Shameless Promotion

John J. Walters Dec 14, 2010

Is it really shameless promotion if most of it isn’t about oneself?  In any case, today I would like to bring three items worthy of your attention to light.  Each of these three is related to a subject about which there seems to be no shortage of rhetoric and criticism: public unions.

First, I direct your attention to this excellent article by Tim Pawlenty, which contains a compelling description of the contest between government unions and the average, American taxpayer.  Right from the get-go he argues that, “the moral case for unions -- protecting working families from exploitation -- does not apply to public employment,” and that, “thanks to President Obama, [the government has] become the only booming ‘industry’ left in our economy.”

 These are hard hitting words, and ones that will surely win him no shortage of enemies among the political left.  Still, he backs his position up with some good data and a few very revealing anecdotes from his experience combating the public unions as governor of Minnesota.  He also gives three pieces of advice for dealing with the runaway public employee compensation and benefits that have become a problem nationwide:

First, we need to bring public employee compensation back in line with the private sector and reduce the overall size of the federal civilian work force. Mr. Obama's proposal to freeze federal pay is a step in the right direction, but it falls well short of shrinking government and eliminating the pay premium enjoyed by federal employees.

Second, get the numbers right. Government should start using the same established accounting standards that private businesses are required to use, so we can accurately assess unfunded liabilities.

Third, we need to end defined-benefit retirement plans for government employees. Defined-benefit systems have created a financial albatross for taxpayers. The private sector dropped them years ago in favor of the clarity and predictability of defined-contribution models such as 401(k) plans. This change alone can save taxpayers trillions of dollars.

These ideas are not new.  In fact, they are echoes of what is being preached all over the country by various independent research organizations (like us) and conservative members of our government.  But it will be an uphill battle.  Since the end of WWII, public unions have been gaining ground all across America, and they now represent a vastly powerful political force.

For a history of the public unions’ rise to power that is both quick to read and chock full of juicy tidbits, I strongly urge you to check out Steven Malanga’s book, Shakedown: The Continuing Conspiracy Against the American Taxpayer.  In it, Malanga details how government employees went from being underpaid public servants to some of the most well-compensated workers in the modern economy, along with how Obama’s political history has positioned him to be an extremely powerful ally of theirs.

Finally, I would like to take this opportunity to officially announce the start of a new project for the Maryland Public Policy Institute.  Because public unions are infamous these days for their out-of-control pensions and other post-employment benefits that are creating massive unfunded liabilities for state and local governments alike, we thought it might be nice to make a map detailing the money each county in Maryland owes to its employees and how much of these liabilities are currently unfunded.  It’s just our way of highlighting the need for reform.

The project is currently in the research phase as I sift through each county’s Comprehensive Annual Financial Report (CAFR) to find the data we need to make a map that should look something like this (except for the state of Maryland alone).  I’ll try to be as quick as possible, but this is my first attempt to brave the world of the CAFR, so please be patient with me.  I hope to have things completed sometime in January.