By William C. Shelton
(The opinions and views expressed in the commentaries of The Somerville News belong solely to the authors of those commentaries and do not reflect the views or opinions of The Somerville News, its staff or publishers.)
“An investment banker, a tea partier, and a unionized public employee are sitting around a plate of 12 cookies. The banker takes 11 cookies, turns to the tea partier, and says, ‘Watch out for that union guy. He’s trying to take part of your cookie.’”
This little parable is circulating on email networks. It aptly summarizes what we are seeing in Wisconsin and the 15 other states where public employee unions are under assault.
Billionaire bankers’ reckless greed plunged the global economy into dire fiscal crisis. A Republican President and Congress chose to bail out the banks instead of workers and homeowners.
The cumulative effect was plummeting tax revenues and gaping state and federal deficits. On the federal level, this expanded a national debt already swollen by three Republican administrations’ overspending and under taxing.
Now the right uses these deficits as a pretext for making war on working people instead of taxing those who created the crisis. Its propaganda machine and politicians shamelessly chant falsehoods about unions and deficits.
Here are some truths about unions. Without the union struggles of the 20th Century, you would have no 40-hour workweek and no weekends off. You would have no minimum wage or workers’ compensation. You would have few paid benefits and fewer enforceable safety standards.
It is not an exaggeration to say that union militancy was a factor critical to the creation of social security. Nor that unions were essential to the emergence of a post-World-War II middle class.
Research by the Economic Policy Institute tells us that unions raise unionized workers’ wages and salaries by 20 percent, and their total compensation by 28 percent. Unionized workers receive 26 percent more vacation time and 14 percent more paid leave than nonunionized workers. They are 18 to 28 percent more likely to have employer-provided health insurance. They are 23 percent-to-54 percent more likely to be in employer-provided pension plans.
Workers in so-called “right-to-work” states earn on average $5,538 less per year than in states where workers can collectively bargain. And right-to-work states have workplace death rates 52.4 percent higher, along with higher poverty and infant mortality rates.
As stark as differences between unionized and nonunionized workers are, unions elevate nonunionized workers’ lot as well. Labor market economics dictate that union wage levels move wage levels for the entire labor market in their direction. It’s not merely coincidence that as the proportion of workers who are unionized dropped from 27.4 percent in 1970 to 11.9 percent last year, average wages and salaries have stagnated or declined.
The trend is similar with benefits. Employers once made contributions equivalent to 10 percent of an employee’s pay to “defined-benefit pensions.” These plans paid a retired employee a pre-agreed fixed rate over their remaining lives.
As union membership has declined, employers have replaced defined-benefit plans with 401K plans and reduced their contributions to four percent of an employee’s pay. With 401Ks, the employee bears the market risk as well.
I am not blind to unions’ flaws. Some rigidly enforce work rules that are irrational, inefficient, and create unnecessary costs. Some union policies protect workers who are lazy, incompetent, or hurtful to their coworkers. Some union operatives obstruct management’s efforts for no reason other than habitual malice.
But these legitimate criticisms are very different from the lies that Wisconsin Governor Scott Walker and his ideological companions use to rationalize their war on unions. Intending to isolate and promote resentment toward public-employee unions, they charge that public-sector workers are overpaid.
Another Economic Policy Institute study concluded that, “On an annual basis, full-time state and local government employees in Wisconsin are undercompensated by 8.2 percent compared with otherwise similar private sector workers.” Estimates by other analysts place this disparity as high as 14 percent for public-sector workers nationwide.
When confronted with these facts, anti-unionists counter that public workers’ wages may be lower, but their pensions are at ruinous levels. Living in the Boston area, we are aware of some specific cases where this is glaringly true. But in a national context they are exceptions.
The average public-sector pension in Wisconsin is $23,000 per year. And the Wisconsin pension plan is close to fully funded.
Pension plans in other states are often far from fully funded. In past collective bargaining agreements, public officials insisted that, in return for accepting lower compensation, public employees would receive higher pensions. Politicians who negotiated these deals did not have the courage to raise taxes. Now that the bill is coming due, they are reneging on solemn promises and attacking their employees.
Most insidious is the lie supporting claims that public employees shouldn’t be allowed to unionize at all. The argument is that union dues go to support campaign contributions and union organizing that benefit union members; and that taxpayers are unfairly obligated to fund these exorbitant benefits.
During the 2010 federal election cycle, public-sector unions gave $34 million to political campaigns. The finance, insurance and real estate folks who brought you the financial meltdown made campaign contributions of $289 million.
In 2010, public-sector unions spent $14 million on lobbying. The finance, insurance and real estate industry spent $471 million on lobbying. And they represent only one industry, while all labor unions combined contributed only $92 million to political campaigns and spent $47 million on lobbying.
Which do you think costs taxpayers more, public-sector wages and benefits that are not significantly greater than those in the private sector, or public policies that support usurious interest rates, fraudulent financial agreements, a crashed economy, and a $700 billion TARP bailout? Which creates larger deficits? Which will Scott Walker and his allies work to change?
