Empire Strikes Back
While the unions let Pandora out of the box in Wisconsin, they kept her locked securely inside in Ohio.
In March 2011, Ohio governor John Kasich rammed through a bill similar to the Wisconsin law. It reduced some of the unions’ collective bargaining power over public workers and got rid of binding arbitration in labor disputes. Public workers were banned from striking and teachers’ salaries were tied to test scores. The bill passed narrowly in the State Senate, by a vote of 17–16.34
But there was a difference. In Wisconsin, the reform law actually went into effect—and the people of Wisconsin saw its benefits. As the Wall Street Journal explains about the Wisconsin reforms: “Attempts to modernize government are always controversial, but support usually builds over time as the public comes to appreciate the benefits of structural change.”35 But in Ohio, the law never did go into effect—and so the citizens of Ohio never got to experience the benefits that the law would bring.
What else was different in Ohio? First, Kasich didn’t make the moral case for curtailing collective bargaining. He focused instead on budgetary issues, a crucial public relations mistake on his part. Second, Kasich’s job-approval rating was already low. Third, Kasich didn’t exclude public safety workers from his reforms, like Walker had. The people were afraid of being left unprotected by striking police and firefighters.36 Finally, the unions spent more than $40 million on the repeal effort, outspending the pro-bill forces 3 to 1.37
For all these reasons, the government employee unions quickly gathered enough signatures to start a referendum on the law. And predictably, in November 2011, the bill was recalled by a wide margin, 61–39.
Since the law was repealed, Ohio has continued to sink into an economic morass. Firings are the order of the day. In Marion, Ohio, the budget situation caused the firing of fifteen police officers, delaying response times to emergency 911 calls. Teachers unions are threatening to strike for higher pay, even as the teachers themselves are getting the ax.38 As Red State reported, “Ohio’s public workers are enjoying the sort of union victory that’s often accompanied by a pink slip.”39
Return of the Jedi
The battle continues in New Jersey. Chris Christie is the Han Solo of this story, fighting the Imperial forces once again.40
In a memorable speech to the New Jersey legislature, Mr. Christie branded “pensions and benefits” as “the major driver of our spending increases at all levels of government—state, county, municipal, and school board.” And, like Walker, he made the moral case against the government employee unions: “Is it ‘fair,’ ” he asked, “for all of us and our children to pay for this excess?”
During 2010, Christie convinced his Democrat-controlled legislature to pass a budget for the year that closed the state deficit without raising taxes.41 Christie admits that he has further to go before New Jersey could be considered in good financial shape. As Christie has pointed out, New Jersey is “never going to have enough money to pay that $50 billion” shortfall that it needs to pay future government employee pensions. The same is true for its $67 billion shortfall for funding retiree health-care costs.42 To bring New Jersey’s government spending in line, Christie ultimately will have to lay off many government employees. This is what happens when government employee unions come into conflict with reality: jobs get lost.
Other rebel forces are beginning to get it, too. North Carolina recently passed a law over Democrat governor Bev Perdue’s veto, barring the state from collecting dues automatically from teachers’ paychecks on behalf of teachers unions—the dues checkoff provision that unions value so much.43 Governor Perdue, who took $1.8 million from the unions in her 2008 governor’s race and benefited from another $1.7 million in campaign ads paid for by the unions, complained that the vote took place “in the dark of night,” because it was passed at 1 a.m.44 Nonetheless, repealing dues checkoff is likely to substantially curb teachers union membership in the state of North Carolina as in other states where it has been repealed.
Other states, too, are swarming to the anti–government employee union rebel cause. Tennessee, a right-to-work state, ended collective bargaining for teachers. Under the new law, the districts will sit down to discuss working conditions with the teachers unions, a process called “collaborative conferencing.” But the school board, not the teachers unions, will ultimately be responsible for decisions about how the district’s schools are run.45
Meanwhile, in Oklahoma, the legislature repealed a law that had required Oklahoma cities with populations of over thirty-five thousand to impose collective bargaining on certain types of city workers.46 A number of other states, including Indiana, Idaho, Florida, and even Massachusetts, passed laws in 2011 that cut into union collective bargaining power over government employees by limiting the issues over which the unions can bargain with the government.
The tide is turning now.
Writing on the Wall
When do you know the government employee unions are in trouble? When Darth Vader begins to turn on the Emperor—when the government officials that the unions helped elect begin to bail on government employee unions, and when even their private sector union brethren begin to disassociate from them.
