Public-Sector Unions Choke Taxpayers

Public-Sector Unions Choke Taxpayers

John Stossel
Oct. 20, 2010

"I thought unions were great -- until at Chrysler, the union steward started screaming at me. Working at an unhurried pace, I'd exceeded 'production' for that job."

That comment, left on my blog by a viewer who watched my Fox Business Network show about unions, matches my experience. No one ordered me to slow down, but union rules and union culture at ABC and CBS slowed the work. Sometimes a camera crew took five minutes just to get out of the car.

Now unions conspire with politicians to rip off taxpayers.

Steve Melanga of the Manhattan Institute complains that politicians get union political support by granting government workers generous pensions and health benefits. After those politicians leave office, taxpayers are liable for trillions in unfunded promises.

"It's squeezing out all other spending," Melanga says. "Where are we going to get this $3 trillion dollars? ... When they're (government workers) allowed to retire at 58 and the rest of us are retiring at 60 and 67 -- and by the way we're living to 80 -- it's crazy. The public sector is the version of the European welfare state which, by the way, in Europe, they're actually rolling back."

John Gage, president of the biggest federal workers union, the American Federation of Government Employees, disagrees: "This thing about unions and the public sector and bankrupting America, that's very far from the truth. Yes, we have a problem with pensions. Basically because these pension plans haven't been properly funded."

Melanga's response: "Fund public-sector pensions at a level that we can afford, (and turn) the pension system into a defined-contribution system. Public-sector employee unions and states have refused to do that."

A defined-contribution plan is like your 401(k). Your pension benefits depend on how well your investments do. State and local unions, by contrast, have "defined-benefit" plans, which simply force taxpayers to send retirees a monthly check.

Gage doesn't like Malanga's suggestion: "Can you imagine working 30, 35 years ... and (with) what just happened with the (stock) market, suddenly you're left holding nothing?"

I don't think they'd be holding "nothing." Yes, the market crashed, but the Dow is still above 11,000. Twenty-eight years ago, it was below 800. That's up more than 1,000 percent. Over time, 401(k)s provide a decent retirement.

When I said that we in the private sector have such plans, Gage responded, "Only because of the laws in this country which make it almost impossible for private-sector workers to organize and to have a union. ... (W)ithout unions, we'd have a 'race to the bottom.'"

But this makes no sense. Do all employers move to Mexico because wages are lower there?

But many viewers side with Gage:

Grover said: "Stossel's take on Unions is nothing but appalling. According to him, workers have no rights. Workers are the ones who make a company profitable, not CEOs. In Stossel's slanted view, worker's are dirt and don't deserve anything."

Jakob wrote: "Are you really this stupid? Do you really want to lower American workers' standards to that of Honduras and China, where democratic unions do not exist? Would you like for us to go back to a time in America before we had unions? When children worked in factories for 14-hour days and health and safety standards simply did not exist?"

These are popular views. But they are wrong. Factories are safer because of free markets. Companies want better workers and must compete to get them. Free markets create wealth that permits parents to send their kids to schools instead of factories. Unions once helped to advance working conditions, but now union work rules mostly retard growth and progress.

Many workers understand that, and that's why only 8 percent of private-sector workers still belong to unions. In the private sector, wage and pension demands are tempered by competition. If one company pays too much, a competitor takes his business.

But governments are monopolies. They face no competition and get their money by force. So they can conspire with public-sector unions to milk taxpayers. That explains the fix we're in today.

Something's got to give.

That depends on the party as far as Europe is concerned. Unions are very much a socialist concept. The Tories don't support them and accept no money from them. Thatcher did her best to destroy them. Even Labour, whose majority of funding comes from the Unions have been cautious in recent years.

Personally I feel that Unions are a necessary evil, but there has to be a fair balance. When they end up with too much power they can grind the country to a halt.

The_Amber_Spyglass wrote:That depends on the party as far as Europe is concerned. Unions are very much a socialist concept. The Tories don't support them and accept no money from them. Thatcher did her best to destroy them. Even Labour, whose majority of funding comes from the Unions have been cautious in recent years.

Personally I feel that Unions are a necessary evil, but there has to be a fair balance. When they end up with too much power they can grind the country to a halt.

I belonged to a union a my last job. It wasn't all people say it was. Most of the employees hated it but you had to be in it to be employed (or to just get the job). Yeah, it paid well but they didn't do much for you.

The city of Ft. Worth, Texas is going thru some of this right now from what i'm reading in the paper online there. The city is on the hook to pay these generous bennies and now have to find the money to pay them in the years to come. It has most of the citizens there mad as hell.

I am quite happy to say that I have never had a job that required me to join a union. As a disabled vet, I get a very high priority consideration for federal government jobs, but I refuse to work for in a federal civil service job because I would be forced to join a public sector union. I would rather be poor than contribute to the obscenity that is a public sector union. These civil servants are paid by all taxpayers, and their unions have secured for them pay that is way above what equivalent private employees get, public sector health plans and retirement benefits are way above what the private sector gets.

It is criminal that public sector unions would allowed to use members dues to bribe politicians to continue to give them sweet heart wages and benefits paid for by the taxpayers.

Were it me, I'd make all public sector unions illegal, there is just no excuse for them in this day and age.

There's no excuse for unions in the public sector since it's already a gov't job regulated by... ahem, cough.... the gov't.

But we've seen the stats in the last year on how public sector jobs are outpacing the private sector. Then the excuse i get for that by some is that it's better that they're paid well because they'd otherwise be unemployed like the rest of us bottom feeders.