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  • Morning Bell: The Public-Sector Union Threat to Economic Recovery

    Last week the Department of Labor reported that employers shed a net 539,000 jobs in the month of April, bringing the nation’s unemployment rate to 8.9%. The manufacturing sector lost 149,000 jobs, business services lost 122,000 jobs, and construction lost 110,000 jobs. All told, the private sector lost 611,000 jobs. So how was the total job loss only 539,000? Because one sector of the economy has proven impervious to economic realities: the public sector. Government actually added 72,000 jobs.

    The continued growth of the public sector while all other sectors of the economy contract is no accident. Government employee unions were a driving force in making sure large chunks of President Obama’s stimulus package went to states and cities to preserve jobs. In fact, when you talk about the entire labor movement today, you are really talking about government employees. Less than 8% of the private sector workforce belongs to a union. Contrast that with 37% of all government employees carrying union cards and 42% of all local government employees.

    Make no mistake, collecting union dues from public-sector employees (whose salaries are paid by taxpayers) is big business. The Service Employees International Union collects nearly $5 million a month from just 223,000 health care workers. And when the SEIU is not blatantly stealing this money, they are turning it into efforts to elect politicians who promise to endlessly grow the public sector. SEIU president Andy Stern recently told the Las Vegas Sun: “We spent a fortune to elect Barack Obama — $60.7 million to be exact — and we’re proud of it.”

    And the SEIU is not alone. According to the Center for Responsive Politics, big labor spent over $120 million dollars on just federal elections in 2008. And they have gotten their money’s worth. When the California legislature tried to close their $42 billion budget deficit by trimming $74 million from one of the state’s fastest growing programs, the SEIU forced the Obama administration to threaten to rescind $6.8 billion in stimulus money from the Golden State.

    And big labor’s influence does not end there. Despite President Obama’s campaign promise to bring transparency to government, his administration is moving to rescind union accountability and financial transparency regulations. The very same transparency regulations that helped uncover the SEIU’s theft of over $1 million from government health care workers just this past year. Manhattan Institute senior fellow Steven Malanga warns what will happen if public-sector union power continues to grow:

    In the private sector … employers who are too generous with pay and benefits will be punished. In the public sector, however, more union members means more voters. And more voters means more dollars for political campaigns to elect sympathetic politicians who will enact higher taxes to foot the bill for the upward arc of government spending on workers. That will be the pattern for the indefinite future unless taxpayers find a way to roll back the enormous power public workers have acquired.

    Quick Hits:

    Posted in Ongoing Priorities [slideshow_deploy]

    30 Responses to Morning Bell: The Public-Sector Union Threat to Economic Recovery

    1. Steve, Michigan says:

      Eventually, if unchecked, the public sector unions will do to our nation, its local governments and the public schools exactly what the unions have done to the domestic auto companies, drive them into bankruptcy. Public sector unions should be illegal, as there is no economic check on their monopoly power. At least the private sector unions have some check on their power due to competition.

    2. Nelia, Fountain Hill says:

      Corruption abounds! The SEIU is rife with everything from strong-arming to bribes and certainly pay-backs. Its connection to ACORN is also a factor. If 'unlawful' still has any meaning in this country, the all-about-money operation of SEIU is racketeering, pure and simple.

    3. Pamela Colorado says:

      You need to somehow get this kind of information out to the people who only listen and read what main stream media wants them to hear and see — people that don't get it and sit back and say "oh well, we'll get 'em on the next election"

      I am shocked at reading about these unions. A long time ago something should have been done about union. I am beginning to think people in this country are so stupid and that it's all about free this free that and the truth is that nothing is for free——not even your freedom not anymore.

    4. Tenn Slim says:


      The hutzpah shown by the SEIU blantant push to retain their Calif. wages via the OBNA, may just have been the tipping point. Their offensive behavior, coupled with the seemingly endless parade of OBNA generated "COMMANDS OR ELSE" statements, may have finally awakened the USA Electorate. I envision this as the 30 Yard line defense. Hardening, after a set of downs, playing the old Cowboys Prevent Defense, which never worked. Now we are like the Oakland Raiders, smash mouth football. Montana, Georgia, even Michigan, has said ENOUGH. The Center for American Progress recognizes this, has a "Project" called Enough….

