Sorry Wisconsin unions, no more government cheese for you!

Tuesday will be a pivotal moment in U.S. political and economic history.

The critical recall election in Wisconsin where union organizers and tax and spend Democrats are foolishly trying to recall governor Scott Walker in order to defend and expand their largesse is almost underway, and all polls point towards a win for freedom, economic viability, common sense and business ethics.

The hopes of employers and home owners who are always rooting for small government, a balanced budget and lower taxes lies in the balance, as they rally to protect their wallets from politicians who are beholden to union leaders who are beholden to their loutish and greedy members.Let's not ignore the other benefactors in this fight - students, working people and those that need assistance. More tax dollars, more jobs and less wasteful spending on no bid labor contracts (unions) means we can better protect those that need our help and more investment for those folks we believe in.Governor Walker, in taking an adverse position towards public sector trough unions in Wisconsin, has required union workers, who face no competion or risk in their jobs from competitors or economic downturn, to provide a reasonable amount of money for their luxurious health benefits and over the top retirement plans, and thereby reduced the burden on taxpayers, as well as reduced Wisconsin’s ability to borrow to fund unions and pork barrel projects.


Why is the recall effort insane?

In just his first year Walker has been able to balance the state budget and add jobs to Wisconsin’s economy.
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When Walker wins, this election will be viewed as evidence that voters prefer the long term benefits of fiscal discipline and private sector growth to create jobs vs. continued forced investment in crony capitalism, union largesse and government sponsored beaurocratic waste.This vote is a direct tie in to the upcoming presidential election and many other state and local races. We have seen other states, like Ohio and Indiana, follow a similar course in balancing budgets the way Scott Walker has done in Wisconsin, with similar positive results.
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As small business owners we see with our own eyes - and wallets - how public and entitlement spending and growing debt outstrip the goals of wealth creation and lead to confiscation of wealth through higher taxes and an irreversible course of higher debt and job losses.

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Perhaps Democrats should begin drinking heavily now?

Have you fed your welfare victims today?

As Conservatives are told they are heartless about providing benefits to people that won't work, we find out that the unemployment figures are actually ginned up in Obama's favor, but creating a loophole wher millions of Americans can STILL live without working at all.

Disability is the new LAZY MAN's way to play. Disability claims are up almost 20% as people threatented with having to go back to work after disemployment incentives are used up now turn to "back problems" and "mental health issues" as the new way to get paid. In fact over 43% of all claims are related to "mental illness" and a growing number of them come from former white collar workers.

Over 10.5 million people, about 5.3 of the population now are "disabled". Another 7.5 million or another 3.5% are behind bars. 27% are under age 20. 23% are over 65. A furhter 6% of the population is "legitimately disabled" to a degree they can't work. 1% are in the active duty military. 9% are "unemployed". A further 9% do no work because they can't be bothered any more to seek a job. 8% of the population is on welfare.

Want to feel like a one %'er? You should by now.

Just remember that given these figures, 9% of the US population is providing the free ride to all the other classes (with the exception of the military - who deserve every penny they get and more). Even if you remove double counting possibilities (disability victims on welfare) - 28% of the population supports 72%.

As the disability fund is expected to run out of benefits in FOUR YEARS, I would plan on a big fat juicy take hike to pay for all the Obama supporters who can't or won't contribute.

I can only hope this change doesn't happen. I'm running out of charity.

Hate Working Weekends? Thank a union member - part 3 of 3

It is impossible to calculate the cost of the unions’ greed on the rest of us, but several recent studies provide some sobering, and frankly piss-offing (off-pissing?) indications. Policy Exchange, a conservative think-tank, calculates that people in the British private sector work 23% more hours than their public-sector counterparts over their lifetimes, thanks to public-sector strikes, sick days, fat holiday benefits and early retirement.

 Barry Bluestone, a left-wing economist, calculates that the price of America’s public services increased by 41% in 2000-08, while that of private services rose by just 27%.

Eric Hanushek, an economist at Stanford University, argues that replacing just the bottom 5-8% of American teachers with merely AVERAGE performers could move the United States from near the bottom to near the top of the international math and science rankings.

