Debate Forum Topic 01/12/11

Public Service Unions Salaries and Benefits on the Chopping Blocks

As state legislatures across the country begin the difficult task of balancing their state budgets, the cost of paying the salaries and pensions for public service union employees has become a volatile topic. For the nearly seven million union members who work for the various local, state and federal governments, they are feeling the heat as more and more discussion regarding balancing the budgets is focusing on their salaries and benefits for which they have fought. To counter these efforts to target public service employees’ salaries and pensions, the unions are fighting back with information campaigns and political activism to support the elected officials most sympathetic to their cause.

Since the middle of the 20th century, organized labor in America has undergone two major transformations. These transformations have had major implications for the nation’s politics. First, there has been a dramatic decline in overall union membership. Fifty years ago, organized labor represented one-third of the non-agricultural work force; in 2010 it represents just 12.3%. The second transformation is even more significant: the change in the percentage of the unionized workforce between private sector union jobs and public sector union jobs. As the number of private-sector unions have shrunk, public-sector unions have expanded dramatically. The Bureau of Labor Statistics reports that, in 2009, for the first time ever, more public-sector employees (7.9 million) than private-sector employees (7.4 million) belonged to unions.
The cost of public-sector pay and benefits (which, in many cases, far exceed what comparable workers earn in the private sector), combined with hundreds of billions of dollars in unfunded pension liabilities for retired government workers, are weighing down state and city budgets. And staggering as these burdens seem now, with the coming of retirement age for the “Baby Boom” generation, these burdens are actually poised to grow dramatically in the years ahead. Some analysts are warning that if policymakers fail to control this growth, a fiscal Armageddon will be the inevitable result.
Union spokesmen point out that these salaries and benefits have been bargained for by the unions and agreed to by the government officials in charge. They argue that these employees are hard working bureaucrats who process applications, clear your streets, run into burning buildings and patrol your neighborhoods. They point out that these benefits were negotiated in good faith and that it is unfair to single out union employees as the culprit in these efforts to balance budgets during this time of financial downturn.

But the critics of public service unions point to some troubling trends. One report shows that when all jobs are considered, state and local public-sector workers today earn, on average, $14 more per hour in total compensation (wages and benefits) than their private-sector counterparts. The New York Times has reported that public-sector wages and benefits over the past decade have grown twice as fast as those in the private sector.

The skyrocketing costs of public employees’ pensions now present a huge challenge to state and local governments. New York, Michigan, California, Illinois, Washington and many other states also find themselves heavily indebted, with public-sector unions at the root of their problems. Prior to the current crisis, few politicians were willing to take on the powerful public service unions which can play a significant role in their re-elections. Today’s budget crisis has changed that reluctance on the part of many elected officials who now see the cost of public employees’ salaries and benefits as a legitimate place to find cuts for the local, state and federal budgets.

Forum Question of the Week:

Are public service unions being unfairly being made the scapegoats for the current budget crisis or is their record salary and benefit growth in the past 10 years fair game in attempting to balance the budget?

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