all have.
The way I see it, public workers have negotiated their way into prosperity with zero risk. They have used an unfair advantage in negotiating their benefits and now are screaming foul as if they are the only one hurting. When will they realize that a public work is working for the public and not the government and that the rest of us are paying them out of our own pockets.
Here’s a piece from a few weeks back on what happened to the many $100,000 teachers after NYC closed down the “rubber rooms” where they were housed:
http://www.nytimes.com/2010/12/08/nyregion/08schools.html
S.I.: Thanks for the link. What I got out of it was that none of the teachers NYC was trying to get rid of were being targeted for incompetence as teachers. One woman was allegedly insubordinate. Another was “accused of leaving a child unattended”. The male teacher (“meacher”?) was “accused of sexual harassment”.
Separately, it is worth noting that New York City’s education spending went from $12.7 billion in 2003 to $23 billion in 2011, a 70-percent increase after adjusting for inflation. How are the schools doing with all of the extra cash (mostly in the form of pay and benefits increases for unionized teachers) that Michael Bloomberg gave them? http://www.nytimes.com/2011/02/25/nyregion/25science.html says “Only 18 percent of the city’s public school fourth graders and 13 percent of its eighth graders demonstrated proficiency on the most recent national science exams, far below state and national levels”. The kids in Louisville, Kentucky walked all over the NYC kids.
Phil asks, “Where are the big-spending groups representing the other 88 percent of working Americans? Where are the big-spending groups representing the interests of the poor and/or unemployed?”
As far as I can tell there aren’t any. What we do have is this:
http://blogs.forbes.com/rickungar/2011/02/18/koch-brothers-behind-wisconsin-effort-to-kill-public-unions/
and this:
http://www.nytimes.com/2011/02/22/us/22koch.html?_r=1
I seriously doubt that the Koch brothers and their ilk care at all for the taxpayers of Wisconsin or the poor & unemployed of that state.
You also say, “The Walmart employee may not enjoy the comfortable material lifestyle of a government worker, but I don’t think it is fair to say that he or she occupies a lower level of society or morality.”
I never said that or anything close to that. I have nothing but respect for anyone who works for a wage, especially a low one like Walmart pays. My implication was that pension and wages shouldn’t be the same as Walmarts.
You injected Walmart employees into this thread. I doubt if they like this:
http://abcnews.go.com/Business/walmart-ceo-pay-hour-workers-year/story?id=11067470
Jim: Thanks for the references to the Koch brothers. As a taxpayer, however, these guys don’t scare me. Unlike the public employee unions, they aren’t lobbying politicians to take money from taxpayers and transfer it into their own pockets.
[There may be other things that are bad about the Koch brothers, e.g., their alleged attempts to weaken environmental regulation (something that most economists would say is necessary due to the externality problem). But attacking the idea that the clerk at the DMV who processes driver’s license applications should earn more, on average, than the citizen who applies, does not seem like something the Kochs’ would do out of self-interest. (Here in Massachusetts, the toll collectors on the highway earn more than the people driving through (see http://www.tollroadsnews.com/node/3961 ).) Another bad thing that a big powerful company can do to citizens is charge monopoly prices, oftentimes aided by government regulations that stifle competition. I searched for “Koch Industries antitrust”, however, and couldn’t find any evidence that the Koch brothers harmed consumers through unfair methods. http://en.wikipedia.org/wiki/Koch_Industries indicates that the worst stuff that you can say about the Kochs has to do with pollution or safety.]
I’ll start to worry about the Koch brothers’ fiscal policy lobbying when I read about $100 billion in tax money flowing into their personal or company checking accounts (the way the river of tax dollars flowed to Wall Street, AIG, GM, Chrysler, and the United Auto Workers). In the meantime, I’ll try not to get too close to any of their pipelines…
Please bear in mind that I ask this in as respectful a way as I know how, from the perspective of a student, not an antagonist.
As someone who shares some heritage with a group of people who saw their rights chipped away slowly until one day we ended up with genocide, doesn’t neutralizing unions scare you? I mean, I know the labor party of the 1920s started as something that parallels our democratic party more than republicans, but it seems like history could repeat itself to some extent here.
On a micro level- my infinitesimal life experience, I’ve hated unions for a long time. The Kohl’s grocery store I worked for when I was 15 charged crazy dues relative to my $6/hr pay, told me I HAD to be in the UFCW union to work there (apparently a lie), and I barely made enough to feed myself if I stole expired yogurt cups (woulda taken expired meat, but they just redated it till it turned green then threw it in with the hamburger). PS: Don’t emancipate yourself at 15. It sucks.
Anyway, I’ve hated unions since that time, but they seem to have been extremely important in the past, and I think maybe I like things like child labor laws and weekends…though when I was a child I wanted to be able to work more hours to make more money, and as a young adult in health care I don’t actually have weekends…or even 2 days off in a row.
I’m really confused, and its very difficult to find a valid set of facts to work from. But it seems like union busting is about a power grab, not a balanced budget. This bill will split UW-Madison (apparently a leader in publicly funded stem cell research) from the rest of the system and allow the governor to appoint a new board of directors. He is very anti-stem cell. That seems like a major enough change to warrant its own legislation- not just be a side note on this budget bill.
