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Public Workers join the New Reality  Too bad the showdown with public employee unions has come to this, however long in the making. One can be pro-union and still feel a growing resentment at these workers’ ability to set their own dream retirement benefits as the private sector’s were being amputated. Not that they are to blame. They got what they could — it’s the American way — though they overplayed their hand by resisting honest efforts to reform government, schools above all.The public workers respond that rather than race to the bottom, others should rise to their level. But the difference between them and others is that they got to fire their employers at the ballot box. Their payoff came in the form of future goodies that wouldn’t hit the taxpayers until the politicians were long gone. Hence, retirements at age 50 and gold-plated health coverage for life.
“Do you know how much of our retirement plan we are funding ourselves?” an aggrieved teachers union official asked. To which I replied, “No, I don’t know, but I happen to be funding 100 percent of mine.”
Public employees are fighting to keep their old-fashioned defined-benefit plans, which have all but disappeared in the private sector. Such plans promise to pay a set amount to each qualified retiree. If the investments can’t keep up with the promises, the employer must make up the difference — in the case of government workers, the taxpayer.
Private-sector workers are now in defined-contribution plans, such as 401(k)s. These are self-funded through pre-tax deductions from the employees’ paychecks. The workers usually decide how much money goes in and choose an investment strategy. If they don’t contribute enough, or their investments go south, then tough luck.
The employer may help by putting in some matching contributions, though many have stopped doing that.
Federal workers, by the way, have 401(k)-like options, for which the government still offers a generous match.Most states have laws forbidding changes in pension plans of their current workers — something private employers do all the time. But Alaska and Michigan have moved to 401(k)-type plans for their new hires, and several others have created hybrid retirement systems.
It stuns to hear policy analysts still regarding public workers as a special class deserving special protections. For example, Teresa Ghilarducci at the New School for Social Research argues that 401(k)s are a “bad deal” for taxpayers. “Dollar for dollar,” she writes, “a traditional pension plan yields more pension benefits than do 401(k) plans because 401(k) management and investment fees are three times higher.”
First off, whose dollar is she talking about? If public workers depended on 401(k)s for their retirement, taxpayers would be spending far fewer of theirs. Really, had traditional plans provided employers a better deal, the private sector wouldn’t have frozen them years ago.
There are good arguments against the 401(k). The fees can be high, as Ghilarducci notes, though they can be minimized by putting the money in a low-fee index fund.
Alicia Munnell, formerly on the Council of Economic Advisers, points out that private-sector workers tend to put too little money in their 401(k)s, and many will face a threadbare retirement. Thus, she concludes, they are useful but not an alternative to defined-benefit plans for the public sector.
To this I ask, what makes public workers a species apart from everyone else? If 401(k)s are flawed and need fixing — or another way to provide for retirement is superior — shouldn’t the remedy be available to all American workers?
There’s no need to demonize government workers. But it’s time they joined the rest of us in the new reality. If they don’t like it, well, neither do we.
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The answer to that question, according to the following recent editorial in The Washington Examiner is “Yes!”

One need look no further than two Michigan officials — William Cooper, the city manager of Hamtramck, and Tom White, associate director for labor relations of the Michigan Association of School Boards — to grasp the seriousness of the financial crisis exploding across this country. Cooper told the New York Times that his city government “maybe” can pay its bills through March 1. Hamtramck has already cut what it could from its budget, reducing spending for parks, senior centers and road maintenance. Now city leaders say their only remaining option is to file a municipal bankruptcy. If Hamtramck is allowed to do that, according to the Times, at least another 30 Michigan cities will quickly follow suit, so state government leaders aren’t likely to permit such bankruptcy filings.

White says public school districts across Michigan face similar dilemmas. Their situation could be quickly and dramatically improved “with the stroke of a pen.” But that stroke likely won’t be taken for the state’s school districts for the same reason it won’t for Michigan’s desperate localities — public employee unions reflexively oppose cuts in their tax-funded compensation programs, including salaries, retirement and health benefits. White estimates that as much as $300 million could be saved merely by requiring public school employees to pay for 20 percent of their health benefits — they currently pay nothing. By contrast, private-sector employees with company health plans pay a nationwide average of 26 percent, according to the Kaiser Family Foundation. And Cooper says Hamtramck’s police and firefighter unions have steadfastly refused to renegotiate pay and benefits contracts that eat up 60 percent of the city’s annual budget. “They kind of have the Cadillac plan, and we’d kind of like the Chevy,” he told the Times.

