Unions lose Members as they Spend Millions in Union Dues on Liberal Candidates and Causes

Posted by PITHOCRATES - December 30th, 2012

Week in Review

The past few years haven’t been great for organized labor.  They’ve spent a fortune in union dues to win President Obama’s reelection.  But though they won that battle they may be losing the war (see Spending large sums in state labor battles adds to unions’ problem of losing members by FOX News/AP posted 12/23/2012 on FOX News).

Unions represented roughly 30 percent of the country’s workforce in the early 1980s, when the federal government started tracking those numbers, but they now represent 11.8 percent.

The declining numbers are in part the result of the country’s shrinking manufacturing sector, but the situation has been compounded by recent efforts in Michigan and Wisconsin to limit unions’ power.

Unions had already spent roughly $22 million in Michigan on a failed November ballot issue regarding collective bargaining, before Republican Gov. Rick Snyder signed legislation this month that stops unions from making workers pay dues or representation fees to keep their jobs…

They also spent more than $20 million in Wisconsin to remove Republican Gov. Scott Walker this year in a recall election after he signed 2011 legislation stripping most public employees of much of their collective-bargaining power, but Walker still won that election.

The unions also spent roughly $24 million last year in Ohio to overturn an anti-union measure.

But unions spent more in California this year to defeat a ballot measure that would curb dues collection than they did total on political efforts in Michigan, Ohio and Wisconsin.

James Sherk, a labor expert with the conservative Heritage Foundation think tank, estimates Michigan unions, including United Auto Workers, will lose an additional $100 million annually as a result of the changes and members leaving.

Workers have already “left unions in droves in Wisconsin, Idaho and Oklahoma,” he said.

If you do the math that adds up to $66 million for Michigan, Wisconsin and Ohio.  Double that to add in California and that brings it up to $132 million.  Throwing in the estimated $400 million in the 2012 elections that brings the total up to $532 million.

That’s half a billion in union dues they spent for political purposes.  Perhaps explaining why workers are leaving the unions in droves where they can.  Especially when the American people identified themselves at the end of 2011 as 40% conservative, 35% moderate and 21% liberal (see Conservatives Remain the Largest Ideological Group in U.S. by Lydia Saad posted 1/12/2012 on Gallup).  As a lot of those union dues go to support liberal candidates and liberal causes they no doubt bothered the 79% of the population that isn’t liberal.  Especially those paying those dues.

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Wisconsin Takes a Step Forward, the UK Takes a Step Back

Posted by PITHOCRATES - March 9th, 2011

 A Foul Stench Wafts across the Rheine

Empires come and go.  But one truly transformed the world.  And still is today.  The British Empire.  Their representative government, property rights and economic policies unleashed unimaginable growth and prosperity.  They gave us the Industrial Revolution.  And we’ve never looked back.  Great nations started as British seedlings.  Canada.  Australia.  India.  New Zealand.  To name a few.  And, of course, the United States.

Sadly, the UK strayed in the 20th century.  As many nations did.  Including the US.  Thanks to a foul stench that wafted across the Rheine.  Karl MarxFriedrich Engels.  They wrote a book.  The Communist Manifesto.  And their goal was to replace capitalism with socialism.  And then replace socialism with communism.  The ultimate welfare state.

The British government exploded in the 20th century.  They nationalized industries.  Raised taxes.  And empowered unions to the point that the nation was at their mercy.  If they didn’t get the pay raise they wanted you didn’t have any electricity.  Their strikes were notorious.  People called them the British Disease in the Seventies.  But help was on its way.

Thatcher and Reagan cut Taxes to Economic Prosperity

Margaret Thatcher was prime minister during the Eighties.  And she started turning the UK around.  Like her counterpart did in the US.  Ronald Reagan.  Both cut taxes.  And nearly doubled their tax receipts (see High income tax will cost the country dear by Telegraph View posted 3/9/2011 on the UK’s Telegraph).

Between 1979 and 2009, UK corporation tax rates fell by half, even as the revenue from the tax rose by half – hard evidence that lower taxes encourage economic activity and boost Treasury receipts.

