Wednesday, September 29, 2010

When unions become a millstone around the economy's neck

I don't know whether readers have been following the shenanigans in Europe, where trades unions and Left-wing organizations are protesting furiously against economic austerity measures that threaten the feather-bedded privileges that they've built up in that haven of Socialist thought over the past decades.

Angry workers mounted mass street protests against spending cuts across Europe Wednesday, bringing cities to a halt, clashing with police and even ramming the gates of Ireland's parliament.

In Brussels, the heart of the European Union, tens of thousands of people from 30 countries joined the city's biggest march in a decade as riot police barricaded the EU headquarters against the backlash to brutal spending cuts.

Spain staged its first general strike since 2002 and thousands more also rallied in cities from Portugal to Poland, although leaders such as France's Nicolas Sarkozy pressed on with a "historic" attack on soaring overspending.

The focus of the protests was the Belgian capital, where a sea of marchers snaked past heavily guarded banks and designer stores to say "No to austerity".

Between 56,000 and more than 100,000 took part in the giant cortege that crossed half of the city, according to various sources, and police said 218 "troublemakers" were detained.

"We're here to say 'no' to the multiplying number of austerity plans, whether adopted by governments or by European institutions," said Bernard Thibault, head of the major CGT French trade union.

"Our message is to avoid adding an unprecedented social crisis to the financial crisis, with the workers paying the cost."

. . .

"This is a crucial day for Europe," said John Monks, British general secretary of the European Trade Union Confederation.

"Our governments, virtually all of them, are about to embark on solid cuts in public expenditures."

As Europe tries to clean up its post-recession books, the backlash has focused on feared vast numbers of public sector job cuts.

Millions of jobs fell off the European map in the global downturn and many more look set to be squeezed as governments axe public spending.

There's more at the link.

Note that the protesters aren't concerned about other people, or other sectors of the economy, having to pay for the present mess: they just want to make sure that their jobs, and their benefits, aren't affected. It's unabashed, in-your-face selfishness.

Precisely the same thing is evident in US trades union protests against certain policies, and in support of others. The New York Post reports:

The Tea Party movement may have arisen to protest rising deficits and increasing federal control of everything from health care to the auto industry -- but the big-government coalition it's fighting wasn't born in Washington. The federal agenda that the movement is now battling to overturn originated in state capitals like Albany, Trenton and Sacramento.

This agenda has been promoted with growing success in the last 50 years by a self-interested coalition of public-sector unions and social-advocacy groups that benefit from bigger government, higher taxes and more public control of the economy. Merely "taking back" Congress on Election Day won't stop the relentless rise of this coalition, which has at its disposal enormous resources.

President Obama is an expression of the big-government coalition, and his election to the White House was a signature event in its rise to power. He began his public life as a Chicago community activist heading a nonprofit funded heavily by government to organize neighborhood residents into a political force.

As a young college graduate immersed in the world of tax-bankrolled activism, Obama learned a lesson that many other activists also absorbed: To protect the funding that created and nourished their groups, community organizers like him had to head into politics.

. . .

In New York, government-funded activists long ago took the same road into politics as the young Obama. Organizers like Ramon Velez (who ran a vast, government-funded nonprofit network in The Bronx), Pedro Espada (who founded and ran Bronx health clinics) and Vito Lopez (who built a Queens social-service empire) all leapt from community activism into state and local politics.

By the early 1990s, in fact, a fifth of all New York City Council members and 15 percent of state legislators had come out of the social-service world. They could be counted on to advocate for higher taxes and more money for government services.

Over time, these activists partnered with another growing force in local government that shared their affinity for bigger government -- public-sector unions. These groups became important players in city halls and state capitals starting in the late 1950s, when then-New York City Mayor Robert Wagner gave public employees the right to collectively bargain in order to win their support in his battles with the Tammany Hall political machine.

Quickly, other big-city mayors and governors also began granting employees the right to negotiate with government for wages and pay -- ignoring the critics who pointed out that because government was a monopoly, public workers could hold cities and states hostage by going on strike.

. . .

