Out of Control

Bill McGowan, the AngryEconomist, asks, and answers, the question "If this isn't greed . . . what is? How Public Employees Unions Can't See the Forest for the Trees".

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Let us be clear: the largest problem with public employee unions is
not the pay they get for their employees, but the benefits. Raising
current salaries substantially across a huge employee base is always
difficult in private business, and even more so in the public arena.
This is why AFSME, the CTA and other public employee unions have
focused most of their negotiating on benefits, whose costs are long
term and permanent. The problem is that the unions have been too
successful. In one Southern California county, executive level
employees get to retire at 100 percent of salary after a mere 20 years
on the job. Worse, they also get to "bank" vacation time and receive a
cash payout when they retire. Already granted a generous six weeks per
year, it is no surprise that many county employees leave with a bonus
check equal to almost a year's worth of "banked" vacation.

A long-term study of public education finds a trend of diverting a
larger percentage of education revenue to salaries and benefits
coincided roughly with the passage of Proposition 13 here in
California. From about 1980 onward, school districts increasingly cut
capital budgets for things like new schools and maintenance in favor
of funding current demands for salaries and benefits. Interestingly
enough, the same trend appears nationally at about the same time, so
Proposition 13 is not solely to blame. In essence, nationwide the
teacher's unions were eating their seed corn, counting on the
taxpayers to bail them out later when the inevitable crisis arrived.
That many of our schools are falling down now, 20 years after this
systematic neglect began, is no surprise.
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