FedUpUSA

Archive for the ‘unions’ Category

Now that Schwarzenegger is a certifiable lame duck (dead duck may be a more appropriate term) Schwarzenegger sees fit to take on public unions in a major way. It’s too late now (for him) even as he speaks the truth.

Please consider Public Pensions and Our Fiscal Future by Arnold Schwarzenegger.

Recently some critics have accused me of bullying state employees. Headlines in California papers this month have been screaming “Gov assails state workers” and “Schwarzenegger threatens state workers.”

I’m doing no such thing. State employees are hard-working and valuable contributors to our society. But here’s the plain truth: California simply cannot solve its budgetary problems without addressing government-employee compensation and benefits.

Thanks to huge unfunded pension and retirement health-care promises granted by past governments, and also to deceptive pension-fund accounting that understated liabilities and overstated future investment returns, California is now saddled with $550 billion of retirement debt.

The cost of servicing that debt has grown at a rate of more than 15% annually over the last decade. This year, retirement benefits—more than $6 billion—will exceed what the state is spending on higher education. Next year, retirement costs will rise another 15%. In fact, they are destined to grow so much faster than state revenues that they threaten to suck up the money for every other program in the state budget.

At the same time that government-employee costs have been climbing, the private-sector workers whose taxes pay for them have been hurting. Since 2007, one million private jobs have been lost in California. Median incomes of workers in the state’s private sector have stagnated for more than a decade. To make matters worse, the retirement accounts of those workers in California have declined. The average 401(k) is down nationally nearly 20% since 2007. Meanwhile, the defined benefit retirement plans of government employees—for which private-sector workers are on the hook—have risen in value.

Few Californians in the private sector have $1 million in savings, but that’s effectively the retirement account they guarantee to public employees who opt to retire at age 55 and are entitled to a monthly, inflation-protected check of $3,000 for the rest of their lives.

In 2003, just before I became governor, the state assembly even passed a law permitting government employees to purchase additional taxpayer-guaranteed, high-yielding retirement annuities at a discount—adding even more retirement debt. It’s as if Sacramento legislators don’t want a government of the people, by the people, and for the people, but a government of the employees, by the employees, and for the employees.

For years I’ve asked state legislators to stop adding to retirement debt. They have refused. Now the Democratic leadership of the assembly proposes to raise the tax and debt burdens on private employees in order to cover rising public-employee compensation.

Much needs to be done. The Assembly needs to reverse the massive and retroactive increase in pension formulas it enacted 11 years ago. It also needs to prohibit “spiking”—giving someone a big raise in his last year of work so his pension is boosted. Government employees must be required to increase their contributions to pensions. Public pension funds must make truthful financial disclosures to the public as to the size of their liabilities, and they must use reasonable projected rates of returns on their investments. The legislature could pass those reforms in five minutes, the same amount of time it took them to pass that massive pension boost 11 years ago that adds additional costs every single day they refuse to act.

…

All of these reforms must be in place before I will sign a budget.

I am under no illusion about the difficulty of my task. Government-employee unions are the most powerful political forces in our state and largely control Democratic legislators. But for the future of our state, no task is more important.

Schwarzenegger Washes His Hands

Schwarzenegger drones on and on about who is to blame. He also acts as if he was fiscally responsible.

That is far from the truth. In Turn out the lights California, the party is over I blasted Schwarzenegger’s fiscally reckless proposals.

Flashback March 2, 2007: Schwarzenegger wants $500 billion to rebuild California

Sound Bites

• $42.7 billion in general obligation bonds issued last year is “only the foot in the door, to whet the appetite.”
• It will take $500 billion to “rebuild California the way it ought to be”.
• $500 billion is “too big for people to digest, so you don’t talk about that” even though he is talking about it.
• California needs $500 billion even though it has “done tremendously with the revenue increases”.
• California will not issue less debt even if the economy slows.
• California “could face lower tax revenues” but he opposes tax hikes.

Well here we are, 9 months later and the $4.1 billion reserve went to a $14 billion deficit in the last 4 months.

Thank God Schwarzenegger did not get what he asked.

Now in massive revisionist history he attempts to take credit for being fiscally conservative. Please, let’s stop the charades.

While there is some truth he wanted concessions from unions, unlike Governor Chris Christie, he never fought for them very hard. Only now is he saying “All of these reforms must be in place before I will sign a budget.”

He should have said that in 2009, 2008, and 2007. He is saying that now that he is a lame duck. While I commend the idea, the problems he was elected to fix are more broken than ever.

It will be interesting to see how this budget battle plays out, but no amount of hand-washing can absolve Schwarzenegger of his share of the blame.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com

The Herald-News reports Talks fail – Illinois construction strike drags on

Monday’s negotiations failed to produce a settlement between striking union laborers and operating engineers and their employers.

