The backlash against public employee unions
The Scott Walker victory in Wisconsin this week showed just how unpopular public employee unions have become in the US.
Nearly four out of ten voters who have a union member in their household still voted in favor of Walker, the Republican who shredded collective bargaining rights for public employee unions.
This is speculation, but I would bet you a cup of coffee that many of those “union households” who went Republican weren’t from families with ties to government work.
The reason? Public sector workers have continued to win contracts that bring solidly middle class benefits, while the rest of the unionized (and non-unionized) work force has seen sharp declines in wages and benefits.
Even within the labor movement there is growing tension over this disparity.
After all, a big chunk of those government worker wages and benefits aren’t paid by corporations or by rich folks’ income taxes.
They’re paid through property taxes, which is (depending on your point of view) either a perfectly fair flat tax or a really unfair regressive tax.
Whatever your political leanings, the result is that means middle- and working-class homeowners pay the same rate as the one percenters.
The result has been huge tax pressure on precisely those families who can least afford it, and on families who are seeing their own quality of life erode. That is a formula for severe resentment.
And we’re seeing that conflict play out here in the North Country and across the US.
In Democratic New York state, Governor Andrew Cuomo’s popularity soared after repeated confrontations with public sector unions. Voters in relatively liberal California have also been voting eagerly to curtail pension benefits for public workers.
One interesting factor here is that a growing number of Democrats are leading the “fight” against public employees and their benefits. This from the Wall Street Journal.
San Jose Mayor Chuck Reed, a Democrat elected in 2006, blamed cuts in city services such as library hours and police staffing largely on rising pension costs. … ‘Now that we are getting control of retirement costs, we can cautiously start to restore services,’ Mr. Reed said.
Chicago Mayor Rahm Emanuel — a former top Obama administration official — is also locked in a pitched fight with public sector workers.
This week, the Washington Post urged the leaders of public employee unions to heed these warning signs and come back to the bargaining table.
They would do better to engage governments in a good-faith effort to restructure and preserve public services for the long term. States and localities face genuine financial problems, and the unions share responsibility for them.
Interestingly, I head a similar message this week when I spoke to unionized workers at the Horace Nye nursing home in Elizabethtown, which was sold by the county on Monday as an effort to cut costs.
Shawna Barber, a nurse from Mineville, said there was strong support among employees talking with county leaders and accepting concessions.
“We tried to, we talked to the union about that. We were willing over there to give up anything we had to give up. And because this county’s a whole union, they would not let us do it,” she said.
Unions argue that these kinds of cuts reflect a race to the bottom in a society where income inequality between the wealthy one percent and the rest of us is emerging as a defining factor in public life. There’s some real truth to this.
But sometimes political truth is far more powerful and immediate than statistical truth.
When people pay their property taxes every year, they don’t feel pinched by the rich and the super-rich. When they see their services being cut, while paying more in taxes, they don’t blame Donald Trump or the Koch brothers.
They feel like they’re being fleeced by the teachers, prison guards and highway workers who live right next door and who are experiencing a significantly better quality of life.
“As for the “pie” reference. I would avoid that.”
Well, Paul, a lot of us see it as very much a pie slicing operation, one in which, even as the pie has grown smaller in recent years, a larger portion of it has gone into the mouths of the already overfed top fraction of the one percent.
“Our system is quite competitive.” Right. That’s why when the rich get richer, the poor get poorer. It wasn’t always this way. American captains of industry once realized that if they squeezed every last penny out of their workforce, no one would have the wherewithal to buy their products. Ah, but now, with the international marketplace in full swing, the American worker be damned!
If you want to rely on arcane studies and statistics that can support any position, fine, you win. Despite all the US bashing and bleating about how bad things are here not one of you is leaving. Many of you made your “fortunes” at the public trough and/or during the Reagan inspired economic boom and now all you can do is cry about how badly things suck. Let’s be blunt: people resent public employees because they do not operate in a performance based system and have secure job tenure for the most part. Good pay, great benefits and all you have to do to keep your job is to keep breathing and avoid most felonies. Like it or not that is the perception. Deal with it and count your blessings
Come on Walker, take a look at the “business practices” of Ford, Rockefeller, Morgan, et. al., and then tell me with a straight face that things are getting worse for American working people. It was not so long ago that minorities of all kinds were paid less and even denied employment in many cases.
