Payne: Union ‘city-busting’

Posted by hpayne on April 2, 2012

Democrats call Rick Snyder’s Detroit consent agreement “union-busting.” But a sober assessment of Detroit’s finances reveals that unions – as in other municipalities across the country – are “city-busting.”

Due to unsustainable benefit and pension costs, cities like Detroit now exist to serve Big Labor, not their citizens. Union liabilities have put the city underwater financially, stealing needed city revenue and leave citizens without proper city lighting and essential services like 9-11 response.

Pensions? What are those? For Detroiters paying the city’s bills, pensions are a generation-ago luxury – replaced by 401k retirement plans. Yet they are expected to feather Big Labor’s retirement nest even as they walk Jefferson Avenue in the dark. Those 401k retirement accounts are among the reasonable terms of Governor Snyder’s consent agreement for Detroit.

“Treasury’s proposed provisions (won’t be) surprising to the 93 percent of the American work force who do not belong to unions,” writes The Detroit News’ Dan Howes, ” do not assume seniority should always trump competence. ‘Snap-back’ provisions in wage reductions would not be permitted, bumping rights would be eliminated and new hires (to the extent there are any) would be required to pay into a municipal 401(k)-style defined contribution retirement savings plan and not accrue a pension.”

Yet on Planet Labor, such terms mean war.

“This is a power grab and a state takeover,” roared AFSCME negotiator Ed Mcneil Monday, ratcheting up the paranoid, racial rhetoric. “Employees are not going back to the bargaining table and let somebody rape them again. I don’t think the governor wants unrest in this city, but I think if you are going to force peoples’ hands I think you’ll probably see that.”

McNeil’s violent rhetoric masked equally outrageous claims that his union had made concessions necessary to rescue Detroit from its dire fiscal crisis. “We’ve done our job,” he told The Frank Beckmann Show citing alleged Ernst & Young approval for a city agreement with it unions that yield, ” at best, savings of only $47 million and $172 million for fiscal years 2012 and 2013, respectively,” according to the Treasury Department’s review team. This in a city facing $200 million annual deficits and debt payments of $580 million a year.

The governor’s office knows of no Ernst & Young stamp of approval. The union concessions “don’t go far enough,” repeated Snyder spokeswoman Geralyn Lasher. “They don’t address the long-term. We need a long-term solution that the states and private industry have already done.”

Example? By law state employees must pay 20 percent of their health benefits. In the private sector, the split is 30-70. On Planet Detroit? Nothing.

This is city busting. And Detroit is not alone. Stockton, California also stands on the brink of bankruptcy thanks to union city-busting.

“(Stockton) recognizes more than 100 different categories of ‘additional pay’ that employees can earn to boost their salaries but that still make basic compensation packages appear reasonable to the outsider,” reports Steve Malanaga of the Manhattan Institute in The Wall Street Journal ” Stockton safety employees with 30 years of service receive 90 percent of their highest working salary as a pension, with cost-of-living adjustments up to 2 percent annually for the rest of their lives. . . . Stockton couldn’t afford this rich program even in boom times, so officials played risky investment games. Now Stockton is stuck with interest costs on top of pension obligations that pile an additional 48 percent onto basic employee pay. Thus a public safety worker earning $70,000 annually costs the city another $33,000 in interest and pension-borrowing costs. ”

From Stockton to Pontiac to Detroit, American cities are in crisis. And union-busting isn’t the problem.

 

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