.
.
.
Given the effort by the Governor of Wisconsin to dismantle the state employee union collective bargaining rights, a story that appeared in the well-respected Forbes magazine web site entitled “The Wisconsin Lie Exposed – Taxpayers Actually Contribute Nothing to Public Employee Pensions.” Written by Rick Ungar, it makes for some insightful reading.
Ungar, a Southern California attorney and consultant on health care policy and politics, dispels the perception that the taxpayers fund public sector retirement benefits. His perspective is that it is the employees who fund those benefits, by foregoing what would otherwise be an increased direct salary and instead accepting deferred income directed to a retirement plan. Given that the media, in reporting the compensation of public officials includes the cost of benefits as part of the total picture, Ungar’s perspective does seem to have some logic.
Yes, it can be argued that the taxpayer pays the salaries of public employees so the taxpayers also pay the costs of the retirement benefit. But, in a retort to an e-mail post Ungar states that to view it that way one would also have to suggest that a monthly payment into an employee retirement plan by the public sector employer is a gift of some kind, and that is no truer than saying their salary is a gift.
Let’s see. An employer and employee contribution to a 401K defined contribution retirement plan is a pre-tax, deferred income contribution to be collected at a later date, hopefully with interest. Is a contribution by an employer and employee to a defined benefit plan really any different? Seems to me it is not. One must recognize that the later however, like an annuity, guarantees a set benefit regardless of how well its investments do.
So, if the Wisconsin lie is not the real reason that the Governor there seeks to pretty well dismantle the public sector unions’ bargaining rights (except for that of law enforcement), what is the real reason? More on that in a later post.
[poll id=”300″]
“So, if the Wisconsin lie is not the real reason that the Governor there seeks to pretty well dismantle the public sector unions’ bargaining rights…, what is the real reason? ”
Well, it’s not because collective bargaining causes deficits, either.
From Huffington Post;
Craig Crawford
Bargaining Bans Don’t End Deficits
Debt in the five states that forbid it totals $222 billion. In the 11 states that don’t ban or require collective bargaining with public employees, their finances are not any better whether or not they do it. In Arizona, where the law permits bargaining but the state chooses not to do so, its total debt stands at $22 billion with a yearly deficit of $2 billion (despite laying off 2,000 state workers in recent years).
To say the least, it is rather difficult to prove that ending collective bargaining, as is now proposed in Wisconsin, Ohio and elsewhere, offers any guarantee that states can close their budget gaps.
States Where Collective Bargaining is Explicitly Illegal
(in billions)
Georgia
Total Debt: 44.2
Yearly Deficit: 2.0
North Carolina
Debt: 43.7
Deficit: 3.7
South Carolina
Debt: 31.0
Deficit: .008
Texas
Debt: 81.1
Deficit: 20.0
Virginia
Debt: 22.3
Deficit (Surplus): .403
Any person with two neurons to rub together knows that ending or diminishing collective bargaining rights has nothing to do with fiscal responsibility…it’s nothing more than a political power play intended on eroding the influence of the Democratic Party.
Well, that along with the obvious – increasing corporate power and profits. Things are often more than one thing.
I thought that we were talking about removing some collective bargaining rights in Wisconsin for public employees. Increased corporate power and profits would not be a factor at all in that discussion.
No, increased corporate power and profits is always their goal, even if you don’t see a direct correlation here. Everything they can do to weaken the working class on every front, helps to make the rich richer and more powerful, and the poor poorer and more desperate. ALWAYS their goal.
More directly, the only real threat to the Republican agenda at this point is the collective power of unions to influence elections. The corporations have been given carte blanche courtesy of the Supreme Court. Now if they could only silence those pesky Democrats and their union influence and money they would be home free.
Definitely a political power play:
http://hotair.com/archives/2011/03/03/just-a-reminder-unions-rake-in-millions-for-democrats-in-wisconsin/
Glad you are finally admitting what’s going on, Newbie. Koch etc would like to have NO competition in the “free speech” of spending money on politics.
