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.


Why is it so hard to acknowledge that governments are susceptible to bubbles just like the private sector? Firefighter and police officer pay was set at a time when a reasonably competent person who could wake up at 7 could make 6 figures as a plumber or real estate agent or air conditioner repairman. It actually was necessary to pay 65-100k for these people back then, and it was genuinely unfair that mortgage brokers made 5 times what cops did. None of that is true anymore, but the government is horrible at adjusting to changes. Guess what -- those pension benefits were predicated on a lie -- that you could passively make 8% a year forever in the stock market. Now that we know that isn't true, what do we do? Do we stop giving poor kids organ transplants so that Captain Danville can keep his $100k/ yr at age 55, or do we just tell him - never mind, your unrealistic investment didn't pan out? Not even taking 100% of all the billionaires' money would do it, btw, Tim: the unfunded pension liability of CA is closer to $500 billion, see http://articles.latimes.com/2010/apr/06/opinion/la-oe-crane6-2010apr06 .

Here is how it is going to happen, public sector employees: you are not going to get what you think you are going to get. States are sovereigns, you can't sue them to make them give you what you think you are entitled to, a judge can't make them sell a park so that you get your pension, and they can't order higher taxes. You are going to wake up one day in 2014 and the checks are just going to stop coming. (Fortunately you will be young enough to get another job if you are a retired cop or firefighter.)

Posted by Guest on Dec. 22, 2010 @ 4:28 pm

I have posted this already here before You guys should stop complaining because, one the health care we have now isnt as good as it was supposed to be. also the law has just been signed so give it some time. so if u want to say u have the right to choose tell that to ur congress men or state official. If you do not have insurance and need one You can find full medical coverage at the lowest price check search online for "Wise Health Insurance" If you have health insurance and do not care about cost just be happy about it and believe me you are not going to loose anything!

Posted by daleleblanc on Dec. 22, 2010 @ 9:57 pm

Thank for saying this Tim. I think that those "progressives" who jumped on this bandwagon should to own up to the fact that they are part of this class warfare against workers. Only they have taken the side of the uber wealthy, whether they know it or not. If we don't wake up and begin to fight back like the Europeans are doing, we will soon see the end of retirement and job security for all workers. Here's what Shamus Cooke had to say in his piece on this issue~

"Public workers are being targeted because they are the strongest sector of the national labor movement, and their strength is incompatible with the agenda of the political/corporate establishment: making working people pay for the bank bailouts and two foreign wars. [...]

Public workers cannot be spectators in this unfolding drama. They must learn to act, collectively. Unions must educate their membership as to the gravity of the coming assault. Resisting these attacks must be done while proposing alternatives; state funding must be increased by raising taxes on the rich and the corporations. If public employee unions are busted, the rest of the labor movement will be targeted next, but too weak to defend itself."


Posted by Lisa Pelletier on Dec. 23, 2010 @ 4:27 pm