Public Employee Unions Rule & Ruin

“In cities across the country, voters may cast ballots, but it’s really the employees who rule.” So says Joel Kotkin and Harry Siegel in The December 21 New Republic’s, “The Transit Strike and Democrats.” (Behind the New Republic’s subscription wall, but available at Joel Kotkin’s website.)

“During the past 30 years, public employee unions have largely won the battle for urban political power by default,” as “other traditional power centers…have over time receded from urban politics.” Although “Democrats are usually seen as the beneficiaries of this situation,” they now are so beholden to public unions as to bear almost the entire responsibility for the breakdown of the social contract with the rest of the urban citizenry through oversize public union wages and benefits starving the budgets for other needs. “It is Democrats who control most big city halls. It is Democrats who are tied most intimately to the public center unions. And it is Democrats who will lose out most when cities they run no longer work.”

The New York Times reports the “Transit Strike Reflects Nationwide Pension Woes.” As the report sums, “Many officials and fiscal experts assert that across the nation government pension plans face a shortfall of hundreds of billions of dollars.” Nonetheless, “Labor unions, for their part, say that the worries are overblown.”

Interestingly, although staunch supporters of Democrat taxes that would squelch economic growth, their hope lays in Wall Street: “They argue that much of the shortfall in pension financing could be erased by a strong stock market in the next several years.” As the creditworthiness of our cities crumbles under the weight of public employee wages and benefits eating up from 60-80% of the budgets, and basic social services – from education to roads to parks and libraries – suffering, Wall Street is leery of loaning more, putting more pressure on public employee beholden politicians to act more responsibly.

“Nationwide, 90 percent of public-sector workers have traditional [defined] benefit plans … while just 20 percent of private-sector workers do.” At the same time these gold-plated watch wearers’ health plans are so generous as to cost two to four times the cost of private sector plans. They are simply unaffordable, regardless of how nice for them.

The other major beneficiary of comparatively generous pension and health plans are in academia, pushing up tuitions by rates treble and quadruple the rate of general inflation or of wage increases in the private economy, and sorely pressing families’ budgets. Again, there are limits to taxes, and parents’ raided retirement savings, and loans that weigh down graduates.

It is inevitable that public unionists and academics will have their benefit programs trimmed, and they have to more frugally budget and save just as the rest of Americans.

As this happens, their responsiveness to Republican principles favoring lower taxes and higher savings, assuming that Republicans reassert these core platform programs, will whittle at two main legs of the Democrat Party. (Minorities traditionally Democrat who work in the private sector are, also, slowly turning Republican, as they realize personally where their future security is.)

The rule by public employee unions of the Democrat Party will be either America’s or the Democrat Party’s ruin.