People deride ‘trickle-down’ Reaganomics in the US but it worked.  And it worked in the UK, too.  Because jobs are everything.  If you don’t have jobs your economy goes into the toilet.  If you have jobs your economy soars.  It just doesn’t get simpler than that.  And how do you create jobs?  You give people a reason to be brilliant.  Give entrepreneurs an incentive to create something.  Let businesses be profitable and they will take every opportunity to grow their businesses.  To be even more profitable.  All the while creating jobs.  Every step of the way.  The more they grow the more jobs they create.  And the better life gets for everyone.

Of course, remove that incentive and it’s the opposite.  If you raise taxes you reduce profits.  And that removes incentive.  Well, they are raising taxes again in the UK.  And what will the genius entrepreneurs do?  Well, what would you do?

Behavioural changes prompted by the higher rate – with entrepreneurs departing for more benign tax regimes or devising ways of avoiding the new tax – are set to flatten economic growth and lead to a collapse in tax revenues. The think tank estimates that the cost to the Treasury over a decade could be as much as £350 billion… Why should wealth-creators stay here when almost two thirds of their income is taken from them? The answer is that they won’t.

History has shown that higher tax rates rarely bring in the money the government expects.  While lower tax rates bring in more money than any of the naysayers ever dreamed.  So why, then, do they keep raising taxes?  Politics.

The Deed is Done in Wisconsin

Big Government needs supporters.  With the wane of private sector unionization, it’s getting harder and harder to get people to support Big Government.  Because people who work and enjoy life have no need for government help.  So they need to find people who do.  Or create them.

Enter the public sector unions.  These people beg for high taxes.  Because they are paid with tax dollars.  So the more people in the public sector, the more people there are to support big government spending.  It’s a little of the old you scratch my back and I’ll scratch yours.  And to sweeten the deal, public sector workers not only get pretty decent pay, they get outrageous benefits.  All paid for courtesy of the taxpayer.

And this is what is at issue in Wisconsin.  The union was ready to cave on everything but the collective bargaining.  Because that’s how they pass the full cost of their benefits onto the taxpayer.  Without the taxpayer having any say in the matter.  Until now, that is (see G.O.P. Tactic Ends Stalemate in Wisconsin Union Fight by Monica Davey posted 3/9/2011 on The New York Times).

The bill makes significant changes to most public sector unions, limiting collective bargaining to matters of wages only and limiting raises to the Consumer Price Index unless the public approves higher raises in a referendum. It requires most unions to hold votes annually to determine whether most workers still wish to be members. And it ends the state’s collection of union dues from paychecks.

So now if they want a raise larger than the Consumer Price Index (as a lot of raises are determined in the private sector for COLA raises), they have to ask the taxpayer to approve the raise.  And you can see why they are against this.  They want to keep getting big raises without the people paying them having any say in the manner.

And the whole choice thing about staying in the union?  And making people write checks for their union dues?  Why, if people do that, some are not going to stay in the union.  Not all union members vote Democrat.  But nearly all union dues go to Democrat candidates.  So, of course, the unions don’t want any of these changes to come to pass.  Or government.  Because the little arrangement they had was a nice way to dump bushels of taxpayers’ money into Democrat pockets.  Often against their will.  Or without their knowledge.

Public Sector Union – A Vehicle to Steal Money from the Private Sector

Everyone knows what we need for economic prosperity.  Thatcher and Reagan showed how to do it in the Eighties.  And they turned around nations that were in a pretty sorry state.  Tax cuts spurred that economic activity.  And filled government coffers.  However, Thatcher cured the British Disease.  And Reagan fired the air traffic controllers.  They stood up to the unions.  And that choked off a lot of money funneled (i.e., laundered) to the opposition parties.

And this is what the Left fears in Wisconsin.  That responsible government beholden to the taxpayer may waft out from Wisconsin and infect other states.  Thus turning off the great spigot of coerced political contributions.

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Collective Bargaining in Wisconsin – Greed versus the Taxpayers

Posted by PITHOCRATES - February 25th, 2011

Democracy in Action and Whiny Democrats in Wisconsin

The Wisconsin Democrats need to take a refresher course in democracy.  Because democracy isn’t oligarchy.  The minority power can’t have its way.  No matter how unhappy they are.  Elections have consequences.  Like Obama said.  The Obama Administration governed without the consent or input of the minority power.  It may not have been nice or what he said he would do during the campaign.  But it was legal.  And democratic.  So Obama governed against his campaign platform.  And the American people.  The people didn’t like that.  And gave the House back to the Republicans in the 2010 mid-term elections.

