When considering the labor movement in the United States, there is a huge distinction between government unions and private sector unions. Government unions elect their own bosses, they operate within agencies that collect taxes instead of having to make a profit by enticing consumers to buy their products, and they operate the machinery of government which means their more zealous members have the ability to intimidate their political opponents. Private sector unions have none of these advantages. They negotiate with managers hired by CEOs who report to shareholders. They negotiate with companies that will go out of business if they over-compensate their workers. And with rare exceptions, workers in private companies are not approving our business permit applications, inspecting our workplaces, or auditing our tax returns.

So where does this put construction unions who compete for government contracts?

This question matters a lot to reformers, because private sector unions, properly regulated, not only have a vital role to play in American society, but their members have the potential to lobby effectively against many of the special interests who are killing… Read More

UnionWatch has just released thefourth and final installmentof“The Fall of Pacific Grove – The Final Chapter,” written by John Moore, who is a retired attorney and resident of Pacific Grove. This four part series constitutes an extended epilogue to a eight part series on Pacific Grove which was published last year on UnionWatch. Links to all twelve installments appear at the conclusion of this post.

Moore’s earlier set of articles describe in detail howPacific Groveslid inexorably towards insolvency by yielding, again and again, year after year, to pressure from local government unions to award unaffordable pension benefits to city employees. Pacific Grove’s challenges area textbook case of how there is simply no interest group, anywhere, currently capable of standing up to the political power of government unions. This small city now faces the possibility of selling off every asset they’ve got, primarily real estate, to private developers to raise cash for the city’s perpetually escalating annual pension contributions. They face the… Read More

A reportissued earlier this year from California’s Office of Legislative Analyst “California’s High Housing Costs: Causes and Consequences,” cites the following statistics:“Today, an average California home costs $440,000, about two–and–a–half times the average national home price ($180,000). Also, California’s average monthly rent is about $1,240, 50 percent higher than the rest of the country ($840 per month).”

It’s actually much worse than that. Anyone living on California’s urbanized coast, from Marin Countyto San Diego, has to laugh at the idea that a modest homecan be found for anywhere close to $440,000, or a decent rental can be found for anywhere close to $1,240 per month. In most urban areas within 50 miles of the California coast, finding a home or a monthly rental at twice those amountswould be considered a bargain.

These prohibitive costs for housing are mirrored in California’s unusually highcosts for electricity, gasoline, water, and, of course, California’s unusually high taxes. The cost of living in California… Read More

Attending a high school reunion after more than a few decades ought to be a memorable experience for anyone. Hopefully the occasion is filled with warmth and remembrance, rekindled friendships, stories and laughs. But as our lives develop and we build our adult networks based on shared values and common professions, a high school reunion offers something else; a unique opportunity to meet people we knew very well and still care about, whose lives all went in completely different directions.

My high school classmates chosea diverse assortment of careers. Some became engineers, some went into sales, some are entrepreneurs; some work in high-tech, some in aerospace, others in construction. And some are teachers, some are police officers, and some are firefighters. Without any exceptions I could observe, all of them made conscientious choices, all of them worked hard, all of them were responsible with their savings and investments. And now they’ve reached the age where whatever retirement plans they made are unlikely to change much.

How to ensure government pensions are not blown up by the next sustained market downturn is a complex challenge, complicated further… Read More

Often missing from entirely legitimate criticism of government unions is an accompanying explanation of the moral values that underlie the criticism. Last month we published a post entitled “Deceptive and Misleading Claims – How Government Unions Fool the Public,” which listed ten myths that government unions use repeatedly in their propaganda campaigns. Missing in that post, and added here, are the moral values that underlie the need to expose each of these myths.

TEN GOVERNMENT UNION MYTHS AND THE MORAL ARGUMENTS AGAINST THEM

Myth #1: Government unions are protecting the middle class.

Reality: Government unions are protecting government workers at the expense of the private sector middle class. The agenda of government unions is more wages and benefits for government workers, and more hiring of government workers. To adhere to this agenda, failure of government programs still constitutes success for these unions. More laws, more regulations, and more government programs equates to more unionized government… Read More

Back in the late 1970’s something happened to the Santa Clara Valley. Increasingly it became referred to as the Silicon Valley, because the emerging silicon based semiconductor industry found its first home in plants nestled along the southern shores of the San Francisco Bay.Boasting what are among the finest universities in the United States – Stanford and Cal Berkeley – and the best weather in the world, high technology companies began choosingthe San Francisco Bay Area in the 1940’s and never looked back. Where once there wereendless orchards of Prune, Apricot and Cherry trees, a sprawling ecosystem of high tech companies and venture capital firms now attracts talent from everywhere on earth. The Silicon Valley became, and remains, the epicenter ofthe most dramatic technological advances in history.

For the first 25 years or so, certainly through the end of the 20th century, the mantra in the Silicon Valley was “better, faster, cheaper.” Entrepreneurs were creating entire new industries, as digital technology enabled “mini-computers” to replace mainframes, and “work-stations” to replace mini’s, which were in-turn replaced by PCs and… Read More

Not one presidential candidate, apart from Gov. Walker’s last-ditch rhetoric prior to dropping out, has discussed the problems with unionized government as a major issue. That’s too bad, because these problems are bigger than even most critics acknowledge.

When people discuss the need to reform, if not eliminate, public sector unions, the only reason typically cited is that their demands are bankrupting our cities and states. And reformers also usually fail to communicate the fundamental differences between government unions and private sector unions, or emphasize the bipartisan urgency of public sector union reform. Government unions don’t merely drive our cities and counties into service insolvency if not bankruptcy, they are distorting policy decisions of fundamental importance to the future of America.

With a focus on California, and in no particular order, here is an attempt to summarize how this is occurring:

(1) The Economy

California has the highesttaxes and fees in the U.S., and is consistently ranked as the worst state in America to do business. California also has the highest paid public employees in the… Read More

Last month an article entitled “Pensions as Economic Stimulus” was posted toFox & Hounds Daily. The author,Charles Beckwith, is a former CalPERS senior financial manager. Beckwith’s article, while thoughtful, invites a response. Because California’s pension systems may stimulate the economy in some ways, but equally significant ways, they are killing the economy.

Beckwith’s primary argument is this: California’s pension systems pay out over $3.0 billion per month to retired state and local government workers, who go out and spend this money, “at auto repair shops, home improvement centers, tuition for grandchildren, hair salons, rent, and at a thousand other small and large businesses.”

The problem with this reasoning rests on a fundamental assumption Beckwith makes, which is that all the money taken from taxpayers to fund these pension investments would not have created a similar economic stimulus if they had been free to spend it themselves. Mr. Beckwithgoes on to extol the virtues of professional financial managers placing pension fund… Read More