Tag: unions

U.S. Mail Monopoly Wants Rate Hike

The long-term prospects for the U.S. Postal Service monopoly are bleak. To help stem the flow of red ink, the USPS intends to seek a rate increase. Only a government monopoly would try to raise prices when the demand for its services is plummeting. The rate increase will only push its already declining customer base to use cheaper, more efficient electronic alternatives.

The USPS is in need of drastic reform, but instead of looking at big picture, Congress is hung up on the USPS’s request to eliminate Saturday mail delivery service. In contrast, countries around the world are continuing to liberalize their postal markets by embracing competition and private sector involvement.

Britain is a good example.

In 1969, the British Post Office transformed from a government agency into a corporation, which would come to be known as Royal Mail. However, the company’s shares are owned by the government. In 2006, Royal Mail’s regulator removed its monopoly and opened British mail delivery to full competition, which the postal unions opposed.

Like their counterparts in the U.S., the British postal unions are a hindrance to effective and efficient postal management. With email and other technologies undermining traditional mail, neutering the inflexibility caused by unions is paramount for mail operations here and abroad.

According to the Daily Mail, the British government is now prepared to take the next step: privatization. In doing so, the government is considering transferring a portion of Royal Mail’s shares to its employees. Giving the employees ownership stakes would inhibit the unions’ ability to extract concessions that would negatively affect the company’s bottom line.

A popular argument against mail privatization in the U.S. is that an important service can’t be entrusted to self-interested capitalists concerned only with making a profit. But public officials are just as motivated by self-interest. The difference is that public officials aren’t subject to market forces, which compel private businesses to adapt and economize to survive.

For example, the third-ranking official at the USPS stepped down in May after it came to light that he awarded six-figure, no-bid contracts to former colleagues at various companies.

From the Washington Post:

A 64-page report by the Postal Service Office of Inspector General found that [Robert F.] Bernstock clashed with Postal Service lawyers over whether he could conduct outside business by using agency computers, e-mail and staff… Bernstock also used office telephones to conduct teleconferences and other meetings related to his private business holdings and also instructed staffers to conduct private work for him, investigators found.

The report details how Bernstock awarded non competitive contracts to five former business associates and a $1.5 million consultant deal with Goldman Sachs. He also violated company policy by negotiating a holiday bulk stamp sale agreement with Costco while owning $30,000 in company stock. The Postal Service requires officials owning more than $15,000 in a company’s stock to recuse themselves from any official dealings with the company.

Unfortunately, One Man’s “Paranoia” Is Everyone Else’s “Reality”

Finished with my woman
‘Cause she couldn’t help me with my mind
People think I’m insane
Because I am frowning all the time

- Black Sabbath, “Paranoid”

According to the Fordham Institute’s Chester Finn, I and others like me are “paranoid.” So why, like Ozzy Osbourne, am I “frowning all the time?” Because I look at decades of public schooling reality and, unlike Finn, see the tiny odds that “common” curriculum standards won’t become federal standards, gutted, and our crummy education system made even worse.

Finn’s rebuttal to my NRO piece skewering the push for national standards, unfortunately, takes the same tack he’s used for months: Assert that the standards proposed by the Common Core State Standards Initiative are better than what most states have produced on their own; say that adopting them is “voluntary;” and note that we’ve got to do something to improve the schools.

Let’s go one by one:

First, as Jay Greene has pointed out again and again, the objection to national standards is not that the proposed CCSSI standards are of poor quality (though not everyone, certainly, agrees with Finn’s glowing assessment of them). The objection is that once money is attached to them – once the “accountability” part of “standards and accountability” is activated – they will either be dumbed down or just rendered moot by a gamed-to-death accountability system. 

This kind of objection, by the way, is called “thinking a few steps ahead,” not “paranoia.”

It’s also called “learning from history.” By Fordham’s own, constant admission, most states have cruddy standards, and one major reason for this is that special interests like teachers’ unions – the groups most motivated to control public schooling politics because their members’ livelihoods come from the public schools – get them neutered. 

But if centralized, government control of standards at the state level almost never works, there is simply no good reason to believe that centralizing at the national level will be effective. Indeed, it will likely be worse with the federal government, whose money is driving this, in charge instead of states, and parents unable even to move to one of the handful of states that once had decent standards to get an acceptable education.

Next, let’s hit the the “voluntary” adoption assertion. Could we puh-leaze stop with this one! Yes, as I note in my NRO piece, adoption of the CCSSI standards is technically voluntary, just as states don’t have to follow the No Child Left Behind Act or, as Ben Boychuk points out in a terrific display of paranoia, the 21-year-old legal drinking age. All that states have to do to be free is “voluntarily” give up billions of federal dollars that came from their taxpaying citizens whether those citizens liked it or not! 

So right now, if states don’t want to sign on to national standards, they just have to give up on getting part of the $4.35 billion Race to the Top fund. And very likely in the near future, if President Obama has his way, they’ll just have to accept not getting part of about $14.5 billion in Elementary and Secondary Education Act money.

Some voluntarism….

Finally, there’s the “we’ve got to do something to fix the schools” argument. I certainly agree that the education system needs fixing. My point is that it makes absolutely no sense to look at fifty centralized, government systems, see that they don’t work, and then conclude that things would be better if we had just one centralized, government system. And no, that other nations have national standards proves nothing: Both those nations that beat us and those that we beat have such standards.

The crystal clear lesson for those who are willing to see it is that we need to decentralize control of education, especially by giving parents control over education funding, giving schools autonomy, and letting proven, market-based standards and accountability go to work. 

