Published: Wednesday, January 26, 2011
Narrow labor agenda pushes more spending
The president tells us that the state of the union is good and improving. But last week’s statistical report on the state of the unions shows continued weakness and decline.
According to the Bureau of Labor Statistics, union membership nationally dropped to 11.9 percent of the workforce in 2010. In 2009, it stood at 12.3 percent. When you carve out public sector workers, the numbers are anemic. Just 6.9 percent of private sector workers belong to unions, down from 7.2 percent in 2009 and a record low. Union membership fell by more than the total number of lost jobs in the economy.
Government workers continue to prop up union ranks. In 2009, for the first time, public employees made up more than half of all union members. They now account for 52 percent. Our state ranks fourth nationally in union participation, with similar public sector dominance.
Public employees have a vested interest in increasing public spending, protecting generous pension and health care packages, and blocking privatization efforts. With state and local revenue streams still ravaged by the great recession, the corresponding contraction in government spending exposes the imbalance between public and private sector compensation and job protection.
Among the general public, support for government unions continues to erode. Labor leaders fault political leaders for scapegoating public employees. But reality, not rhetoric, has tipped the balance. In neighborhoods across the nation friends have experienced two quite different recessions. Private sector job losses came early, along with wage and benefit reductions and shrinking retirement accounts. Meanwhile, government employees continued to enjoy uncommon job security, wage increases, guaranteed pensions, and generous health care benefits. You don’t need a pundit or politician to highlight the distinctions.
Labor leaders say that it’s their job to get the best deal for workers. It is. And it’s the responsibility of management — governors and legislators — to assure balance. There can be no justification for imperiling private sector jobs with unsustainable government spending, unrealistic compensation programs, and uncompetitive tax and regulatory policies.
The pursuit of such policies inevitably will unravel the fabric of labor solidarity. Undaunted by 9.3 percent unemployment, the Washington State Labor Council, for example, proposes tax increases and expanded entitlements.
The group wants to find $3 billion or more by suspending unspecified tax exemptions. Each suspension, of course, would be a tax increase requiring voter approval, thanks to an initiative passed last fall. It’s a distraction from the reset required to establish a sustainable state budget. Three years after the start of the recession, does anyone think legislative leaders have failed to mine the tax code for easy money? It’s not there.
The state, through the bipartisan and professional Joint Legislative Audit Review Commission, conducts a comprehensive and thorough evaluation of each exemption on the books. It’s smart policy.
Labor’s call, however, isn’t about good tax policy. The unions simply want more money. Jeopardizing jobs by breaking faith with employers who have made long-term investments based on tax policy makes no sense.
The labor council also calls for a new unemployment insurance entitlement. Unemployment insurance provides a partial wage replacement for workers who have lost their jobs through no fault of their own. Washington already has the nation’s second most generous weekly benefit — and the high taxes that accompany it.
The governor proposes modest relief by capping a scheduled unemployment insurance tax increase. The labor council, balking at a business break, would add a $15 per week children’s benefit (per dependent up to $50). The proposal uncouples the unemployment benefit from wage replacement by introducing a new need component more common to welfare programs.
Whatever its justification, this dependent’s benefit does not belong in the unemployment insurance system. Over time, taxes align with benefits. Like the governor’s plan, the labor proposal draws down the currently healthy unemployment insurance trust fund. Unlike her plan, however, labor’s proposal leads to a permanent increase in costs, driving up taxes and imposing a drag on hiring.
Union membership and public support for labor may grow again when the unions show they understand that the key to a strong economy is a prosperous private sector. Currently, they appear to have other priorities.
Richard S. Davis, president of the Washington Research Council, writes on public policy, economics and politics. His e-mail address is rsdavis@simeonpartners.com.
According to the Bureau of Labor Statistics, union membership nationally dropped to 11.9 percent of the workforce in 2010. In 2009, it stood at 12.3 percent. When you carve out public sector workers, the numbers are anemic. Just 6.9 percent of private sector workers belong to unions, down from 7.2 percent in 2009 and a record low. Union membership fell by more than the total number of lost jobs in the economy.
Government workers continue to prop up union ranks. In 2009, for the first time, public employees made up more than half of all union members. They now account for 52 percent. Our state ranks fourth nationally in union participation, with similar public sector dominance.
Public employees have a vested interest in increasing public spending, protecting generous pension and health care packages, and blocking privatization efforts. With state and local revenue streams still ravaged by the great recession, the corresponding contraction in government spending exposes the imbalance between public and private sector compensation and job protection.
Among the general public, support for government unions continues to erode. Labor leaders fault political leaders for scapegoating public employees. But reality, not rhetoric, has tipped the balance. In neighborhoods across the nation friends have experienced two quite different recessions. Private sector job losses came early, along with wage and benefit reductions and shrinking retirement accounts. Meanwhile, government employees continued to enjoy uncommon job security, wage increases, guaranteed pensions, and generous health care benefits. You don’t need a pundit or politician to highlight the distinctions.
Labor leaders say that it’s their job to get the best deal for workers. It is. And it’s the responsibility of management — governors and legislators — to assure balance. There can be no justification for imperiling private sector jobs with unsustainable government spending, unrealistic compensation programs, and uncompetitive tax and regulatory policies.
The pursuit of such policies inevitably will unravel the fabric of labor solidarity. Undaunted by 9.3 percent unemployment, the Washington State Labor Council, for example, proposes tax increases and expanded entitlements.
The group wants to find $3 billion or more by suspending unspecified tax exemptions. Each suspension, of course, would be a tax increase requiring voter approval, thanks to an initiative passed last fall. It’s a distraction from the reset required to establish a sustainable state budget. Three years after the start of the recession, does anyone think legislative leaders have failed to mine the tax code for easy money? It’s not there.
The state, through the bipartisan and professional Joint Legislative Audit Review Commission, conducts a comprehensive and thorough evaluation of each exemption on the books. It’s smart policy.
Labor’s call, however, isn’t about good tax policy. The unions simply want more money. Jeopardizing jobs by breaking faith with employers who have made long-term investments based on tax policy makes no sense.
The labor council also calls for a new unemployment insurance entitlement. Unemployment insurance provides a partial wage replacement for workers who have lost their jobs through no fault of their own. Washington already has the nation’s second most generous weekly benefit — and the high taxes that accompany it.
The governor proposes modest relief by capping a scheduled unemployment insurance tax increase. The labor council, balking at a business break, would add a $15 per week children’s benefit (per dependent up to $50). The proposal uncouples the unemployment benefit from wage replacement by introducing a new need component more common to welfare programs.
Whatever its justification, this dependent’s benefit does not belong in the unemployment insurance system. Over time, taxes align with benefits. Like the governor’s plan, the labor proposal draws down the currently healthy unemployment insurance trust fund. Unlike her plan, however, labor’s proposal leads to a permanent increase in costs, driving up taxes and imposing a drag on hiring.
Union membership and public support for labor may grow again when the unions show they understand that the key to a strong economy is a prosperous private sector. Currently, they appear to have other priorities.
Richard S. Davis, president of the Washington Research Council, writes on public policy, economics and politics. His e-mail address is rsdavis@simeonpartners.com.
Comments
(