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How Organized Labor Bankrupted an Entire City

Posted By Conn Carroll On March 11, 2008 @ 12:08 pm In Economics | Comments Disabled

If something does not change fast the city of Vallejo, California will soon declare bankruptcy. The San Francisco Chronicle [1] tags the departure of Mare Island Naval Shipyard on April 1, 1996, as the “key moment” in Vallejo’s woes, but a closer read of the article shows that the true culprit is organized labor.

Despite being a destination for middle class families to find affordable housing, the famously pro-labor town has the highest paid police officers and firefighters in the Bay Area. The city pay firefighters 10 percent more than others in the region and 21 of them made more than $200,000 in salary and overtime last year. Salary and benefits for unionized public safety employees account for 74% of the city’s general fund budget.

Union forces have been equally effective at driving away businesses from Vallejo. WalMart leased a temporary site in the city and then sought permission to build a Supercenter. When the city council delayed the project over union protests, WalMart built a store in neighboring American Canyon and closed the leased store in Vallejo. In the past two years sales tax revenue in Vallejo is down 10%.

Many cities through out the country are facing revenue shortfalls as real estate prices fall. Apparently those in the iron grip of organized labor will be the first to fail.


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URL to article: http://blog.heritage.org/2008/03/11/how-organized-labor-bankrupted-an-entire-city/

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[1] The San Francisco Chronicle: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/03/10/MNFKVEV4L.DTL

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