Jim Sweeney, president and business manager of International Union of Operating Engineers Local 150, said he was ” … tremendously disappointed at the employers’ lack of urgency.”

Mish Translation: Local 150 wants employers to quickly cave into obscene union demands

“We are asking the employers to share the burden with us,” Sweeney said.

Mish Translation:

This is what sharing the burden really looks like.

A press release issued Monday night by MARBA said the unions “… have been unwilling to come to the table with a proposal that is in line with the state of the industry and the economy.”

The strike has stopped a wide variety of projects in nine Chicagoland area counties. Will County projects affected by the strike include the new Silver Cross Hospital in New Lenox, 159th Street work in Lockport and the Route 59 widening through Shorewood, Joliet and Plainfield.

What’s MARBA?

Inquiring minds are reading About MARBA.

Formed in 1971, the Mid-America Regional Bargaining Association (MARBA) is a multi-employer association focused on collective bargaining in the construction industry. It brings together various contractor associations in the Metropolitan Chicago region for the purpose of unified labor relations.

MARBA recruits industry experts to serve in the leadership roles during negotiations. These individuals are usually one of the leading employers in the particular craft for which MARBA is negotiating. MARBA stabilizes the construction industry by unifying contractors and providing them with a strong, single voice to handle union relations.

Negotiating twenty-one separate collective bargaining agreements with ten unions is just one aspect of MARBA’s services to its members.

MARBA Press Release

I happen to have a copy of a document from MARBA that shows who is really holding up contract negotiations. Here goes.

A Sense of Urgency

The union accuses employers of having “no sense of urgency”. The Collective Bargaining Association points out why.

• Unions are asking for a 4.55% raise per year for 3 years
• The Operating Engineers’ medical plan covers 100% of most medical expenses with no deductible or co-payment and the maximum deductible for anything is $300.
• The Laborers’ plan covers 100% of the first $10,000. After that, members are responsible for a mere $200 per calendar year deductible per person ($400 per family).

Tom Nordeen, Chairman of MARBA says “These are the kind of benefits many would envy”

I think that is quite an understatement, don’t you? Yet greedy unions are holding out for obscene pay hikes on top of those benefits.

Gall of Jim Sweeney, President of Local 150

Jim Sweeney, president and business manager of International Union of Operating Engineers Local 150 has the gall to talk about “Shared Sacrifice”.

What You Can Do About It

If you are in Chicago, stuck in construction-zone traffic, looking for where to place the blame, please blame the unions.

Better yet, if you want to do something about this, do not vote for any candidate who wins a union endorsement. In general that means boot Governor Quinn out of office and his Democrat cronies right along with him.

Not in Illinois?

No problem, just do the same thing in your state: Do not vote for any candidate beholden to public unions and do not vote for any candidate who thinks raising taxes is the solution to the problem of union arrogance and greed.

By the way ….
Want to know one reason medical costs are soaring?

Look how union employees have absolutely no incentive to hold down costs. They do not care what medication costs or how many tests are done. Those with high deductibles are less prone to do needless tests and more prone to use generics. Taxpayers foot the bill for this extravagance twice, once in insane salaries and pensions, the second in rising health care costs.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com

By Andrew J. Coulson

Teachers unions, the Obama administration, and most Democrats in Congress want to spend another $23 billion that we don’t have to shore up public school employment. If we don’t go along, they tell us, it’ll be a “catastrophe” for American education. With fewer teachers our kids will supposedly learn less, further crippling our already wounded economy.

They couldn’t be more wrong.

Over the past forty years, public school employment has risen 10 times faster than enrollment (see chart). There are only 9 percent more students today, but nearly twice as many public school employees. To prove that rolling back this relentless hiring spree by a few years would hurt student achievement, you’d have to show that all those new employees raised achievement in the first place. That would be hard to do… because it never happened.

Student achievement at the end of high school has been flat for as long as we’ve been keeping track—all the way back to 1970. But we did get something in return for all that hiring: a great, big, fat, BILL.

If you graduated from high school in 1980, your entire k-12 education cost your fellow taxpayers about $75,000, in 2009 dollars. But the graduating class of 2009 had roughly twice that amount lavished on their public school careers. The extra $75,000 we’re now spending has done wonders for public school employee union membership, dues revenue, and political clout. It’s done a whole lotta nothin’ for student learning (see chart).

But, some readers may ask: were all those new employees teachers? About two thirds of public school employment growth has been teachers (41 percent) or teachers’ aides (23 percent). The remaining third was comprised almost entirely of support staff in schools and district offices.

So, yes, a bit of public schooling’s employment bloat can be put down to a swelling bureaucracy. But given that adding a couple of million new instructional jobs did nothing to improve achievement at the end of high school, there’s no reason to expect that shedding a few hundred thousand of them would hurt it.

