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President Obama Accepts Reality on Collective Bargaining


Posted by Joshua Culling on Tuesday, December 13th, 2011, 10:29 AM PERMALINK


Josh Barro has a great piece in NRO today about the President embracing private sector compensation reform rather than layoffs. Obama cites Marvin Windows and Doors, a Minnesota company that cut pay and benefits but avoided any layoffs during the economic downturn. It's worth reading in full, but here's an excerpt:

But let’s take a closer look at the Marvin model that Obama is praising. The president noted that Marvin’s workers “agree[d] to give up some perks and some pay,” but there wasn’t really an agreement — the workers’ options were to take the pay cut or quit. As one incensed FireDogLake contributor notes, Obama is praising a non-union company for unilaterally cutting its workers’ pay.

Barro goes on to make the case that this is the exact type of choice that is not available in the public sector where collective bargaining exists. Unions time and again choose layoffs over compensation reform, because entrenched union members would avoid the brunt of the layoffs but share the pain of any reductions in wages or benefits.

I'd go a step further and note that unions would argue that the layoffs versus pay cuts dichotomy presents a false choice. Government has a third option: raise taxes and avoid layoffs and compensation cuts.

While this is technically true, it is politically impractical. Ohio is a great example. Last month, voters soundly rejected Issue 2, which would have significantly eroded government unions' collective bargaining power. On the spending side of the ledger, government employee compensation is literally the only area to realize meaningful budget cuts, as wages and benefits constitute up to 90 percent of local budgets.

With that option gone thanks to a dishonest campaign waged by government unions and their allies, tax increases and layoffs now present the only opportunities to balance local budgets. Except that voters in Ohio simultaneously rejected tax increases en masse. There were 21 new local income taxes on the ballot last month; 17 of them failed, by an average margin of 60-40. 117 new school levies went before voters; 85 of them failed.

The only option left, of course, is widespread layoffs of police officers, fire fighters and teachers. In Central Ohio, the Mayor of Lancaster announced the layoff of 13 firefighters even before the referendum on Senate Bill 5 last month. In suburban Columbus, Westerville schools plan to cut about 175 teaching positions, while Cincinnati officials immediately announced that public sector layoffs are likely in the wake of the election.

No matter what you believe with respect to cutting the public payroll, one thing is certain: Unions are certainly not protecting education and public safety jobs, and collective bargaining is almost solely to blame.

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