Stunning Facts About Public Sector Unions

See here for stunning facts about public sector unions:

For every $1-an-hour pay increase, noted Dennis Cauchon in USA Today, public employees have gotten $1.17 in new benefits. Private workers have gotten just .58 cents in benefits for every $1 raise. This gap worries left-liberal labor economist Barry Bluestone. The price of state and local public services increased by 41 percent nationally between 2000 and 2008. Private services only increased by 27 percent. The benefit growth has continued unabated into the Great Recession, and Bluestone says the gap will inevitably produce a backlash.

Like banks, but with even less self-control, state governments make long-term promises in boom times while depending on the short-term flow of revenues. But when the boom ends, the benefits that have been ratcheted up have to be paid for out of a declining private sector economy. Barring a sharp recovery, state and local government tax-funded pension contributions in New York are likely to triple over the next five years in order to pay out the pension benefits guaranteed by the state constitution. (This is equally true in Illinois.) California’s public pension fund liability has already topped $200 billion, and in cities such as Oakland, Vallejo, and Rio Vista bankruptcy looms.

If you want to really scare people on Halloween, dress up as a retired teacher, police officer, county lawyer, or any other public employee eligible for a pension and lifetime medical benefits. (Actually, that's the problem--we're not yet scared of these people, even as California issues IOUs. Maybe we'll pay attention when the sales tax is 20% and the DMV charges $400 to register an old car.)

Comments

[Tom Armistead:]

Reponsible estimates place the unfunded pension liabilities of state and municipal governments at 1 trillion.

Warren Buffett noted that some of these government persion funds borrowed money during boom times in order to leverage their investment returns, a maneurver that was successful but has had unforseen consequences as the value of the assets purchsed with borrowed funds has declined.

Probably the best approach would be to require state and local governments to fund their obligations as they are incurred. That would raise taxes and draw voter attention.

Nov 02 07:31 AM

[DuffBeer:]

This group is the strongest union of all. They will drain you to make sure they get theirs or is it ours ?
Watch what the tax assessors do with real estate tax bills. Home valuations down 10-20-30 50 100 1000 % but it will mean nothing !!! The plan find the years it was all good and raise the real estate taxes based on those years !
Did they not do that already ???
Some protected group and we continue to pay for them .
Cheers, DuffBeer crying in my beer on this one

Nov 02 10:03 AM

[somecatchyp...:]

Welcome to the new feudalism.

From the top down:

Top 30%

1. The independently wealthy.

2. Highly skilled government workers.

3. Low skill government workers.

Bottom 70%

4. Highly skilled private workers.

5. Low skill private workers.

6. Illegal aliens.

The parasites versus the productive.

The parasites supported by a growing police state with ever more efficient tactics and technology.

Rather than encourage a young person to go into government, I would encourage that young person to learn Mandarin or Spanish. This will make it a whole lot easier to flee the country. This is better disaster insurance than gold bullion.

Nov 02 12:06 PM

[Westcoaster:]

If the economy stays flat this is the biggest problem of my generation. I am supporting a pension tax. Yes, every entitlement the government has given is a "guaranteed contract". But government can also enact any tax they want. Therefore we either get out of this by growing our economy again or we tax pension benefits.

Nov 02 02:47 PM

[Gedankonomist:]

Too bad the states can't get the FED to print money for them too.

Nov 02 02:57 PM

[Fabien Hug:]

In all fairness, home value assessments for tax purposes have been revised downward generously in CA. A house that sold for $ 1,1 mio in 2006 is now valued $ 765K for tax purposes.
This being said, prepare to vote with your feet. Running always beats democracy.

Nov 02 09:55 PM