Governor Patrick is far from alone in facing the ire of prominent public sector unions as he makes tough choices about spending. Across the western word, governments of all political stripes are facing a grim fiscal prognosis (and the vagaries of the bond markets), forcing them to pursue austerity measures that in particular target the perks and prerogatives of government employees.
Patrick has irked the police unions because of civilian flaggers and the Quinn Bill funding reductions. But compared to what other governments have had to take on its relatively tame stuff.
In Ireland, the government slashed public sector pay by about $1.5bn over the last year, cutting staff salaries by 5% for the lowest paid, up to 15% for higher paid employees, with even the Irish Taoiseach (Prime Minister) taking a 20% pay cut.
In Greece, Athens is burning as the price of the world’s biggest ever bailout ($200bn+) means a public sector pay freeze, major public sector jobs cuts and caps on public sector pension benefits.
The “Great Recession” has killed private sector jobs by the millions from Tokyo to Toledo, but as the economy recovers and fiscal stimulus is withdrawn, the next wave of workforce pain will likely be in the public sector.
Here in Massachusetts, after the Herculean efforts of Governor Patrick to balance the books, including 2000+ job cuts, Mike Widmer and Mass Taxpayers are forecasting another $2.5bn structural hole for the fiscal year 2012.
The structural deficit is in part a legacy of the nonsensical income tax rollback Cellucci pushed in 2001. Rising medical expenses hasn’t helped. Any solution to solving the deficit will likely include finding increased revenues – Ireland and Greece have or will raise taxes significantly alongside the austerity measures they are implementing. But, as the Globe rightly asked a few days ago, can we continue to justify or afford public sector workforce benefits so far beyond what the private sector receives, in this fiscal climate? Can we ask people to stump up for further tax rises, or see vital services cut, while these benefits are retained?
I’m a big supporter of the labor movement and know that public sector workers carry out vital tasks that benefit us all. I’m up for appropriate tax hikes to help solve the structural deficit. But we know more taxes can’t get us there alone (politically untenable) so we have to look at reform, even painful change, to preserve programs that support the vulnerable and invest in our future – and place our state on a more stable fiscal standing.
We may not be Greece or Ireland, or near-bankrupt California for that matter, but even as we dig ourselves out of recession, our structural deficit will continue to hold us hostage. It may be impossible for us to confront public sector benefits in an election year – the unions making up a key and welcome piece of our base. But I fear that because we don’t, we cede the reform ground to Charlie Baker and I know if I were a public sector employee I’d much rather be making concessions to a friend like Governor Patrick than a foe like Mr. Baker.
Protecting a status quo that is increasingly hard to defend can’t be good politics – for unions or Democrats, especially when so many outside of government have been feeling the pain already. Does something have to give on public sector benefits?
to refer to unions as a whole when collective bargaining often happens at the local level. I also suspect that Easterners on BMG tend to think of what happens in Boston and Greater Boston as representative of all unions. It’s not.
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p>The Boston firefighters won a huge raise in arbitration, particularly in this economy, but they are hardly indicative of what is happening around the state. A teacher’s local in my neighborhood had a contract with zero percent increases for the next three years. Other municipalities are negotiating contracts more within their means.
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p>Union health benefit changes are coming down the pike, so to speak. A month ago, I was told by someone in Beacon Hill leadership that municipalities will be forced to bring their health insurance reform in line with the GIC or face losing state aid. The only aspect of the plan to be decided is whether municipal governments will be able to impose whatever benefit structure they want by “impact bargaining” or have to negotiate (or eventually arbitrate) the changes. I wish to hell that I knew what that meant for my coverage. I have Health New England and pay 30% of the premium.
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p>To me, saying raising taxes is untenable so we have to cut union job benefits is getting in bed with Grover Norquist and inviting Carla Howell join you for a threesome. (I don’t mean you Lanugo; I think you’re just putting the question and issues out there for discussion).
…me opposing tax increases so that the benefits of people making more than me are maintained (most teachers, cops and firefighters)–while my benefits are being cut–is getting into bed with Grover and Carla?
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p>And speaking of misleading…sure collective bargaining is at the local level. but the statewide teachers unions have their professional bargainers at all the local sessions, pulling the strings to make sure no local compromises and endangers the collective.
the benefits and salaries of public employees should be cut to the level of your benefits. Why we’re are at it, let’s lower the benefits of public employees to the level of our poorest taxpayers? What workers really need is someone to lower the bar for them.
