Sunday, January 02, 2011

The Battle Between the Public and Public Employees

I have been pretty up front about my admiration for Governor Chris Christie (R-NJ), I have admired how he takes no crap from anyone, generally doesn't play the media dance and calls a spade a spade when it comes to state finances.  I might not make the same decisions that he makes, but I admire the fact that he is willing to take on New Jersey's "sacred cows." 

But as this story from the NY Times points out, it is not that simple.  There is a growing battle between the public and public employees or more specifically, public employee unions.  At a time when union membership in the private sector is generally shrinking, the public sector employees are growing, booming even.  While the incestuous relationship between public unions and politicians creates one set of problems, the more pressing problem is coming from people who are seeing public employee unions feeding at the government trough and then the government turning around and asking the tax payer to put more in the trough.

Across the nation, a rising irritation with public employee unions is palpable, as a wounded economy has blown gaping holes in state, city and town budgets, and revealed that some public pension funds dangle perilously close to bankruptcy. In California, New York, Michigan and New Jersey, states where public unions wield much power and the culture historically tends to be pro-labor, even longtime liberal political leaders have demanded concessions — wage freezes, benefit cuts and tougher work rules. 

In my hometown area, the county government is looking at an $11 million budget shortfall (which is about 4 percent of the budget).  Everyday, you read stories of cities and counties in crisis, there is talk of bailouts (a word that is just overused at this point) and of course you hear about tax increases.  What is rarely discussed is spending cuts, or at least not spending cuts where the cuts need to happen--in employee pay and benefits. Our leaders talk of "doing more with less" as if that will work.  There have been changes in the work rules, but there will come a time when you will hear the buzz and rumble of "work to the rule" and nothing more.  Such an attitude will lead to only one result--more animosity toward public sector workers.

But the conversation about public unions and their role in the municipal and state budget crises is coming and has been joined in places like New Jersey.  The problem of course, is that it has taken the larger financial crisis to bring us to the point of talking about the issue.  The inevitable fallout of waiting to talk about this problem is that the financial crisis has made the converstation more shrill, probably more than it needs to be, and the stakes that much higher.  But the fact is that unfunded pension liabilities have been a problem for more than a decade in some states yet, in the good times, the bill and the buck was just passed.  I feel sorry for future state legialtors in say 10 years when they will be vilified and demonized for having to make the truly hard choice--i.e. denying some state workers a pension outright, when some politicians now or ten years ago could have made far less painful, though still unpopular, decisions but chose, for political expediency not to. 

People have talked about "doing more with less" but at this point, we need to change the tenor of the conversation.    The battle will be waged and ultimately, the unions will have to cave--the financial realities are just too dire.  To be sure, public sector unions are not doing a good job on the PR front, talking about how they lag behind private sector in pay and benefits (all evidence to the contrary notwithstanding).  But our political leaders have failed to demonstrate a spine and stand up to the unions.  The problem is that because of political cowardice, we face a possible, indeed probable, future will be one where we look at a government worker not with a modicum of respect, but rather we will look at public employees union in the same way we think of the Mafia--with a look of disdain and discomfort. 

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