Public Sector Unions – death to thinking

The rigidity of the public sector does not merely reduce the quality of services. It also discourages innovation. In the private sector innovative firms routinely experiment with new business models, measure the success of those models and then expand the successful ones. But whenever public-sector managers have tried to do the same—by establishing magnet schools that focus on certain subjects, or charter schools with longer teaching days, for example—the unions have opposed them. Rabidly.

Greed Kills – How the Unions chewed off the teat that fed them.

Public-sector unions now face the biggest challenge in their history. Governments almost everywhere—particularly in the rich world—are being forced to cut back public spending. Many governments (for example in Ireland, Greece and Spain) are cutting public-sector pay. Others (for example in Japan and America) are freezing it. Greece is increasing the retirement age from 58 to 63 and making it possible to fire public servants. Britain is cutting government departments by as much as a quarter, and is reviewing pensions.

In the United States several rising Republican governors are keen to turn the short-term struggle over pay and benefits into a bigger battle about trade-union power. New Jersey’s Chris Christie and Minnesota’s Tim Pawlenty have both eagerly taken on the new “privileged class” of public-sector workers. Do the public exist to serve public-sector workers with their high pay and inflated benefits, they ask, or do public-sector workers exist to serve the public?

Tellingly enough, even people on the left are beginning to echo these complaints. Andrew Cuomo, the incoming Democratic governor of New York, is rattling his sabre against public-sector unions despite the fact that they make up an important part of his base. Davis Guggenheim, an impeccably liberal film director whose credits include Al Gore’s “An Inconvenient Truth”, subjected the teachers’ unions to a merciless critique in “Waiting for Superman”, flagellating them for perpetuating a broken system and presenting Randi Weingarten, the head of the American Federation of Teachers, as “something of a foaming satanic beast”, as one reviewer put it.

The unions have responded by proclaiming war on cost-cutting governments. They have already organized strikes and protests. Millions of French workers marched against Nicolas Sarkozy’s modest plans to raise the retirement age by two years. Hundreds of thousands of people have taken to the streets in Ireland and Greece against austerity measures. London Underground workers have repeatedly paralyzed transport in the city. Cities across the US needed to be fumigated after the Occupy Whatever Flea Party came through town after town.

Despite all the bloviating “take them out” references by the likes of Hoffa and the putrid acts of the OWS fleabags, public-sector unions will find it hard to win these battles in the long run. Or even the short run.

They have not been particularly successful in mobilizing public anger, considering the scale of the cutbacks, nor have they notched up any notable victories. The Greek and Irish governments have implemented their austerity packages and Nicolas Sarkozy has raised the retirement age in France. They are also discovering that many people in the private sector regard their public-sector colleagues as an overprivileged, underworked remora on the belly of productive society. Spanish civil servants were shocked at how little support they got when, last June, they protested against a 5% cut in pay. And a recent poll showed that 65% of people in stick-in-the-mud Greece want civil servants to lose their job security.

 The pressure to rationalize the public sector is likely to continue in coming years. The debt level in OECD countries is expected to rise to 120% of GDP by 2014, thanks to a combination of ageing populations and inherited obligations, some of them driven by the public sector’s insatiable appetite for pensions. Joshua Rauh, of the Kellogg School of Management at Northwestern University, reckons that seven American states will have exhausted their pension assets by 2020. America itself will have its debt level over 108% of GDP – not far off from Greece in a year or two. 

Check your boots for cling on poop.

It would be a mistake to write off the public-sector unions. They are masters of diverting attention from strategic to tactical questions. Undoubtedly the unions will lose some of their privileges over the coming years; the scale of the debt crisis makes this inevitable. But will governments have the courage to tackle the root causes of the problem (such as pensions) rather than dealing with secondary problems (such as wages)? 

And will they dare to tackle questions of power rather than just pay and perks? If they are to claim victory in the coming fight, they need not just to restore the public finances to health - rather they need to remove the tiger grip of mediocrity placed around the necks of scociety by the uions and the limp souled politicians that support them.