      We can prevail. We will survive.

      Semper Fi


    5. Dennis A. Social Cir says:

      This just proves the union have obama in the hip pocket. he is dancing to their tune, and will continue to do so, Californis is the perfect example of unions and the government in the cookie jar. The unions require people to pay their money to work and then give the money to obama and the dems to keep the unions in power. this is wrong.

    6. J.C. Hughes, Texas says:

      "SEIU president Andy Stern …'We spent a fortune to elect Barack Obama … and we’re proud of it.” Not only is such a statement extremely offensive, it's a glaring conflict-of interest.

    7. Jim@Redding,CA says:

      Sane thinking on "jobs saved and created"

      by Obama's outrageous spending of our tax

      $$ will prove that the ONLY JOBS emerging

      from all this are in government – oh, and

      do NOT forget Obama's creation of his evil

      and ominous "civilian security force"

      which will (according to all responsible

      accounts) rival our entire military forces

      in its size… US citizens had better take heed NOW as to how we might best fight such tyrannical planning before it

      gets beyong our means to do so…

    8. Michael - New York N says:

      I once lived in a country call America..It was great……

    9. Ken Jarvis - Las Veg says:

      "Less than 8% of the private sector workforce belongs to a union. Contrast that with 37% of all government employees carrying union cards and 42% of all local government employees."


      that UNIONS Benefit Workers.

    10. Ben C, Ann Arbor, MI says:

      I fear for our country. It is imperative we band together for the next election cycle and yell so loud even MSNBC will have to take us seriously.

    11. Ken Krul, Long Beach says:

      If anybody hasn't figured it out yet, unions have been the single biggest factor in the decline of the American economy. When union membership decreased, the economy did better. When it was higher the economy faltered. These conditions exacerbated down-cycles in business when union membership was hig at the same time; and boost up-cycles when union membership was low.

    12. John franklin, wisco says:

      As a developer, I can tell you that as the government grows the economy slows. I don't know if any one looks at that as an economic forecast, but I can guarantee you it's true.

      Opposites don't always attract. Look at the unions and the government, one in the same. No incentive to achieve, at the end of the day same wage for everyone. Same old same old.

      Socialism at its finest.

    13. ra,ohio says:

      We have roughly a year and a half to attempt to put a big dent in the socialistic direction this administration is taking us to.

      Obama knows this; that is why he said on the campaign trail that he wanted to get these policies through within a 2 year time frame.

      He knows that the American people will not stand for this.

      He's a 1-termer at best, and congress needs cleaned out badly.

      Have faith fellow real Americans,….2010…we vote again.

    14. ella quinn kinston n says:

      Yes 2010 we vote these evil ones out.I wish we could vote obama out then to.I agree with dennis on the unions.

    15. Lee-White Tanks AZ says:

      Where are Teacher's Unions in all of this. Are they in the State and Local Government numbers?

      If not, they should be, which only acerbates the problem. Bottom line: Taxpayer supported work is the only "Growth Industry" going. And, they "own" the Representatives of their employer. We the people are quite simply, screwed.

      Fascism anybody??

      PC is Thought Control


    16. Ben C, Ann Arbor, MI says:

      For Ken in Las Vegas:

      How is it that I am not allowed to sit down with colleagues and discuss fee schedules – dubbed "price fixing", but your unions can fix prices for their incomes. This is not a level playing field. You want businesses to keep prices low but you do not allow business the same tool when hiring employees. You labeled off shore labor as in-humane. What will become in-humane is when I can no longer afford to run my business profitably and will be forced to lay off employees then declare bankruptcy. Perhaps I can find one of your government jobs before the country goes bankrupt as has happened in Iceland. Capitalism is the Golden Goose and the Ken's of the world are killing it.

    17. Lee-White Tanks AZ says:

      Question Two: Is the UAW now classified as a "Government Employee" Union or is it still considered as part of the 8% of private enterprise workers who are "organized"?