In Massachusetts, some Democrat politicians have attempted to curtail collective bargaining. In April 2011, the Democrat-led Massachusetts House voted to limit collective bargaining for municipal employees over health care. The bill was specifically aimed at reducing runaway health-care costs for municipal workers by giving city governments the right to set health-care co-pays and deductibles for their workers unilaterally, saving an estimated $100 million in the first year alone.47 The unions went on the offensive to prevent passage of this bill in the Senate. One union official complained, “These are the same Democrats that all these labor unions elected. The same Democrats who we contributed to in their campaigns.”48 In other words, the Democrat legislators, whom the unions had supported, were not staying bought. Another union official hit this same point, “All votes relating to the matters discussed in this letter may be considered Labor Votes and calculated into Labor Voting Records upon which endorsements and levels of support are determined.”49 In other words, look out, labor-supported Democrats—the unions are keeping careful score of your vote on these matters. Eventually, the unions reached a compromise agreement with the Democrat governor to maintain a large role for the unions in negotiating health-care terms, while still holding out a hope of reducing municipal health-care costs. And the change was passed into law as part of the 2012 budget.50
Similar small steps are occurring in Connecticut and New York. In Connecticut, the Democrat governor Dannel Malloy forced through $1 billion in wage and benefits concessions and cuts from the state employees union. He said, “I am attempting to bring the benefits enjoyed by state employees—wages, healthcare, and pension benefits—more in line with those enjoyed by their counterparts in the private sector and federal workforce.”51 It’s a good move and about time.
New York Democrat governor Andrew Cuomo forced state agencies to cut spending by 10 percent, or $1.5 billion, and cut $1 billion from Medicaid and $1.5 billion from education. Cuomo has pushed for pension reform, raising minimum retirement age to sixty-five and cutting benefits for newly employed state workers. Mayor Michael Bloomberg of New York City has also cut $4.6 billion from the budget that would largely impact the unions, including pensions.52
Democrat strategist Pat Caddell sees the writing on the wall for the Democrats and unions. Caddell explains that the Democrats are “asking taxpayers, asking ordinary people, to pay for people who make twice as much as they make…”53 He concluded that “the public unions are going to take the country and the Democratic party down the tubes.” How will we know that we are winning? We will see more and more Shadowboss-supported politicians pulling away from the unions’ agenda to save their own political hides, as we are starting to see in a small way with politicians like Governors Malloy and Cuomo.
&
nbsp; A House Divided
In theory, unions of all kinds are supposed to be united in fraternal solidarity. Indeed, for many years, private sector unions fought to extend collective bargaining over government workers, while public employee unions supported their private sector brethren in their opposition to treaties such as the North American Free Trade Agreement in the 1990s.
Suddenly, it’s a different world. In the current tough economic times, construction workers are suffering from unemployment levels double the national rate, according to the Associated General Contractors of America. They are relearning the hard way that without a growing economy, all the labor-friendly laws and regulations in the world won’t create new jobs for them. And many private sector workers, including union members, are starting to resent paying for government employee union members’ large paychecks and benefits.
Democrat Stephen Sweeney, the president of the New Jersey State Senate and an ironworkers union boss, drew a sharp distinction between private sector unions and government employee unions. He could fix things, he said, “if the unions were willing to work and basically stand up and tell their members the truth like I do in the private sector.” But the government employee unions instead “keep telling their members the sun’s shining when it’s raining. Well, we got a monsoon right now and my job is to do the right things for the people of this state.”54
Not only are private and government union members starting to pull away from each other on issues, but also there is a growing gap between their rates of unionization. Even in heavily unionized New York, private sector union membership continues to decline whereas government sector union membership continues to rise. A recent article in Crain’s New York Business noted that in New York State, “Unionization in the private sector last year fell to 13.5% from 13.7% in 2010, while the rate in the public sector rose to 72.2% from 70.5%.”55 In the hard hit construction industry, unionization rates fell from 27.5 percent to 23.7 percent in a single year, from 2010 to 2011. Of course, New York is a forced-dues state, so private sector union members are not leaving the unions voluntarily (because they can’t). But new businesses that replace failing businesses are not being unionized as quickly as previously, showing that unions are increasingly falling out of favor with private sector workers.
When the Obama Administration first delayed building the Keystone Pipeline, a massive infrastructure project that would have employed thousands of union members, the decision was met with disbelief by the president of the Laborers International Union: “The administration chose to support environmentalists over jobs. Job-killers win, American workers lose.” Privately, union officials whose members would have gotten jobs from the project express bitterness that the government employee unions sided with the environmentalists against them, and that the Obama Administration took the government employee union/environmentalist side.
When the Obama Administration first delayed building the Keystone Pipeline, a massive infrastructure project that would have employed thousands of union members, the decision was met with disbelief by the president of the Laborers International Union: “The administration chose to support environmentalists over jobs. Job-killers win, American workers lose.” Privately, union officials whose members would have gotten jobs from the project express bitterness that the government employee unions sided with the environmentalists against them, and that the Obama Administration took the government employee union/environmentalist side. One unnamed official told Politico about his outrage and his disappointment, “People are p——d. The emotions are really, really raw right now. This is a big deal.”56 Another private sector union boss echoed the sense of betrayal felt by some private sector union members: “Unions… have kicked our members in the teeth.”57
Union bosses divided, and a group of unions openly criticizing the Obama Administration? This is something new. But it is not surprising that Obama went with the government employee unions and the environmentalists against the private sector unions. After all, it is the government employee unions that devote their resources to political activities and campaign giving, because their dues income depends on it. Private sector unions have been dwindling in importance for decades and are not as politically important as government employee unions. So we should expect to see a lot more issues on which President Obama and other Democrats come down on the side of the government employee unions against the private sector unions. After all, you get what you pay for.