Larry@
“myown: “socialist” countries have better economic mobility that we do today…” Did I miss the huge wave of US emigration to Russia….or was it Spain…Greece? It’s not a fact.”
In talking to people I am hearing more and more stories of young American college grads going overseas to find work. I have one child who has done so. I was talking to a woman last night who said a friend’s son is doing data entry work in Kabul. Afghanistan may not be socialist but it doesn’t look good for us.
It is a fact.
myown, there are no rich CEO’s in the north country. Teachers pay comes out of people’s pockets of old people who are trying to pay their property taxes, farmers and just regular people, most of whom make less than the teachers and certainly get worse benefits, THAT is the crux of the resentment issue.
Sure if you want to go downstate and tell those rich people living in Westchester and the Upper East side they should pay for North Country teachers salaries I would be ALL for that. But that is a pipe dream and we all know it, we are going to have to pull it out of our own people. When you live in a poor area with now private sector employment worth a crap to speak about, it is a tough sell.
Personally I think we SHOULD pay teachers more they are the future they are really important.
So Larrry. Let me get this straight you are jealous of public employees. Is that correct?
Paul, in reality total income and wealth in the US are pies – we just don’t usually look at it that way. But economists do and we should, especially since the disparity of income and wealth has grown so dramatically. And there are specific reasons why that has happened. I hope we agree this huge disparity is not a good thing for anyone concerned about social stability and economic growth in the US.
There are no absolutes on how the economic pie should be split up unless we want to go back to letting a lord or king make that decision. But we don’t like to talk about it much because it exposes some real unfair disparities. What someone receives in compensation for their labor is partly determined by all sorts of conscious policy decisions including payroll taxes, income taxes, tax deductions, subsidies, etc.. Other types of income like capital gains and profits by hedge fund managers are taxed at lower rates than income through actual hard labor. Obviously, these rates have been altered from time to time, for policy reasons – some misguided.
My point is we should look at the total economic pie and if we did we would see the distortion in how it is currently being divided up based on existing policies. I believe the average person would be surprised at a comparison of historical economic pies and would argue for a return to the policies and tax rates when lower and middle income folks got a bigger slice of the economic pie than they do today.
Mervel, your comment is precisely why education needs to be totally state funded in a more progressive and even fashion. Will that happen? I know it will never happen if we don’t keep raising the issue.
Canton is saying they are going to have to lay off ANOTHER 20 teachers next year.
This is a train wreck, it is not a long term issue to work at, we need solutions in the next year and part of those are going to have to be large concessions from the teachers unions. If people don’t support that then they they should not complain about the school or their taxes.
I think it will be very interesting to see how the Democratic Party attempts to prevent this from becoming a wedge within their party. I think this will play a huge role in the uncoming elections.
It should be very interesting to see how the Democratic Party attempts to prevent this issue from being a wedge within the party. I think this issue will play a huge role in the upcoming elections.
Larry, Ford, Rockefeller, and Morgan made the bulk of their money in the period leading up to the great depression, when things were dark indeed for the American worker. Their labor practices were largely responsible for the rise of the labor movement in this country. (Though Ford fought labor unions, he also famously paid his employees better wages that the market required at the time: “Ford substantially increased its workers’ wages, giving them the means to become customers.”)
FDR’s New Deal combined with government spending in WW II ushered in a golden era of American capitalism in the fifties and sixties, when American workers were well paid and executive pay was relatively modest. The middle class swelled, along with GDP and productivity, and the U.S. experienced economic growth distributed fairly evenly across the economic classes.
This all began to decline in the 1970s due to American balance of payment problems linked with the Vietnam war, and in the 1980s, voodoo Reaganomics, which started the conservative trickle-down, anti-tax, anti-labor, anti-regulation movements that have brought us inexorably to today’s happy situation– a steady slide towards banana republic status.
Of course, you might see things somewhat differently.
Walker,
It is wrong to think of the New Deal as the beginning of a “Golden Era” in American economic and social history. Initiated in FDR’s first administration (1932 – 1936), it had the undeniable effect of providing sustenance for people who had no other recourse, but it did not resolve the Depression. In fact, the recession of 1937 wiped out the modest progress that had been made during FDR’s first term. Unemployment, for example, was still as high as 15% as late as 1940.