There seems to be fudging and finagling of the little primary financial data available, but when a university prof and I tried to see the actual Wisconsin state budget, we got only 404 errors where there used to be official documents on the wi.gov web site. Secondary sources have stated that Wisconsin’s governor proposed 140million in new spending since January, and he now says there is a 137million dollar short fall.
Since taxpayers are used to getting kicked in the nuts when politicians screw up, why not charge every tax payer a one time $100 fee? There are 5.6 million people in the state, so even if 1/4th of them pay taxes, that would fix the problem.
Kris: The question of whether teachers can unionize, strike, and collectively bargain with the politicians they helped to elect, oftentimes sacrificing the interests of 10-year-old children (and, via bonds and unfunded pension liabilities, sticking much of the bill on kids who haven’t even been born), is an entirely separate one from the question of whether auto workers can unionize and collectively bargain with the managers representing (incompetently, as we now know) the interests of, say, General Motors shareholders.
There are no moral issues when the shareholders of GM are wiped out by the actions of their incompetent managers who agreed to let unionized workers retire at age 48, collecting a pension and unlimited health care. Nobody forced the shareholder to buy GM stock and nobody forces a customer to buy a GM car. The union did not get to choose the managers with whom they are negotiating. In theory, an American born in the year 2020 cannot leave the labor and delivery wing of the hospital already owing thousands to GM retirees (in practice, thanks to the government’s $100 billion bailout of GM and Chrysler, the next generation of Americans will in fact be paying off the assemblers of 1998 Suburbans). With a schoolteacher union, though, the taxpayers are forced, at gunpoint if necessary, into paying taxes. An elderly taxpayer working 60 hours/week will be paying taxes to support a 50-year-old retired teacher whose pension may well be higher than the working taxpayer’s salary. Children are forced to attend their local public school (unless their parents have $25,000/year (after taxes) to spare for private school tuition). The union can, through cash contributions and mobilizing members, significantly change the likelihood of electoral victory for a politician with whom they would like to negotiate.
It is not sensible to say that a person who does not believe public employees should be permitted to strike and collectively bargain is “anti-union”. A public employee union has almost nothing in common with a union of private sector workers. Probably the right answer is to rename public employee unions. We could call them “public employee cartels” and a person who thought like FDR could say “I’m pro-union, but anti-cartel”.
[See http://www.nationalaffairs.com/publications/detail/the-trouble-with-public-sector-unions for more about this, including a quote from FDR “The process of collective bargaining, as usually understood, cannot be transplanted into the public service”.]
If that’s a fact, then tell me: what about the people who are taking days off work for Tea Party protests?
KWH: I did a quick Google search and found pages such as
http://teapartychicago.netboots.net/posts/thank-you-for-attending-the-madison-tea-party-rally-in-support-of-gov-scott-walker
which seem to indicate that the Tea Party counter-protests are on Saturdays (as you might expect for an event whose organizers hope to attract people with jobs). On standard work days, there are vastly more public employees out demonstrating than taxpayers because, according to the Google search results, the public employees can call in sick and collect the taxpayers’ money for every hour that they are demanding more of the taxpayers’ money in the future. It is kind of a beautiful system, if you think about it.
Here’s a glimpse of how the southern states handle government unions and collective bargaining issues:
http://my.earthlink.net/article/top?guid=20110227/2a93ca62-82aa-43d9-ab24-64ec1c6d85e1
Thanks for the article, Jim. I think the journalist intended readers to react with horror when they came to “chip away at public employees’ benefits or eliminate government jobs”, but what I see when I read that phrase is a 67-year-old $12/hour worker avoiding a big sales increase that would substantially reduce her standard of living. I see a 5-year-old kid having a slightly lower debt burden.
“… government jobs are still seen as more secure and desirable than most private-sector jobs … In Mississippi, one of the poorest states in the nation, state workers get 10 paid holidays a year, their sick days and vacation days can be rolled over from year to year, and they can retire after 25 years of service under a defined benefit plan. They also have a certain level of civil-service job protection.”
It doesn’t sound as though the sky fell in Mississippi for government workers merely because they can’t conspire with politicians against the interests of taxpayers. Perhaps they’re not earning the $250,000/year of a Massachusetts state trooper (plus pension and other benefits), but they’re still doing better than the taxpayers in their state.
In a market economy, you would know when government workers were getting a raw deal: the government would have trouble hiring. Right now, for whatever combination of reasons, it seems that the total basket of compensation offered by the government is much better than what taxpaying American employers are offering.
http://voices.washingtonpost.com/campus-overload/2010/05/even_teaching_jobs_hard_to_fin.html talks about thousands of qualified applicants at school districts with just a handful of openings. Why would taxpayers want the government to pay more than is necessary to hire and retain qualified workers?
FYI: the evil Mr. Koch defends himself in http://online.wsj.com/article/SB10001424052748704288304576170974226083178.html