Oh, right.  All this using evidence and logic is probably just my paranoia kicking in again.

 

Minimum Wage Hikes Deserve Share of Blame for High Unemployment

Even though the Obama Administration claimed that squandering $800 billion on so-called stimulus would  keep the joblessness rate below 8 percent, the unemployment rate today is almost 10 percent. There are many reasons for the economy’s tepid performance, including a larger burden of government spending and the dampening effect of future tax rate increases (tax rates will jump significantly on January 1, 2011, when the 2003 tax cuts expire).

A closer look at the unemployment data, though , suggests that minimum wage laws also deserve a big share of the blame. In this Center for Freedom and Prosperity video, a former intern of mine (continuing a great tradition) explains that politicians destroyed jobs when they increased the minimum wage by more than 40 percent over a three-year period.

Mr. Divounguy is correct when he says businesses are not charities and that they only create jobs when they think a worker will generate net revenue. Higher minimum wages, needless to say, are especially destructive for people with poor work skills and limited work experience. This is why young people and minorities tend to suffer most - which is exactly what we see in the government data, with the teenage unemployment rates now at an astounding (and depressing) 26 percent level and blacks suffering from a joblessness rate of more than 15 percent.

In a free society, there should be no minimum wage law. From a philosophical perspective, such requirements interfere with the freedom of contract. In the imperfect world of politics, thought, the best we can hope for is that politicians occasionally do the right thing. Sadly, the recent minimum wage increases that have done so much damage were signed into law by President Bush. It’s worth noting that President Obama’s hands also are dirty on this issue, since he supported the job-killing measure when it passed the Senate in 2007. When the stupid party and the evil party both agree on a certain policy, that’s known as bipartisanship. In the real world, however, it’s called unemployment.

Feds Propose Forfeiture as Immigration Employer Sanction

As recent posts in this space indicate, advocates of individual liberty have a variety of views on the proper policy response to illegal immigration. Whatever the disagreements, I suspect there’s some degree of consensus that certain proposed remedies are entirely too Draconian. From the California Labor and Employment Law Blog:

The U.S. Attorneys Office in San Diego has recently criminally prosecuted a French bakery for allegedly engaging in an intentional pattern and practice of hiring unauthorized workers. As part of the indictment, the Government is seeking hefty monetary fines, prison time for the owner and management, and asset forfeiture of the entire business to the Government. While the Government does not have experience running a French bakery, they are getting very serious about enforcing I-9 regulations.

More details on the French Gourmet prosecution can be found at the San Diego Union-Tribune and Restaurant Hospitality.

When government began pushing for asset forfeiture powers, some imagined that the formidable power would remain mostly confined to use in, say, illegal drug or money laundering prosecutions. But that’s not how it has worked. And immigration is hardly the only area in which employers should be worried about the expanding bounds of criminalization. Bills pending in Congress would criminalize “misclassification” of employees – which commonly consists of disagreeing with the government or with labor unions as to whether particular employees should count as independent contractors not covered by overtime and similar federal labor laws. Are we far from the day when prosecutors will start proposing forfeitures against employers over such infractions?

Bureaucrats vs. Taxpayers

The political process often resembles an unseemly racket as politicians take money from people who earn it and give it to another group in exchange for campaign cash and political support. The modern bureaucracy is a good example. Government workers have now become a cosseted elite, with generous pay, extravagant benefits, lavish pensions, and ironclad job security. In exchange for this privileged status, they reward the politicians with millions of dollars of support and a host of in-kind contributions.  I have documented many of these outrages in my “Taxpayers vs. Bureaucrats” series at the International Liberty blog. Well, now we have a video detailing how the government workforce has morphed into a fiscal nightmare for taxpayers.

There are three things in the video that deserve special emphasis. First, bureaucrats are vastly overpaid. The government data cited in the video show that total compensation for the federal civil service is twice as high, on average, as it is for workers in the productive sector of the economy. There are some bureaucrats who deserve above-average pay, such as scientists dealing with nuclear weapons, but it is outrageous that the average drone in the federal bureaucracy is getting twice as much compensation as the taxpayers (serfs) who pay their salaries.

Second, this mini-documentary debunks the silly argument (put forth by government employee unions, of course) that bureaucrats are underpaid compared to the private sector. The Department of Labor has data looking at voluntary departure rates by profession. If government workers were being underpaid, you would expect them to be more likely to leave their jobs in order to take new positions in the (supposedly higher paid) private sector. Instead, the video reveals that people in the private sector are six times more likely to switch jobs than federal bureaucrats.

Third, the video concludes with the essential point that most federal bureaucrats should be paid nothing because they work for departments and agencies that should not exist.

Last but not least, Chris Edwards deserves special mention. Much of the material in this video came from his work on this issue.

This Is Sparta!

…Sparta, New Jersey that is. Like their fellow citizens in 54 percent of school districts across the state, the people of Sparta rejected their local district’s proposed budget yesterday. That’s the highest rate of school budget rejections since 1976, according to the New Jersey Star Ledger. Why? Taxpayers are tired of the relentlessly increasing per-pupil cost of public schooling at a time when their own household budgets are under pressure. It helped that popular new governor Chris Christie recommended that voters reject their districts’ budgets unless the teachers unions agreed to a one year salary freeze. [HT: Instapundit]

If this keeps up, voters might just decide to dump the government monopoly approach to schooling in favor of an education system that offers families far more choices while dramatically reducing costs.