What the New Deal did do was usher in a Golden Age of big government and big government spending. The rise of public sector employment and entitlement began with the New Deal. There’s no doubt that government handouts are very seductive (and even necessary sometimes, as in 1932) but they are a dismal failure, overall, as economic policy. The New Deal succeeded when there was nothing else but set the philosophical tone for subsequent Democratic administrations that did not face the same challenges as FDR.
You can’t blame it all on Conservative presidents and their policies. It was Kennedy, for example, who got the Viet Nam ball rolling, initiated inflationary monetary policy and caused a sharp stock market decline by his actions against US Steel. You need to consider the historical perspective and understand that there have been mistakes made on both sides.
“…the recession of 1937 wiped out the modest progress that had been made during FDR’s first term.” You mean the recession of 1937-38 that was brought on by ill-timed austerity measures?
Larry, I don’t blame it all on Republican administrations. Kennedy and Johnson certainly did their parts to mess things up. And if we had listened to Eisenhower, we might have been in a much situation today.
But I have difficulty understanding how anyone could look at the last ninety years of American economic history and not recognize that Keynes was right, and that the Reagan/Bush years have been a disaster for the American worker and for the middle class generally.
Larry, you are right that that FDR’s first four years radically improved the economy and lives of Americans. However, the crash of 1937 followed severe cutbacks in these when FDR and Congress swallowed the conservative line about deficits and big government. The combination of reasonable regulation of business and government spending produced, as Walker says above, economic growth and much more even (some, probably not you, would say “fair”) income distribution across income groups for forty years.
Also, unlike virtually all U.S. history before 1933, and since 1975, the New Deal, wartime, and postwar periods had ZERO massive economic disruptions. Compare this with , since Reagan alone, the S & L, Enron, Worldcom, internet bubble burst, and Great Recession , most of which resulted in massive massive disruption, bankruptcies, loss of savings and pensions, followed by government (taxpayer) funded bailouts. Quiet progress through the Seventies ended with the conservative resurgence, as we move closer and closer, again from Walker , to banana republic status. The amazing thing is that so many. like you apparently, will be cheering all the way.
One thing that has not been said here is that even the workers don’t seem to want to be in the unions. When they make it voluntary it seems like most of them leave? myown, you seem like a big supporter. Are you a member of a union? I have worked under union rules before but did not have to join the union because it was seasonal work. Or some reason, I can’t remember why?
But Mervel makes the the best point. Taxpayers (at all levels) want their money to go as far as possible. In NYS we spend plenty of money per student. The problem is the money is not being spent on educating the children. That is annoying to taxpayers. This solution here isn’t about shaking the Monopoly man (the fat cats) upside down to pay for this.
I never said that the New Deal improved the economy; it did not. I said it provided sustenance for people with no other recourse. As for the recession of 1937, how about Federal Reserve gold policy and monetary deflation as causes?
Are you kidding me about there being no “massive economic disruptions” from 1933 to 1975? I can’t even begin to address that one myself but you might take a look at the decline of the family-owned farm as one of the seminal disruptions in American history.
As far as Keynes goes, I agree with Harry Truman who said (referring to Keynes), “Nobody can ever convince me that Government can spend a dollar that it’s not got.”
“The amazing thing is that so many. like you apparently, will be cheering all the way.”
That is a mean comment. And totally unfair.
But it is typical, when you are losing an argument – attack the person instead of the issue.
Paul-
My comment about Larry’s attitude may have been sharp, but it completely reflects his comments. He may , or may not, believe that the policies that favor the wealthy over government intervention to protect the economy and regular people against the depredations of the worst of them are taking us to banana republic status, but he certainly is cheering them on.
I attacked the person’s facts, and drew an appropriate conclusion.
Larry, unemployment declined and the U.S. economy constantly expanded between 1933 and 1937, under the New Deal. This is so well known it is not worth documenting.
The decline of the family farm has occurred since roughly 1900, mostly as a result of mechanization and agriscience, as fewer and farmers were needed to grow more and more food. It may have been disruptive, but not across the economy, as was the Great Depression, and the other events I mentioned.
