The key to bringing balance back to public sector labor relations and balance state budgets is to break the iron triangle of closed-shop mandatory unionization, compulsory dues collection, and oversized campaign donations to politicians that promise to do the unions’ bidding…
The power of private sector unions was long ago broken by many heavily unionized companies going bankrupt. While this was painful for both workers and shareholders, the economy motored on as nimbler non-union competitors picked up the slack. This approach is problematic for the public sector because bankrupt state and local governments cannot be replaced by competitors waiting in the wings. Yes, citizens can always vote with their feet, emptying out cities like Detroit, leaving the blighted wreckage behind. But isn’t Walker’s targeted fiscal retrenchment less painful than scorched-earth abandonment?
The post WWII America, in which the rest of the world’s industrial base was in rubble, could afford gold-plated pensions and inefficient work rules. That ended in the 1970s, but it’s been a slow, lingering death. Here VDH writes you can see the signs of necropathy everywhere:
The blue-state model of large government, increased entitlements, and high taxes may be good rhetoric, but it is unsound reality. Redistribution does not serve static, aging populations in a competitive global world — as we are seeing from California to southern Europe.
Over at Powerline, John Hinderaker dusts off the “subtitle-Hitler-from-The-Bunker” gag. It got played out a while ago, but it has been a while and if you’re glad about the WI outcome you will enjoy:
As some clever fellow once wrote, predicting the ugly fights ahead, you could confiscate the entire wealth of “the rich” and it would still be insufficient.
There simply isn’t enough money to pay the entirety of the unfunded pension and healthcare liabilities – something has to give. In a choice between (a) defaulting on municipal bonds, (b) raising taxes in high-tax states, (c) debauching the dollar, and (d) asking public sector employees to live with something more closely resembling – but still better than! – what those of us paying them live with… I’d predict (d) and a little (c). But it’s become such an intrinsic part of the Democratic Party fundraising base and power structure, the fight will be red in tooth and claw.
UPDATE: Matt Welch at Reason suggests that progressives give up the “plutocrat baiting” and actually govern:
It is a fact that the majority of state budgets are in the red, that overall state spending increased by 81 percent from 2002-2007, and that rare-in-the-private-sector defined benefit pensions for government workers (along with post-retirement medical benefits) are a large and growing portion of state and local budgets, even while being chronically underfunded. The situation is terrible now, and will be much worse in the near future. So, progressives: Tell us concretely what you plan to do about this.
The state of California’s public-sector pension contributions have increased 304 percent in a decade, up to $2.2 billion of a $91 billion budget, and growing faster by the minute. Pension contributions account for 20 percent and 27 percent, respectively, of the city budgets of San Diego and San Jose, whose citizens have responded by passing initiatives asking government workers to contribute more to their own pension and health care. Cities from California to Rhode Island have initiated bankruptcy over pension costs.
So, progressives: What is the right percentage of a government budget to be spent on public sector pensions? If this requires that cities and states simply need to come up with bigger budgets (through increased taxes) precisely how much bigger would be appropriate? If you don’t want to increase overall budgets, what other government services are you willing to cut?