The Battle Lines Are Being Drawn

To paraphrase Winston Churchill, “The battle for the private sector is over, the battle for the public sector is about to begin.”

Make no mistake about it; the Unions have lost the private sector.  Their total membership as a percentage of the private sector workforce in 1960’s was at 30% of the workforce.  Today the unionized private sector is down to less than 7% of the private sector employees.  We look at the Federal Mediation and Conciliation (“FMCS”) records all the time in Ohio.  They report the number of unionized companies and break it down by state.  What we have found is that from 20 to 25 percent of union companies go out of business every three years!  In a twelve year time span, that means that statically there is a 100% failure rate of union companies.  The question is no longer will there be a private sector of unionized companies but only when the last unionized company will turn out the lights?

Will some private sector employers be unionized?  Sure.  But those will be the largest employers who will have contracts in public utilities and the like.  Companies like Yellow Freight that merged with Roadway are hanging on by their finger nails.  The odds that they will over time survive are unlikely.  I for one would not buy stock in that company.  There is not going to be any more “bail-outs” for large private sector union companies. 

The Democrats are in fact now the focal point of union fury (and rightfully so), because of their inability to pass the Employee Free Choice Act (“EFCA”).  That failure will be looked upon as the final turning point of the decline in the private sector unionized workforce.  Not even the National Labor Relations Board (“NLRB”) can save the unions.  All the NLRB can do is speed up the demise of union companies as it costs these companies tons of money to fight that government agency.  In the end, the NLRB does not care about what happens to individual companies.  Thus, the future in this Country is in the non-union sector.  The demise of the union private sector is a given, the only question is when?

Therefore, the battle for the private sector is over, the battle for the public sector is about to begin.

The first thing to understand is that in the public sector, for many years, unions grew, their power grew and the costs to the public taxpayer became greater and greater.  How and why did this happen?

The answer is really quite simple.  The politicians in office were NOT paying the bill.  The taxpayers were paying the bill.  It is easy to allow salary and retirement benefits to grow because there is nobody there politically to stop it.  The “politicians” only cared about getting re-elected.  There was no “voter group” saying to them that if you keep giving these raises and benefits, one day the state or county or city will be broke and cannot afford to pay these benefits.  Think of it as nothing more than a giant PONZI scheme.  These politicians make promises they know the government can’t keep.  They take the current money from the tax payer and pay the “old” promises, and expect to keep getting more money from new taxpayers to keep paying off these old promises.  Meanwhile all the future debt they keep giving away simply becomes more and more unfunded liability.  The states of California and Illinois have just about wrecked their economies over this debt.

But just like Bernie Madoff, when the economy crashed, when all the old promises came due, there was suddenly no “new” money from the taxpayers coming in to pay the bills.  It is estimated that the state and local governments owe somewhere between one and three TRILLION dollars in unfunded health and pension benefits.  Just like General Motors, these public employers gave away the moon to the unions in the hope to buy off the present problem and push the issue down the road.  Unfortunately, the road is now at a dead end.  The state and local governments must now pay the bill charged by past politicians who bought their way into office and re-election on the backs of the taxpayers.

So now the battle to control the “public unions” begins and it starts in the Midwest.  States like Wisconsin, Ohio, Michigan and Indiana will be for the first time confronting the old system and saying “no-more!”

The unionized public sector was about 40% of the workforce in the 1960’s.  Today the numbers are about the same.  However, this could soon change.  Simple items like “Right to Work” where employees are no longer REQUIRED to give money to a union should be passed by every state and applied to state workers in particular.  Requiring the public  unions to establish on a periodic basis that they actually represent a majority of the public employees is an excellent idea whose time has come.  Imagine if you would a future world where the public employees decide for themselves if they want to pay union dues, and decide for themselves if they still want the union to represent them.  The simple fact is that the numbers of people being members in public unions will drop like a rock.  This is the reason why in Wisconsin the unions are putting up such a pitched battle.  They see this for exactly what it is – the gravy train is about to come to an end.

I sincerely believe that if employees, public or private) are given the choice, a large percentage of them will decide that they do not want to pay the union money.  I also believe that as these people stop giving the union money, that they will decide that they do not need a union to speak for them and that they can negotiate their own wages and benefits directly with their employer.

It is my prediction that we are now going to see this decade as the high point of public union membership.  Just like we look back at 1960 as we do in the private sector, we will look back to 2010 as the high point to the continual drop in public employee membership in unions.  It is my sincere hope that maybe for the first time, politicians will be representing the TAXPAYERS in negotiations with the public unions.  Requiring these contracts to be ratified by the taxpayers is an excellent start. 

Of course to keep this going, Democrats must not be allowed to run the state and local governments or else the cycle will in all liklihood start over.

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