Saturday, July 21, 2012

Governments Buried by Pensions & Perks

For some strange reason, little is said these days about union/government corruption as governments on all levels are strained for cash – some even declaring bankruptcy – and consequently engage in cutting services or raising taxes, the latter currently a distinct no-no. This is especially true for state and local governments, many if not most of which took the “glorious” stimulus money meant to create jobs and used it instead to continue the cash-flow connected to governance…writing the checks.


Warning Caveat: This writer was a member for many years of a trade-union in his job as a railroader, mostly as a locomotive engineer. In the process, he saw both management and labor at their best and worst, neither superior to the other in either case. He retired at age 62 and draws a consequently reduced pension comprised of the social security tier enhanced by a “tier-two” arrangement bought and paid for by both the railroad and the employee. The pension is modest by any measure.

No government should ever be connected in any way to trade-unions, i.e., it should hire no employees represented by a union and should never be forced to negotiate anything other than workplace conditions, and only then through a lawfully established commission with both government and employees equally represented and governed ultimately by the appropriate state and federal laws.

This may sound strange coming from a union guy. The reason it isn’t strange is that the union guy worked for an employer that had to compete for business and show a profit to stockholders in order to stay in business, while a government employee works for an organization that competes for nothing, never has to show a profit, and has pockets made deep through virtually unlimited taxation dollars, not competitive success.

The prime case in point currently is that of impending governmental bankruptcies account being unable to fund pension plans negotiated with unions and producing agreements that are outrageous by any standard. The prime example of a governor and legislature actually doing something about this problem occurred recently in Wisconsin when government-employed union workers were made to join the country, i.e., pay through the nose like everyone else for perks like medical insurance and pension benefits, not least because on average they made far more than private-sector workers and could afford paying their “fair share,” as the prez might have it.

Wisconsin, like most other states as well as the railroads and other industries, until the last 25 or so years dealt with workers on the basis of “contracts” negotiated when technology was more primitive and when unions provided an element of protection for workers, who could be mistreated upon a managerial whim. Such is not the case today.

According to the U.S. Bureau of Labor Statistics, 11.8% of the work-force is unionized. Only 6.9% of workers (7.2 million) in the private sector are unionized, while 37% of public workers (7.6 million) are unionized. Therein lies the rub. Legislators and other elected officials (translated vote-seekers) have virtually given away the store to government employees, using tax dollars, while private-industry workers must negotiate settlements with the company’s bottom line as a critical issue.

According to the BLS, government workers on all levels in 2011 averaged earning $938 per week, a whopping 29% more than private-sector workers who averaged $729. This is unconscionable and the unfairness is obvious. Even more outrageous is the fact that in many if not most states, government employees can retire on full pensions in their early 50s while private-sector employees must stay in the saddle past age 65 just to get full social security benefits. Schoolteachers, for instance, who face no physical problems in their employment, can retire after 25 years while a railroader is still pounding the ballast and doing manual labor at age 65, after 44 years of service.

It’s impossible to pay people from age 50 to age 80 (average age of women at death) a full pension for doing absolutely nothing – more years doing nothing than the total number of years at work. According to the Lexington Herald-Leader of 04 July 2010, “Most state employees hired before 2008 can retire after 27 years [a teacher at age 49] and collect a pension based on an average of their best-paid years of service. For instance, a worker who earned $50,000 a year would draw an annual pension of $27,000 for the rest of her life, plus cost of living increases. Workers who perform “hazardous duties,” such as police officers, can retire after 20 years [early age-40s].” The next step is a brand-new occupation to work out another pension.

In 1981, the government-paid air-traffic controllers decided to strike, against the advice of their union leaders and even though they had signed contracts – same as the military – disallowing strikes. President Reagan fired them and hired a new bunch without a hitch. The controllers still have a union, but its members know where the line in the sand is.

Every level of government should now be in the process of completely revamping its personnel practices, with or without union cooperation, and notwithstanding all previous agreements. Government workers are not a privileged class, just as private-sector workers are not. This will do no harm to the pension-process, but will simply put it on a footing the taxpayers can afford.

The worker-unions bear much of the responsibility for the current fiasco. Their lobbyists bought the lawmakers or coerced them through threatening to withdraw support. Lawmakers and other elected officials bear most of the blame, however, because they “USED” workers to do the legwork in their campaigns and paid them with money coerced from the citizenry. Disgusting!

Of even more import is the fact that public-sector unions such as the NEA and SEIU, besides having unlimited access to the current White House, can contractually force mediocrity as the common denominator in the matter of performance. This is especially hurtful regarding the teacher unions.

And so it goes.
Jim Clark

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