Public Sector Unions are Bankrupting America

Only in the fetid parallel universe of government is unionization expanding.
Unions exact uncompensated value politically that cannot be earned on merit.
Public Sector Unions are Bankrupting America

$4 Million a Year for a Bureaucrat

By: George Noga – September 5, 2016

    US private sector union membership was nearly 50% after WWII; today it is 6% and declining as private sector workers conclude the costs of union membership are not worth the putative benefits. Public sector union membership, non-existent in 1945, is 40% and growing, as union workers average twice the compensation of the private sector for comparable jobs. In short, they use politics to extort from the rest of us.

In the private sector, market forces serve as a counterbalance to unions; if pay and benefits get too far out of line, companies lose money and go out of business. This causes unions’ interests to be closely aligned with the private companies they organize. Private sector unions become fierce advocates for private enterprise and lower taxes. This flip-flops with public sector unions; they become pro-government and anti-market agitating for higher taxes at all levels. They literally are bankrupting America.

Public sector unions have many horrors but two stand out. First is teachers unions. The NEA and other public unions are primarily to blame for our failing schools. They stand in the schoolhouse door blocking inner city kids from leaving, trapping them in failed schools. They have turned education into a jobs program for adults. They suck up more and more resources for ever declining performance. School choice is the civil rights issue of our time and the NEA is the 21st century Bull Conner, fire hoses and all.

Second, public sector unions are bankrupting America with enormous pressure for higher taxes to fund unsustainable public pensions and benefits for workers earning double free market compensation. Many jurisdictions are facing bankruptcy; others must jeopardize public safety and cut vital services to fund the aforementioned pensions and benefits. As shown in the following section, the situation is so extreme that it can cost up to $4 million per year to fund one low level civil service job.

$4 Million a Year for an Entry Level Bureaucrat

This animadversion is stranger than fiction. Assume a man begins working after high school as a unionized clerk in the Department of Motor Vehicles. He works for 30 years, eventually becoming a mid-level bureaucrat. He then retires receiving 90% of his final year pay; this is  based on 3% per year for 30 years – a common arrangement. He and his spouse (who also is entitled to benefits) collect the indexed pension for the rest of their joint lives. Of course, they also receive lifetime health care benefits.

       Our civil servant had a son at age 20 who followed precisely in his footsteps as did his grandson and great-grandson – each, in turn, working for the DMV in similar jobs. Fast forward many years; the original civil servant, his son and grandson are all alive, retired and collecting pensions and benefits. Taxpayers are paying four generations of the same family for only one active worker (great-grandson) who just began work.

      The cost, albeit well into the future, is $3-$4 million/year depending on overtime spiking, health care costs, disability status and inflation. Bottom line: taxpayers are paying up to $4 million for only one active employee, who just began work. In the private sector, the comparable amount would be under $300,000. This means the government, thanks to public sector unions and politicians, is paying up to 13.3 times (1,330%) the private sector for a low skill job. Perhaps now you can better understand how public sector unions are bankrupting cities, counties and states across America.

The next post about international trade begins our fall series addressing election issues.