Monday, September 19, 2011

This is why fewer and fewer people support public sector unions

Late last week the state Senate passed the latest iteration of pension reform legislation.  The marquee provision raises the minimum retirement age for most public employees from fifty-five to sixty years of age. 

Would anyone be surprised to learn that the Commonwealth's public employee unions strongly opposed the change?  State House News (via WWLP):
The unions, who represent hundreds of thousands of police, firefighters, teachers and other workers, say the bill will force employees to work later in life and receive a smaller benefit because of past mistakes made by the state. “There is no justification for cutting the pension benefits for future public employees,” the unions wrote.
No justification... except that the state's current unfunded pension liability (the value of our pension obligations for which no money has actually been set aside) could pay for the Big Dig several times over, and is continuing to grow at a horrifying rate.  And as to those "past mistakes made by the state"?  Sober and disinterested observers might rationally observe that among those "mistakes" was the decision to allow public employees to retire at an age when a lot of private sector workers are just hitting their professional stride.

Among the unions' few remaining strong arguments is the notion that current public employees decided upon a career in the public sector based on a certain understanding - a "contract" with the state - and it is wrong, morally, for the state to renege on that contract by unilaterally altering the terms.  I agree with that to a certain extent, although there does come a point where the inflexible reality of the 'blood from a stone' scenario kicks in (see, e.g., Central Falls).

But that isn't what we're talking about here.  The increase in retirement age contemplated by the current legislation (from middle age to late middle age) would leave current public employees free as ever to "retire" at 55 (and embark on a second career - maybe in "consulting"! - with the backstop of a state pension).  Future employees would enter into their employment with the full understanding that they could very well be "forced to work" a little bit "later in life." 

This situation in a nutshell explains why all across the country public sector unions are losing public support.  They over-reach.  Always they over-reach.  There is no change in employee benefits that can simply be accepted without a fight.  No unilateral concession on anything, ever, in any circumstance.  "You give something to get something," period. With the federal, state and local government drowning in debt from coast to coast, the public is less and less appreciative of the unions' steadfast intractability.

Happily the pension reform bill last week passed the Senate over union opposition.  Ah, but hold your applause for the Senate and shed no tears for those future public employees who may be forced to toil to the ripe young age of 60.  The Globe's editors today point out that the unions hardly came away from the table empty handed  - and in fact a provision added to the bill at the unions' behest pretty well negates the benefit of the meager "reforms" that the bill would achieve.
On the upside, cuts in the Senate measure will save $9 billion over 30 years, according to calculations by the Massachusetts Taxpayers Foundation. The changes would include raising the minimum retirement age for most new public employees from 55 to 60, raising the full retirement age from 65 to 67, reducing early-retirement benefits, and calculating a worker’s pension in a more conservative way. Yet the bill contains provisions that would cost billions of dollars, such as reducing contributions for some long-serving workers and making all retired, current, and future retirees eligible for larger cost-of-living increases.

This last provision illustrates a deeper problem: Lawmakers have generally maintained that benefits for current employees must never be diminished - not by a penny - but have been willing to increase them time and time again. Worse yet, while the savings from the other provisions in the bill will accrue only over time, a greater cost-of-living increase will cost money right away. Without such a provision, though, the reforms in the bill won’t be palatable to the public-employee unions that so many lawmakers rely upon for support.
A cynic might suspect that the unions deliberately kicked up a fuss over the 55 to 60 increase in the retirement age in order to distract attention from their real plum - the COLA increase for current public employees.  Wait a sec... I'm a cynic.  And yeah, I suspect that.  Well played.  Nobody can be heard to say our union bosses aren't good at what they do.

But here's a memo to those bosses: when the Boston Globe calls you out for over-reaching, it's a pretty good bet you're over-reaching.

UPDATE: Coincidentally, the Wall Street Journal published an op-ed today on this very topic (generally), by former Clinton pollster Douglas Schoen.  Worth a read in its entirety.  It reveals a certain lack of public understanding about what "collective bargaining" really is, coupled with a clear public sentiment in favor of cutting and/or limiting public employee benefits and their growth.  Here's the meat of it:
Last month, in a wide-ranging national survey of 1,000 randomly selected, registered voters, and in 10 polls in individual states each with 400 respondents, my polling company found that voters strongly favor measures to pare the compensation of current and future public employees. They strongly oppose higher taxes.

Specifically, over three-quarters (78%) say their state faced a budget crisis this year, and 68% say that the crisis was resolved with spending cuts. Overwhelmingly they blame politicians for creating and exacerbating the problems: 48% say "elected state officials made careless and self-serving decisions," while only 6% say "state governments did not tax enough."

The top priorities for resolving current fiscal issues are to cut government spending (47%) and to ask for greater sacrifice from current public employees, by having them contribute more towards their benefits (31%). By almost two-to-one, they think that current public employees should have to contribute more toward their pension benefits because of budget problems.


  1. "all across the country public sector unions are losing public support at a dizzying rate."

    That's an interesting assertion but you don't provide any evidence. Can you cite some nationwide public polls?


    Perhaps most importantly,

    That said, Anonymous, you have correctly called me out on a bit of hyperbole. Hard to justify "dizzying," except as a reflection of my own biases, I guess. And so I have revised the sentence.

    Thanks for the comment.


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