Last week UnionWatch received an email from a fairly prominent SF Bay Area journalist who shall remain anonymous. It said “Solidarity forever! You scabs can go to hell.”
The email conversation that ensued was civil, and the final email received from this journalist had a different tone entirely, concluding with this: “If you’re auditing the county budgets and are non-partisan, I owe you an apology–but the “Union Watch” heading made me think you were part of the new war on unions.”
For nearly three years, UnionWatch, along with its parent organization the California Public Policy Center, have been offering news and analysis focused on the impact of California’s public sector unions. Almost invariably, the perspective has been that public sector unions are too powerful and their demands have brought California’s state and local governments to the brink of bankruptcy. And yes, auditing local and statewide public sector budgets and compensation is the biggest reason for this conclusion.
Whether or not this perspective constitutes a “war on unions,” it is nonetheless one that puts us in the company of noted Democratic leaders, including San Jose Mayor Chuck Reed, who was quoted in Bloomberg last year as saying “There’s a difference between being liberal and progressive and being a union Democrat.”
For his courage in standing up to public sector unions, Mayor Reed has been relentlessly vilified. Yet he joins a growing number of Democrats who are criticizing public sector unions, including San Francisco public defender Jeff Adachi, former state assembly speaker Willie Brown, former state senate speaker Gloria Romero, Los Angeles Mayor Antonio Villaraigosa, and, off the record, Governor Jerry Brown. In a guest column for the Orange County Register late last year, commenting on the defeat of Prop. 32, Gloria Romero described quite well what’s starting to happen in California, and has already happened in states from Michigan to Rhode Island:
“The bright spot, even in this loss, is that, while proponents were vastly outspent by the opponents led by public sector unions, a new coalition of Republicans, Independents and Democrats has clearly begun to form. If this coalition can be solidified, it may be California’s best bet to move political reforms forward in the next decade by working across party lines in a new California political playing field.”
All Californians, whether they are right-wing, left-wing, or wingless, are going to need to confront the fact that union pay scales, union retirement benefits, and union obstruction of reforms that might streamline state and local government, are one of the primary causes of California’s economic challenges. In a recent editorial, referencing a recent CPPC study, we estimated that the true size of California’s “Wall of Debt,” is over $800 billion, more than $80,000 for every household in the state.
One of the decidedly nonpartisan perspectives of UnionWatch is to recognize that the financial sector benefits when governments spend more than they collect and have to borrow. Bond issuers collect billions in fees. Similarly, the financial sector benefits when pension benefits are enhanced, and guaranteed by taxpayers, since fund managers collect billions in fees, and invest the money with no moral hazard. The alliance between the financial sector (typically associated with the ideological right), and the public sector unions (typically associated with the ideological left), is one of the biggest unreported political dynamics of our time. And they’d like to keep it that way.
To recognize that the pecuniary interests of Wall Street Bankers and public sector union bosses are aligned complicates the entire notion of right and left. To trumpet that point of view, repeatedly, as we have endeavored to do, certainly does not endear us to the true believers on either side. So perhaps it’s time for more liberals and good government Democrats to recognize this complexity, and begin to confront the possibility that public sector unions do NOT generally operate in the public interest.
Union spokespersons representing firefighters, along with those representing teachers, nurses and police, frequently say that compensation for their members must be elevated in order for them to be able to “afford to live in the communities they serve.” They are missing a key point: Nobody can afford to live in these communities. And the reason nobody can afford to live in these communities is because public sector unions, along with their allies in the environmentalist lobby and on Wall Street, have pooled their political influence to pass laws and regulations that have given California an unaffordable cost of living. Critics of right-to-work laws correctly point out that wages are lower in right-to-work states. What they ignore is the fact that the costs for everything – housing, water, gasoline, electricity, and taxes – are even lower. People make less in right-to-work states, but they have more disposable income. Perhaps that is an area where the allegedly conservative leaning public safety unions should focus their legal and political energy – a political agenda aimed at lowering the cost of living for everyone, instead of raising their own pay to unaffordable levels.
Dan Borenstein, a journalist with the Bay Area News Group (Borenstein is not the one who emailed us last week), is blessed with not only the financial literacy to fully appreciate the unsustainable excess of union negotiated pay and benefits, but the courage to write about it. His perspective, however, is that of a liberal, and he has consistently explained that public sector union influence is an issue that should concern progressives.
Steve Greenhut, a journalist formerly with the Orange County Register, and author of the book “Plunder, How Public Employee Unions are Raiding Treasuries, Controlling our Lives, and Bankrupting the Nation,” leaves little doubt as to his perspective on public sector unions. But Greenhut is no Republican. He is a libertarian, who has frequently admonished good government Democrats to defer the argument over what government programs we need until after we’ve tackled the public sector unions – who have taken all the spoils of government for themselves.
When libertarians and progressive Democrats are stepping forward in growing numbers to question the power of public sector unions, and when the secret partner of public sector unions is none other than the Wall Street financial sector, something bigger than partisan politics is at work.