Michigan authorities aren’t alone in facing years of collective bargaining agreements that promised public workers far more pay and benefits than taxpayers could afford. The Heritage Foundation’s David John observes that “Chicago has only about $22 billion in pension assets to pay for $66 billion in pension promises to its city workers, while New York City has $93 billion available to pay $215 billion in city pension promises, and Boston has only $3.5 billion available to pay $11 billion in promises.” The Pew Center for the States estimates total state obligations at $2.8 trillion, with only $2.3 trillion available to cover them.

It is no coincidence that President Obama and congressional Democrats want federal taxpayers to bail out state and local governments in order to save municipal jobs and services. The real beneficiaries of the bailouts would be the very public employee unions whose excessively generous pay and benefits caused the fiscal crises. Sooner or later, union leaders must realize the only alternative to major concessions today is facing the reality of no benefits being paid at all tomorrow. And voters should reject politicians who lack the will to confront unions on this issue.

CURRENT LABOR UNION TOPICS

The following is a description of what a union is and how they are created. Unions have become very important to the American Taxpayer in that they are largely responsible for the election of Barack Obama. Unions contributed upwards of $600,000,000 to his campaign! Ironically, most of it came from your pocket. I will explain how that happened after we explore the nuts and bolts of unions.

My qualifications are as follows: I was Management Representative in three UAW campaigns to organize our work force. Our group consisted of 186 potential union members. I worked closely with an outstanding labor attorney. He was very pro management and understood unions and how they worked. We were aggressive in defending our right to be union free and believed it was in the best interests of our workforce to remain union free. We won the first two campaign votes outright and ultimately won the third – even though we lost the last election by 4 votes. The workforce came to agree with us after several months operating under the contract negotiated with the UAW.  The workers lost benefits and many had reduced paychecks. Work rules were very restrictive and violations resulted in harsh punishment. The Bargaining Unit voted the union out as soon as they could legally do so. A simple explanation of union organizing follows.

Question: What is a Union?

Answer: A Union is a business, not a fraternal organization. The product is a contract made between an employer and the Union. The contract establishes work rules for the Bargaining Unit.

Question: What is a Bargaining Unit?

Answer: The non-supervisory group of people who perform the everyday tasks of a business.

Question: How is a union formed?

Answer: Unhappy employees may contact an organizer or an organizer may solicit employees as they enter the workplace or leave the workplace. The organizer collects names of supporters and may present the employer with a listing demanding an election be held, at the employer’s expense, to certify the organizers allegations. If an election is held and the union wins a simple majority the results are presented to the NLRB (National Labor Relations Board) and the NLRB with the Union/Organizer as the agent certifies a Bargaining Unit.  Contract negotiations are set to establish the working relationship between the parties. Once a contract has been agreed upon by the two parties (Union and Employer) it is presented to the Bargaining Unit by the organizer and voted upon by the Bargaining Unit.  If accepted the effective date for implementation of the contract is set and an arms length relationship between the employer and the Bargaining Unit goes into effect. The contract remains in effect for the term specified in the contract. At the completion of the contract term a new contract is negotiated unless the Bargaining Unit chooses to de-certify it’s relationship with the Union.

Question: What’s the incentive for the Union to incur the expense of organizing?

Answer: Money. Lots of it. The typical Bargaining Unit member pays the union 2 hours wages each week. If the Bargaining Unit member earns $15/hr. that means the union gets $30/week per Bargaining Unit member. If there are 100 members, that computes to $3000/week. Extending to 1 year you get $156,000.  To secure that money, the union has very little direct costs. A union with millions of members generates a lot of cash. The most important issue for the union is to acquire “dues checkoff”. This is a procedure whereby workers agree to ask the company to automatically deduct their dues from their paycheck and pay the union with one check. Without “dues checkoff “ the union would have to collect dues from each individual.

I think labor unions are just fine in the private sector. Businesses can bargain hard and keep their costs down or they can get fat and lazy and wind up like GM, Chrysler and Ford. Businesses who treat their employees badly can expect to see the organizer visiting their employees. The more enlightened companies treat their employees well and consequently their employees see no need for a union.  The employee relationship with the business changes when a union is involved. The employees work for the union and are governed by the contract. The company and the union, not the employee and their supervisor, handle employee disputes.

Unions are always seeking to make more money. Since the union gets money from member dues they seek ways to increase their take from dues. The two most common ways they do this is to bargain for higher wages and increase the number of workers in the bargaining unit. The union wants to make restrictive work rules in order to cause additional workers to be hired. For example, a hydraulic tech cannot remove sheet metal panels from an airplane even though a screwdriver is all that is needed to do the job.  So, the hydraulic tech stands by while the sheet metal tech removes the panel. Then the sheet metal guy stands by while the hydraulic tech does his job. Then the sheet metal guy can button up the panel and the airplane can go fly. In non union shops the hydraulic tech would remove the panel and do his work.