It seems to me there are two reasons that public workers have gotten so far a head of private workers. One being that public jobs are very difficult to do without. For example; you can layoff school teachers, snowplow drivers fire fighters and police but only to a certain threshold. In the private sector technology(and outsourcing) has allowed for a reduction in workers. Secondly, long ago public workers were provided with benefits in llieu of wages. The public employees gambled and have won. They have good(some would say outrageous) benefits. Basically they invested in a stock market of sorts and got their payday.
Newt,
You haven’t a clue about my attitude or for whom I am cheering. Additionally, one can not attack facts. The fact is that the New Deal did not solve, cure or fix the Great Depression; the inconvenient truth (to borrow a phrase) is that WW II did. Your comments about the decline of the family farm and the lack of economic disruptions from 1933 to 1975 beggar belief. It seems you want to make it personal but are afraid to say so.
Actually I would support teachers unions more if ONLY classroom teachers were in so called teachers unions.
On the subject of unions I noticed that the new Chief of Canton decided he may not want the job which pays 75,000 per year because he was making more in his old position as Sargent, something well above 85,000. 85, 000 to be a cop in Canton NY? Seriously, I mean once again the union did a good job for these guys, but who negotiated these contracts? Did they care at all about the taxpayers?
I know I know compared to a CEO who make 10 million per year that is nothing and much harder dangerous work. I have not seen any of those 10 million dollar per year CEO’s hanging out in Canton though, where are they so I can ask them for more money?
“cheering them on”? How is that? I think you are over-analyzing. I looked back at all of them and I can’t find anything that comes close to “cheering”.
He just has a different opinion than you. Big deal.
Being a cop is much more dangerous for sure and it is hard work. But I keep seeing this myth portrayed here and in many places that executive management is not hard work. That is totally ridiculous. Some executive managers are slackers for sure but so are some cops.
They don’t blame prison guards. Anyone in a uniform gets a free pass from the lazy “all public sector workers are pathetic leeches” smear.
Just came across this info today. It shows graphically the simultaneous decline of unions in the US and the rise of economic inequality the past 30 years.
http://www.epi.org/blog/union-decline-rising-inequality-charts/
I don’t think anyone here has said that public sector workers are pathetic leaches, I know I wouldn’t say that. Some are good some are bad just like any other field.
I just think that when you make your money from the taxes of the public you are then open to the scrutiny of your bosses, the taxpayers-citizens.
I don’t know, should a police officer in a village of 6000 people make 85,000 per year? Does that makes sense? This is the question that citizens should be able to be a part of and answer. These questions will get more scrutiny when the economy is bad and people are struggling to pay their taxes.
myown, that is an interesting study. But if you look at the conclusions since 1999 union numbers have remained mostly flat and income inequality has continued to rise. It states that this must be due to other factors that have nothing to do with unionization. Also, they conclude:
“The relationship between declining union coverage and rising inequality is starkest in the earlier years (between 1979 and 1989). ”
This is a period of relatively high (very high actually) income tax rates compared with today. Especially for higher income individuals. One of the solutions being offered today is to raise income tax rates back to those levels especially for higher income earners. Seems to me like that won’t fix anything since you had even faster rising income inequality during those years of higher taxation?
What am I missing here?
It is interesting that when we take out our wallets and pay taxes we feel we have the right to question every public employee’s salary or benefits. Yet when we take out our wallet and pay for gas or food or electricity we are less inclined to scrutinize what employees or CEOs make – even though it affects what we pay.
The majority of public employees receive salaries that, added to the income from an employed spouse, allows them to maintain a middle-class life. If taxes are insufficient or can’t be raised then we need to ask why? Instead we criticize teachers and cops and foster resentment for what they have. We should be asking why the community can no longer afford to pay public employees decent salaries. What are the incomes in the community like and why are they so low. Why are private sector wages so low? That is what we should be focusing on.
Plenty of companies are making record profits and certainly could afford to pay their employees more. Why don’t they? It is the lack of unions in the private sector to represent workers and offset the power concentrated at the top. Without no employee counterbalance company executives maximize their own salaries. And profits, as a result of hard working employees, are distributed to stock holders instead of employees through better pay. To add insult to injury – stockholders, who never had to lift a finger, will pay less taxes on their gains than the employees will pay on their labor wages. As a result we now have the greatest disparity in income and wealth in the US since the 1920s.