      PC is Thought Control


    18. Frank W., New Mexico says:

      Well I think we've finally done it, we've reached the point that more people are living off the Government then are paying taxes. The free rides can out vote us taxpayers. I'm looking for a civil service job with a government retirement. When GM, Chrysler, Banks, and Government start running out of taxpayers money what will the Government do? Some one will read the constitution like it's a brand new undiscovered idea and maybe we can all start over.

    19. NYstatehome says:

      The New York Times soon reported that Dale Rathke, the brother of ACORN's founder Wade Rathke, was found to have embezzled $948,607.50 from the group and affiliated charitable organizations in 1999 and 2000. ACORN executives, including Rathke, yet they did not inform their board or law enforcement, but signed an enforceable restitution agreement with the Rathke family to repay the amount of the embezzlement in exchange for confidentiality. Wade Rathke stated that "the decision to keep the matter secret was not made to protect his brother but because word of the embezzlement would have put a 'weapon' into the hands of conservatives who object to ACORN's often strident advocacy on behalf of low- and moderate-income families and workers." So, I guess it’s not a crime unless the left chooses to identify it as such or if the embezzler is a conservative. It’s a crime when it happens to a Republican and an “incident” when a liberal does it.

      A whistleblower revealed the embezzlement in 2001; the Rathke brothers both departed ACORN in 2008; the agency and their affiliates After Points of Light noticed financial irregularities in early June, it took less than a month for management to alert federal prosecutors, although group officials say they have no clear idea what the financial impact will be. But that means that both brothers remained with ACORN until the embezzlement became public knowledge and the cover-up was exposed. Normally, the criminal would be sitting behind bars instead of remaining an employee with the same business or group the he embezzled from

      The amount Dale Rathke embezzled, $948,607.50, was carried as a loan on the books of Citizens Consulting Inc., which provides bookkeeping, accounting and other financial management services for ACORN and many of its affiliated entities. But, Dale Rathke remained on ACORN’s payroll until June, 2008. As the news leaked out and the left leaning media tried to minimize the theft by calling it a misappropriation of funds; that sounds more like “I misplaced my wallet” which sound more politically correct then embezzlement. The Nation board of ACORN fired Wade Rathke in June of 2008, only after he refused to resign.

      The Rathke Brothers have moved on to bigger and better things, they now are running Service Employees International Union (SEIU), which is part of the AFL-CIO union organization.

    20. Phil Davis, Florida says:

      All of this political payback will only serve to cause one thing. Change in 2010 and 2012! There may be unions out there but the non-unions far, far out number them! Let them continue to hang themselves!

    21. Steve, Michigan says:

      If you want to see what happens when government sucks all the oxygen out of the country, check out today's Detroit News on line. There is a photo spread that shows graphically what all of the social tampering of the government experts has done. Detroit used to be, even before the auto industry, the city of trees, with gracious homes and wonderful parks and cultural institutions. That was before the government had about a million "better ideas". Don't blame it all on the government unions, but they definitely have a share of the blame. Anyway, that's where we are headed unless principled voters will look beyond short term self interest and insist on policies that will serve our children and grandchildren well.

    22. David Sayers, NC says:

      I agree with Ken from Long Beach,CA. that unions have always been a big factor in the decline of our economy but I would have to put the ACLU right along side of them. Of course, don't forget the marxist lying politicians. I don't want them to go away mad,just go away. If the unions take over the auto makers along with Chairman Obama, just don't buy the stupid eco-friendly little things.

    23. Emanuel McCray, San says:

      Remember, Government does not have a role to play in the economy, per se. When private sector employers shed jobs, they are in fact engaging in tax rebates, or tax cuts. Washington Democratic Governor Christine O. Gregoire recently gave tax breaks to her newspapers so that they could stay in business; proving tax cuts works. If State, County and local Governments do not cut taxes, i.e., fire a bunch of union and nonunion workers, they will either have to go out of business and become a ghost Government or file for bankruptcy. It is really that simple. My position: let's encourage them not to cut their taxes so that we can get back to smaller Governments on all levels, State and Federal. This is a blessing in disguise! We all should be asking the Administration to print a whole bunch of money; and instead of spending it, stick it in our mattresses. Yee Haw! The Italian Cowboy rides again!

