Jan 30, 2009
Public Sector Unions Must be Banned
There is a major underlying theme with the rapidly growing state and federal debt — unions. Over the past 30 years unions have won lucrative defined benefits contracts that placed affordable benefits in the present (e.g. 1978), but pushed off unafordable benefits to the future. Police officers could work for 20 years, and then retire with nearly full salary for those next 45 years. Similar schemes have been put in place for MANY other institutions that the tax payer funds (including, the big three auto makers). Of course, to believe that a policemen creates enough value in 20 years at a salary of ~$100K/year, to then live off of ~$90K/year for the next 45 years is ludicrous. Add to this the growing health benefits that many workers have and you have a recipe for disaster.
Unfortunately, the impact of transfering wealth from tax payers to overpaid union employees damages future growth as well as present consumption. Consider that NYC will have to cut its present police force so it can pay for its retired police force. Thus, crime rates will go up, and it will be tougher for businesses to do businesses, not just because of high taxes, but because of a more dangerous environment. The same concept is true with service cuts in the MTA and other vital industries.
The solution of course, is to ban public sector unions and to ban defined benefits. It is one thing if a private sector’s union forces them to go out of business. A better company will grow. However, the public sector can’t go out of business, so it’s costs can only grow. In the last 6 years entitlement spending in the country has increased about as fast as tax receipts, and this is in a period of dramatic growth. Now that most of this growth has proven illusionary, so should these benefits. My 401K went down by 30%, and so should the benefits of retired union workers. Just because union workers feel like they are very valuable, does not mean they are — this is proven by the fact that they must form a union to receive their excessive wages.
We need to ban public sector unions so that they stop strangling the tax payer. The government has little incentive to fight the unions because they use other people’s money to pay them. Union employees need to get paid less, and work harder. And those retired policemen need to get back to work like everyone else in this country.
It’s amazing how jealous people get when others are doing well. Unions are more important now than ever for working people, private and public sector. If more company’s had DB plans or a combination of DB and DC plans more Baby Boomers would be able to retire and enjoy life instead of watching their retirement savings all but disappear. For years people in the public sector have made less than their counter parts in the private sector and the only thing that made the job attractive and worth the low pay were the benefits that they received (tuition remission, early retirement, etc.). Now that wages have been decreased because of corporate greed and CEO bonuses that are 400% higher than regular employees, people in the private sector want to complain. It’s not the fault of unions that businesses go under, it’s in large part because of poor business planning by the employer. The big three aren’t going under because of unions. A lot of it has to do with NAFTA and other trade agreements as well as auto designs that aren’t competitive. Public sector unions have created a space for the middle-class to survive some of the hard times, like what we’re in now. In many places they help keep a competive wage scale so that the private sector can’t further lower wages. The problem is not unions but the greed that drives capitalism.
[GS: It is true we could just give all the baby boomers 1 million dollars and they would be super happy! But what about everyone else who would now be slaves to these peoples benefits? Your arguments sound like communism -- why not give everyone everything? Of course, all that leads to is everyone being poor]