Employment

Economics 101: A Primer for Tim Bishop

by Bill O'Connell on January 12, 2012

Share and Recommend:

 

Tim Bishop likes manufacturing. The manufacturing of campaign issues, that is. In his effort to manufacture a campaign issue around overseas outsourcing, he got a lifeline from the White House yesterday when President Obama held an “insourcing” forum yesterday to encourage companies to “bring jobs back to America.” An editorial in the Wall Street Journal titled, “Insourcing for Dummies” describes the effort.

Click to Read More

Share and Recommend:
Share and Recommend:

 

As the Occupy Wall Street movement starts to sputter and annoy people, a recent announcement by New York University pretty much sums it up.

[click to continue…]

Share and Recommend:

It’s Labor Day, Not Union Day

by Bill O'Connell on September 5, 2011

Share and Recommend:

Photo by photobunny

It would be an understatement to say that unions have had some setbacks recently, so what’s wrong with hogging a holiday all to themselves as they lick their wounds?

The Marathon County Labor Council originally tried to ban Republican lawmakers from Monday’s parade, but it backed down when the Wausau mayor threatened to refuse insurance costs and other expenses to the public event.

While it is true that organized labor was behind the establishment of Labor Day, when you consider that at their peak in the 1950s, unions only represented a little over a third of  all workers, it never would have happened without a lot of non-union support to get them more than the fifty percent needed to pass any legislation. So just how did we get in this mess?

Click to read more

Share and Recommend:

Why We Need Wealth Redistribution

by Bill O'Connell on March 14, 2011

Share and Recommend:

Candidate Barack Obama said to Joe the Plumber, spread the wealth around, it’s good for everybody; he also said, I want to give those coming up behind the same chance you had. It sounds altruistic, caring, full of hope. But if Barack Obama turned and looked over his shoulder he might be surprised to see that there are fewer and fewer people coming up from behind. What he might see is the fear of reckoning for one hundred years of progressive policy and programs. Policy and programs that were sold to allay earlier generations’ fears coupled with the promise that the bill was easily paid and a long way off. But the bill collector is now at the door and the next generation is huddled in the corner with no sign of hope and no confidence that Barack Obama will change anything.

[click to continue…]

Share and Recommend:

Public Sector Unions: Right or Wrong?

by Bill O'Connell on February 23, 2011

Share and Recommend:

To hear the progressives talk about the public sector unions in Wisconsin and other locales you would think collective bargaining was enshrined in the Bill of Rights. We have a right to bargain collectively. The unions are fighting for their rights. The Bill of Rights was won through the fighting of a bloody revolution. The right for all citizens to vote was won through the passage of an amendment to the Constitution. So, naturally, the right of public sector unions was won through a similar groundswell of popular support, right? No. Actually it was started by one man, fighting for his political life, in the shadow of Tammany Hall.

[click to continue…]

Share and Recommend:

It’s Time to Dismantle the Public Sector Unions

by Bill O'Connell on January 25, 2011

Share and Recommend:

The public sector unions have succeeded. They have been so successful they are on the verge of bankrupting the country. Like the private sector unions, who at one time were a key advocate for unskilled and semi-skilled workers, they don’t know when to declare victory and go home.

  Click to read more

Share and Recommend:

Cutting the Federal Beast Down to Size

by Bill O'Connell on December 9, 2010

Share and Recommend:

In the recent election campaign, lacking anything positive to say about their record, when Democrats were not making personal attacks on their opponents one of their diversions was to taunt their opponent by saying, “Oh yeah, what specifically would you cut from the federal government, and don’t say waste and fraud.”

  Click here to read more

Share and Recommend:

Balanced Budgets, Public Pensions and Bailouts

by Bill O'Connell on August 9, 2010

Share and Recommend:

Many states have a constitutional requirement to balance their budgets while the federal government has no such limitation.  As such, a number of stately are longingly looking toward Washington to throw some cash their way so they don’t go bankrupt.  It is not going to get better.

If you think Washington awash in debt, is a problem, it is chump change compared to what is brewing at the state level.  Trillions in unfunded pension liabilities are looming and those who are benefiting from those generous plans or who are going to, don’t care about the rest of us who have to pay for them and then go provide for ourselves.

Lawsuits are starting to be filed to stop states from altering the terms of these plans.  The time to act is sooner rather than later, but that is lost on one teacher in Colorado who says, “Why is the state so quick to break its promises.”  Perhaps we should explore how these promises were made, in both directions. 

