Friday, February 25, 2011

Government Unions: Hoodwinking the Public, One Voter at a Time

If you're a California voter, you've been the victim of a scam perpetuated by the state's public sector unions:

[Actual] CalPERS data shows the average career public employee, who put in at least 30 years of service and retired in the 2008-09 fiscal year, collected a starting pension of $67,000 a year, or 2.5 times the advertised figure [by CalPERS]...

The pension numbers are even higher for the separate local retirement systems that cover employees of the two East Bay county governments. The average was $85,500 for career workers who retired in 2009 from the Contra Costa system, and $83,000 from Alameda County. A majority of these workers also receive Social Security, which could add, very roughly, about another $19,000 to the annual pension.

More here. 1) think California doesn't spend enough on education? 55% of California's general fund will be spent on education (43% on K-12; and 12% on higher education); and 2) think we should tax people more? Think harder. If you're a company and want to expand, are you going to expand someplace where you and your workers have access to cheaper housing, reasonable wages, and lower taxes, or someplace with higher housing costs, higher salaries, and higher taxes?

What about taxing corporations instead of individuals, you ask? From David Walker's book, Comeback America (hardcover, page 121): "we must realize that corporations don't really pay taxes. Rather, they pass along any tax, in the form of higher prices to consumers, lower wages to workers, and/or lower returns to shareholders." It turns out trickle down economics exists--at least when it comes to taxes.

Bonus I: from Calvin Massey:

In the private sector a union bargains for a greater share of the entity’s revenue and profits. What it can provide in return is greater productivity, accomplished perhaps by work force stability, higher morale, and the belief that the common fate of employer and employee will be enhanced by productivity gains. If this happy event ensues, at the next round of collective bargaining, union workers can and should receive their fair share of the resulting gains.

In the public sector, by contrast, a union is not bargaining for a greater share of the revenue produced by economic activity; it is bargaining for a greater share of revenue that is obtained by force of law – taxation – or, if not a greater share, at least for a constant share of those revenues extracted from the citizens. What a public sector union can and does provide in return is political support for the faction that chooses to increase taxes or the union’s share of existing taxes. If public sector unions deliver on their support, they will be rewarded by ever more generous payments. There is no market that acts as an external monitor of worker compensation; there is only a steady repetition of a corrosive bargain – tax the public ever more in order to maintain political power. That is inimical to responsible government.

It appears Calvin Massey is a law professor at UC Hastings. Bravo!

Bonus II: Christopher Caldwell, FT, 2/25/11:

Public-sector unions have long posed a problem of what the economist Mancur Olson called the “logic of collective action”. Democracy tends to offer benefits to small, well-organised groups (who defend them vigilantly) while spreading the costs among the broader public (in doses that are too small to rally resistance around). The result is a hardening of privilege. What is new in Wisconsin is that those who do not belong to public-employee unions see this logic as clearly as those who do.

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