Public Employee Unions: The Great American Scapegoat

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Public Employee Unions: The Great American Scapegoat

Pols turn on labor unions

Maggie Haberman and Ben Smith

A person carries a sign as she walks near the New Jersey Statehouse Saturday, May 22, 2010, in Trenton, N.J., from a rally to protest Gov. Chris Christie's proposed budget cuts. A national trend has put public employee unions in the cross-hairs of politicians trying to score easy points in a rough economic environment. (AP Photo/Mel Evans)

Spurred by state
budget crunches and an angry public mood, Republican and some
Democratic leaders are focusing with increasing intensity on public
workers and the unions that represent them, casting them as overpaid
obstacles to good government and demanding cuts in their often-generous

Unlike past battles over the high cost of labor, this time pitched
battles over wages and pensions are being waged from Sacramento to
Springfield to New York City and the conflict is marked by its
bipartisan tone, with public employee unions emerging as an
intransigent public enemy number one in cities and state capitals
across the country.

They're the whipping boys for a new generation of governors who, thanks
to a tanking economy and an assist from editorial boards, feel freer
than ever to make political targets out of what was once a protected
liberal class of teachers, cops, and other public servants.

Republicans around the nation have cheered New Jersey Gov. Chris Christie, whose shouting match over budget cuts with an outraged teacher—“You don’t have to” teach, he told her without sympathy—became a YouTube sensation on the right last week.

And even Democrats, like the nominee for governor in New York, Andrew Cuomo, have echoed the attacks on unions.

Christie is merely the most florid voice for a calculated, national
effort to fundamentally reshape the debate on the labor costs that
account for the bulk of government spending at every level. And at the
core of the shift is a perception among many political leaders that
public anger at civil servants is boiling over.

“We have a new privileged class in America,” said Indiana Gov. Mitch Daniels,
who rescinded state workers' collective bargaining power on his first
day in office in 2006. “We used to think of government workers as
underpaid public servants. Now they are better paid than the people who
pay their salaries.”

“It's a part of a very large question the nation's got to face,”
Daniels told POLITICO in an interview. “Who serves whom here? Is the
public sector—as some of us have always thought—there to serve the rest
of society? Or is it the other way around?”

The new focus on public workers is the product of a perfect storm of anti-labor factors.

First are the very real financial obligations imposed by their
salaries, health benefits and—especially—their traditional,
defined-benefit pension plans, which have been sweetened over the years
in many states by legislators eager for the support of
politically-powerful unions. This is particularly true in the northern
and western states that allow public workers to organize. A recent
study from the Pew Center on the States found that states are short $1
trillion toward the $3.35 trillion in pension, health care and other
retirement benefits states have promised their current and retired
workers, the product of a combination of political decisions and the
recent recession. 

But the immediate cause of the new spotlight on public sector unions is the collapse in tax revenues that came with the 2008 Wall Street

crash, something that union leaders bitterly note is not their fault.

outrageous to blame a librarian – to blame a fireman for the financial
mess that we find this country it,” the president of the American
Federation of State County, and Municipal Employees, the largest
national public workers union, Gerard McEntee, said. “We are the
scapegoats in the states.”

The revenue crunch coincides with a bipartisan national resistance
against teachers’ unions and the power they wield over classroom
instruction, an effort financed – ironically -- largely by Wall Street
and championed by figures ranging from Barack Obama to Newt Gingrich,
Mike Bloomberg to Al Sharpton.

Governors have made sporadic attempts over the last decade to
fundamentally alter the spiraling pension costs that have consumed
increasing shares of state budgets, and which legislatures in states
like New York and California often sweetened as a gift to political

The recent revenue crunch, though, has given governors and big-city
mayors new leverage. The early initiatives have largely been stopgap
measures: everything from furloughs in the two biggest states, New York
and California, to initiatives like Bloomberg’s deal last week in New
York City with teacher unions to cancel raises in exchange for avoiding

Other executives have won larger, structural changes. Illinois Gov. Pat
Quinn, a Democrat, signed into law last month a bill changing benefits
for all five of the state’s pension systems, raising the retirement
age, limiting pension raises, capping maximum benefits and ending
public pensions for people who work another public job.

