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Thread: The Fourth Rail

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    Grandmaster BloodEclipse's Avatar
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    The Fourth Rail


    The Nation's Pulse

    The Fourth Rail

    By Ross Kaminsky on 2.25.10 @ 6:07AM
    Entitlement programs or, more specifically, reforming them before they bankrupt the nation, is considered the Third Rail of Politics. We now have, however, a Fourth Rail, just as pernicious, doing just as much damage to our national financial well-being and perhaps threatening our liberty even more than Social Security and Medicare. That Fourth Rail is the growth of the public sector work force, i.e. employees of federal, state, and local governments, and the massive money- and power-hungry unions which represent them.
    Supporters of unions have long argued, and with good reason, that in the early days of industrializing America, unions helped eliminate child labor and forced companies to create safer working conditions for employees. Do workers at the DMV, IRS, or your town's Public Transit Board (or their children) have substantial risk of working 16 hour days in dark, dangerous environments? It's hard to imagine the founders of the AFL thinking that unions would devolve into organizations whose primary goal is to make it impossible to fire bad workers, to argue for an ever-increasing number of vacation days, and to eliminate secret ballots which are not just a staple of union election history but also a fundamental underpinning of liberty. The purpose of public sector unions is now simple: Maximize the unions' income and political power by working against every possible increase in government efficiency. And they've been wildly successful.
    In the last few years, government employment -- and thus the taxes required to fund it -- has been growing while private businesses across the nation have had to cut back to survive. As THIS chart from Americans for Limited Government shows, since December 2007 the private sector has lost over 7 million jobs while government has added about 100,000 jobs.
    But even this growth of government employee headcount, which is about 85% at the state and local level, understates the problem. In addition to government hiring more workers, it's also increasing their total compensation at a much faster rate than is found in the private sector. (See chart on page 3 of the Cato Institute's Chris Edwards' analysis of "Public Sector Unions and the Rising Costs of Employee Compensation".)
    Until the late 1960s, private sector workers tended to earn slightly more than government workers -- an appropriate situation given the job security that tends to come with a government job. For about the next 15 years, until the early 1980s, public and private sector average compensation was about equal. But beginning in 1982, compensation patterns diverged, with state and local government workers getting much larger raises than private sector workers.
    The growth of federal (civilian, not military) compensation is even more pronounced, as another Edwards study shows. In 2000, the average federal civilian worker made two-thirds more than the average private sector worker. By 2008, the federal worker was making double -- yes double -- the private sector worker.
    You'll forgive me if I sound like an infomercial salesman here when I say "But wait, there's more!" These figures include what is actually spent on government employee compensation, not what is promised. Government workers' pensions tend to be "defined benefit" rather than the now-typical "defined contribution" plan in the private sector. This means that government will owe retirees fixed payments regardless of the value of the investments or savings in which the government deposited its contributions for those workers' sunset years. Across the country, state and local governments have consistently underfunded pensions and future health insurance liabilities, even before the stock market sell-off of 2008.
    According to a new study by the Pew Center on the States, "A $1 trillion gap… exists between the $3.35 trillion in pension, health care and other retirement benefits states have promised their current and retired workers as of fiscal year 2008 and the $2.35 trillion they have on hand to pay for them."
    So, the growth of government head-count and compensation is not only costing taxpayers over a hundred billion dollars a year now, but it's also burdening our children with massive future liabilities.
    But it's not just in terms of finances that this growth of the public sector is hurting America. The unions which represent government workers, including the Service Employees International Union (SEIU), the American Federation of State, County, and Municipal Employees (AFSCME), and the American Federation of Government Employees (AFGE), are accumulating power, money, and influence, especially over Democrats, and using these as a self-reinforcing mechanism to acquire more.
    The unions pushed (and fortunately failed, albeit just barely) for the Senate approval of Craig Becker to the National Labor Relations Board. Becker, an associate general counsel to the SEIU, is a radical pro-labor activist attorney who believes, among other things, that "employers should have no right to be heard in either a representation case or an unfair labor practices case." Although Mr. Becker's approval was successfully filibustered in the Senate, it remains an open question whether President Obama will give Becker a "recess appointment" that would allow Becker to hold the NLRB job for nearly two years over the Senate's prior objection.
