Public Pensions, Public Employee Unions, and Elections - The Fight Is On

The WSJ reports opposite ends of the same issue today.  On the front page is the story of the American Federation of State, County, and Municipal Employees (AFSCME) becoming the largest outside spender in this election cycle, at just under $100 million.  When asked about it, the president of the AFSCME had this to say:

 The union is spending heavily this year because “a lot of people are attacking public-sector workers as the problem,” said AFSCME President Gerald McEntee. “We’re spending big. And we’re damn happy it’s big. And our members are damn happy it’s big—it’s their money,” he said.

But President McEntree is incorrect.  I have not seen anyone villify public sector workers, or hang a fireman’s likeness in effigy.  I’ve not seen ads that portray sanitation workers or policemen as agents of corruption or evil.  McEntree is taking a liberty in painting the picture broadly, when the focus of people’s anger and frustration is quite narrow – public sector employee total compensation.  Finally, FINALLY, taxpayers are waking up to what they owe this very small group, and they are shocked at what they see. 

The other end of this fight – what to do about existing pensions, healthcare, and benefit payments that are outrageous – gets a little ink in the opinion section, where Michael Moritz discusses Prop B in San Francisco.  This proposal would require public sector employees to contribute up to 10% of their income to their pensions and to pay 1/2 of the healthcare benefits for their dependents.  Is that over the top, asking workers to pay for their benefits?  What if you consider that in San Francisco a resident with one dependent pays $953 a month for healthcare, but a public employee pays less than $10?  Moritz points out that private workers in San Fran make about 1/2 of what public workers make, but he does not say if that includes benefits beyond cash compensation, like healthcare and pensions.  It doesn’t really matter, we get the point.

The situation in San Fran is being repeated around the country.  Someone has the temerity to speak out and organize a drive for signatures to get a proposition on a ballot to end the insanity of benefits for public workers.  What ensues is an overwhelming effort by public employee unions to stave off any changes.  Who’s going to win?  My guess is that unions will win this round.  But the fights are not over.  The fact that this is front (and back) page news is exciting.  People are realizing exactly where we are financially and as the scales fall from their eyes they are being motivated to act. 

That’s a beautiful thing to see.

Read more at H. S. Dent