public employees

Bogus Statistic from Wisconsin Union Backers Spreads Despite Repeated Debunking

by Hans Bader on February 28, 2011 · 6 comments

in Economy, Employment, Labor, Regulation

Post image for Bogus Statistic from Wisconsin Union Backers Spreads Despite Repeated Debunking

“A lie can make it half way around the world before the truth has time to put its boots on” — like a false statistic recently spread by supporters of Wisconsin’s government-employee unions, such as MSNBC’s Rachel Maddow. Despite being debunked by PolitiFact, it has since been widely repeated in multiple letters to the editor, and it remains uncorrected on the web sites of publications like The Economist.

On Wednesday, PolitiFact debunked the claim by Wisconsin union supporters that Virginia, which bans collective bargaining in state agencies, ranks 44th in the nation in ACT/SAT scores, compared to Wisconsin ranking 2nd. For example, it noted that in 2009, Virginia ranked 22nd in ACT scores, while Wisconsin ranked 13th. As PolitiFact notes, this claim was originally disseminated by the Wisconsin Democratic Party, which has now retracted it.

(Although PolitiFact didn’t note this, in 2010, Virginia actually beat Wisconsin in ACT scores, with Virginia ranked 12th and Wisconsin ranked 17th. Unlike Wisconsin, Virginia is a right-to-work state that bars forcing employees to pay union dues. Collective bargaining with government employee unions is currently mandated in Wisconsin, but banned in Virginia.)

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Obama Fans the Flames in Wisconsin, Seeking to Block State Budget Reforms

by Hans Bader on February 21, 2011

in Economy, Employment, Labor

State employees are paid better than people in the private sector. But government-employee unions refuse to make sacrifices to help close huge state budget deficits. Democratic legislators allied with those unions shut down the Wisconsin State Senate last week, fleeing the state to Illinois in order to block a quorum. Meanwhile, “over 1,000 teachers” called “in sick to force the closure of schools in Madison, Wisconsin” for another day, in a massive shutdown of Wisconsin schools.

Obama is fanning the flames, reports The Washington Post:

President Obama thrust himself and his political operation this week into Wisconsin’s broiling budget battle, mobilizing opposition Thursday to a Republican bill that would curb public-worker benefits and planning similar protests in other state capitals. . . .The president’s political machine worked in close coordination Thursday with state and national union officials to get thousands of protesters to gather in Madison and to plan similar demonstrations in other state capitals.

Wisconsin’s governor has been vitriolically attacked by state employees for seeking to limit their pay and collective-bargaining privileges. Some of these protesters are wielding signs bearing the words uttered by John Wilkes Booth as he assassinated Abraham Lincoln, “sic semper tyrannis.” Others are putting crosshairs on pictures of his face, along with the word “reload.” Others are branding him as “Hitler,” or comparing him to the fascist dictator Mussolini and Egypt’s recently ousted ruler Mubarak. So much for the short-lived era of civility that Obama and his supporters preached without practicing.

To shut down the Wisconsin State Senate, all the Democratic senators fled to a hotel in Illinois, which has a sympathetic Democratic governor. (Illinois Governor Pat Quinn just signed into law a 67 percent increase in income taxes, after a campaign in which he promised the state’s well-paid workers no layoffs and two-years of cost-of-living increases. Never mind that Illinois already has more government employees per person than neighboring Indiana.)

States are required by their constitutions to balance their budgets. The federal government doesn’t have to. So it’s easy for Obama, who has the ability to run up record deficits to hire tens of thousands of new federal employees, to fault cash-strapped state governments for trying to reduce the entitlements and collective bargaining rights of their employees. As Victor Davis Hanson notes, “what distinguishes Obama’s homespun platitudes about public-sector jobs from state governors’ more honest worries is just that ability. . .But pass a law that the U.S. must balance its books like the states must,” and President Obama might change his tune.

