The Homa Files

Punch line: Private-sector union workers are beginning to notice that their job prospects are at risk from public-employee union contracts

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Excerpts from WSJ: Labor’s Coming Class War, Jan. 4, 2011

Some may be missing the first stirrings of a true American class war: between workers in government unions and their union counterparts in the private sector.

In this recession, for example, construction workers are suffering from unemployment levels roughly double the national rate. They are relearning, the hard way, that without a growing economy, all the labor-friendly laws and regulations in the world won’t keep them working.

What’s more, “blue-collar union workers are beginning to appreciate that the generous pensions and health benefits going to their counterparts in state and local government are coming out of their pockets …  they are beginning to understand the dysfunctional relationship between collective bargaining for government employees and their own job prospects.”

• In NJ, 40% of  iron workers are out of work—and they know that unless the high-tax state gets its fiscal house in order, the only work they’ll find will be in Texas.
• In NY, the unemployment rate for members of the  Building and Construction Trades Council of Greater New York is running at 20%.

In some ways, this new appreciation for the private sector is simply back to the future. FDR, for example, warned in 1937 that collective bargaining “cannot be transplanted into the public service.”

These days the two types of worker inhabit two very different worlds.

In the private sector, union workers increasingly pay for more of their own health care, and they have defined contribution pension plans such as 401(k)s. In this they have something fundamental in common even with the fat cats on Wall Street: Both need their companies to succeed.

By contrast, government unions use their political clout to elect those who set their pay: the politicians.

In exchange, these unions are rewarded with contracts whose pension and health-care provisions now threaten many municipalities and states with bankruptcy.

In response to the crisis, government unions demand more and higher taxes. Which of course makes people who have money less inclined to look to those states to make the investments that create jobs for, say, iron workers, electricians and construction workers.

Full article:
http://online.wsj.com/article/SB10001424052748704111504576060092978223976.html?mod=WSJ_Opinion_LEADTop

This entry was posted on January 5, 2011 at 6:29 am and is filed under Unemployment, Unions - UAW. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.