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p>To get in bed with Grover and Carla is playing into their hands. Shrink government by cutting taxes, and when a recession comes cut back on services and employees.
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p>The MTA gives us a negotiator. Aside from lobbying, that’s what my $600 a year gets me. Some of negotiators suck, but I’ve never heard of them carry water for the MTA. The fact is that locals know what surrounding communities get; they’d be stupid not to be.
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p>I thought you were a progressive…
I hear what you’re saying, but I do want to point a few things out.
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p>1) Increasing health care costs are not the fault of the working men and women of the unions. The blame should not be placed on the backs of working people. The issue has a dozen “mothers” and not one of those mothers is named “Local” any number. Start with Big Pharma. Big monopoly hospitals.
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p>2) These benefits were negotiated and not imposed.
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p>3) The benefits are not “so far” beyond the private sector. Typically, union members are paying 10-50% for health, depending on what city or town they work in. Copays are 5 bucks, 10 bucks or so. It’s not exactly CONGRESS-level healthcare. BTW, I work in the private sector, and I get free medical and dental.
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p>4) If you cut the benefits – how do you intend to make union members whole, having negotiated and made concessions through the years to retain those benefits?
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p>5) Comparing Massachusetts (state) to a country (Greece, Ireland, etc) seems a little inappropriate.
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p>Just saying…
The unions in Greece are ridiculous — retirement at 40, pensions passed down to unmarried daughters, pay for not showing up at work. Ever. Greek and Massachusetts unions are similar in that they both use adjectives.
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p>And as you say, this “crisis” is being driven by atavistic credit rating corporations whose last big bet was on the stability of mortgage derivatives.
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p>I didn’t have a raise this year, which is fine — the economy is tough for everyone. My local is doing its part to help the town. But despite all the noise at a time where most American corporations dodge the income tax, it seems that there are more lucrative and worthwhile ways of finding revenue…
…in that T workers can retire in their forties…plus state pensions can be passed on to siblings in MA (at least I know of one case). Sabutai…as a teacher, if you have your thirty years in, can you retire at 56? Some MA teachers can.
Your earlier comment is not correct. The bargaining of which I’ve been part have involved only locals. Granted, the unions — like the town — do take advice from people who could be counted as “professional”, though the union doesn’t spent taxpayer money for it.
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p>As for your misconceptions about teacher contracts, I need to have 35 years in the system before my self-funded pension kicks in. I need to work the as much time as I can since the money I paid into social security is stolen from me under the “windfall elimination provision” Ronald Reagan enacted.
…”self-funded” pension? So you’re telling me that once you’ve exhausted all your pension contributions and whatever earnings they get from investments over time, that the community is not obligated to pay the rest? That would be self-funded (like a 401K). Your pension plan is not self-funded.
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p>I’m certainly not begrudging good benefits for every American. But when many folks are seeing theirs cut back, or are losing their jobs, it’s hard to sit back and reading the whining…yes, whining…about switching medical plans that have incremental changes and can save jobs and prevent middle-class tax increases.
My pension is 96% from my own funding at this point not quite 100% yet — though it’s projected to be entirely so in about ten years (I’m paying for myself, and to refill the pension fund from politicians’ raids on it). I’m giving up 11% of my income for my retirement, unless politicians manage to steal it from me first and tell me it’s my problem.
Sab – I understand that you put money into your pension as do many people in the private sector. Where the difference falls is what happens when the investment of those contributions results in gains or losses beyond what was assumed.
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p>In the case of gains beyond those assumed, those in the private sector keep those gains while the public sector employees do not see the benefit of the gains (one could argue that reduced pension contributions by municipalities results in higher salary increases in the public sector, but let’s leave that stretch out of the discussion for today’s purposes).
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p>In the case of gains less than those assumed or losses, those in the private sector bear the risk of those losses and realize lower retirement payouts. Those in the public sector receive their calculated pension payout regardless of pension investment results. The difference is made up primarily through higher municipal or state contributions funded by higher taxes or reduced services. This is where we find ourselves now, many in the private sector have seen their retirement accounts hammered (don’t even bother looking tonight it is ugly) while being faced with calls for higher taxes to make up for unfunded liabilities in the public pension plans.
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p>I think it is the difference in gain and loss treatment that has many people wound up and angry at the current state of the market and the economy. There is no easy solution to the issues, but we all need to understand the differences in how contributions and benefits are either matched or not matched to investment performance in the various plans, otherwise we will be shouting at each other with no chance for discussions that lead to a solution.
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p>Just my thoughts.