A long standing rule for unions was that no government workers could belong to a labor union. The reasons were obvious – a strike by government workers could have devastating effects on our economy and the incentive to bargain hard in order to keep costs down just isn’t there in tax supported organizations. Jimmy Carter’s administration altered the Labor laws to allow government workers to join a union provided they gave up the right to strike. Recall the air controllers strike that occurred in the early part of Ronald Regan’s presidency? The union decided to flex its muscles for better pay and working conditions, even though law forbade them to strike. The unions took on the wrong guy and all the air traffic controllers got fired! However, they did get the right to organize federal workers.  A small price to pay for such a large plum!

Earlier in this paper I mentioned that a very large part of the $600,000,000 contributed to Obama by the unions came from your pocket. This is true because it comes from tax dollars whereas private sector dues come from the services/merchandise sold by the employer. The costs of a private sector union are lumped in with the costs of doing business – adding to the cost of doing business. Not so in the public sector. Those dues are paid from tax dollars in that every thin dime spent by the government comes from taxpayers.  My definition of a taxpayer does not include those on tax-supported payrolls.  Yes, they “pay taxes” but in reality they are just returning a part of their pay to the treasury from whence it came.

Labor unions in the public sector are a disaster for private sector taxpayers. Federal employees earn much more than their private sector counterparts. In 2009 the average Federal worker earned about $28.64 /hr.  ($59,571 annually) and had a $32,115 (annual cost) benefit package. Compare this to the private sector worker who earns $18.27/hr  ($ 38,001 annually) and has a $9,882 benefit package. ¹ The dues gathered from the high paid government workers group are truly significant. All of these wonderful benefits came to be after the Carter years. The union bargained for and got all this in a relatively short period of time. So why didn’t the management in these bureaucracies bargain hard for the taxpayer? Most of them are ideologically sympathetic. However, I have heard high paid people in the government say that the way they get ahead is to spend their entire budget and then some. So where is their incentive? Currently, Obama is creating new agencies and staffing them with loyal SEIU members. This is a double whammy to the taxpayer. Not only do we get the burden of paying their high wages and benefits we also get slammed when the union dues are used to further the advance of the Obama progressive agenda.

You can thank Congress and Jimmy Carter for the gift of unions for government workers. I think it is interesting that the map below showing States who have Right to Work laws are mostly Red States. The forced unionism states are mostly Blue States. It is also true that the SIX States that are “solvent” are all Red States while all the States that are bankrupt or near bankrupt are all Blue States.

Click link for a map courtesy of: http://www.nrtwc.org/. I suggest that you visit this site if you are interested in keeping up with the governments union activities.

Oscar T. Unger/Tiger Team: Union Watchdogs

EXPOSED: Big Labor Announces “Secret Plan to Destroy the Right Forever”

In a surprising display of honesty about their true agenda, union bosses and Far Left activists participated on a panel at the Netroots Nation conference called “The Secret Plan to Destroy the American Right.”

What’s their “secret plan” to expand the power and size of government and raise taxes on hard-working Americans? It’s passage of the woefully misnamed Employee Free Choice Act, more accurately called the Card Check Forced Unionism Bill.

Union bosses apparently see the billions of forced dues dollars that the bill would funnel into pushing Organized Labor’s radical political agenda as THE major selling point for the bill.

Unfortunately for the panelists and the Big Labor hierarchy, but fortunately for the American people, there’s nothing secret about the Card Check Forced Unionism Bill and how it would obliterate the rights of American workers. On the National Right to Work Foundation’s Freedom@Work blog, we’ve kept concerned citizens informed about this union boss power grab:

* Expert legal analysis explaining how the Card Check Bill would destroy the secret ballot in union certification elections;

* Workers in Albion, Indiana tell Fox News about the real life intimidation they felt during a card check organizing drive by the militant United Auto Workers (UAW) union;

* A former union president testifies before Congress about the dangers of card check organizing;

* Worker explains to Senate labor committee how union goons lied to him to get him to sign a card;

* National Right to Work president Mark Mix discusses card check and union intimidation on a nationally syndicated radio program;

* At the 2009 Conservative Political Action Conference, Mix demonstrates why union bosses love card check;

* Far Left icon George McGovern writes in the Wall Street Journal about another disturbing feature of the Card Check Forced Unionism Bill: mandatory binding arbitration.

Check out our full archive on card check.