Ed. sec. Arne Duncan and friends are thus mistaken if they really expect a negative academic or economic impact from reversing some of our costly and ineffectual public school employment growth. In fact, they actually have it backwards.

In the private sector, jobs are created and retained only if they are believed to add value to the enterprise—if their salary and benefit costs are outweighed by the revenue they generate. By contrast, we know that the millions of new government school positions added over the past four decades have not added measurably to student knowledge or skills at the end of high school. So instead of boosting the U.S. economy, these jobs have actually been a drain on it. Returning to the staff-to-student ratio we had in 1980 would save taxpayers about $142 billion every year.

Losing a job is a terrible experience, but the school hiring binge of the past four decades has been entirely disconnected from enrollment levels and unaccompanied by educational improvement. Foolish public officials and self-serving, empire building teachers’ unions have created millions of unproductive jobs that were never justified in the first place and that have been a terrible drain on the U.S. economy.  With the nation $13 trillion in debt and many state governments looking at red ink for years to come, we just can’t afford to perpetuate their mistake any longer.

Throwing billions more at the system would only worsen the problem and delay the solution, which is to help ease the transition of these workers from their current unproductive employment back into the productive sector of the economy.

Big Government

Click Images to Enlarge

The Daily Bail

Private citizens have had enough of overpaid, underworked, public employees with benefits most private workers can only dream about.

Unfortunately, President Obama has not gotten the message (and likely won’t until he is kicked out of office). Time and time again, president Obama has proven that he is beholden to public unions no matter how unjustified the cost.

Now President Obama is asking for $50 billion more taxpayer dollars, your dollars, to dole out to the states, in an effort to buy votes or simply because he is economically illiterate. Most likely, it is a combination of both.

Please consider this letter from Obama to Speaker of the House Nancy Pelosi and the Senate leaders of both parties.

The president whines about losing 84,000 government jobs at the state and local level. I consider that a 5% down payment on what needs to happen.

Obama Begs for More of Your Money

The Washington Post sums up the situation nicely in Obama pleads for $50 billion in state, local aid

President Obama urged reluctant lawmakers Saturday to quickly approve nearly $50 billion in emergency aid to state and local governments, saying the money is needed to avoid “massive layoffs of teachers, police and firefighters” and to support the still-fragile economic recovery.

In a letter to congressional leaders, Obama defended last year’s huge economic stimulus package, saying it helped break the economy’s free fall, but argued that more spending is urgent and unavoidable. “We must take these emergency measures,” he wrote in an appeal aimed primarily at members of his own party.

“I think there is spending fatigue,” House Majority Leader Steny H. Hoyer (D-Md.) said recently. “It’s tough in both houses to get votes.”

Democrats, particularly in the House, have voted for politically costly initiatives at Obama’s insistence, most notably health-care and climate change legislation. But faced with an electorate widely viewed as angry and hostile to incumbents, many are increasingly reluctant to take politically unpopular positions.

The House last month stripped Obama’s request for $24 billion in state aid from a bill that would extend emergency benefits for jobless workers. Senate Majority Leader Harry M. Reid (D-Nev.) hopes to restore that funding but with debate in that chamber set to resume this week, he acknowledges that he has yet to assemble the votes for final passage. Obama’s request for $23 billion to avert the layoffs of as many as 300,000 public school teachers has not won support in either chamber.

Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell (R-Ky.), called the letter full of “contradictions.”

“He’s calling on Congress to pass a [jobless] bill that will add about $80 billion to the deficit, but then calls for fiscal discipline; he says these measures need to be targeted and temporary, but then calls for extending programs passed in the stimulus more than a year ago,” Stewart said in an e-mail.

Overpaid Unions Workers Need To Share The pain

If President Obama has any sense of fiscal responsibility he would be calling on public unions to share the pain. Government works almost entirely escaped the pain most in the private sector have gone through.

We lost 8 million private sector jobs in the recession, and a few hundred thousand public sector jobs are now at stake. Instead of asking overpaid, underworked public union workers to share in the pain, Obama want to tax to death everyone else to pay for it.

Send a Message

It is time to send a message and the way to do it is to vote against any incumbent from either party who just cannot say no to this fiscal madness.

What You Can Do

Please call your legislative representative and tell them the problem is too much government spending, unions are wrecking the country, and if they vote for more taxpayer sponsored bailouts of public union workers or more state aid, then you will vote them out of office.

Tell your representatives you are against spending $50 billion more on states and that it is long overdue for government workers share the pain and that it’s time for states to fix their budget messes without more Federal handouts and taxpayer dollars.

Here is a directory sorted by state of all the Senators of the 111th Congress.

You can also look up the phone numbers in the Online Directory For The 111th Congress

Bear in mind, not a single job is really at stake. All the unions have to do to keep every jobs is lower pay scales or reduce benefits. Instead, they want everyone else to pitch in to pay for their bloated salaries and their bloated pensions.

Enough is enough.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List