Wow, I love the logic on here. Yeah, taxpayers pay the public employees’ salaries and benefits, but because they take less salary for deferred payments, the taxpayers really don’t pay their salaries and benefits. Sure, let’s ignore the multiple studies finding public employees make higher salaries and benefits on average than private employers. Let’s ignore the fact that private employees take all the risk in contributing to their 401k (admittedly some employers do offer minimal matching of contributions), hoping that their investments will make money over time, versus public employees who are guaranteed pension payouts at a certain level, regardless of the state of the economy. Let’s ignore the recent statistics showing that the average pension for recent California public retirees is $65,000+ per year making them millionaires in just over 15 years of retirement.
And then Anonster offers the unremarkable, and unsupported argument that since states that prohibit collective bargaining have deficits, the public employees salaries and benefit costs in states that do allow collective bargaining can’t be the cause of their deficits.
I guess if that’s the best the left has in rebuttal, unions don’t stand a chance.
Actually, comparing educational levels of employees in the public sector and those in the private, public folks get less across the board.
You’re also avoiding the fact that instead of griping about people getting benefits, we should be griping about so many employees getting no benefits whatsoever. Unions are the key to a strong middle class, and that’s not the goal of the ultra rich and corporate interests.
Newbie,
Governor Walker, Faux News and republicans in general have been posturing the lie that collective bargaining is the cause of government deficits and that if state governments were just free of union demands their respective budgets would be in much better shape, well they can pull that crap out of their asses (and idiots like you can swallow it whole), but REAL WORLD examples DON’T BACK IT UP.
From Media Matters;
Fox Falsely Suggests State Budget Shortfalls Are Result Of Public Union Collective Bargaining
Kilmeade Suggests That “Union Bargaining Should Be Abolished All Together” Because It’s “Breaking The Public Piggy Bank.” On the February 28 edition of Fox News’ Fox & Friends, co-host Brian Kilmeade asked, “If union bargaining is breaking the public piggy bank, should it be abolished all together?” [Fox News, Fox & Friends, 2/28/11]
Liz Cheney: Collective Bargaining “Reduces [Local Officials’] Ability To Actually Manage Their Own Budget.” On the February 20 edition of Fox Broadcasting Co.’s Fox News Sunday, Liz Cheney stated that “when you’ve got collective bargaining in place and when you’ve got the benefits that are basically sealed in, and no ability by those local officials to touch those or affect them, it reduces their ability to actually manage their own budget.” [Fox Broadcasting Co., Fox News Sunday, 2/20/11, accessed via Nexis]
Wallace Lets Walker Suggest That Collective Bargaining Is Preventing States From Balancing Budgets. On the February 20 edition of Fox News Sunday, Chris Wallace hosted Wisconsin Gov. Scott Walker to claim that state governments are facing budget crises because of collective bargaining.
**************************************************
“Sure, let’s ignore the multiple studies finding public employees make higher salaries and benefits on average than private employers”
ANOTHER LIE.
From the Center for State and Local Government Excellence;
Out of Balance? Comparing Public and Private Sector Compensation Over 20 Years
Analysis May Shed Light on Government Hiring Difficulties, Despite Economic Conditions
This new report, commissioned by the Center and the National Institute on Retirement Security (NIRS), provides an original analysis of data from the U.S. Bureau of Labor Statistics.
Key findings include:
Jobs in the public sector typically require more education than private sector positions. State and local employees are twice as likely to hold a college degree or higher as compared to private sector employees. Only 23 percent of private sector employees have completed college, as compared to about 48 percent in the public sector.
Wages and salaries of state and local employees are LOWER than those for private sector employees with comparable earnings determinants, such as education and work experience. State workers typically earn 11 percent less and local workers 12 percent less.
During the last 15 years, the pay gap has grown: earnings for state and local workers have generally declined relative to comparable private sector employees.
The pattern of declining relative earnings remains true in most of the large states examined in the study, although there does exist some state level variation.
Benefits make up a slightly larger share of compensation for the state and local sector. But even after accounting for the value of retirement, healthcare, and other benefits, state and local employees earn less than private sector counterparts. On average, total compensation is 6.8 percent lower for state employees and 7.4 percent lower for local employees than for comparable private sector employees.
