Fred Barnes has a post in the Washington Examiner today about the differences that have arisen over the years between pay and benefits in the public and private sectors. As public sector unions have become more powerful, the salaries and benefits of public sector employees have grown much faster and much larger than their private sector counterparts. The public sector does not have to make a profit, and generally it is not examined too closely to see how much individuals are paid or the benefits they receive. The link above will give you information on some of the problems union pensions and benefits are causing in various states. But I want to look at a different aspect of this.
Union membership in the public sector in 2009 was 37.4 percent. In the private sector, union membership in 2009 was 7.2 percent. Therefore, it seems to me that if you wanted to increase the number of union members (and the power of unions), all you have to do is increase the number of public sector workers. At this point I would like to remind you that the healthcare bill includes a provision for 17,000 additional Internal Revenue Agents (future union members?). I would also like to mention that the most frequent visitor to the White House during the Obama Administration has been Andy Stern, the President of the Service Employees International Union (SEIU) which has 2.2 million members.
The divide between the wages and benefits paid in the public versus the private sector is important for a number of reasons:
- The wages and benefits paid in the public sector are paid by the people working in the private sector.
- As the public sector increases, the private sector decreases, and the economy contracts.
- At some point, the private sector is going to rebel against the wages they are paying and the benefits they are granting--particularly when those wages and benefits are compared to what they are paid.
- The private sector has moved away from unionization. As the public sector unions become more powerful, there may be a tendency to strongarm private companies into unionizing (card check through the NLRB rather than legislation?).
At any rate, the growth of salaries and benefits in the public sector needs to be checked or we will see a number of states going bankrupt. Much of the stimulus money was paid to states to avoid a financial crisis last year. This year they will have to deal with the problem themselves. So far, New Jersey is the only state actually trying to find a solution.
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