You see, that’s how democracy works.  You don’t whine and cry when you can’t have your way.  You compete in the arena of ideas.  Win elections.  And govern accordingly.  And when you lose elections you don’t govern any more.  Unless you’re a bunch of whiny cry babies in Wisconsin (see Capitol Chaos: Assembly Passes Budget Repair Bill by Charles Benson, Jay Sorgi and the Associated Press posted 2/25.2011 on todaystmj4.com).

Shortly after 1:00 a.m., after more than 60 hours of debate on this, the Republicans quickly called for the vote, which ended all debate.

Some of the Democrats were so taken aback by what had happened, they didn’t get a chance to vote. 

The vote happened so fast, within seconds, that the bill pass with Republican voting for it, but while they were voting, Democrats kept yelling, “No!  No!  You can’t do this!”…

After it passed, Republicans started walking off the floor, and the Democrats started yelling “Shame!  Shame!  Shame!” as Republicans walked off, one by one, and left the Assembly floor.

Obamacare was hustled through a lot faster with a lot of bribes.  There was no debate.  Nancy Pelosi said we had to pass it to learn what was in it.  The Democrats had no problem with that vote.  The vote in Wisconsin, on the other hand, they do. 

The people of Wisconsin, unhappy with the Democrats, voted in a Republican controlled legislature.  And a Republican governor.  The Republicans had the majority.  The Democrats didn’t.  It’s called democracy.  Which they’re all for.  When they are in power.  But when they’re not in power democracy just isn’t fair.  And they whine.

Of Course they’re Over-Compensated

After the vote layoff notices went out.  The UPI reports teachers are so anxious that they were breaking out in tears.  And for good reason.  They have some pretty nice jobs.  All public sector workers do.  I mean, they wouldn’t be making such a big fuss if those jobs were as bad as they would have us believe.

We the taxpayers pay public sector workers well.  And we’ve been giving them the best of benefits.  Well, yes and no, say the critics.  They’re smart.  Well educated.  And underpaid for their brains.  The critics say people in the private sector with the same education are compensated more.  That’s a little hard to believe.  Because few give up those public sector jobs once they get them (see Everything You Need to Know about Whether State and Local Bureaucrats Are Over-Compensated, in One Chart by Daniel J. Mitchell on 2/25/2011 on CATO@Liberty).

The data on total compensation clearly show a big advantage for state and local bureaucrats, largely because of lavish benefits (which is the problem that Governor Walker in Wisconsin is trying to fix). But the government unions argue that any advantage they receive disappears after the data is adjusted for factors such as education.

This is a fair point, so we need to find some objective measure that neutralizes all the possible differences. Fortunately, the Bureau of Labor Statistics has a Job Openings and Labor Turnover Survey, and this “JOLTS” data includes a measure of how often workers voluntarily leave job, and we can examine this data for different parts of the workforce…

Not surprisingly, this data shows state and local bureaucrats are living on Easy Street. As the chart illustrates, private sector workers are more than three times as likely to quit their jobs.

The reason someone doesn’t quit a job is simple and straight forward.  They can’t find a better one.  Over in the private sector, they say the way to increase your compensation is to make a few moves to other companies.  Let private employers bid up your salary.  This isn’t how it works in the public sector.  Pay and benefits have nothing to do with ability.  You get in and you stay put.  And let the union shake down the taxpayers for ever more generous pay and benefits.

Greedy Teachers and the Poor Taxpayers they Shake Down

Wisconsin teachers are calling in sick to show up at these protests.  They are using fraudulent doctor’s notes handed out at the protests to excuse their ‘sick’ days.  That’s not very ethical.  And probably not very legal.  Or a good lesson for the children they teach (some of which have joined them in the protest as useful pawns for the children can’t possibly understand what’s really at stake here).  So why would they go to these lengths?  Will the governor force them to choose between food and medicine?  Will they have to eat cat food?  I doubt it.  For it looks like they’re currently enjoying champagne and caviar (see Oh, To Be a Teacher in Wisconsin by Robert Costrell posted 2/25/2011 on The Wall Street Journal).