(Obama ran up the largest deficit in history in 2010, running up more debt in just one month than Bush did in the entire year of 2007. Obama’s recent budget proposal increases spending over the next two years while pretending to cut it, drawing criticism even from the liberal Washington Post.)

Even with budget cuts, government employees in Wisconsin would still live far better than the taxpayers who pay their salary. Wisconsin’s governor “would require many state workers to contribute 5.8 percent of their salary toward their pensions (up from 5 percent) and pay 12.6 percent of their insurance premiums — still much less than the average Wisconsinite pays for insurance through work.” As the Washington Examiner’s David Freddoso notes, “I defy anyone to find a private sector workplace where you can contribute only 6 percent for a generous defined benefit retirement plan, and have your employer pick up the tab for 88 percent of your health insurance. It just doesn’t exist. What we’re seeing is a protest based on disrespect for the taxpayers who are picking up the tab, most of whom do not make as much as the members of the teacher’s union.”

The public-sector unionization that Obama so prizes is something America just can’t afford.  As The Washington Post’s Charles Lane notes:

The truth of the matter is that ‘collective bargaining’ in the public sector is too often a parody of the real thing. For years, public-employee unions have used their dues money to help elect pliant politicians — usually Democrats — who, in turn, award the unions what they want at contract time. The taxpaying public’s only role in this costly cycle is to foot the bill. It’s not democracy when citizens lose control over the pay and benefits of the people who work for them. It’s not progressive when employee compensation takes finite resources away from Medicaid, parks, roads and libraries. And it’s not collective bargaining when union representatives sit on both sides of the table.

Stimulus Package Forces States to Raise Taxes, Harms Economy

by Hans Bader on January 2, 2010 · 2 comments

in Deregulate to Stimulate, Economy, Employment, International, Labor, Politics as Usual, Stimulus to Nowhere, Trade

The federal government’s $800 billion stimulus package, which failed to cut unemployment, is now forcing states and local governments to raise taxes. The Wall Street Journal describes how “stimulus dollars came with strings attached that are now causing enormous budget headaches . . . At the behest of the public employee unions, Congress imposed ‘maintenance of effort’ spending requirements on states. These federal laws prohibit state legislatures from cutting spending on 15 programs,” such as ”welfare, if the state took even a dollar of stimulus cash,” even if a state’s tax revenue has since fallen due to the recession.  “So when states should be reducing” their spending ”to match. . . lower revenue collections, federal stimulus rules mean many states will have little choice but to raise taxes.”

Obama claimed the stimulus package was needed to prevent the economy from suffering from “irreversible decline,” but the Congressional Budget Office admitted that the stimulus package actually would shrink the economy “in the long run.”  Unemployment has skyrocketed past European levels, as big-spending countries have fared worse than thrifty ones.

The Washington Examiner says that “75,000 jobs” Obama has claimed credit for are “clearly imaginary” or “highly doubtful.”  That includes thousands of jobs the administration claims credit for creating in nonexistent Congressional districts. As the Examiner notes:

If his stimulus program was approved, Obama promised, unemployment would not go above 8 percent this year. The reality is that it passed 10.3 percent in October. So now the stimulus books are being cooked to mollify an anxious public worried that real-world jobs continue to disappear and angry that Obama has thrown almost $1 trillion down the stimulus rathole.

The stimulus package actually destroyed thousands of real world jobs by triggering trade wars with Canada and Mexico that killed jobs in America’s export sector (the stimulus package barred a measley 97 Mexican truckers from U.S. roads, a minor NAFTA violation that led to massive Mexican retaliation against U.S. exports of 40 farm products and kitchen goods worth $2.4 billion).  It also is wiping out jobs by inflicting costly mandates on state governments (such as repealing welfare reform, and imposing costly “prevailing wage” regulations and expensive racial set-asides).

