Public Employee Unions Are NOT the Problem

‘Shadowbosses:  Government Unions Control America and Rob Taxpayers Blind’ by Mallory Factor is a perceptive book that came out last week.  I read Chapter 1 (Meet the Shadowbosses) and Chapter 6 (Shadowbosses Bankrupt Our States) and will likely finish it today if the rain persists.  The information is accurate but the target is off.

In theory, when unions negotiate contracts for their members, unions sit on one side of the bargaining table, and government officials representing the taxpayers sit on the other side of the bargaining table.  In reality, though, the government officials on the other side of the table may be beholden to the same unions against which they are negotiating.  Unions effectively end up sitting on both sides of the negotiating table.  The only party not represented at the table is you, the American taxpayer. p. xv

Yes, that is a common scenario but who is to blame?

Aren’t the unions doing their jobs in trying to get the best deal possible for their membership within legal boundaries that they can try to redraw?

What about the politicians who sold their votes?  If the unions vacate their seat at the table, won’t those politicians still be there?  And who will they then be bargaining with?

One example is Union County which privatized their golf operations in 2009 primarily to get greenskeepers and their benefits off of the county payroll and have ended up closing a popular golf course while pumping over $13 million into another one on the hope of maximizing profits for the company they brought in to manage the two remaining courses.

Of course this is only one example of the fiasco that is Union County government but are other governments much better?  If your municipality is facing bankruptcy due to giving away the store to public employees represented by unions will the situation get any better when for-profit entities are negotiating with these same compromised fundraisers and event-planners who were so cheaply purchased by the shadwobosses?

Anyone looking objectively at the situation has to realize that the problems are real and changes need to be made but those changes need to begin at the other end of the table.

34 responses to this post.

  1. Posted by Jeff Arnold on August 27, 2012 at 1:24 pm

    Corrupt gov’t officials are to blame in either case. Only by replacing them will we, the taxpayers, have any hope of improving our public finances. Things are NOT likely to improve when ONE PARTY rule is the norm. It is one reason why SMALLER gov’t is better, it is much easier to monitor and does less damage.


  2. Posted by Tough Love on August 27, 2012 at 2:07 pm

    John, 2 thought on your accurate post:

    (1) Yes, the politicians approving these excessive pension & benefit packages are the primary culprits, but the RECIPIENTS of the money (now and promised well into the future) are the Unions members, so (as Willie Sutton said when asked why he robbed banks) … that’s where the money is and that’s WHERE (or in the Taxpayer’s case, TO WHOM) we must go after to remedy this unjust situation …. by rolling back these pensions (for CURRENT and RETIRED workers, not just new workers) to what they would have been in the absence of the Union-Politician collusion. Based on Public vs Private Sector pension comparisons, that reduction should be AT LEAST 50% (and more for safety workers).

    (2) Politicians reward those who contribute to their campaigns, plain and simply. And unfortunately, proving that link (even though statistically OBVIOUS) through to a successful (bribery and bribe-taking) prosecution is near impossible. So short of outlawing Public Sector Union campaign contributions which seems extremely unlikely (especially in light of the recent Supreme Court ruling effectively allowing unlimited Corporate contributions) the Taxpayers are stuck with this VERY ineffective and corrupt structure ………… which is a good reason why Public Sector Collective Bargaining should be outlawed.


    • Posted by Tom Wyka on August 30, 2012 at 11:20 am

      Thus – publicily financed campaigns and spending limits. The only way to get true public servants in power.


      • Posted by Tough Love on August 30, 2012 at 12:01 pm

        Yes, as long as it is accompanied by a clear road to jail for any politician who accepts even 1 dime outside of the public-funding.


  3. Posted by Anonymous on August 27, 2012 at 2:36 pm

    Republicans bribe the rich with (the promise) of money. Democrats bribe the poor/middle class with (the promise of money in exchange for their vote. Both parties are rotten and stink terribly, we just take the deal that sinks the least.


  4. Posted by Anonymous on August 27, 2012 at 2:39 pm

    TL once proclaimed that she worked in close conjunction to the banking system. I didnt realize that she meant that her great great grandfather was Willie Sutton.


    • Posted by Tough Love on August 27, 2012 at 5:46 pm

      I expected another of you pea-brained sized comments. Thanks for not disappointing me. Again, clearly you are one of the Public Sectors “best and brightest”. Why not share your comments with your bosses and see if it helps your career.


  5. Posted by Eric on August 27, 2012 at 3:29 pm

    Tough Love:
    Why did you change your position regarding retirees? I remember reading posts by you that we should stop digging and making the hole bigger and prevent increases,regarding pensions, going forward only. Is this a first for you in attacking the retirees?
    I am not saying that I disagree with you I am only asking if you have changed your stance and if so, why?


    • Posted by Tough Love on August 27, 2012 at 5:52 pm

      Because the unfunded liability (calculated with reasonable assumptions) is too great (and unfair) for taxpayers to address alone and it would be unfair for current workers to contribute toward the unfunded costs of those already retired.


    • Posted by Tough Love on August 27, 2012 at 6:13 pm

      Follow-up to my earlier reply (as to why I feel RETIREES must also take pension haircuts either directly or via significant contributions to their underfunded pensions):

      While I can easily determine a pension’s cost as a level annual % of pay given the Plan particulars, since I do not have access to detailed Plan demographics, until more recently I was unaware of just how seriously underfunded most Public Sector Plans are when valued with more appropriate and reasonable assumptions …. MUCH worse than the Plan’s official figures.

