Sunday, February 27, 2011

Sustainability: Not just for environmentalists anymore

The public unions in Wisconsin and in other states may feel like they have a target on their backs in the here and now - and they do - but it's the future for everyone of us that's at stake. States and municipalities are facing collective liabilities in the trillions of dollars due primarily to promises made to public employees. These promises in many cases defy all common sense, in a few cases they defy common decency.

When a public servant can retire at the ripe old age of 55 and collect a benefit check from tens of thousands to hundreds of thousands of dollars for the rest of their lives with paid health insurance thrown on top it's no wonder we have an unsustainable situation. The rest of us working in the private sector would be lucky to retire at 67 with no pension and a (devastated) 401K and only Medicare to look forward to. Will there be Social Security in 20 years for those of us who paid 7% of our wages into it for 40-50 years? Many state a municipal workers don't care, why should they?

Traditionally public employees enjoyed very good benefits and job security, and that was just fine. It was assumed that they were paid a little less as compared to their private sector counterparts. That part of it is probably not true anymore. The average wage for a Federal employee is reported to be over $80,000 a year, there is no way the private sector can claim that. Even factoring in the education level differences it's clear that government workers are getting sweetheart deal when it comes to wages and benefits - including generous vacations, educational opportunities and even sabbaticals.

The problem is that since the day public workers have been allowed to unionize they have had direct involvement with determining who sits across the table come contract negotiation time. They have essentially bought sympathetic bargainers through the election process. Unions fund political campaigns and then reap the benefit of the symbiotic arrangement. Since there was an ever rising revenue stream while the economy grew this worked for them. Today, however, the party is over, state and local governments are broke. Governors and legislatures face the possiblity that the jobs that have been lost are not coming back. Unlike the Federal government they can't just have the treasury print more money. Something's got to give.

Gov. Scott Walker simply must not back down. He does need to come across as reasonable and fair and that means explaining with simple facts why this has to be done - and now. It's all about sustainability.