Editor's Notes

The United States economy has shifted radically, and the focus on labor benefits is misguided



When the talk comes around to budget politics these days — and these days, nobody in politics can talk about much else — there's a pretty consistent line out there, from the mainstream left to the far right, and it goes like this:

Public employees have been riding high on great pay and benefits, and they're going to have to accept that those days are over. We can do it nicely, and negotiate and all, but the people who work for the city and the state are getting a haircut. Pension reform. Health care premium hikes. Two-tiered wage systems. Sorry, folks — there's no other choice.

And I understand the feeling. There are plenty of unemployed people out there who aren't happy that they're still paying taxes to support generous pay and health benefits for workers who are consistently maligned as lazy. There are small business owners who can barely afford minimally adequate health insurance for themselves and their employees. There are underpaid private-sector workers who get jealous when they hear what you make over at City Hall.

I get it, and in terms of political reality, public-sector pensions, pay, and benefits are going to have to be part of any budget resolution in Sacramento or San Francisco.

But let me say something else.

In the past 30 years, while public-sector unions were getting organized, becoming a political force and negotiating decent pay and benefits, the United States economy was shifting radically, in a way that we hadn't seen since the turn of the Century. From Reagan on through Bush I, Clinton and Bush II, powerful forces in Washington launched a class war in this country, one that has as many victims as most of the traditional wars we've fought in the past century. The winners have been a small number of people and businesses that have grown impossibly rich — by taking money away from everyone else.

And they aren't getting any cuts. In fact, their pay, pensions, benefits, and wealth aren't even on the table. Which is profoundly unfair.

Of the 400 richest people in America (according to Forbes), 80 live in California. Their combined new worth is $231.8 billion — about 10 times the size of the state's budget deficit. If they gave up just a modest amount of the benefits they get from living in this state and this country (and yes, the rich got that way in part because of the benefits they get from living here), we wouldn't have a budget crisis at all.

The people who declared this war were smart enough to figure out how to divide the opposition, to turn us against each other. That's why they keep winning.

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