Unions backed Democrats almost exclusively.  Democrats riding union support into office had a debt to repay.  They repaid it by supporting the kinds of contracts that the unions wanted and the unions returned the favor with their loyalty.  Who paid the bill?  The rest of us.  How much say did we have in the process, next to none.  In private industry, unions negotiate with management.  Unions have almost no say in who gets hired into management and will sit across from them at the bargaining table.  So the adversarial relationship has management supporting the shareholders and unions backing the workers.  As management became more enlightened and took better care of their employees, the need for a union middleman faded away.  That is why in private industry union representation is down to about 7% and falling while in the public sector is around 37% and growing.

The public employees argue that their generous pension plans is merely deferred compensation to make up for their salaries during the time they worked.  The only problem is that the unions did a good job not only on the pensions but on the salaries as well, so that the average public sector employee makes about 34% more than his private sector counterpart.  Fair being fair, our public sector friends would probably recognize their good fortune and agree to help fix the problem, right?  No chance.  As one put it, “I shouldn’t be responsible for past pension underfunding and foolish risks managers made with my money long after I retired,”  Okay, let’s give that a closer look.

Why do you think the pension is underfunded?  Could it be that the government entity could not afford to make the extravagant  payments the union contract required and still balance the budget?  If they tried to raise taxes to cover the shortfall then even the unions with all their political muscle couldn’t get those responsible re-elected.  So it was better to sweep it under the rug for a future administration to deal with.  What about those risky investments?  Well, with risk goes reward.  If you need bigger payoffs on your pension assets to make up for the shortfalls in funding that you didn’t want to make, you may take bigger chances to make a bigger payoff.  But if you are wrong, instead of fixing the problem, you make it worse.  So the real problem is that the unions and the politicians they fought to elect negotiated contracts that were unrealistic and unsustainable.  What does the union member say. “I’ve got mine, you go get yours.”

What are some of the onerous changes that states are asking for?  In New Jersey, Chris Christie asked for a one-year freeze on public employees pay and for them to contribute 1.5% of their salary toward their retirement.  Outrageous!  How about in Colorado where they asked for a 2% cap in the Cost of Living Adjustment (COLA) for retirees instead of 3.5%, in an environment with 0% inflation.  Dastardly!  One individual’s justification was that he does not and cannot pay into Social Security so the pension is all retirees have to live on.  He fails to point out that being prohibited from contributing to Social Security puts 6.2% more of his salary in his pocket, since he pays no Social Security taxes, and if he had the self discipline to take that and invest it in the Dow Jones Industrial Average he would have far more money of his own than he would ever get from Social Security.

This problem is not going away.  Once upon a time, public sector employees did earn less in salary than those in the private sector, but those days are long gone.  They earn more, can retire earlier, can retire with more money for longer periods of time and put the burden on all taxpayers who have to cover their pension while providing for their own.  Their “too bad” attitude is shameful.

Share and Recommend:

All Aboard!

by Bill O'Connell on June 4, 2010

Share and Recommend:

 

If the news hasn’t reached you yet, we are all on an express train heading over a cliff due to public unions and the ridiculously generous pay and benefit packages they have gotten from the taxpayer, and we never even got to sit at the bargaining table.  A report in the New York Times  yesterday reports that there are 8,074 employees of the Metropolitan Transportation Authority, the entity that runs the commuter railroads and subways in and around New York City, that made more than $100,000 per year.  This includes a conductor who retired in April that made $239,148 which was $4,000 more than the Chief Financial Officer made.

By the way, did I mention, that the MTA had a budget deficit of $400 million?  Did I mention that they went through a series of service cutbacks to try to close the gap?  Perhaps, I can suggest another place to look?  But there’s more.

Two train car repairmen and twelve police officers who guard the bridges and tunnels under the MTA’s control were among 50 employees that pulled in more than $200,000.  Mr. Thomas J. Redmond, the aforementioned conductor had a base salary of $67,772, overtime of $67,000 and he took in almost $100,000 in unused sick days and vacation time. 

A locomotive engineer earned $75,000 in base salary, with overtime of $52,000, but wait there’s more.  He also received $94,600 in penalty payments.  What are those, you might ask?  Union rules say that because the engineer worked in a storage yard, he gets paid extra if he is assigned to move a locomotive outside of the storage yard, for example to a nearby maintenance facility.  I don’t understand your pique.  Don’t you have a similar arrangement with your employer?  You mean you don’t get a penalty payment when you have to go to a meeting on another floor in your building? I am shocked!

But don’t feel sorry for the senior management.  The new president of the Long Island Railroad, part of the MTA, now earns $350,000 plus a $3,500 monthly housing allowance.  I guess $350,000 is not enough to get by on so we have to pay the guy’s mortgage too.