And the average person’s income has stagnated making property and school taxes harder to pay.
Another note on the Euro immigration debate way upthread: “In emigration/immigration terms and after centuries of net emigration, Spain has recently experienced large-scale immigration for the first time in modern history.”
http://en.wikipedia.org/wiki/Immigration_to_Spain
As far as unions go I think that most people (myself included) support paying fair wages and benefits for public sector employees, and if they need to be unionized to do that fine. But myown I am afraid that you are stuck in a difficult position defending a system that has included years of abuse by public sector union officials that have given many employees too much money and too many benefits. Now in an effort to cling to those gains they are throwing it all away. That isn’t the taxpayers fault or their representatives. Look here in NYS, for example due to the Tri-Borough amendment if the union negotiators and the folks negotiating for the tax payers come to am impasse all contracts are frozen and that includes all pre-approved wage increases. What that sweet deal means is that when we are stuck in a tough financial position the unions can simply walk away from the table. Makes absolutely no sense if you think about it, seriously?
BTW, this civil service law I describe above also keeps union contracts in effect even after they have expired? Ridiculous. There is no way that you can seriously defend something like that, it clearly puts the taxpayers at a huge disadvantage in a negotiation.
Paul writes “One of the solutions [to rising inequality] being offered today is to raise income tax rates back to those levels [in effect between 1979 and 1989] especially for higher income earners. Seems to me like that won’t fix anything since you had even faster rising income inequality during those years of higher taxation?”
Those marginal rates for high income taxpayers went from 70% to 28% during that period, having previously ranged from 67% in 1917 to 94% in 1944. They were at 91% in 1954, 77% in 1964 and 77% in 1964, right through the most sustained growth rate we’ve seen in recent history. One might just as well conclude that the key to growing the economy so that there’s enough for everyone is to go back to much higher top rates than anyone that I’ve seen is suggesting.
Obviously things are more complicated than just tax rates and unionization, but it seems crystal clear to me that high tax rates on high income individuals do not, in themselves, kill jobs.
Paul, if you honestly believe that lowering top rates would help reduce inequality, I’d be interesting in hearing how you think that would work.
I know, I know, you didn’t say that. But you did say it wouldn’t help. So what do you think would help? Or do you think the American dream will survive years of soaring inequality just fine? Or doesn’t the dream matter any more?
“But myown I am afraid that you are stuck in a difficult position defending a system that has included years of abuse by public sector union officials that have given many employees too much money and too many benefits.”
Paul, public unions got what publically elected officials agreed to. And during many economic downturns public employees went years with no raises. That you think public employees are now overpaid is more an indictment of the private sector where wages have stagnated for 30 years. And why – see my post above.
You are making way too much of the Tri-borough amendment. Yes, contracts are continued but only the basic elements. For instance, a contract might have had cost of living increases but those ended with the contract and do not carry over via the Tri-borough amendment. In NYS public employees gave up the right to strike. Both management and the unions believe the Tri-borough amendment is helpful to avoid large scale disruptions of services. And depending on the economic circumstances at the time of contract negotiation it can be advantageous to management to delay settlement of a new contract.
Two public employee benefits that some people resent are costs of pensions and health insurance. And both of those were screwed up by the private sector. It was deregulation and the elimination of the Glass-Steagal Act which allowed combining banking with Wall Street casino betting that gave us the financial crash in 2008. Pension funds still haven’t recovered from being plundered by the Wall Street sharks. As a result, government contribution rates have had to increase to make up for the losses. And that requires raising taxes to replace the value stolen by Wall Street. Public employees were not responsible.
Health insurance is the same thing. Rates keep going up because market forces do not work with health care, and private health insurance companies focus on profits, not managing provider costs. This again is not the fault of public employees. It is the fault of government not to move to national health insurance.
“public unions got what publically elected officials agreed to” How is that not the same as CEOs getting what their stockholders agree to? It’s easier to demonize someone that you don’t know who makes $10M annually than the schoolteacher next door who makes “only” $50 – 100K. When did it become the job of insurance companies to manage provider costs? That’s the government’s job and they’ve failed miserably at it. And while I’m at it, how is deregulation and the Glass – Steagal Act the fault of the private sector. Both were government actions, no? You can’t have it both ways: blame the government when it’s a Republican administration and blame the private sector when the Democrats are in.
