January 27, 2010

Bankrupted for Solidarity

Justin Katz

Ted Nesi reports:

The increase in the share of all Rhode Island workers belonging to a union posted an even more dramatic increase, jumping to 17.9 percent. ...

In New England, no state had a larger share of workers in a union than Rhode Island. It was followed by Connecticut (17.3 percent), Massachusetts (16.6 percent), Vermont (12.3 percent), Maine (11.7 percent) and New Hampshire (10.8 percent).

The Labor Department also reported that the median weekly earnings of full-time wage and salary workers were $908 for union members last year, compared with $710 for employees not represented by a union.

Given that a majority of union workers are now employed by government, the declining pool of non-union workers is increasingly having to fund the livelihoods of their better-paid neighbors. Moreover, with unions by definition highly organized, where public policy is apt to lean in their favor, in opposition to the private sector, especially within the public sphere, where market forces apply only weakly.

Comments, although monitored, are not necessarily representative of the views Anchor Rising's contributors or approved by them. We reserve the right to delete or modify comments for any reason.

Looks like a coincidence that our Rhody has the highest unemployment rate BY FAR - 13% - while New Hampshire's is just about half - a mere 7%. Card Check, anyone?

Posted by: TProv at January 27, 2010 5:54 AM

I hear Pat coming to post his propaganda.

Posted by: john at January 27, 2010 6:11 AM

Union weekly wages are higher than non-union wages.

Well DUH!

Government employees -- insulated from competition and market forces -- now make considerably more than private sector employees, and government employees are a majority of unionized workers, so of course the "average union wage" figure is artificially goosed up.

Plus in the private sector the "would still be employed but for the fact that they were unionized" folks who now earn zero are not included in the calculation of average union wage, so again it is artificially goosed up.

For example, the no longer employed unionized steelworkers and UAW auto workers are not included in the calculation, merely the (minority) of them who still collect those "union wages."

Posted by: Ragin' Rhode Islander at January 27, 2010 7:35 AM

The public unions in RI remind me of a quote by Agent Smith in The Matrix:

"Agent Smith: I'd like to share a revelation that I've had during my time here. It came to me when I tried to classify your species. I realized that you're not actually mammals. Every mammal on this planet instinctively develops a natural equilibrium with the surrounding environment, but you humans do not. You move to an area, and you multiply, and multiply, until every natural resource is consumed. The only way you can survive is to spread to another area. There is another organism on this planet that follows the same pattern. A virus. Human beings are a disease, a cancer of this planet, you are a plague, and we are the cure."

Posted by: Patrick at January 27, 2010 8:53 AM

Patrick, that description sounds a lot like the WalMart mentality that unrestrained capitalism has created. Once the American workforce learned to not tolerate abuses by industrialists the industrialists moved south, then east, now China, where slave labor exists in polluting, child labor promoting spirit deadening enviornments. There, the communist government would never tolerate anything as counterproductive as a union.

Where to now? Space? Or back here after the meltdown, when the starving populace will work for food.

Better polish up on your Chineese.

Posted by: michael at January 27, 2010 11:40 AM

>>I hear Pat coming to post his propaganda.

He had to stop to pick up his George Bush mask.

Posted by: Ralph at January 27, 2010 4:06 PM

Ni hao, michael. Touche.

Posted by: Patrick at January 27, 2010 7:20 PM

On top of all these public employees rests a pension system that is quickly going bankrupt. Let's compare these pensions with the IRAs and 401ks that the average taxpayer must use for retirement.

First Social security. Today,the most any person is going to get from Social Security is $24,000. That's if they currently make about $75,000. That's about 30 - 35% income replacement. Compare that to the 75 -80% that government workers are promised by irresponsible legislators.

A municipal/state worker making $75,000 would get a pension of approximately $50,000. For a private sector employee that computes to an IRA/401k of $1,000,000! Yes. one million dollars interested in bonds yielding 5% is just $50,000. Now how many Rhode Island taxpayers do you think have been able to accumulate $1,000,000 in their retirement plans, especially considering the market problems of this past decade? I can tell you...very, very few.

OK. The opposition is going to say only teachers make that kind of salary. Most state workers make far less. First, teachers' salaries and matching pension contributions are swallowing the budgets of municipalities # read property taxes#. Secondly, the fact is that state workers are making 40% more than their counterpart in the private sector. And a $25,000 pension for that RIDOT secretary making $35,000 still computes to a $500,000 IRA. Still a number far beyond the average Rhode Islander. Certainly far beyond the average senior, living on social security. The average social security recipient who worked for $35,000 a year is now collecting only $10,000 a year.

No one wants to hurt the people who work for state and local government. We know they are good people. They will argue that they bargained for these benefits. The truth is that their union bosses strong armed weak and corrupt legislators, town councilmen and school boards members into giving up these overly generous payments. The truth is that as taxpayers we can't sustain these ill gotten benfits. To protect our state's economy,they must be stopped.

While the average senior has trimmed their spending, the state retiree has continued to receive the same monthly check. While social security was frozen this year and next with no COLA, the state retirement system added to the state retirees monthly check. While the average retiree, reacting to the tech bubble of 2001-2002 and the current sub-prime decline, has been forced to take far less from their IRA accounts to supplement their social security check, the municiapl retiree has awakened each morning with no imperative to trim any part of their spending.

They have missed the connection that the state's retirement funds are invested in the stock and bond market. Their retirement funds have suffered just like the private sector's retirees retirement funds have suffered.

It time to close that loop and convert the state pension system to a 401k system. Current employees will receive lump sum distributions, in many cases large checks, to begin saving for their retirement, just like the rest of us. This is really not to hurt them. It is to save us all. We will understand their pain. It's the pain we have been living and dealing with ourselves.

Posted by: PJ at January 28, 2010 9:13 AM

Maybe I'm in the wrong job. (Local 799, Providence Firefighters)75 to 80% promised by legislators? 50% is the truth. 60 if I make 30 years.

Whatever they do I hope they hurry it up, I'm tired of all this he has, she has finger pointing stuff.

Posted by: michael at January 28, 2010 9:33 AM

Oh, and Ni Hao to you Patrick! (I had to Google it, should listen to my own advice now and then)

Posted by: michael at January 28, 2010 1:17 PM
Post a comment

Remember personal info?

Important note: The text "http:" cannot appear anywhere in your comment.