      Each of the 3 big NJ Plans (see link below) are less than 40% funded with a combined unfunded liability of $145 Billion (John, that’s even worse than you recent blog estimate of $134 Billion). Add to this the $70+ Billion of unfunded OPEB (primarily retiree healthcare) and the seriousness and magnitude of the problem (and need to proactively and forcefully address it) becomes clearer.

      FYI, State-by-State (with Plan splits) funded ratios and Unfunded liabilities can be found here:


  6. Posted by Javagold on August 27, 2012 at 5:00 pm



  7. Posted by Eric on August 27, 2012 at 5:58 pm

    Tough Love:
    I understand. It seems that the “new normal” is a one percent return on investments. Of course, thanks to the corrupt Fed, real interest rates are negative.


  8. Posted by Jeff Arnold on August 27, 2012 at 7:09 pm

    At the very least we need to rescind the 9% increase granted to the system in “01. Yes, we are forced to reduce benefits to current employees which really sucks, but again, it was the politicians who succumbed to the bribes.

    But Mr Bury makes a great point, there is NO such thing as collective bargaining with public unions. So the bigger question is “who will represent the taxpayer?”


  9. Posted by Anonymous on August 28, 2012 at 1:32 am

    TL never made it past the second grade when it comes to insults. She should run for president, she would certainly outshine the former president Shrub.


    • Posted by Tough Love on August 28, 2012 at 2:11 am

      So, have you shares your comments with your boss yet …. to see if he/she is “impressed” with you ?


    • Posted by Jeff Arnold on August 28, 2012 at 9:54 am

      Shrub was never much for insults. TL needs to study the DNC a little, they have it down to a science.


  10. Posted by eatingdogfood on August 28, 2012 at 8:22 pm

    Only one way to turn the State around! Outlaw Public Employee Unions! That will cut down on the direct payoffs to the Lying Thieving Bloodsucking Double Dealing Tax and Spend Democratic Party!


  11. Posted by Eric on August 29, 2012 at 8:40 am

    As Ronald Reagan would have said, there you go again. Remember, both parties fit your description.
    And, as I have said, Jim Rogers put it best, a pox on both of their houses.


    • Posted by Tough Love on August 29, 2012 at 9:19 am

      Unfortunately the SOLUTION that would stop the problem (politicians granting greater-than-necessary or justifiable compensation, primarily via pensions & benefits) in it tracks …. outlawing campaign contributions from Public Sector Unions …. is not likely to happen.

      Ending Collective bargaining is 2-nd best (short of outlawing the Public Sector Unions completely).


  12. Posted by Eric on August 29, 2012 at 9:38 am

    The problem will be stopped in its tracks when the global economic depression deepens. This is just a matter of time. Nothing has been or will be solved in Europe. As I have said, if not for the US having the world’s reserve currency and the strongest military, no one would accept our dollars.
    The problem here, meaning in the US, is similar to a leaky pipe hidden behind a wall, for which Ben Bernanke has ordered new wall paper to literally “paper over” the unsightly condition. When the problem, reappears, the entire wall may collapse dragging down everything with it including pensions and the sickly US dollar which will be massively devalued.
    just be attentive before the music stops.


    • Posted by Tough Love on August 29, 2012 at 10:02 am

      Sounds like you’re moving towards an “off-the-grid”, “gun-in-the-waistband” type.

      It won’t be that bad, but being attentive is good advice.


  13. Posted by muni-man on August 29, 2012 at 11:19 am

    Looks like Ca. is gonna cap pensionable income, reduce accrual rates and lengthen retirement ages (for new hires only). Won’t do a thing to prevent their implosion but it will piss off the unions a lot which ain’t a bad thing.


    • Posted by Tough Love on August 29, 2012 at 1:08 pm

      There is conflicting reporting as to whether the workers paying for 50% of Plan costs applies to CURRENT as well as new workers.

      Even for new workers, I seriously doubt it will be implemented so that these worker REALLY end up paying for 50% of Plan costs. Current Gov’t Plan valuation methods seriously underestimate true costs, so to do it RIGHT, the Plans would need to for workers and retirees to share 50% in developing unfunded liabilities. Given the Politics of CA, I doubt that will ever happen. More smoke & mirrors … and trying to get Taxpayers to approve tax increases.


  14. Posted by Eric on August 29, 2012 at 12:43 pm

    Watch Jackson Hole and a concerted effort by the Fed in unison with the ECB (European Central Bank) to print money. It will give the stock market a temporary sugar high and all along Bernanke will blame congress,and rightfully so, for the fiscal mess, but will print gobs and gobs of dollars nonetheless.


  15. Posted by Walter Reuther on August 29, 2012 at 11:15 pm

    You’re missing the point. You cannot negotiate with government unions. Look at the people who run Union county. Do you think they can stand up to the police. More or less middle class people cannot disappoint the police. Maybe exceedingly wealthy people, but not normal people who have families. If your kid screws up and the police hate you, you are screwed, you’re kid is screwed even worse (perhaps literally if he ends up in jail). But it also works that way with schools, tax assessments, road work. If you have a kid in public school are you going to argue with the school unions?

    That’s why when real unions had power they prevented government workers from unionizing.

    At this point only the ‘markets’ and the federal government can impose order on places like Union co. It is like Jim Crow laws, the federal government had to step in because local government was paralyzed.


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