Unionized into Bankruptcy

How Big Labor's appetite for money and power threatens to do far more damage yet.

Public-sector labor unions could bring more of our cities, counties, and states to the brink of bankruptcy.  Members of Congress who proudly wear the union label are helping the effort. House Speaker Nancy Pelosi disgracefully led the way in amending the war-funding appropriation bill to include language to force police officers, firefighters, and Emergency Medical Technicians (EMTs) into “exclusive” union bargaining in every state in the U.S.

The collective bargaining legislation carries the feel-good name “The Public Safety Employer-Employee Cooperation Act.” It was passed by the House July 1. But its fate in the Senate is iffy. A spokesperson in the office of Sen. Tom Harkin (D-Iowa), a strong supporter, said the legislation could pass before the Congressional recess or, if not, later in the year.

Unionization of government employees spells politicization of the workplace, inflexible work rules, fewer high-performance workers, and even such workplace lunacy as the New Jersey Port Authority contract with the police union that pays officers “suspended without pay” for unearned overtime during their suspension.

Mark Mix, president of the National Right to Work Committee, wrote in an op-ed article for the Washington Examiner July 8 that “policies expanding public-sector monopoly unionism have played a major role in driving many states to the verge of insolvency.” He said 41 percent of government employees nationwide were subject to a contract negotiated by a union monopoly-bargaining agent. Mix said:

But in the 22 states that prohibit forced union dues for government workers, fewer than 30 percent of public workers are unionized. Not one of these 22 states was found ‘most likely to default’.... Laws empowering government union officials to negotiate contract terms for all front-line employees at a public agency, even for employees who want nothing to do with the union, are behind the [fiscal] messes in Sacramento, Springfield, and Trenton.

Not to dismiss brave cops and firefighters who put their lives on the line. But unionized police and firemen’s sky-high pay already has bankrupted one California city. In Vallejo, CA, population 120,000, a cash flow crisis was insufficient to cover contract obligations, which totaled nearly 80 percent of the city’s general fund.

As reported by columnist George Will in December of 2008, each of the 100 firefighters paid $230 monthly in union dues and each of the 140 police officers paid $254 monthly “giving their unions enormous sums to purchase a compliant city council.” A police captain racked in $306,000 a year in pay and benefits. Twenty-one of the firefighters made more than $200,000. The previous year, 292 city employees each pulled in more than $100,000. All police and firefighters were guaranteed lifetime health benefits after just five years of service. Many California firefighters earn more than $200,000 a year in pay alone.

For the first time in American history, a majority of union members now are government workers, according to the Bureau of Labor Statistics (BLS). The New York Times reported that the 7.9 million unionized public-sector workers easily outnumber those in the private world, where recession woes have shrunk the private-sector. Manufacturing and construction were hit particularly hard. Construction lost 900,000 jobs, and 1.3 million factory jobs were lost, BLS data showed. Among government employees, union membership grew to 37.4 percent last year.

Fred Siegel, a visiting professor at Brooklyn’s St. Francis College and a senior fellow at the Manhattan Institute, was quoted as describing “enormous political ramifications” that public-sector workers are now the majority in organized labor. He said “at the same time the country is being squeezed [financially], public-sector unions are a rising political force in the Democratic Party....In four big states—New York, New Jersey, Illinois, and California—the public-sector unions have largely been untouched by the economic downturn. In those states, you have an impeding clash between the public-sector unions and the public at large.”

New York City taxpayers’ share of the city’s pension costs have zoomed up more than 900 percent in the past decade, according to the financial report of the NYC comptroller, the New York Post reported July 11. Taxpayers’ share of city pension costs went from $703.1 million in 2000 to $6.5 billion in 2009, the city comptroller reported. The toll is expected to hit $7.6 billion this fiscal year. E. J. McMahon, a senior fellow at the Manhattan Institute, was quoted in the article as saying: “It’s a double whammy for taxpayers. If they’re privately employed, they shoulder the risks of saving for their own retirement. At the same time they have to pay a steadily mounting cost of guaranteed pensions for government workers.”

Teachers get the heftiest return for their pension contributions. New York has to put in $15.50 for every $1 a teacher contributes. For firefighters, taxpayers pay $10 for every $1 a fireman pays in, and $9 for every $1 a cop contributes. Transit and sanitation workers get $5.60 cents from taxpayers for each dollar they pay in, the comptroller’s report showed. Cops and firefighters are guaranteed a generous 8.25 percent return on their pension contributions. They can make loans from their plans up to twice a year at the enticing rate of 4 percent interest. Anthony Garvey, former head of the Police Pension Fund called the benefits only fair because they risk “getting shot or running into burning buildings.”

Last year, when the national health-care debate was raging, the National Right to Work Committee’s Mark Mix warned of “huge financial windfalls for unions and provisions “that will help bring about the forced unionization of the health care industry. In a Wall Street Journal op-ed piece, Mix said that tucked away in the legislation was a forced union scheme sought by Obama pal, Andy Stern, then head of the Service Employees International Union (SEIU) to reclassify state-reimbursed in-home health care and child-care contractors as state employees, thus forcing them to pay union dues. Further Health and Human Services Secretary Kathleen Sebelius would have authority to set up monopoly bargaining and compulsory union dues that could possibly force into unions even doctors and nurses.

Stern, according to a Washington Post story in April, visited the White House 38 times during the period when the health care legislation was being hatched. Stern, now resigned from the union, is on Obama’s National Commission on Fiscal Responsibility. A faithful and generous patron of Obama, Stern stayed fixed to his left-wing ideals when he told the annual conference of the ultra-liberal Campaign for America’s Future June 7 that the free market “has failed America and everyone that works here.”

Obama and SEIU are as close as hand-in-glove. Why shouldn’t they be? Andy Stern proudly told the Las Vega Sun in 2009 that SEIU spent “$60.7 million to be exact” to elect Obama. In return, the Administration held up billions of dollars in stimulus money for California contingent on the state’s reversing a scheduled wage cut for SEIU workers.

The Obama Administration, apparently, is still true to its connections with SEIU. When it was discovered that Patrick Gaspard, an Obama political director, who formerly was political director for SEIU local 1199, failed to disclose a nearly $40,000 payout from the union while working at the White House, this was found to pose absolutely no problem.  Politico reported June 28 that White House spokesman Bill Burton said that Gaspard was correcting his disclosure forms. So, this was not an embarrassing or dishonest occurrence in the eyes of the Administration. Forgiveness apparently was seen a preferable to any possibility of racial prejudice, since Gaspard is African-American.

Meanwhile, if Congress passes, and Obama signs, the benignly-named Public Safety Employer-Employee Cooperation Act, government employee unions will gain a tighter grip on state and local bodies. And federalism and individual freedom of association will be further undermined in America.