The stimulus package has since spawned countless examples of government waste and corruption.  Recently, Obama fired an inspector general, Gerald Walpin, who uncovered millions of dollars of waste and fraud in the AmeriCorps program, including by a prominent Obama supporter, endangering the Obama supporter’s ability to administer federal stimulus spending in Sacramento.  Obama’s alleged justification for firing the inspector general turned out to be false.

Overpaid Bureaucrats Expand in Number and Pay

by Hans Bader on September 30, 2009

in Labor, Politics as Usual, Stimulus to Nowhere, Trade

Thanks to the $800 billion stimulus package, and other huge government spending increases, the number of federal and state employees is projected to increase massively. The federal government’s payroll may grow by more than 200,000, and perhaps as much as 600,000, over the course of the Obama administration. Obama’s budgets, which would result in record deficit spending of $9.3 trillion, would add at least 100,000 additional bureaucrats during just his first budget, and perhaps as many as 250,000.

This is going to be enormously costly, because federal employees are paid much better than private-sector employees, especially for unskilled jobs and jobs requiring only a liberal arts degree. (On the other hand, there are a few highly-skilled professional jobs that are paid lower in the federal government than in the private sector, but that’s rare).

State and local government employees are even more overpaid.  “More than 40% of city employees In Vallejo, California, had salaries greater than $100,000 in 2008. In May 2008, Vallejo filed for bankruptcy. Taxpayers support some hefty teacher salaries in Illinois. For example: a physical education teacher earning $163,000 (more than 400 earn in excess of $100,000); an English teacher earning $164,000 (more than 300 earn in excess of $100,000); a driver education teacher earning $170,000 (94 earn in excess of $100,000). In New York, state agency workers collected more than $459 million in overtime, with one aide clocking in 2,455 extra hours, nearly tripling her base salary from $38,500 to $110,841.”

Government employees have radically better benefits and pensions than private sector workers. “When wages and benefits are combined, federal civilian workers averaged $119,982 in 2008, twice the amount of $59,909 which workers in the private sector averaged for wages/benefits. The value of benefits for federal civilian workers averaged $40,000/year, four times the value of benefits that the average private sector employee receives. Only 12% of retirees from the private sector have defined benefit pensions to supplement Social Security. Their average annual pension is $13,083, and they are not eligible for full Social Security benefits until their late 60s. But the majority of public sector workers have pension plans that allow them to retire 10-25 years earlier with benefits many times the retirement payout that Social Security would provide. In San Jose, California, 256 retired officers and firefighters and 34 other city workers collect $100,000+ pensions, and all city retirees get free healthcare.”

Pay in the public sector rises faster than in the private sector even during Republican administrations. Pay for federal workers rose 53.7% between 2000 and 2008, compared to 28.5% for private sector workers.

Many of the new bureaucrats are being hired as a result of Obama’s welfare-filled stimulus package, which largely repealed welfare reform.

Obama claimed the stimulus package was needed to prevent the economy from suffering from “irreversible decline,” but the Congressional Budget Office admitted that the stimulus package would shrink the economy “in the long run.” The stimulus package has since destroyed thousands of jobs in America’s export sector, and subsidized countless examples of government waste and corruption.

Earlier this year, Obama fired an inspector general, Gerald Walpin, who uncovered millions of dollars of waste and fraud in the AmeriCorps program, including by a prominent Obama supporter, endangering the Obama supporter’s ability to administer federal stimulus spending in Sacramento.

The stimulus package also imposes on states racial set-asides and prevailing-wage requirements, which increase the cost to taxpayers of government contracts. The prevailing-wage requirements will increase states’ costs by at least $17 billion. Racial set-asides also are very costly.

The Democratic Party is closely tied to the government employee unions, which consistently endorse its candidates.  This poses a political risk, since the Democrats are already viewed by some “working-class voters” as “the party of the undeserving rich.”

The $9.3 trillion in deficits under Obama’s budgets is twice the $4.4 trillion baseline left behind by Bush, despite at least $1.9 trillion in tax increases projected under Obama.