Commentary

Recession of 2008 Exposed True Cost of Public Employee Unions

By Tad DeHaven
This article appeared in The DC Examiner on March 22, 2011.

A silver lining in the dark cloud of the recession that began in 2008 is that it has awakened the nation’s beleaguered private-sector work force to the fact that government employees are prospering at their expense.

For the private sector, the recession meant layoffs, pay cuts and reduced benefits. State and local employees felt nary a scratch. In fact, life is pretty good if your paycheck comes from the taxpayer.

In 2009, hourly compensation (wages plus benefits) for the average state and local government employee was 45 percent higher than the private-sector average. The share of state and local employees offered health care benefits was 88 percent versus 71 percent in the private sector.

[L]ife is pretty good if your paycheck comes from the taxpayer.”

For retirement benefits, it’s 90 percent to 67 percent. State and local employees are also more likely to be offered life insurance (80 percent to 59 percent) and paid sick leave (89 percent to 67 percent).

Did I mention that defined-benefit pensions are offered to about 80 percent of state and local employees, versus 20 percent in the private sector? Or that they’re typically twice as generous? That’s kind of a problem because these pensions are underfunded by about $3 trillion and state and local government finances are already in poor shape.

But wait, there’s more.

Try job security. “Layoffs and discharges” in state and local government occur at just one-third the rate of the private sector. In fact, life in state and local government must be good considering that workers there quit at one-third the rate of private-sector employees.

Public-sector unions have had a hand in creating this privileged class of citizens, and any threat to their power is viewed as a threat to their existence. That’s why Wisconsin Gov. Scott Walker’s move to limit collective bargaining privileges for state and local employees became a national battleground. If the state that gave birth to public-sector unionism were to fall, the union dominos across the country could follow.

Now that Walker has won the legislative battle, the unions and their allies on the Left are determined to make sure that Walker, and those who believe that taxpayer interests should come before union privileges, lose the war.

The unions and the Left are scurrying to raise millions of dollars to fund recall campaigns against the Wisconsin senators who dared challenge their interests. Walker himself is likely to be targeted. They’re also mobilizing manpower and money to head off similar threats in other states.

Gerald McEntee, president of the 1.6 million-member American Federation of State, County and Municipal Employees, says that “the country is now seeing more clearly the radical right-wing effort to destroy the power of working men and women.”

The attempt to make common cause with “working men and women” is as repulsive as it is backward. Employee compensation accounts for half of the money state and local governments spend each year. That money is taken from working men and women in the form of income, sales, property, and a multitude of other levies on the private sector.

One can sense how desperate McEntee and his ilk are to maintain their grip on the taxpayers’ wallets by the ridiculousness of their rhetoric. In trying to rally the public to his cause, McEntee enlists Lech Walesa and Pope John Paul II, while tarring the opposition as kindred spirits of the Bolsheviks and Iranian mullahs.

Although the government employee unions might be desperate, they also possess substantial financial resources and a motivated network of support. They also benefit from an unwarranted level of sympathy in the mainstream media.

Therefore, it will be up to the “forgotten” men and women — the unorganized, and often unheard, taxpayers — to fight back against a force that views it as its “right” to live comfortably at their expense.

Tad DeHaven is a budget analyst at the Cato Institute and co-editor of Downsizing Government.org.