This is what the politicians give to the unions when they negotiate contracts with them.  The unions in turn, make sure those politicians get re-elected, through the unions electioneering efforts.  Does that sound like collusion to you?  New York State is broke, just like California but we will have to pay for all these sweetheart contracts that make the federal budget deficit look like chump change.

Share and Recommend:

The Gathering Storm

by Bill O'Connell on March 7, 2010

Share and Recommend:

If we manage to escape the economic catastrophe that is ObamaCare, we may breathe a little easier, but watch the horizon for a storm is brewing that makes the health care monstrosity look like pin money.

Unions have long been in decline in private industry, but recently for the first time union membership in the public sector surpassed that in the private sector, and it is still growing.  We all know the stories about municipal workers working for 20 or 30 years, then retiring at 50% to 90% of their last year’s pay which is often inflated with heavy overtime, and then they go out and get another job where they work until retirement and a cushy life of a public pension, a handsome private 401k, and Social Security.

It used to be that it was a trade off that government workers (teachers, cops, firefighters, sanitation workers, clerical) got great benefits because they were paid poorly when compared to the private sector.  However that is no longer the case as reported in USA Today:

 USA Today reported that nearly one in five federal government employees now earn over $100,000. The paper also reported the average federal salary rose to $71,260, almost $31,000 more than the comparative average private-sector wage. 

If that doesn’t get the hair on the back of your neck to stand up as, after all you are who pays for these salaries and benefits, then perhaps this will from National Review’s March 8, 2010 issue:

The highest-paid municipal employee in Madison, Wis., is bus driver John E. Nelson, whose salary last year totaled more than $159,000. Half a dozen of his fellow drivers also earned in six figures. How is this possible? The Wisconsin State Journal explains:“A high base salary and other benefits for drivers were largely set in the 1970s and 1980s, when the city took over the bus company.” Combine that with generous, federally mandated leave provisions that make for lots of overtime, and it’s not unusual for a bus driver to out-earn the mayor (and with much better job security). In the 1950s, Ralph Kramden of The Honeymooners was paid $62 a week by the skinflints at the Gotham Bus Company; he was constantly hatching schemes to strike it rich so he could quit. Today Kramden’s dreams of avarice would have been a lot simpler: get a government job and join a union. — The Week, “National Review,” March 8 , 2010

$159,000 for driving a bus.  Imagine.  I wonder what the private bus company was paying their drivers before the city took them over?  I am sure, like ObamaCare, the takeover was a cost savings measure.  After all, those greedy private companies are out to make a profit. 

Who was the most frequent visitor to the White House  at the time the White House released its visitor logs?  It was Andy Stern, president of the Service Employees International Union (government workers), which should tell you where this is going.  Remember, as well, that when the federal government took over GM and Chrysler they gave huge percentages of those companies to the unions.  So when it comes time to negotiate the next contracts the union will sit on both sides of the bargaining table, as management and labor.  How will that turn out?  It will be one of two ways, either the union will have an epiphany and realize that profits are important to staying employed, or the unions will pick the bones of GM and Chrysler clean, driving them out of business and leaving you and me, brother, holding the bag.

The Ticking Pension Bomb

The killer, however, is unfunded pension liabilities.  All those pensions that we will be paying for with retirees being retired for longer than they worked in many cases, will be like nothing we have imagined before from a fiscal crisis standpoint.  In private industry as businesses learned to appreciate the value of their human assets, they treated them accordingly and the unions withered.  However in the public sector we have elected officials writing laws, e.g., Davis Bacon, that heavily favor or require union labor.  Unions in turn, pour millions into making sure those same politicians get re-elected.  Who is looking out for you and me?  As the ultimate employers of government employees, how about a law that union contracts must be ratified by the public at the ballot box?  Too cumbersome?  Okay, how about a law that government employees cannot receive salaries and benefits that exceed what the average private employee (the public employees’ bosses) receives in that geographical area?

Tea Party Members, are you listening?

It is clear from the present administration that the statists believe that it is their destiny to rule, not govern, over the masses who they believe are their intellectual inferiors.  Keep piling it on, but don’t worry we can always tax the rich to pay for it.  But as you board that bus in Madison Wisconsin, ask yourself if Mr. Nelson behind the wheel, is the rich guy picking up the tab or is it you?  Watch out folks, if we don’t do something soon, the rich won’t be rich enough to pay for it even if we tax them at 100% and there is no law to stop them from taking their wealth and moving somewhere else where taxes are lower.  And at this rate there are a lot of places in the world where the taxes are lower.

Share and Recommend:
© 2012 Liberty's Lifeline. All Rights Reserved.