For the entire study;
http://www.slge.org/index.asp?Type=B_BASIC&SEC={22748FDE-C3B8-4E10-83D0-959386E5C1A4}&DE={BD1EB9E6-79DA-42C7-A47E-5D4FA1280C0B}
It’s too bad Larry Summers, Obama’s former National Economic Advisor (I won’t use the dreaded czar term for your sake), disagrees:
“Another cause of long-term unemployment is unionization. HIGH UNION WAGES THAT EXCEED THE COMPETITIVE MARKET RATE are likely to cause job losses in the unionized sector of the economy.” (my emphasis)http://www.econlib.org/library/Enc/Unemployment.html
Darn those Democrats messing up the story all the time.
I don’t think you’ll find that Larry Summers is very popular among progressives, Obama’s economic team has been raked over the coals in the liberal blogosphere.
I know you conservatives can’t comprehend the idea of “differing” viewpoints, in your lock-step world it’s all, repeat and regurgitate the right-wing talking point du jour.
If you want to make this all equivalent – 1) end civil service job protection; 2) end teacher tenure (these both have value and are not available at any price in the private sector); 3) make ALL compensation numbers a part of the final package including the tax benefit of the deferred savings plan not available to the public sector (if you are going to “count” pension payments as salary then you are going to have to “count” all of the benefits); and 4) pay teachers at fair market value. SHOCK – FAIR MARKET VALUE WILL BE SUBSTANTIALLY LESS THAN CURRENT PAY – PRIVATE SCHOOL TEACHERS MAKE LESS ON SALARY LET ALONE BENEFITS.
Otherwise shut up and go away you are just playing with yourself statistically.
“If you want to make this all equivalent”
That’s a two-edged sword, private sector workers also have perks;
*bonuses
*401k matching contributions
*golden parachutes
*stock options
*housing allowances
*car allowances
*gas cards
*business “retreats” at exotic locales
*gym facilities
*on-site daycare
*paid or subsidized education and training
” FAIR MARKET VALUE WILL BE SUBSTANTIALLY LESS THAN CURRENT PAY – PRIVATE SCHOOL TEACHERS MAKE LESS ON SALARY LET ALONE BENEFITS.”
Private school teachers may or may not be accredited, private school teachers usually have smaller class sizes and DON’T have to deal with kids who have “issues” and
SURPRISE;
From myths about private schools;
Myth: Private school teachers make less than their colleagues in public schools.
As with most things, that’s not necessarily true. A lot depends on the kind of the school we are talking about. For example, a third grade teacher in a parochial school will make about 10-15% less than her counterpart in a public school. Why? Parochial school budgets are traditionally the slimmest in the business because their tuitions are among the lowest in the business. Now, put that same third grade teacher in a Montessori school and the salary gap closes significantly. Why? Montessori schools typically charge what the market will bear.
Highly qualified teachers with terminal degrees working at the top prep schools will make very close to what their colleagues in public education make. Ditto for administrators.
I think you pretty much make my point anonster – thanks
How was that? Did you declare victory and go home? And why shouldn’t private school teachers be paid well? How much continued leverage can you get from arguing that people in general should be paid like crap? The corporate powers love folk who argue agaisnt their interests.
Anonster’s data, though derived from uncited sources still supports my contention that private school teachers on average make far less than public school teachers which ratifies and supports my point.
I did not say that private teachers should be paid well – that’s not my job, that is the job of the market in a free economy that values services based upon supply and demand.
I have never argued that people in general should be “paid like crap” and would argue that overall salaries in the United States have improved everyone’s style of living as compared to the generation before. Our descendants would have viewed today’s lifestyles as superior to their own across the board. The first folks in American history that probably won’t be able to say that is our kids who are inheriting the spoils of free market intereference.
There is no doubt that parochial school teachers make less (tuition at these schools is also less), but the better private schools are competitive with public school teacher pay.
http://privateschool.about.com/od/salaries/qt/salaries.htm
Private schools also usually give free tuition to teacher’s kids, that could add 20 or 30 grand a year onto the pay scale.
You also have minimized the importance of accreditation, advanced degrees, and working conditions.
First, if you understand the accreditation process you know that it is a joke. I am not minimizing “advanced degrees” or working conditions since I am trusting the market. Second, the link you provided throws in a series of “adjustments’ to the private sector salary without then “readjusting” the public side salaries to equalize for greater pension and health benefits. Bottom line is that private teachers, by everyone’s admission, make between “slightly less” to ” substantially less” than public school teachers BEFORE you add in the exorbitant benefits paid to public teachers.