    The AFGE is filing a petition to be named "the exclusive union representative for 40,000 Transportation Security Officers." Barack Obama's most recent nominee to head the TSA, Errol Southers, who had to withdraw his nomination after having been found lying to Congress, was being blocked by Senator Jim DeMint because Southers refused to disavow wanting to unionize the TSA. The last thing our nation needs is the stultifying influence of unions on airport security. If there's one area where we must not allow unions to prevent the firing of incompetent workers, it's where the safety of our citizens is so clearly at stake. And yet, given the symbiosis between unions and the Obama administration, this outcome remains all too likely.
    Last month, the Labor Department reported union membership numbers showing that for the first time in American history, there were more public sector union members than private sector union members: "More public sector employees (7.9 million) belonged to a union than did private sector employees (7.4 million), despite there being 5 times more wage and salary workers in the private sector." And what's the impact of this trend?
    In 2008, unions contributed $74.5 million to political candidates, of which $68.2 million went to Democrats. Since 1990, unions have contributed over $630 million to Democrats (more than 12 times their contributions to Republicans.) But even that understates the magnitude of the union-Democrat symbiosis since it doesn't consider independent expenditures such as campaign advertising not coordinated with candidates, as well as get-out-the-vote efforts.
    According to the Center for Responsive Politics, "In the 2008 election cycle, labor unions reported spending nearly $80 million on independent broadcast advertising, mail and internal advocacy to help elect or defeat federal candidates." In other words, money spent by unions to help Democrats is even greater than the money donated by unions directly to Democrats. As Michael Barone puts it, "Public-sector unionism tends to be a self-perpetuating machine that extracts money from taxpayers and then puts it on a conveyor belt to the Democratic Party."
    If there is any good news to be found, it's that the public is rapidly moving away from support of unions. A survey released Tuesday by the Pew Research Center for the People & the Press describes "Favorability Ratings of Labor Unions Fall(ing) Sharply." For the first time since 1985, Americans' unfavorable opinion of unions, at 42%, is higher than the favorable rating, at 41%. Also, the 41% favorable rating is by far the lowest level of public approval of unions in the 25 years of Pew's surveys. The trend toward union disapproval is consistent among men and women, blacks and whites, and is clear across Republicans, Democrats, and Independents. Currently only Democrats now show more favorable than unfavorable views of unions but by a much narrower margin than three years ago.
    It remains the standard tactic of liberals, government workers, and other leeches off your earnings to demonize anyone who wants to reduce the cost and intrusiveness of government by saying that teachers and policemen will lose their jobs. A few responses are in order: First, both education and law enforcement organizations could reduce bureaucratic bloat if they were forced to cut their budgets. Second, why should it be unacceptable for a teacher or cop to lose his or her job? There is no evidence that hiring more teachers has improved educational outcomes. Indeed some of the most expensive school systems in the nation (on a per-student basis), such as Chicago and Washington, D.C., produce spectacularly bad academic results. Similarly, it can't be that each additional policeman adds proportionately to our safety…but they add disproportionately to our costs. When times are this tough, America can't afford to have sacred cows.
    The growth of the number of government workers and the cost of each worker threatens not just Americans' economic future but also our liberty. It is time for citizens to force government at all levels to live within our means. The good news is that much of the problem is at the state and local level, where small numbers of citizens can have bigger impact than on the federal level. Cutting back the metastasizing public sector is the Fourth Rail of politics. It is time for a few well-grounded politicians and citizens to step on that rail before we turn into France -- or even worse, into Greece.


    Ross Kaminsky is a professional derivatives trader, a fellow at the Heartland Institute, and a frequent contributor to Human Events. He blogs at Rossputin.com.

    As I was reading this I kept thinking about what is going on in Greece. The Country is being held hostage by these public sector Unions. We must make serious changes to Congress this year and retake the White House in 2012. Look at Europe now, if we don't change course we will become what they are.

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    Grandmaster Fletch's Avatar
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    And despite being better compensated, public sector jobs are absolutely soul-crushing to anyone with a love for making products or providing services that people actually want. I make a tiny bit more (salary) and lost a metric buttload of benefits (including 3 weeks of vacation/year) since switching back to the private sector, but I'd only go back under the direst of personal circumstances.

    Clarification: that was 3 weeks of vacation lost. I still have 3 weeks a year in the private sector. Yeah, it's like that.
    Last edited by Fletch; 02-26-2010 at 05:33.
    Every decent man is ashamed of the government he lives under. -- H.L. Mencken

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