February 20, 2011
It's about time. I've been waiting for this debate to mature for 15 years.
The battles in Wisconsin and New Jersey over public sector union benefits are merely financial precursors to a much bigger ideological war that has been on the horizon now for years, if not decades. When you acknowledge the coming battle, you realize that Governors Walker and Christie -- courageously as they are behaving -- are only nibbling at the edges of the real issue.
And the real issue is whether public sector unions should even be allowed to exist. Frankly, when even a modicum of common sense is infused into the equation, the answer is a resounding no. And the foundational reason is simple. There is no one at the bargaining table representing the folks who are actually going to pay whatever is negotiated.
Gee, what could possibly go wrong?
Well let's see what went wrong: California, New Jersey, Illinois, Michigan, Chicago, New York State, New York City, Wisconsin...on and on I could go including almost every city and state where government workers are unionized.
Oh, and have you seen pictures of Detroit lately?
The problem is that our country has been lulled to sleep over decades of hearing that government workers are dedicated and low paid public servants who trade good pay for security. And every time a union pay debate came up, it seemed like only cops and fire fighters and teachers were mentioned. No one stopped to think that most government workers are actually bureaucratic charmers like those we see at the DMV and other government offices -- and not "heroic teachers" or crime fighters.
But as long as the private sector was humming along, there was no reason for reality to permeate that myth in most peoples' minds. But the reality is that government workers long ago passed private sector workers in pay and benefits, and now the compensation is more like 150% or even double, factoring in all the benefits, including more vacation days than private sector workers enjoy. And of course, the inestimable value of job security remains intact and strengthened -- while all of us in the private sector deal daily with the risk-reward constraints of reality that are only getting riskier.
And along the way -- with a public school teacher-educated population that understands virtually nothing about economics -- the sheer idiocy of the concept of government unions escaped almost everybody. It's almost as if the union teachers were lying to their students about economics on purpose.
Consider: Unions exist primarily for the function of collective bargaining, where the union bosses will negotiate on behalf of all the workers with the management of a company over pay and benefits and other conditions. This built-in adversarial relationship along with the realities of a limited resource -- known as operating revenues -- do a pretty good job for the most part of keeping contracts in line.
The union bosses represent the workers. Management represents everybody else, including the stockholders, vendors, customers and potential customers of the company. In other words, management represents everyone whose interests are served by keeping payroll costs down.
In the case of a government workforce, those whose interests are served by keeping costs down would include all who pay taxes and fees to said government. In other words, the universe of folks represented by management is far larger than that represented by the union. This inherent tension is the invisible hand of reality that keeps collective bargaining in line.
However, public sector "collective bargaining" is a bad joke, given that there are only chairs on one side of the bargaining table. The bigger universe of interested parties have zero representation in the process. There is no natural force working to keep costs in line.
Moreover, quite often the very politicians who are "negotiating" with the public unions are politicians who have been financed by those same unions. At least Bernie Madoff ripped off his clients with some panache. No such style is even required in a public sector union negotiation when the folks in charge are bought and paid for Democrats.
Under any circumstances and in any economy, it is simply a matter of time before these costs reach a tipping point. We are at that time. There is simply no more money to give to these public sector unions -- period.
And that is why we are seeing what we are seeing in Madison this week and it is why we have seen the emergence of Chris Christie as a national phenomenon. And I welcome it. Things are finally so bad -- that they are good. And by good, I mean that folks now cannot help but pay attention to the issue of public sector unions.
I submit that the very existence of these unions has only been allowed to happen because it's the kind of issue an electorate is never forced to confront -- until they are forced to confront it. And now they are. There is, as Charles Krauthammer said, a bit of an earthquake in the country. People are sensing that the nation is spinning off a cliff.
And of course it is, and public sector unions are one huge reason why. This conclusion is inescapable. And when you understand that, you understand that public sector unions cannot be allowed to exist. If they are, we will never turn back from the cliff.