As all taxpayers, including private sector union members, find themselves unable to support the growing numbers of net tax receivers, particularly government employees, the wedge between private sector and government employee union members will grow deeper.
As all taxpayers, including private sector union members, find themselves unable to support the growing numbers of net tax receivers, particularly government employees, the wedge between private sector and government employee union members will grow deeper.
Conclusion
Our country is at a turning point. Americans will either follow the Shadowbosses and our nation will decline steadily, or they will embrace the rebellion.
The good news is that more and more Americans seem to be joining the rebellion. In January 2012, the Indiana legislature passed a right-to-work bill. Governor Mitch Daniels signed the bill into law, calling it a “bold stroke.” The law makes Indiana the first new right-to-work state in ten years—and in doing so, frees two hundred thousand workers from forced unionism.58
The great battle has begun. Will you join? To paraphrase Princess Leia, you—the taxpayers of the United States, the pie makers—are our only hope.
Chapter 9 Summary Points
Americans are fighting back against government employee unions. One leader of this movement is Governor Scott Walker of Wisconsin, who has significantly curbed government employee union power in his state and recently won a bitter recall election.
Unions still wield tremendous power, as shown by their defeat of Ohio’s union reform bill, which the unions spent over $40 million to recall.
Governors and state legislatures in New Jersey, North Carolina, Tennessee, Oklahoma, Indiana, Idaho, Florida, Massachusetts, and other states are working to curb the runaway powers of the government employee unions.
Some Democrat politicians are beginning to turn against their Shadowbosses in small ways in order to improve their state’s fiscal future—and save their own political careers.
There is a growing divide between private sector union members and government employee union members, because their interests are diverging.
Private sector union members have interests that are more aligned with taxpayers than with their government employee union brethren. Private sector union members and other taxpayers both become frustrated when government employee unions refuse to make small concessions on their retirement and health-care benefits to bring state and local budgets into line.
Conclusion
Consider our version of Aesop’s fable of the Three Tradesmen:
It once happened that a large walled city came under attack from raiders. The inhabitants came to a public meeting to decide how best to defend their city from invasion.
At the meeting, the head of the Bricklayer’s Union stood up. “Bricks!” he thundered. “They’re the best way to defend against invasion. Build walls full of ’em. And it won’t cost you too much.”
“No, no!” interjected the head of the Carpenter’s Guild. “Timber, sharpened to points, makes an excellent defense! And wood is even cheaper and stronger than bricks.”
“I beg to differ,” the head of the Leatherman’s Local cried to the crowd. “Leather will provide the best resistance for our city, far better than sticks or bricks.”
LEATHER obviously wouldn’t do much to protect the city from attack, but that didn’t stop the leather tradesman from making his pitch. This fable has been used for thousands of years to teach children a simple truth: every man is out for his own trade, even when their city’s future rests in
the balance. And America’s future certainly does rest in the balance.
But unlike the walled city in the fable, our celebrated “city on a hill” is threatened from within. America is under attack. Our nation’s finances are ruinous. We face out-of-control government spending and deficits. Our states are going bankrupt. And instead of working on defending us against these calamities, our government is making the problem worse by following the advice of tradesmen out for their own trades. Our government keeps buying government union bricks, hand over fist. It purchases and stockpiles government union wood. And our government has signed a long-term contract with government union leather merchants. Yet our government is quickly running out of money and borrows from foreign nations to pay its bills. Meanwhile, our undefended city walls are weak and starting to crumble. When outside forces come to threaten us again, we will no longer have the resources to mount an adequate defense to save our people. And our very American way of life will be threatened.
The biggest issues of our time are tied up with the growth of government employee unions and the resulting growth of government. When people talk about America borrowing more than it can pay back, the growth of government is the cause. When people warn us that America is becoming reliant on foreign lenders like China and oil-rich Arab states, excessive government spending is really to blame. When people worry about our states and municipalities nearing insolvency, government employee unions are again at the root.
Government employee unions and politicians have been working on growing our government for decades. The growth of our government may be in the unions’ interest, but it endangers us as a nation. Growing government hurts all the taxpayers—the people who make our nation’s pie. The losers include private sector union members who are also pie makers and don’t share the same interest in growing our government as government employee union members.
Shadowbosses: Government Unions Control America and Rob Taxpayers Blind Page 26