Government Employee Unions-Do You Blame Them?

With so many units of government; from local municipalities and school districts to numerous states and even the federal government facing serious budget problems, there has been a real focus on public employee unions. We’ve seen ads being run by those who say that these unions’ greed had nearly bankrupted the state of Illinois. Unions have also been running ads trying to defend themselves.

OK, time for a disclosure. I have run for office twice (Orland Fire District in 1997, lost and Orland School District 135 in 2003, won) and in both elections, I was backed by the unions that represented the employees of those governmental units. I was then, and still am proud of the fact that they supported me.

There is no question that most government employees enjoy better benefits, and often better pay than their private sector counterparts, especially in today’s economy. Up until recently, they also enjoyed a level of job security that most private sector employees could only dream about. The biggest point of contention is the retirement benefits that public employees receive.  Most private sector employees, if they get any pension at all, get something along the lines of a 401K. The employer puts money into a pension fund, but the employee bears the risk of the underlying investments. Government employees get a defined benefit retirement, in other words, they know, to the penny how much they will get. Many of those also receive an automatic cost of living adjustment.

Although it has become fashionable, I do not blame public employee unions for the financial problems the so many governments face. The job of a union is to get the most for their members. The most money, the best benefits, the nicest working conditions, etc. Any union leader that does not try to maximize those things is cheating their union. It’s like using a realtor to sell your property. It’s her job to get you the best price for your home. She is not paid to worry about how the buyer is going to pay the mortgage in twenty years.

The real fault lies with the politicians who, for political expedience, made ridiculous promises that are now next to impossible to keep. They promised pay raises well into the future, even when there was no indication that revenue would be there. The pension promises were even more outrageous. Yes, the employees pay into their pension, but the amount they pay into it doesn’t even come close to what those benefits cost. It’s like promising a Cadillac, but charging for a Yugo. To make matters worse, governments found that by not paying their share into these pension funds, they could use the money for other, politically expedient items.

In the private sector, when management signs a labor contract, the costs are born by the company’s owners. Every dollar that the union received was a dollar out of the owner’s pocket. In government, the money used to pay employees comes from tax revenues and/or borrowing. When a governor signs a large pay increase, it does not come out of his pocket.

In the private sector, labor has very little, if any say in who the managers are. In government, unions contribute to parties and candidates that they believe will give them the most favorable treatment. Because of this, too many politicians are more concerned with looking out for the public employees and less concerned about the public.

It’s only when the “union” of those who pay for these contracts begin to flex their own political muscle, as we’ve seen in Wisconsin and, maybe, maybe, in the city of Chicago,
that we can have labor agreements that are fair to both government employees, as well as the taxpayers that have to foot the bill.