Geoff,
“I am not minimizing “advanced degrees” and working conditions since I am trusting the market.”
Yeah, you are because it’s one of the main reasons cited why private school teachers accept lower pay. They do it in exchange for smaller classes, supportive parents and fewer disciplinary problems.
Contrast that with what public school teachers face on a daily basis, crowded classrooms, short or nonexistent supplies, hungry kids, abused kids, multiple languages, transitory kids etc.,etc…..a few less dollars doesn’t sound so bad.
And are you saying private school teachers don’t have any benefits?
No matching 401k’s, health care plans or free school tuition for their kids, please provide your sourcing for this assertion.
I’d say our kids are inheriting the spoils of a free market run amuck. Can you explain the long stagnation of middle class incomes, while the ultra wealthy continue to take more and more of the nation’s largess?
Since I also have a non-union job in the private sector, I would like to know what companies in the private sector offer all of these things. Most private sector employers I know offer 3-4 of these “lavish” perks at the most. While I await the list of potential new suitors for my labor, skills and talents, (things that I will freeIy market and negotiate with said employer on my own) I will go through this list of “perks” and compare it to what my current employer offers.
*bonuses
Yes, I am eligible for them but I have to EARN them. Most people nowadays call it work. I’d draw you a picture but you might find it offensive and have me thrown in a gulag for hurting your feelings. FYI, the Feds and the state took a total of 50% of what I earned this last bonus check. I’m sure you feel that you and the government are entitled to it because I’m too stupid to know what to do with that money. If you would have left me with that 50%, I might have exploited some poor French Canadian family for their labor by having them do yard work and other household chores at my palatial estate in MasterPlannedistan.
*401k matching contributions
Sure, 100% match and I can opt out if I choose to fund my own retirement.
*golden parachutes
I’ll try skydiving if they have a club. Oh wait a minute, that’s not what you are referring to. No I don’t think so. I’d like to know who is offering such a perk. Names?
*stock options
Why play the market when precious metals like gold and silver are more stable? I’ll opt out. See my answer for 401K
*housing allowances
Yes, I own a house free and clear and I pay the taxes to the person who replaced that tool Chriss Street. I didn’t know I needed my employer’s permission to own a house. I thought I was free to own my own property. You meant them giving me money for my house? I wish. The answer is no.
*car allowances
No. Paid for it in full w/o a lien. They don’t pay me money for the car or offer me one either. As you can tell, I don’t work in the automobile industry.
*gas cards
Don’t have one of those. Job doesn’t give them out either.
*business “retreats” at exotic locales
Does Hometown Buffet count? Define exotic.
*gym facilities
Does playing paper football with my cubicle partner count as exercise? Once again, no
*on-site daycare
Are you talking about our 35+ managers supervising our 18-24 year old employees on our collections floor or like the show Romper Room with the kiddies running around? If it’s the latter, no on this one.
*paid or subsidized education and training
How the hell am I going to make my team better with practice? Sure, it’s mostly continuing education and your standard compliance reviews
I counted four that my private sector job offers. So let me get this straight. (Newbie, junior and Geoff, feel free to chime in) If I decide that I want to keep the more of the money that I earned (when I say earned, I mean I did some actual work to justify my employer paying me the wage that we agreed to through a mutually binding contract ) instead of ceding it to the government who is going to put it to waste anyway, I’m being selfish and inconsiderate? Please tell how you arrived to that conclusion.
Guy,
Sorry, I”m a bit tardy in responding, I didn’t see this particular rant of yours till this morning.
“I would like to know what companies in the private sector offer all of these things.”
I never said that every private sector worker has some or all of these perks, the point was to give a sampling of the perks and benefits a private sector worker might receive.
*bonuses
“Yes, I am eligible for them but I have to EARN them. Most people nowadays call it work.”
Are you insinuating that public employees don’t work, or is that just a personal jab at me?
“the Feds and the state took a total of 50% of what I earned this last bonus check.”
Sorry bub, but you must of owed it, either that or you need a better accountant.