Buy union made? I'd rather go without.

Solidarity is how WE all get screwed by the public sector unions - part 2 of 3

Economists still debate exactly what impact public-sector unions have on pay but, you probably already know the answer to this one. Evidence from the American Bureau of Labor Statistics support the conservative argument that they have used their power to extract a wage premium to wit public-sector workers earn, on average, a third more than their private-sector counterparts.

Three economic facts are clear:

·      Unions have suppressed wage differentials in the public sector.

Wage differentials are relatively small in the public sector. Lower-level workers, such as secretaries, are usually better paid than their private-sector equivalents, whereas higher-level workers are worse paid. This not only makes it difficult to attract high-flyers into the public sector, but also makes it hard to raise standards by, for instance, putting the best head teachers in charge of groups of schools.

·      They have extracted extra-ordinary benefits for their members.

Why are benefits are generous in the public sector? Easy answer – corrupt and lazy politicians. Governments tend to give their workers light workloads and generous pensions in lieu of higher wages (which have to come out of the current budget). In America teachers teach for a mere 180 days a year. In Brazil they have the right to take 40 days off a year—out of 200 working days—without giving an explanation or losing a centavo of pay.

The defined-benefits revolution that has swept through the private sector has hardly touched the public one: 90% of American state- and local-government workers have defined-benefit plans, compared with 20% of private-sector workers.

Generous pensions have produced an epidemic of early retirement. In Brazil civil servants can retire on full pay after 35 years on the job (30 for women) and teachers can retire after 30 years (25 for women). The result is that Brazil spends as high a proportion of its GDP on pensions (12%) as Britain does, even though the population is much younger. In Poland soldiers and policemen can retire after just 15 years, so it is possible to come across 33-year-old retirees.

 Add to this the fact that any public-sector worker can hide behind union power to game the system—82% of senior California Highway Patrol officers discover a disabling injury about a year before they retire—and you have a dysfunctional mess. Makes you wonder how dumb the other 18% are!

·      They have protected underperforming workers from being fired in order to create a reason for the existence of the union (not to mention the retention of the dues revenue stream!)

Unions have made it impossible to shit-can incompetent workers. In Greece there is a law against sacking government workers solely on grounds of poor performance.

In other countries there might as well be. Mary Jo McGrath, a Californian lawyer, says that “getting rid of a problem teacher can make the O.J. trial look like a birthday party.” In 2000-10 the Los Angeles school district spent $3.5m trying to get rid of seven of its 33,000 teachers, and succeeded with only five.

Incompetence is so endemic that several countries have invented phrases to deal with it. Brazilians joke that public-sector workers turn up on the first day, hang their jackets on the back of the chair, and are never seen again. The Greeks talk about putting incompetents “in the fridge”—giving them pretend jobs. In France it is the cupboard. Americans refer to “the dance of the lemons”—the practice of reassigning bad teachers to new schools rather than getting rid of them. They also refer to the “rubber room” where incompetent or criminal teachers bounce around, often for years, while administrators and unions haggle over what is to be done with them.

The unions’ influence extends to the size and nature of the public sector. Private-sector unions have learned to exercise self-restraint when it comes to pushing for more manpower: they realize that more workers may reduce the wages of their members and that a higher wage bill may drive their employers out of business. But public-sector unions are relentless in demanding more resources and more personnel, which conveniently translate into more members and more dues.

In California, the prison guards’ union has been one of the leading advocates of getting tough on crime. The result of this policy has been a dramatic increase in both the size of the state’s prison-industrial complex (from 12 prisons in 1980 to 33 in 2000) and the pay of the people who run it (prison guards in 2006 made $70,000 a year in base salary and $100,000 with overtime).

But public-sector unions can prosper simply by opposing rationalization: Buffalo, in New York state, has as many public workers in 2006 as it did in 1950, despite the fact that the city has lost HALF its population.

Public-sector unions combine support for higher spending with vigorous opposition to more accountability, performance based pay or outsourcing.

