First They Came for the Greeks: Round 2, Public Union Negotiations

“Government should be set up so that no man need be afraid of another” – Charles de Secondat, baron de Montesquieu.

A few weeks ago we considered the riots in Greece, claiming that the same sort of situation could happen here. Essentially, government promises have exceeded, vastly exceeded, their ability to pay. At some point, the government either has to ramp up taxes on the citizens to meet their promises, or let those promises fail. Either way, there is a group of people that is going to be upset.

Driving home yesterday, I caught a commercial on the radio that speaks directly to the issue. It was paid for by a police union, demanding that the city of Baltimore not cut pension benefits in its attempt to balance the budget. They finished with a cute little tagline of “[police] pension equals our safety.” Here we go.

If you haven’t guessed yet, this is going to be an anti-union rant. But, before I rant, let me make two rather key observations and caveats.

First, in today’s America I find it quite easy to draw a distinction between the union and its members. When unions get big enough, they tend to take on a life of their own, not necessarily representing the desires of the members. They behave very much like the federal government, doing what they deem best for the rest of us, even if we’re too stupid to understand. So, when I say things about an auto-workers union, or a police union, or a teachers union; please don’t take that as me being anti-auto-worker, anti-police, or anti-teacher. I am not. In fact, I think the good workers in each class could make a lot more money if we weren’t forced by the union to pay equal wages to the slackers – no merit pay.

Second, I also draw a distiction between private unions and public unions. In a private sector union, negotiations are fair game. The company is making a certain amount of profit, and the workers would like to have a bigger share. Individually they have almost no bargaining power – they can only demand pay based on their ability to get a better job elsewhere. But collectively they can hold the threat of disrupting production by all walking away together. Each side wants something (a bigger piece of the pie) and each side has leverage. Let the negotiations begin. As long as neither side breaks the law, then I’m fine with this. The right to unionize is wrapped up in freedom of association and I fully support it.

Public unions are a different issue. In the business world, you organize for collective bargaining, which may lead to a larger share of the business profits going to the workers. In the public sector, there is no such thing as profit. The government taxes the citizens and distributes the receipts to fund various projects, programs, and services (including teachers and police). To unionize against a business is to say “we want a bigger share of the profits and we’re willing to stand together to get it.” To unionize in the public sector is to say “we want a bigger share of the citizens’ wealth and we’re willing to stand together to get it.”  If you then add to this “and we’re willing to jeopardize the services that we’ve been contracted to perform in order to get that extra money out of taxpayer pockets” it goes too far.

(Especially when the issues are as simple as the ability to retire with full benefits after 20 years and automatic benefit increases in years the pension investments do well. Seriously, if you start at age 20 you can retire at 40 with full pension benefits. Further, when the investments do well you get automatic pension increases – that don’t go away when the fund does poorly. This is nonsense. Why should the taxpayers feel guilty about eliminating such a gold-plated system? I have no idea.)

This is not a kingdom. It is not a theocracy. It is not a military dictatorship.

The voters ought to be outraged, absolutely outraged that the union posted such an offensive commercial; that they would even intimate that public safety is tied to their pension plans, and that losing this negotiation would directly jeopardize the public. If the city council knew what they were doing, they would realize that this is a sever tactical error and go on the offensive right away. The union loses moral authority when they make such a claim – and could easily be exploited by a skilled political operator. That said, I doubt the Baltimore city council has any such operators.

I wish everybody could have flush pension benefits and good pay – a high standard of living. But we’re in some economically challenging times. While some sectors of the economy are working harder in hopes of keeping their jobs, unions have gone the other way, demanding even bigger raises and better benefits. Again, the private-sector unions are welcome to do so. As more of them are fired en mass the rest will figure it out (like the Boeing factory in Seattle that recently declared its intent to move to South Carolina instead of renewing the union contract). But to hold the public hostage is beyond the pale.

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