Obama is so keen to preserve and nurture public sector unions because they are the lifeblood of the contemporary Democratic Party. To an astonishing extent, the unions are the government in many locales. They elect officials and then sit down to bargain with them over their salaries and benefits. Since they are essentially bargaining with themselves, they generally make out quite nicely. It’s a corrupt and ultimately unsustainable practice. Sooner or later, as Margaret Thatcher observed about socialism, they will run out of other people’s money. Many of us believe that day is nigh, but the unions and their enablers apparently have calculated that there is at least a little more ruin they can inflict.
Still, the issue in Madison is not just the future of public-sector unions. In my view — it’s one thing I agree with FDR about — they should once again be declared illegal, as they were in all states until the 1960s (currently about 40 percent of government workers are unionized). No, important as the fight over public-sector unions is, that battle is only one aspect of a much larger battle: the battle over the fate of individual freedom in a neo-collectivist age. As I said above, Obama has done us the great service of dramatizing the stark choice that faces us. At least since LBJ and his preposterously misnamed “Great Society” programs, the United States has been lurching down the collectivist path. The government has intruded itself in one aspect of life after the next, always with ruinous results. It is ironic, I suppose, that a crossroads should be reached in Madison, Wisconsin, a city named for that great patron of limited government James Madison. “The powers delegated by the proposed Constitution to the federal government are few and defined,” Madison wrote in Federalist 45.Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part, be connected. The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State.
The Means of Coercion - James Taranto
In any case, it seems to have escaped Krugman's and Drum's notice that the Wisconsin dispute has nothing to do with corporations. The unions' antagonist is the state government. "Industrial unions are organized against the might and greed of ownership," writes Time's Joe Klein, a liberal who understands the crucial distinction. "Public employees unions are organized against the might and greed . . . of the public?"
The "labor movement" in America has increasingly come to consist of people who work for government, not private companies. As the BLS notes, the union-participation rate for public-sector workers in 2010 was 36.2%, vs. just 6.9% for private-sector workers.
There is a fundamental difference between private- and public-sector workers. A private-sector labor dispute is a clear clash of competing interests, with management representing shareholders and unions representing workers. In the public sector, as George Will notes, taxpayers--whose position is analogous to that of shareholders--are usually denied a seat at the table:Such unions are government organized as an interest group to lobby itself to do what it always wants to do anyway - grow. These unions use dues extracted from members to elect their members' employers. And governments, not disciplined by the need to make a profit, extract government employees' salaries from taxpayers. Government sits on both sides of the table in cozy "negotiations" with unions.Collective bargaining in the public sector thus is less a negotiation than a conspiracy to steal money from taxpayers. The notion that this is "in the economic interests of the middle class" for government employees in Wisconsin and elsewhere to get above-market wages and extremely lavish benefits is just laughable. Sure, government employees are "middle class," but so are the vast majority of taxpayers who don't enjoy the special privileges that come from owning the means of coercion.
The Rubicon of Wisconsin - Charles Krauthammer
In the private sector, the capitalist knows that when he negotiates with the union, if he gives away the store, he loses his shirt. In the public sector, the politicians who approve any deal have none of their own money at stake. On the contrary, the more favorably they dispose of union demands, the more likely they are to be the beneficiary of union largesse in the next election. It’s the perfect cozy setup.
To redress these perverse incentives that benefit both negotiating parties at the expense of the taxpayer, Walker’s bill would restrict future government-union negotiations to wages only. Excluded from negotiations would be benefits, the more easily hidden sweeteners that come due long after the politicians who negotiated them have left. The bill would also require that unions be recertified every year and that dues be voluntary.
Recognizing this threat to union power, the Democratic party is pouring money and fury into the fight. Private unions have shrunk to less than 7 percent of the working population. The Democrats’ strength lies in government workers, who now constitute a majority of union members and provide massive support to the party. For them, Wisconsin represents a dangerous contagion.
Hence the import of the current moment — its blinding clarity. Here stand the Democrats, avatars of reactionary liberalism, desperately trying to hang onto the gains of their glory years — from unsustainable federal entitlements for the elderly enacted when life expectancy was 62 to the massive promissory notes issued to government unions when state coffers were full and no one was looking.
Obama’s Democrats have become the party of no. Real cuts to the federal budget? No. Entitlement reform? No. Tax reform? No. Breaking the corrupt and fiscally unsustainable symbiosis between public-sector unions and state governments? Hell no.
The Political Economy of Government Employee Unions - Thomas J. DiLorenzo
Thus, when government bureaucrats go on strike they have the ability to completely shut down the entire "industry" they "work" in indefinitely. The taxpayers will complain bitterly about the absence of schools and garbage collection, forcing the mayor, governor, or city councillors to quickly cave in to the union's demands to avoid risking the loss of their own jobs due to voter dissatisfaction. This process is the primary reason why, in general, the expenses of state and local governments have skyrocketed year in and year out, while the "production" of government employees declines.
Day of reckoning on pensions - LA Times Editorial
The housing bubble and subsequent Wall Street collapse wreaked havoc on the nation's retirement savings, as many pension funds and 401(k) plans suffered losses of 30% or more. State and local governments are now facing huge unfunded pension liabilities, prompting policymakers to scramble for ways to close the gap without slashing payrolls and services. But a new report from the Little Hoover Commission in Sacramento makes a more troubling point: Many state and local government employees have been promised pensions that the public couldn't have afforded even had there been no crash.
...
A bipartisan, independent agency that promotes efficiency in government, the Little Hoover Commission studied the public pension issue for 10 months before issuing its findings Thursday. Much of the 90-page report is devoted to making the case that, to use the commission's blunt words, "pension costs will crush government." Without a "miraculous" improvement in the funds' investments, the commission states, "few government entities — especially at the local level — will be able to absorb the blow without severe cuts to services."
The problem is partly demographic. The number of people retiring from government jobs is growing rapidly, and longer life expectancies mean that a growing number of retirees will collect benefits for more years than they worked. But the report argues that political factors have been at least as important in driving up costs, starting with the Legislature's move in 1999 to reduce the retirement age for public workers, base pensions on a higher percentage of a worker's salary and increase benefits retroactively. The increases authorized by Sacramento soon spread across the 85 public pension plans in California.
Compounding the problem, the state has increased its workforce almost 40% since the pension formula was changed and boosted the average state worker's wages by 50%. Local governments, meanwhile, raised their average salaries by 60%. Much of the growth came in the ranks of police and firefighters, who increased significantly in number and in pay.
