More Folks Unhappy about Government
I've been attempting to point out about once a week the burgeoning public anger towards public sector compensation. As the economy continues to tumble and private sector jobs continue to dminish, the drumbeat towards curbing our compensation increases. I believe that places such as San Joaquin County need to be particularly careful about inciting the anger of our private sector brethern.
I was meeting with some economic development officials today about several companies seriously looking to relocate to Manteca. While this is great news, we were also discussing the impact of the NUMMI plant closure and its impact on Stockton and the rest of the county. By next spring, the unemployment rate in Stockton could exceed 25 percent and the county rate could hit 18 percent. It could be worse, but some of the plant suppliers will stay open for a short period of time to supply plants in Mexico. By the way, the reason that companies are looking at Manteca is due to the many amenities and shopping opportunities that we've added over the past decade. Thus, while some of our employees have been critical of the City Council's spending habits--it is these spending habits that will bring jobs and future revenues to the City.
In any case, I found it interesting that the Cato Institute, a renown conservative think tank has weighed in on the issue of public sector compensation. Obviously, this is a group pre-disposed to oppose us, but I believe it is very important to be aware of who is talking about us and what they are saying. This is not a fringe organization, but one whose influence is quite extensive.
Here is the introduction to their policy paper:
Rates of unionization in the United States today are at historic lows and are unlikely to rebound. However, there is one sector in which organized labor is growing in strength: government. This has severe implications for the future of public finances for state and local governments across the nation, and for the nature of organized labor itself.
High rates of unionization in the public sector have led to very high labor costs in the form of generous collective bargaining contracts. Now state and local governments are under increasing financial pressure, as a worsening national economy has led to decreased revenues for states and municipalities—many of which remain locked into the generous contracts negotiated in more flush times. Thus, as businesses retrench, governments find themselves in a financial straitjacket. In addition, as government unions grow stronger relative to private-sector unions, their prevalence erodes the moderating influence of the market on the demands that unions make of employers.
Now, as an economic downturn threatens state and local government revenues, officials who want to keep their fiscal situations under control would do well to look skeptically at public-sector bargaining—especially since the existing political checks on it have proven ineffective. Public officials should eschew public-sector bargaining when possible, or at the very least, seek to limit its scope.
As keepers of the public purse, legislators and local council members have an obligation to protect taxpayers' interests. By granting monopoly power to labor unions over the supply of government labor, elected officials undermine their duty to taxpayers, because this puts unions in a privileged position to extract political goods in the form of high pay and benefits that are much higher than anything comparable in the private sector.
This paper shows how the unionization of government employees creates a powerful, permanent constituency for bigger government— one that is motivated, well-funded, and organized. It also makes some recommendations as to how to check this constituency's growing power—an effort that promises to be an uphill struggle.
To read the entire study, click here.
I was meeting with some economic development officials today about several companies seriously looking to relocate to Manteca. While this is great news, we were also discussing the impact of the NUMMI plant closure and its impact on Stockton and the rest of the county. By next spring, the unemployment rate in Stockton could exceed 25 percent and the county rate could hit 18 percent. It could be worse, but some of the plant suppliers will stay open for a short period of time to supply plants in Mexico. By the way, the reason that companies are looking at Manteca is due to the many amenities and shopping opportunities that we've added over the past decade. Thus, while some of our employees have been critical of the City Council's spending habits--it is these spending habits that will bring jobs and future revenues to the City.
In any case, I found it interesting that the Cato Institute, a renown conservative think tank has weighed in on the issue of public sector compensation. Obviously, this is a group pre-disposed to oppose us, but I believe it is very important to be aware of who is talking about us and what they are saying. This is not a fringe organization, but one whose influence is quite extensive.
Here is the introduction to their policy paper:
Rates of unionization in the United States today are at historic lows and are unlikely to rebound. However, there is one sector in which organized labor is growing in strength: government. This has severe implications for the future of public finances for state and local governments across the nation, and for the nature of organized labor itself.
High rates of unionization in the public sector have led to very high labor costs in the form of generous collective bargaining contracts. Now state and local governments are under increasing financial pressure, as a worsening national economy has led to decreased revenues for states and municipalities—many of which remain locked into the generous contracts negotiated in more flush times. Thus, as businesses retrench, governments find themselves in a financial straitjacket. In addition, as government unions grow stronger relative to private-sector unions, their prevalence erodes the moderating influence of the market on the demands that unions make of employers.
Now, as an economic downturn threatens state and local government revenues, officials who want to keep their fiscal situations under control would do well to look skeptically at public-sector bargaining—especially since the existing political checks on it have proven ineffective. Public officials should eschew public-sector bargaining when possible, or at the very least, seek to limit its scope.
As keepers of the public purse, legislators and local council members have an obligation to protect taxpayers' interests. By granting monopoly power to labor unions over the supply of government labor, elected officials undermine their duty to taxpayers, because this puts unions in a privileged position to extract political goods in the form of high pay and benefits that are much higher than anything comparable in the private sector.
This paper shows how the unionization of government employees creates a powerful, permanent constituency for bigger government— one that is motivated, well-funded, and organized. It also makes some recommendations as to how to check this constituency's growing power—an effort that promises to be an uphill struggle.
To read the entire study, click here.
Labels: Labor
posted by City Manager @ 2:49 AM
2 Comments:
At October 11, 2009 8:01 PM ,
American Hero said...
This the smartest thing I’ve ever read from someone in your position. Unfortunately, it will probably fall on deaf ears in Manteca. I’m sorry to have to say that but in my experience about 30 % of population or so is capable of understanding an economic principle. The other 70 or so percent will just yell at you and blame you for “selling us out!” or some such nonsense.
But let me try anyway to give something to think about. Not to pick on any one union, but since it’s the MPOA that seems to be the problem child, let’s just use them as an example.
Well, there’s only enough money to pay for 60 policemen. Or, we could pay for 72 but we’d have to pay everyone just a little less. It’s really as simple as that. But here’s where it gets odd. By what right does the MPOA “own” those jobs? Maybe our public safety will be reduced, maybe it won’t matter, but by what right does the union dictate the level of public safety the people are entitled to purchase?
Let me extend that to make it clearer. Let’s say next year, because of the raises in costs, there’s only enough money to hire 40 policemen. So the MPOA insists on keeping the pay and demands that another 20 be fired. Will public safety be affected? Presumably. But lets keep going. The next year or so there’s only enough money for 10 policemen, and so on and so on, until in a few years, there’s two police officers in town. Crime is rampant, etc.
What if the people want to hire a new police force, another 70? But the MPOA says you can’t, we can’t. They are the only “representatives” and such (labor union laws). By what right? That’s the question! In other words, who the hell is this “group” that tells us, the people of Manteca, how many police or fire we can hire?
Why can’t we hire public servants that we want? Why can’t we hire another 72 police officers and replace the ones we have now that don’t want to work?
Thanks for the interesting reading. The Cato article is fascinating.
At October 21, 2009 1:38 PM ,
Jesse Baker said...
As I understand this issue, the MPOA is not telling us we cannot hire 72 police officers. They are simply asking the City to keep it's end of the bargain on a contract that was made with them. Admittedly, the economy has changed and the City only has a certain amount of money to spend, so this has caused the lay-offs. If you are satisfied with security cops doing the jobs of police officers, then lower the pay to that of a security guard and see how the City fares. You pay for what you get and if you compare the Manteca wages to other cities, they are not excessive.
Post a Comment
<< Home