Ahhh, National Health Insurance: something else you want to get for nothing. If you do, it will be worth exactly what you pay for it.
oa, the net rise in immigration to the EU is due to people from neighboring countries that are not part of the EU, i.e., Turkey. It is not due to emigration from the US. As for the person who cited the case of someone who “emigrated” from the US to Afghanistan as proof that there’s less upward mobility in the US, get real, please! It took me all afternoon to stop laughing.
Larry, I am not sure why I bother to respond to your vitriolic comments as you have demonstrated no use for facts when they interfere with your ideological mindset. But…
“When did it become the job of insurance companies to manage provider costs? That’s the government’s job and they’ve failed miserably at it.”
Since when has the government had the responsibility of controlling health care costs? Oh wait, that’s what the Affordable Care Act is supposed to do. But since most of it hasn’t taken affect yet and you most likely want to repeal it I guess we should leave the health insurance companies to manage costs.
“…how is deregulation and the Glass – Steagal Act the fault of the private sector?”
Really? I mean REALLY? Do you really think government politicians thought up repealing Glass-Steagal by themselves? With no private sector involvement? REALLY? You don’t think the banks and Wall Street didn’t exert any influence or donate any money to politicians to get it repealed? REALLY?
BTW, Democrat Bill Clinton signed the repeal bill. And it will always be the most significant stain on his Presidency.
‘”public unions got what publicly elected officials agreed to” How is that not the same as CEOs getting what their stockholders agree to?’ Fine, so let’s just tear up those CEO compensation packages along with the union pension plans.
“how is deregulation and the Glass – Steagal Act the fault of the private sector?” Because private industry spent lavishly to persuade elected representatives to vote against the public interest (supported of course by bogus rationales provided by “conservative” think tanks). The finest government money can buy.
“National Health Insurance: something else you want to get for nothing. If you do, it will be worth exactly what you pay for it.”
That’s funny, Larry– Canadians and the French don’t seem to think its worthless. And did you catch that lovely little irony that Palin’s parents used to go to Canada to scarf up free medical care? Kinda like Ayn Rand collecting Social Security (she did, you know).
“It took me all afternoon to stop laughing.”
Boy, that’s proof positive that it’s false! Yup, that’s good enough for me, boy! Larry’s gut knows all!
“the net rise in immigration to the EU … is not due to emigration from the US.”
Got news for you Larry: A Growing Trend of Leaving America. “Europe still draws many of these American emigrants, but even more have relocated in Canada and Mexico. Others are trying out Australia, New Zealand, or one of the new economies of Asia, while a growing stream flows southward to Central and South America.”
“…at least 3 million U.S. citizens a year are venturing abroad. More interesting, the biggest number of relocating households is not those with people in or approaching retirement but those with adults ranging from 25 to 34 years old.”
I didn’t say it was false. It was ridiculous and made me laugh.
But wait! There’s more!
So Many Americans Moving to Europe
“People are moving to Europe for a variety of reasons. One of the most important issues that make people move to Europe is health care. America has a flawed health care system and everyone is very aware of it. If you cannot afford to pay for your health care then you are out of luck. It is a system that only benefits the rich and leaves the poor to suffer and often die. People get stuck in bad situations too. If you are sick and have no insurance then you won’t get treated. If you are living from paycheck to paycheck and you have no insurance, and you get sick, then you are up a creak without a panel. This affects so many people in America it is easy to see why so many are moving to Europe.
“Many people are also moving to Europe for better jobs. Most jobs in Europe are not just better meaning that they pay more or are just nicer jobs to work. Many jobs also just have better work packages. Europeans in general have more vacation time, more sick time and better benefits packages. It really shows through their society as well. People are in general less stressed out and even healthier than in countries that work their people to the bone.”
Etc.
Why not cite the source, Walker? Because it is a blog post on Topix. Really?
myown the basic and intrinsic difference is I don’t have to buy any of that crap from the CEO’s of private corporations, if I don’t pay the salaries of those who work for the government, I go to jail. Taxes have the force of law behind them, buying a new car or buying a particular brand of toothpaste or shoes does not.
Maybe we should make the products that public unions produce optional like we do the products of private companies and they can market them and we can choose to buy them or not? I mean if they are SO great they should have no problem selling them right?