The average Milwaukee public-school teacher salary is $56,500, but with benefits the total package is $100,005, according to the manager of financial planning for Milwaukee public schools.

Wow.  That’s like having one job and getting two paychecks.  And they only work 9 months out of the year.  And get a lot of time off when they do work.  That is some pretty sweet compensation.  I can see why they protest.  They are a privileged elite.  And like elites, they don’t like giving up their elitism.

So how do the benefits add up to $100,005 in total compensation for an average public-school teacher?  Well, thanks to collective bargaining, they get pensions and health care benefits like no one does in the private sector.

•Social Security and Medicare. The employer cost is 7.65% of wages, the same as in the private sector.

•State Pension. Teachers belong to the Wisconsin state pension plan. That plan requires a 6.8% employer contribution and 6.2% from the employee. However, according to the collective-bargaining agreement in place since 1996, the district pays the employees’ share as well, for a total of 13%.

•Teachers’ Supplemental Pension. In addition to the state pension, Milwaukee public-school teachers receive an additional pension under a 1982 collective-bargaining agreement. The district contributes an additional 4.2% of teacher salaries to cover this second pension. Teachers contribute nothing.

•Classified Pension. Most other school employees belong to the city’s pension system instead of the state plan. The city plan is less expensive but here, too, according to the collective-bargaining agreement, the district pays the employees’ 5.5% share.

•Health care for current employees. Under the current collective- bargaining agreements, the school district pays the entire premium for medical and vision benefits, and over half the cost of dental coverage. These plans are extremely expensive.

This is partly because of Wisconsin’s unique arrangement under which the teachers union is the sponsor of the group health-insurance plans. Not surprisingly, benefits are generous. The district’s contributions for health insurance of active employees total 38.8% of wages. For private-sector workers nationwide, the average is 10.7%.

•Health insurance for retirees. This benefit is rarely offered any more in private companies, and it can be quite costly. This is especially the case for teachers in many states, because the eligibility rules of their pension plans often induce them to retire in their 50s, and Medicare does not kick in until age 65. Milwaukee’s plan covers the entire premium in effect at retirement, and retirees cover only the growth in premiums after they retire.

No one in the private sector gets these benefits.  No one.  Unless they make very large contribution towards them.  Whereas the teachers get them totally free.  Is that fair?  People bitch about CEO compensation but at least it’s the shareholders who have last say on that.  In Wisconsin it is doubtful the taxpayers even know what their public-school teachers are making.  Courtesy of their tax dollars.

Overall, the school district’s contributions to health insurance for employees and retirees total about 50.9 cents on top of every dollar paid in wages. Together with pension and Social Security contributions, plus a few small items, one can see how the total cost of fringe benefits reaches 74.2%.

What these numbers ultimately prove is the excessive power of collective bargaining. The teachers’ main pension plan is set by the state legislature, but under the pressure of local bargaining, the employees’ contribution is often pushed onto the taxpayers. In addition, collective bargaining led the Milwaukee public school district to add a supplemental pension plan—again with no employee contribution. Finally, the employees’ contribution (or lack thereof) to the cost of health insurance is also collectively bargained.

As the costs of pensions and insurance escalate, the governor’s proposal to restrict collective bargaining to salaries—not benefits—seems entirely reasonable.

And there you have it.  Why the Left is panicking about what’s going on in Wisconsin.  And it ain’t about the children.  Health care benefits and pensions can’t get any less about the children.  Collective bargaining has given the public sector workers great pay and benefits at the taxpayer’s expense.  All without having the taxpayer to approve these generous compensation packages.  Unlike shareholders in private corporations. 

Collective bargaining for public sector workers enables the transfer of huge sums of money from the private sector (the taxpayers) to the public sector.  Union members pay dues.  And guess who unions support in elections.  Democrats.  If other states follow suit the Democrats stand to lose a lot of campaign cash and foot soldiers.  And this is what it’s really about in Wisconsin.  Greed.  The greed of public sector workers.  And the greed of Democrats.

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