Tag Archives: Benefits

Time to face the music

I have been working on a post about the looming state pension crisis that exists for many state and local unions.  The amount of unfunded liabilities are frightening and must be addressed and not ignored because it will not go away.  But the drama taking place in Wisconsin sheds light on the situation and serves as an example of what is yet to come.

The situation in Wisconsin is just the tip of the iceberg of what is yet to come.  I felt compelled to post an article about the situation there because of the vitriol and hyperbole.  The language coming from the unions and being repeated by those who don’t apply critical thinking to the message are examples of what is wrong with our country.

So first, let me state that I am not fundamentally opposed to unions.  I believe there was a time a place for unions, particularly for trades and unskilled laborers that were treated unfairly by their employers in the past.  However, I will say that I do not understand nor do I believe that there is a need for unions for teachers, state employees or other white collar professionals, so I am making my bias clear.  The primary issue is that unionized civil servants create a conflict of interest.  The politicians that negotiate agreements with the unions agree to terms that are not in the best interest of the state in exchange for votes from the union members.  This is a topic for another post, but the pension and benefits crisis is an example of politicians making long-term promises that the could not possibly keep in exchange for short-term votes .  The auto industry suffered the same issue, committing to pension and benefits packages that they cannot afford to pay.

So, let’s look at what is being proposed in the legislation and then compare that to what the unions are saying and you decide for yourself if the Governor of Wisconsin is Hitler or Mubarak (I’m not kidding, see here) .

This summary is from a Daily Caller artical by Matthwe Boyle Why the Wisconsin Hype

Walker’s proposal, which is part of his plan to address the $137 million deficit in Wisconsin’s current budget and projected $3.6 billion shortfall over the next two years, would allow public sector unions many of the collective bargaining privileges they enjoy now.

Some key points:

  • Public sector employees would still be allowed to collectively bargain on wages, but not on health-care or pension plans.
  • Raises would be tied to the inflation rate, unless the state’s voters deemed the employees worthy of larger raises.
  • Public sector employees would have to pay slightly higher rates for their health care and other benefits, but those rates would remain lower than those of the average private sector employee.
  • Public sector employees would be required to pay 12.6 percent of their health-care premiums; they currently pay about 6 percent.
  • Public sector employees would have to contribute 5.8 percent of their salaries to their pensions under Walker’s plans; currently some pay nothing. From 2000 to 2009, public sector employees paid $55.4 million into a pension system that cost $12.6 billion.

Walker promised not to lay off or furlough any of the 170,000 government employees in the state, saying about 5,500 state jobs and 5,000 local jobs would be saved if the unions give in to this plan.

So, to summarize, the state has a huge deficit problem and rather then layoff 10,500 state employees, he has asked them to pay 6.6 percent more for their healthcare premiums and 5.8 percent to their pensions.  He is also reducing their collective bargaining power to just wages and not benefits.

So what are those opposed to these changes saying. Are they addressing the issue at hand or are they trying to change the message.

From the former Speaker of the House Nancy Pelosi, “workers must have a seat at the table to fight for good wages & a safe workplace-I stand in solidarity” So, the issue is worker safety, no. Does the bill eliminate the ability for the unions to bargain for wages, no. Thanks for your continued wisdom and insight Rep. Pelosi.

Former WI Senator Russ Feingold has weighted in, in an obvious attempt to get his job back. “This state is one of the originators of many of the workers’ rights and protections on child labor, unemployment compensation, and almost all kinds of workers’ rights. The fact that our governor is trying to destroy those rights is something worth fighting against.” So the legislation outlined above is going to re-instate child labor and get rid of unemployment. Thanks for adding common sense to the debate, ex-Sen Feingold. He couldn’t stop there, he added “It’s a very meaningful and very difficult effort against one of the most mean-spirited things I’ve seen in a long time.” Perhaps you haven’t bothered to look at the signs of those union protesters Sen. Feingold.

This from a teacher, yes a teacher at the protests “He’s putting all this money into education and expects the best for his children and our children, and he has to understand that we can’t work for less, and we can’t get sick and have no health insurance to cover us,” said Bitto. “And when our children get sick and lose their BadgerCare, what’s going to happen to them? What’s going to happen to the system? What’s going to happen to our future?” Increasing your pension and healthcare contributions translates to working for less and no insurance for the kids. Don’t forget dog food for the old people. I suppose you would prefer to raise the taxes of those who pay your salary than have to pay a bit more for you own benefits.

From the Congressional Progressive Caucus, “ Wisconsin’s Republican governor, Scott Walker, seeks to slash the benefits and collective bargaining rights of workers in Wisconsin.” I don’t see anything about reducing benefits, let alone slashing, only asking workers to pay for more of them, at a rate significantly less that the private sector. I expect nothing less from the Progressives, as they rely on millions in contributions and votes from the Unions.

I have been a bit sarcastic in response to the hyperbole and vitriol from the unions and the left but the point is, their responses have nothing to do with the reality. They are intentional exaggerating the reality because they hope the average person is only going to listen to the sound bites. They hope you are stupid and will react to the misleading rhetoric rather than looking into the facts. It is very frustrating when we cannot discuss the real issues at play and we resort to outright fabrications in order to prevent the inevitable. The pending fiscal disaster awaiting not only our nation but many of our states will not go away. It is not better to have a job with better than average benefits than no job at all. Taxpayers are paying enough and are struggling to make ends meet and will not pay more taxes so that the unions can continue to get pay increases and have better benefits than the average taxpayer.

The unions need to wake up to the new reality. The gravy train is over. In a time of over 9.5% unemployment (more realistically, 18% resulting in significant decreases in government revenues) record foreclosures, increased usage of food stamps and welfare you would think that accepting reasonable increases, or what our liberal friends like to say, ‘paying their fair share’ would be done so in a gracious manner. Instead the unions have decided to double down and not only not accept the changes, but become belligerent and vitriolic.

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Posted by on February 18, 2011 in Deficit


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