    24. Ron, Derry NH says:

      The problem with unions is there isn't a competitive union bidding against them so by nature a government union is communism and directed toward mediocrity by implemented rules.

      What would be nice if say the teachers union had a competitor who would bid against the other unions to offer a better deal. Then perhaps it wouldn't just be racketeering and extortion but a competition to actually better the unions themselves. Without competition honest scrutiny becomes a casualty to political favor.

      We have seen the results of unions in the public sector. The shear audacity to a statement defending the results proves the incompetence of some people. I would like the public sector to have their earned wages and privileges gained from unionization, but in turn I would like to see educating children to a high standard as the priority not the leverage point to extorting more pay with less results.

      Of course if your idea of government is communism then the take over is near complete in that sector.

    25. Spiritof76, New Hamp says:

      To Ken from Las Vegas,

      The gravy train is about to end. Public employee union may feel great now. Obama borrowing and printing without limits to prop the unions are going to come back with vengeance- Double digit inflation, unemployment and interest rates.

      Did you see in the news that the Chinese government has requested IMF to sell all its gold to them so that they can get rid of the dollars that they are holding. US has veto power in IMF. But your "brother" in Congress, Barney Frank is urging the IMF to sell China all of their gold because the smart Barney of Subprime fame thinks we can use those dollars to aid the poor.

      It is a shame that you are not able to use your god-given brain to think through this fairy tale of Obama socialism and come to the conclusion that the guns are aimed directly at the ordinary, hardworking, law abiding and responsible citizens of the US. How long do you think the public employee union will last?

    26. T O'Gorman, Ohi says:

      In case no one has gotten it, including Heritage, we–the USA–are now experiencing a Socio-Fascist Revolution:

      ~The Rule of Law is out (see 2 of 'Big 3' bankruptcies); the Gov't now determines pertinent 'Law'.

      ~We are about to experience the largest, most confiscatory transfer of production, ie work meaning wealth, ever. (Stalin is jealous.)

      ~We are in the process of killing humans for the convenience of the few, ie stem cell 'research'(my life is 'worth' more than 'that' life).

      The essence of the (USA) Colonial Revolution was: I WILL NOT BE A SERF ANYMORE. I will not be a Slave to a priveledged class.

      We–all working, productive people, are on our way to Serfdom–again.

      We (and your kids and grankids, and their kids) will be Serfs of the STATE: the Gov't, the Ruling Class, the Politicians, unless we fight Socio-Fascism.

      The Democraps are Socio-Fascists. The Republicant's are Euro-Socialists-LITE.

      It's time for a new, a real Conservative party. A party who actually fights for Freedom for ALL.

    27. Ron Thompson, Albuq says:

      At one time the unions served a purpose, in providing some type of oversight to the work environment. Today however, it has lost that purpose. Now, with membership dropping in almost as bad a corruption problem as the government, the Unions have turned to deception, trickery, bullying, as well as politics to accomplish goals and domination of the work force. If they are so good now, why aren't people flocking to them. Maybe it the knowledge that the workers suffer while the leadership "fat cats" it! you pay union dues, yet your money is sent to a political party that hasn't helped anyone, lately! They have to turn to actions such as card check to get members. the cost of a union member verse the quality of work is an interest comparison. I.e. the Boston underground, over budget and time. Now we place this type of action in the mom and pop places and so long business. the people receiving the brunt of this group is the middle class as jobs are gone. the benefactors of this the government and the union leaders. the government because it has another set of victims and continue to get bigger. the Unions is bolster by the government so there is no problems for leadership. The good that once got unions on the road is now lost. With the successful merging of the government and unions free enterprise, good prices and may others will be lost for ever.

    28. Pingback: » Financial News Update - 05/14/09 NoisyRoom.net: “Extremism in the defense of liberty is no vice. Moderation in the face of tyranny is no virtue.” Barry Goldwater

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