Hebron Dollars & Sense
- Created: 18 June 2008
There are many examples of how streamlining government can bring expenses in line with revenues. For example, in 1984 New Zealand initiated a sweeping privatization of national and regional services to forestall national bankruptcy. Workers in transportation were reduced from 5,600 to 53, in forest services from 17,000 to 17, and in the national Ministry of Works from 28,000 to 1 – all with no loss of service or safety to the public.
The major roadblock to importing these kinds of savings to America is resistance from public employee unions, which have become accustomed to extracting generous benefits from politicians without having to give much in return. State government workers collect nearly 50 percent more in total compensation than the average private sector employee, with taxpayers subsidizing 128 percent more than private employers to fund health care benefits and 162 percent more on retirement benefits.
Budget pressures have occasionally forced politicians to make modest demands for increased productivity, and the response from public employees has been less than generous – consider the 2005 holiday transit strike in New York City and repeated threats of illegal walkouts by nurses throughout the University of California system.
In a world where an Internet course can substitute for a live teacher, where technology is cutting the length of hospital stays and where Web-enabled technology can ease the impact of government workforce reductions, the bargaining position of monopoly labor is slowly but surely eroding.
Eventually, Public employees will need to recognize that they too have a vested interest in the productivity changes necessary to resolve the debt crisis, especially at the local level where state legislatures have considerable latitude to restructure failing municipalities by rewriting union contracts. This has already happened in cities like Springfield, Massachusetts and San Diego, California.
Even without the threat of bankruptcy, officials in Texas, Oregon, and Rhode Island have challenged longstanding labor agreements. Although politicians are afraid to discuss it, most know that a showdown between government workers and taxpayers is but a few years away – and that economics dictate only the taxpayers can prevail.
Lew Uhler, President of The National Tax Limitation Committee in Roseville, California said, “Andrews points the way for 'right sizing' public employee salaries and benefits… Public employee unions stand between taxpayers and reform and will be brought to reality 'kicking and screaming'. We taxpayers have to be smarter and tougher than those who direct the unions of our public employees. The Yankee Institute will help lead the way.”
To download a FREE copy of The Coming Showdown with Public Labor , CLICK HERE www.yankeeinstitute.org .