My union friends.
My friends-of-union friends.
Those of you who do not wish to be my friend but who are upset about the what’s happening in New Jersey, Wisconsin, and now Ohio, regarding unions and collective bargaining…
Think about something for a moment. Please consider this:
A private company, let’s call it Bob’s Widgets, takes in $5,000,000 in total revenue in a given year. That means the company has a total pool of money of $5,000,000 to pay for supplies, rent, machinery, insurance, taxes, fees, salaries, wages, benefits, and bonuses. After paying for supplies, rent, machinery, insurance, taxes, and fees Bob’s Widgets is down to, let’s say, $1,000,000 for salaries, wages, and benefits. That means before anyone has been paid a red penny, there is a total pool of $1,000,000 to “divvy up” among the president, managers, and unionized employees. When the union bargains with Bob, if the union rep ups the wage and benefits demand above a certain point Bob can tell the union rep, “if you demand that much in wages and benefits, we will be unable to stay in business, and everyone will lose their job.” The union can then either demand that much anyhow, go on strike, and eventually cause Bob to shutter the business (if only long enough to de-certify the union), thus losing everyone their job; or the union can back off its demands, accept that Bob really can’t afford to pay what they are demanding, and be happy with the pay Bob is able and willing to pay. If Bob is a good and decent man, he will be honest in that negotiation. If the union rep is a good and decent man, he will be honest in that negotiation.
But the bottom line is that there is a bottom line: a finite pool of money from which Bob can pay the workers. No more is available, period.
Now let’s step into the realm of the public sector, where union employees work for the government (i.e., for you and me. Ostensibly, anyhow). George is an elected politician for whom all the unionized workers work. George is the employer who sits across the table from the union representative and listens to the rep’s demands. The union rep demands more money in salaries, nicer health insurance with a very small employee contribution, accumulated sick leave with full pay-out upon retirement, and a structured raise system based on seniority and years served rather than merit. George, since he is a government official, doesn’t have to rely upon selling a good or service to raise revenue; he gets revenue from taxes and fees. George really wants to keep the union rep and all of the unionized government employees happy. George really can’t tell the union rep that it is impossible for the government to increase its revenue pool (because all George has to do is raise taxes and increase fees—he is in government, anyhow). Then he’ll have more money to pay for the increased salaries, benefits, and accumulated sick leave pay-outs. Also, since George is an *elected* official, that means he’ll be up for re-election. Now that George really did his part to make life nice for the unionized government workers, the government, public sector unionized workers will be very inclined to do everything they can to get George re-elected so he can and will continue making their life nice and easy.
So lots of money will be raised from the pockets of all people including Bob, the union representative, and all the unionized employees at Bob’s Widgets through higher taxes and new fees. That money will be used to pay the government employees, who in turn will pass a decent portion of it along to George in campaign contributions, thus helping him get re-elected. That way he can can continue scratching the back that scratched his because he scratched theirs.
Do Bob’s employees get a chance to “re-elect” Bob or support his opponent for the presidency of Bob’s Widgets? Um, no.
Can Bob go out and simply order people to buy his widgets under penalty of garnished wages or jail time? Huh-uh.
But Bob and each of his employees, all of them good union men and women, will have to pay higher taxes and fees out of their pocket, along with higher prices on food, clothing, gasoline, movie tickets, cigarettes, whatever it is that George targeted with higher fees and taxes, in order to pay for the posh deal George signed off on for the public sector union workers.
Eventually the government no longer is of, for, and by the people, but the people must, under penalty of jail time, support that government and all its works and deeds…
See: what is happening in state houses in Wisconsin, Ohio, and New Jersey is not an anti-union action. It is uprooting a corrupt, self-perpetuating system that treats all private sector citizens as piggy banks: to be cracked open as the need arises. It never should have been allowed to happen in the first place. FDR was opposed to the idea of public sector unions collectively bargaining. FDR! Governors Daniels, Christie, Walker, and Kasich are making this first step in fixing the mess that is the public deficit.
It is not pretty, and some promises made by politicians long since out of office will be broken—but they were promises made in bad faith: the politicians who made them had no idea what the future economic realities would hold and thus had no standing to promise future generations’ revenues. But even at that, they also knew they would not be around when the bills came due, so it would be someone else’s problem if it all blew up. Well, with the economy in the tank, the baby boomer generation about to retire en masse, and the simple reality of economics, these promises simply cannot be honored.
The chickens from decades of cozy dealings between politicians and public sector unions are coming home to roost. An economy can only handle so much taxation and fees before imploding.
Public sector unions and private sector unions are the same in name only. Public sector unions have an advantage in collective bargaining that is simply impossible for private sector unions, and then the public sector workers get to pocket the money taxed away from the private sector union guys and gals.
I hope that is sufficiently clear.
Now, if you’ve lost your chill it’s for one of two reasons: you didn’t think of it this way before and you’re ticked off that this has been happening for so long, that it imperils the economy, and that people are defending this dastardly arrangement; or you have been a beneficiary of this arrangement, don’t like that it has been exposed, and resent that the people think it is corrupt and should go away.
If it’s the former, good for you. Do what you can to help bring fiscal sanity to your state and local government by supporting those making tough calls on budget cuts including, but not limited to, efforts like I discuss above. Attend rallies (peacefully, of course), call your elected officials and voice your concern, write letters to the editor and talk with your friends who may also have incorrect notions about what is really happening. Hopefully our politicians will stand their ground and government will be reined in.
If it’s the latter, well, it’s time for a new way of thinking. Support fiscal sanity and the common good rather than your own pocket book for a while. Stay in your present public-sector job, but agitate for deals that are in the best interests of the common good, respecting that the tax payers pay your salary. Or, perhaps to broaden your perspective, get a job in the private sector. Even better, take a risk and start a business (perhaps an educational institution) so you can directly, actively create real wealth-generating jobs for multiple people. You’d be amazed how much good that can do.