California, however, remains ground zero for pension fights, as the
seat of both the nation’s highest-profile budget crises and some of its
most powerful public unions. Republican Gov. Arnold Schwarzenegger has
been fighting them since he took office, and they have handed him his
most stinging political defeats. He failed in 2003 and 2004 to attack
pension costs through the legislature, then in 2005 backed ballot
initiatives to shift public workers to a 401(k)-style pension system,
to cap spending and to roll back teachers’ tenure. But he was forced to
drop the pension measure amid claims it would cut death benefits for
police widows, and lost the other measures in an expensive, bruising
political fight that was the worst defeat of his tenure.

Now, though, Schwarzenegger – in his final months as governor– is
gearing up for what he views as a final, climactic battle over public
sector pensions. And he told POLITICO in an interview that he feels the
time is now ripe for elements of the fight he lost five years earlier.

“The atmosphere has changed,” Schwarzenegger said. “People understand
that they have to lay off their workers or they don’t have the money
for their family. What they don’t like is when there is a certain group
that doesn’t like to make the sacrifices.”

Schwarzenegger said he “will not sign” a budget without pension reform.

“I will hold up the budget. It doesn’t matter how long it drags—into
the summer or fall or into November or after my administration—and I
think the people will support that,” he said.

Schwarzenegger’s political judgment reflects a growing national
consensus that public sector unions may be at their most vulnerable
point ever.

public mood is clearly changing regarding these issues,” said Minnesota
Governor Tim Pawlenty. Pawlenty, a likely 2012 presidential candidate,
boasts of weathering a 44-day bus strike in 2004, the longest in the
nation’s history, and recalled that during that “knockdown, drag-out
brawl,” he shored up support by telling the public that “bus drivers
under one version of their contract could get retirement benefits for
the rest of their lives after working for just 15 years.”

“If you inform the public and workers in the private sector about the
inflated benefits and compensation packages of public employees, and
then you remind the taxpayers that they’re footing the bill for that –
they get on the reform train pretty quickly,” he told POLITICO.

The assault has caught the giant national unions that represent public
employees largely flatfooted, and many leaders concede privately that
they find themselves on defense.

“The Al Shankers and the Victor Gotbaums .....they're not around any
more,” said Norman Adler, the former political director of the New York
City public workers union , referring to public sector union leaders
who battled through the crises of the 1960s. “The people who have
replaced them are either not as sophisticated or not as talented as the
old guard was.”

But another consultant to major unions pointed to a different, more
structural shift: Public sector unions are increasingly the face of
American labor, and they have prospered as private sector unions
disappeared and workers’ wages stagnated.

"The face of labor today is now public employee unions whose wages and
benefits largely outstrip those of average Americans,” said the

But union leaders they also express outrage at what they see as the
fundamental opportunism of politicians whose own Wall Street supporters
caused an economic collapse using it to attack middle-class union

American Federation of Teachers President Randi Weingarten, for
instance, blamed “the hedge fund folks” who, she said, are “trying to
use charters as a way of demonizing public school teachers.

Democrats from Obama on down, however, have backed the pressure on
teachers’ unions to drop inflexible work rules and accept
private-sector style merit pay. But the sharp attacks on the workers
and their leaders remain largely a Republican theme. Illinois Governor
Pat Quinn, for instance, who won a major victory over unions in the
pension changes (which start applying only to workers hired next
January) distanced himself from the Republican rhetoric.

“I don’t get involving in that kind of scapegoating – I don’t think
it’s right,” he said, after hearing Daniels’ remarked about a
“privileged class. “I respect public employees, I respect teachers, and
I think they deserve a pension,” he said.

Quinn noted that pension liabilities had blossomed under the
Republicans who governed Illinois from 1977 to 2002, and indeed, local
Republicans from coast to coast have often accepted the support of
unions and defended their perks. That day appears to be over, at least
for now. Former eBay CEO Meg Whitman, campaigning to replace
Schwarzenegger, has promised to cut 10 percent of the state work force,
or 40,000 jobs.

The lingering question, however, is whether the turn against public
sector unions is here to stay. Union leaders hope that rising state
revenues will ease the pressure, while Republicans insist that there
has been a deep shift in the perception of public workers and even of
the typically popular teachers.

“The question now is, is there going to be a paradigm shift,” said E.J.
McMahon, the director of the conservative Empire Center for New York
State Policy.

“Or are the unions simply going to hunker down, let the wave wash over them, and emerge stronger than ever?”

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