The rise of these groups coincided with a growing public-sector ability to win big pay and benefit raises, including pension benefits. One startling result: Today, states and cities face an estimated $3 trillion in unfunded pension and retiree-health benefits for public employees -- a burden that will squeeze budgets for decades.

The big-government coalition heavily supported candidate Obama for president, and he has rewarded them. The various stimulus packages of the last year and a half have included hundreds of billions of dollars to preserve state and local government jobs. Much of this aid came with huge strings attached: Local governments that took the money committed to not cutting their program spending or reducing their workforce.

But perhaps the biggest boost to this coalition has been ObamaCare. Public unions heavily lobbied for the plan, even though most of their members already have health coverage. Their leaders know it will be good for the unions' "business": As government has increased its involvement in health care through programs like Medicare and Medicaid, politicians have written rules and requirements for these programs that make union organizing easier.

Again, there's more at the link.

Also of note in the US political landscape is that public sector unions are increasingly taking over the political lead from those in the private sector. The former are also more likely to push for higher taxes, forcing the productive sector of the economy to pay for their economically non-productive salaries and perks. As Real Clear Markets has pointed out:

When the union movement in America crossed a crucial threshold recently, as membership in public sector unions surpassed private sector union enrollment for the first time, the event signified deeper changes in labor in America. The new labor movement, dominated by government workers, is an increasingly white-collar interest group, culturally progressive and fiscally liberal, and it has become the chief organizer of efforts to raise taxes in America, especially at the state and local level, where these government worker unions wield their greatest influence. Their efforts have helped boost local taxes this year more than any year since 1979.

Find a tax increase campaign and you're almost certain to find a government union behind it. The California Teachers Association, for instance, is the chief force behind a November ballot initiative in the Golden State which would raise business taxes. The CTA alone has contributed some $6.4 million of its members' dues money to the campaign, according to filings with the California Secretary of State's office. Other public unions have anted up another $2.5 million.

In fact, since the budget squeeze hit states and municipalities starting in 2008, such tax and spend campaigns have been typical. Researchers at the Heritage Foundation counted some 25 public union-driven efforts in that time. They include successful efforts by Arizona's unions to raise the state's sales tax earlier this year, a ballot initiative in Oklahoma sponsored by the state's teachers' unions to raise education spending by $1 billion, a successful $8 million campaign in Oregon by public unions to defeat initiatives seeking to roll back corporate and personal income tax hikes, and a $4 million advertising effort this past spring designed to pressure New Jersey Governor Chris Christie to raise taxes in his state, which failed.

Again, more at the link.

The real-world effects of union influence are being felt in cities all across America. One of the most startling occurred recently in Indianapolis, Indiana. General Motors closed a major body plant there, threatening the loss of up to 2,000 unionized jobs. Another company offered to buy the plant and continue employing the workers, but not at their unionized pay scales. Result? The local workers and businesses supported the offer, wanting to keep jobs in town and attract investment: but GM workers who'd come to the plant from other towns, moved there as part of their union employment contracts, rejected the deal. Their votes swamped those of local workers. They actually preferred to see the plant closed rather than lose their inflated, feather-bedded union benefits. Their short-sightedness and selfishness are almost unbelievable, given the economic realities we face; but they don't care about those realities. They want to keep things the nice, comfortable, unionized way they've been for so long, and they'll happily go on unemployment benefits and deny others a job rather than see things change.

I think many unemployed people would do almost anything to be guaranteed a job at $15.50 per hour . . . but not these self-satisfied unionistas. Makes you think, doesn't it?

Trades unions originally served a useful and valuable purpose to halt the exploitation of workers by rapacious owners and managers. However, in today's world, they've become a stumbling-block, an anachronism. They've become as rapacious as those they were established to resist. Not content with holding companies and employers to ransom, they're now intruding on the political sphere and trying to hold entire nations hostage.

It's time this was stopped . . . one way or another.



Anonymous said...

My suspicions about European unions were confirmed in the late 1990s when the Communists in France led a strike to keep the government from dropping Corpus Christi as a legal holiday and three (or four) day weekend!

Diamond Mair said...

My spousal unit's company tried the same thing as your note about GM above - the union shut it down ......................... and they wonder about the company moving jobs to Mexico ....................

Semper Fi'