The teachers’ unions have an impressive record of terminating reformers. When Marietta Giannakou, the education minister in the last New Democracy government in Greece, insisted on teacher accountability, she lost her seat at the next election. Michelle Rhee, the chancellor of the awful school system in Washington, DC, closed failing schools, fired more than 200 ineffective teachers and principals, and advocated merit pay. But the unions fought her every step of the way, using their muscle first to get rid of her patron, the city’s mayor, and then to bring about her own resignation.

Next posting: Hate working weekends? Thank a union member. Part 3 of 3.

Unions Suck at Being Unions - Part 1 of Three

Unions suck at being unions. Except for the Public Sector Unions

The past 30 years have been dismal ones for the labor movement. In the American private sector trade-union density has fallen from a 33% in 1979 to just 7% today. In Britain it has dropped from 44% to 15%.This isn’t just a major market anomaly - less than 20% of workers in the developing countries belong to unions.

There is one big exception to this story of decline, however: the public sector. In the Canadian public sector union density has increased from 12% in 1960 to more than 70% today. In America it has increased over the same period from 11% to 36%.  There are now more American workers in unions in the public sector (7.6m) than in the private sector (7.1m), although the private sector employs five times as many people. Union density is now higher in the public sector than it was in the private sector in its glory days, in the 1950s.

This private-public shift has transformed the trade union movement. In the 1950s unions were solidly working class organizations, dominated by men who had left school at 16 and leant left on economics but right on social issues because they knew right from wrong – but they also knew where their bread was buttered.

Today union members are much more middle-class: more than a quarter of American unionists have college degrees, and even more have liberal views on economic, social and environmental issues.

The shift has also created tension between the public and private sectors. The private sector is dominated by competition and turbulence. Performance-related pay is the norm, and redundancies (and the resultant lay-offs) are commonplace.

The public sector, by contrast, is a haven of security and stability. Many people have jobs for life and performance measures are rare. The result is an economic paradox: the typical public worker is better off than the people he or she is supposed to serve, and the gap has widened significantly over the past decade. In America, pay and benefits have grown twice as fast in the public sector as they have in the private sector.

Now that the sovereign-debt crisis is forcing governments to put their houses in order, the growing discrepancy between conditions in the public and private sectors has eroded much of the sympathy public-sector workers might once have enjoyed.

The times – they are a changin’.

The Unions are gunning for your VOTE or your ASS!

Public-sector unions are some of the world’s most powerful interest groups. Many of them have large memberships and comparably large wallets: the American National Education Association, the main teachers’ union, has 3.2 MILLION members, an annual budget of over $300 MILLION and a vibrant tradition of political activism. But don’t they work for the betterment of the kids? Not really.

As Albert Shanker, President of the United Federations of teachers put it “I’ll start representing the interests of children when school children start paying union dues.”

Comforting.

But their influence goes much deeper. In many countries unions prop up the left. In America Andy Stern, the head of the Service Employees International Union, was the most frequent guest at the White House in the first six months of Barack Obama’s presidency.

Public-sector unions enjoy advantages that their private-sector rivals only dream of. As providers of vital monopoly services, they can and do, close down entire cities. And as powerful political machines, they pick the people who sit on the other side of the bargaining table. Daniel DiSalvo, the author of an excellent essay on America’s public-sector unions in Nation Affairs magazine, points out that the American Federation of State, County and Municipal Employees was the biggest contributor to political campaigns in 1989-2004.

He also notes that such influence is more decisive in local campaigns, where turnout is low, than in national ones. Even if they fail to elect “their” candidates, public-sector unions have a relatively easy time negotiating with politicians.

Private-sector bosses are accustomed to playing hardball with unions because they know they will go bankrupt if they don’t.Politicians have no such discipline: they can always raise taxes or borrow from future generations. Those who have challenged the unions have often regretted it. Even the Terminator got terminated by the powerful unions. California’s former governor, Arnold Schwarzenegger, tried to fight the unions in the court of public opinion, only to be outgunned. Others have attempted a more stopgap approach, only to get the blame when services are disrupted.

 Next Post - Solidarity is how we all get screwed the same way by the Public Sector Unions

Paulina Gretky - not union thug