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Monday, November 15, 2010

Public Employee Unions

Public employee unions represent a conflict of interest for taxpayers. They spend enormous amounts of money influencing campaigns to elect politicians which will serve them instead of the taxpayers whom they are supposed to represent.

They wield immense power on society and government materially affecting who is elected and whether or not those politicians retain their political position while overtaxed taxpayers are forced to pay ever more of their taxes into the increasing salaries, pensions and benefits. When the public unions desire more money, they simply spend millions on campaigns to raise taxes.

They engage heavily in the practice of "Ghost Bill" legislation which is where public employee unions become involved in drafting legislation and leaning on politicians to get it enacted into law. Though it's our understanding the practice is currently legal, in our opinion, it's a clear conflict of interest.

But it wasn't always this way. Not until John F. Kennedy gave federal government employee unions the right to engage in collective bargaining through an executive order did public employees even have the legal right to form a public employee union. This was not accomplished through legislation.
Originally, the primary advantage of being a federal employee was the immense job security and sense of worth that comes from genuine public service. Today, government employees still have the immense job security but almost nobody in the private sector has it anymore. This unending supply of income throughout one's career is worth a great deal of money in and of itself. In economics, we call it the value of money in time and in risk.

When a person's career is aggregated, private sector employees today find they are going through job transitions with longer periods of unemployment forcing them to live off savings and retirement like never before while the public employees never have to miss a dollar of income over decades nor ever tap into their savings or retirement due to unemployment. This is worth a great deal, in quantifiable monetary terms, and there is no reason to exclude it from comparisons of compensation between public and private sector employees. Public service today is often code for personal enrichment.

Public employee unions naturally seek a Greek like sprawling social welfare state. It's what they are and they seek to expand what they are. These unions represent an undesirable conflict of interest for taxpayers who have to rely on our politicians to sit at the table and negotiate with the unions. It needs to end. The desirable thing to do is to decertify all public employee unions both federally and at the state and local levels. 

In states like California, public employee unions have grown to amazing heights. Why spend a fortune to educate yourself and risk everything on innovating and producing something that brings income dollars into a state with the second highest overall taxes in the nation when you can simply apply to be a government employee with little to no risk and actually make more money on average over time (again the time and risk value of money)?

No risk, more money, join the union. The problem is that it's strangling the state like a Ponzi scheme.

The result is that businesses and wealthy taxpayers are fleeing high taxes, high unemployment, a diminishing quality of education (despite enormous sums being spent on it) that fell from first in the nation to third from the bottom, a diminishing quality of life, etc...

They are leaving the state at record rates. With Brown, Boxer, Feinstein, a democratic legislature, and a new proposition passed to only require a majority vote to pass a budget (rather than the 2/3 rule) the exodus of businesses and wealthy taxpayers for greener pastures is expected to increase substantially once the Democrats get a 2/3 majority and can just pass lots of new taxes and fees.

As the Orange County register just reported in their Sunday November 14, 2010 edition: 1 in 20 California public school employees were paid at least $100,000.00 with an exorbitant pension and benefit package in the 2009-2010 school year and government employee window washers make more than the network administrator in a medium sized private sector enterprise. California prison guards can make $100,000.00 a year while degreed engineers struggle to put food on the table. Police officers, fire fighters, etc... are retiring at age fifty with a 90 percent pension. It's unsustainable.

UPDATE: An investigative February 24, 2011 Orange County Register article reported that the "Average O.C. teacher salary: $77,862." This for producing students that rank among the worst in the United States in standardized scoring. Though teachers are not eligible for social security, they do get pensions, student loan debt forgiveness, teacher mortgage program, long-term care, disability, access to 403b type retirement plans, sometimes bonuses, among other generous perks.

Though the average Calpers pension for everyone receiving a pension currently in California is about $3,300, in 2010 those who more recently began taking pensions were paid greatly increased rates from employees who retired a decade ago and due to the real estate market crash the highest paid government employees are buying lavish homes and living like royalty in a Great Recession off the backs of their barely employed private sector counterpoints. Is this what government is supposed to be? No it is not. It's upside down.

And the entire country is quickly heading into this mire. We'll leave you with this USA Today article explaining how "The number of federal workers earning $150,000 or more a year has soared tenfold in the past five years and doubled since President Obama took office."

Again, this is a systemic problem not a personal one. Be nice to our government employees as you work to decertify their unions.

For more information, visit:

1. California Pension Reform.

2. Shadowbosses: Government Unions Control America and Rob Taxpayers Blind.


3. The John Stossel Show Examines Goverment Employee Union Power:

http://traffic.libsyn.com/acu/Stossel_Unions.mp3



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