It’s also not unusual for people who pay quarterly, to have half or even all of their bonus checks go to taxes (after all, that’s what they’re for).
*401k matching contributions
Many companies offer this and it could be worth up to 13 or 14,000 dollars (whatever the top rate is(?)), if you don’t take advantage of it that is your choice, but it is still a benefit.
*golden parachutes
I really should have used “severance pay”, not an uncommon benefit, typically a worker is given three months salary, but I have known people who have received up to a full year.
*stock options
Again, not an uncommon benefit and whether or not they take advantage of it is up to them. I had a family member who was an early employee of Qualcom, they didn’t buy their stock options, DUMB move.
*housing allowances
A more unusual benefit, but not unheard of, especially if a new employee/transfer is coming from the midwest to the coasts.
*car allowances
Pretty common benefit, I personally know lots of folks who have it, ditto the *gas card.
*business “retreats” at exotic locales
More common for larger corporations, ditto for *gym facilities and *on-site daycare
*paid or subsidized education and training
Again many businesses pay for ongoing education and training, it’s considered an investment in the future.
” So let me get this straight. (Newbie, junior and Geoff, feel free to chime in) If I decide that I want to keep the more of the money that I earned (when I say earned, I mean I did some actual work to justify my employer paying me the wage that we agreed to through a mutually binding contract ) instead of ceding it to the government who is going to put it to waste anyway, I’m being selfish and inconsiderate?”
I don’t know where I said that, but I do believe that we need to pay taxes to live in a civilized society and to keep our country running and I also believe the people who do that work deserve decent pay and benefits.
NOTICE ANOSTER GETS HER INFO FROM HUFFINGTON POST , MEDIA MATTERS , DAILY KOOKS AND MSHATEBC AND THE NY SLIME .. HECK IS ED SCHULTZ YOUR EDITOR ..
*bonuses
*401k matching contributions
*golden parachutes
*stock options
*housing allowances
*car allowances
*gas cards
*business “retreats” at exotic locales
*gym facilities
*on-site daycare
*paid or subsidized education and training
What job in the private sector all of these perks? If you have the name of the companies that are offering this, please let me know so I can send out my resume. I see a maximum of two of these “perks” at my non-union private sector job.
With gas at $4.00 a gallon, I’m going to ask my employer about giving me a gas card.
Well if your point was that public employees are NOT overcompensated, you’re right.
Geoff Wills – saw that you snuck in abolishing civil service sytems along with your anti public sector employee/pension rhetoric. There is a 200 year history of the evolution of civil service systems that you should serously study. Development of such systems was begun to limit, and eventually prevent, political kickbacks to the party in office at any given time – like pay 5% of your salary to our party or lose your job – and to safeguard government jobs as belonging to the public, not a given party or elected official. This was all to common as recently as the late 1800’s.
There is a lot more to this story, but to remove civil service safeguards and thus revert back to an exploitive patronage system as you advocate is nothing anyone with a sense of what good government should be should in any way support. Seeing that you support removing the controls to prevent favoritism, nepotism, cronyism, and kickbacks is scary. The mess with the office of PA/PG John Williams is an example of what happens when the civil service system is bypassed – no one with integrity would want more of the same.
I won’t ever support a system that protects jobs in the face of incompetence – period. If corruption is a problem, the convict those breaking the law (and there are laws on the books) – make government have to be even more transparent – don’t reward the intentional slacker with lifetime job security.
Part of the problem that you do point out is that most of us, maybe even more those of us that have seen things first hand, have become disappointed with the rampant corruption that ranges from minor infringements to wholesale grand theft. I believe few people believe that few if any of our elected officials are fulfilling their office as a community service instead of advancing their own personal interests and wealth.
How about the way the financial sector was exploited by greed and corruption, and folks like Mozillo got away with millions. Where’s your outrage? Wasn’t he just using what the market allowed? The unregulated “system” worked just fine for him, you see.
Easier to blame a teacher, I suppose.
Gee Geoff, we have found somethihng we agree on (your second paragraph about the motivation of so many elected officials). City of Upland Mayor and a cronie of his is the latest example. Hope you do not succumb and run for office some day!
How are people feeling about allan mansoor wanting to end collective bargaining in this state? Is he now the darling of the state assembly?