The usual suspects put everyone out of work in the Hostess affair…

November 16, 2012

UPDATE: 11-17-12

——————-

Here is a new lead to my previous blog in an attempt to add to and correct and clarify what I wrote previously:

Hey, I won’t miss Wonder Bread, or even Ding Dongs, not to mention Twinkies (and what does that phrase “not to mention” mean, when you always go ahead and mention whatever you’re not mentioning?). But it is all very sad that so many people will be out of work, some 18,500 with Hostess filing bankruptcy

It seems over the years the company, which was not always called Hostess, was mismanaged, and at the same time consumer preferences changed to seemingly more healthy food.

The maker of bread and various snack foods grew into a conglomerate, even controlling Colombo Bread of the San Francisco Bay area, thus now putting all those people out of work with the bankruptcy (there had been a previous bankruptcy) and the closure of operations.

Management blamed it mostly on the unions. But some top managers got bonuses even as the company was losing money. And I always wonder how the corporate culture apologists explain that.

I don’t know who all was represented by whom in the union things but apparently while those represented by the Teamsters took concessions, realizing the company was losing money, the Bakers’ union (the Bakers’ union, not its full name, represents more than bakers) held its ground.

Involved in all of this as I read it are the usual suspects — the hedge funds and the quick buck artists, all of whom produce no product or service, just profits for themselves, even as companies lose money and go out of business and people are put out of work.

And let’s don’t forget unrealistic unions, who see no connection between supply and demand and the cost of production versus possible income from products or services.

The original blog post:

I don’t know. Maybe the union overplayed its hand. Hostess told the union bakers and other workers either quit your strike or you will have no job to come back to because we will file for bankruptcy and go out of business.

The deadline was yesterday. The union did not blink. And Hostess has filed for bankruptcy and shut things down. It could be bought by someone else, and I don’t know what power the court has, if any, to forestall things.

Hostess had been in trouble for some time. The market for Twinkies and other sweet pastries has been declining, especially since the Great Recession of 2008, I think.

I first got word of this from a nephew who has spent his whole working life (up until recently) either working in grocery stores or as a route driver delivering everything from potato chips, to bread, to tortillas, and to pastries. That pastry route was his last one. It was not Hostess, but another brand (but I think he did work for Hostess for a time). He told me route sales had drastically declined. Should have kept the tortilla route, I would have thought. He tells me the guy who bought it from him loves it. My nephew is working at a local hospital now, doing housekeeping or something like that. He says the money is good, at least. So there is life after Twinkies.

Don’t know what the union was thinking, except possibly they felt they had nothing to lose since the outfit was going down the drain anyway. Or, maybe — just thought of this — they are positioning themselves for bargaining with whoever might take over the Hostess name. It is hard to believe that legendary brand would just die out.

I am of mixed minds on unions. Even though it seems outrageous that a union would go for more pay and benefits (or even restoring cutback pay and benefits) when a company is not making a profit, that never seems to stop management from getting bonuses and golden parachutes.

All things being equal, I would rather be non-union. I want the work relationship to be between me and my employer, but that does not always work in huge operations. And it is obvious that the business world is taking advantage of labor in hard times.

Union labor can be problematic, however. That nephew of mine spent some time as a supervisor, meaning he was in management, for one of the large bread companies (it might have been Hostess — don’t recall). Anyway he said they knew they had a route driver who was goofing off. But he had to spend a lot of time playing like a detective and following the guy to document it all before they were finally able to fire him.

A further complication when it comes to route drivers is that they are not just drivers but salesmen. It does not work if the guy (or gal) just drives and delivers and punches a clock, I imagine. The drivers have to keep sales up and manage their accounts.

Admittedly I know little about all this. But I am a long-haul truck driver and I am sometimes in the environment and I have that nephew who was directly in it too.

So, on the one hand, as a wage earner I am kind of rooting for the union, and on the other hand I am kind of saying you just can’t bite the hand that feeds you.

You can go into another line of work, hopefully, if the one you are in plays out or just does not have the same reward it once had.

P.s.

Yes, I know changing lines of work is not always easy or even possible. Been there, done that, and it was not easy for me, just necessary.

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Employers would pay more if cheap labor was not available, but then mechanization also becomes more attractive too…

August 27, 2011

BLOGGER’S NOTE:

The following is both a re-posting and a kind of hybrid post of one I did on this site and one I did on another site a day or so ago, but I am interested in the subject of whether there are jobs out there for people to do and whether some of those jobs are being taken by illegal aliens and whether anyone really wants those jobs, and what is practical in the job department:

I think when or if relatively cheap labor is not available employers will pay more for labor, but mechanization also becomes more attractive then too.

Watching the Mexican laborers (citizens some or all, immigration status, I don’t know and don’t care) hard at work the other day as my truck trailer full of potatoes to be processed was being unloaded, I was talking to another driver and we both agreed that unemployed people drawing assistance ought to have to check out these jobs.

Actually I have been there, done that myself once upon a time, or maybe more than once — not at the potato processing plant, but in the strawberry plant harvesting business, and elsewhere, to include harvesting worms out of ponds for tropical fish feed — and these were minimum wage or slightly above jobs.

Just a thought.

This scenario occurs to me: so there are no workers from south of the border to do low-paid or relatively low-paid labor. The government has now severely restricted various programs for the out of work. So out-of-work non-south-of-the-border people go to work at these jobs. Since they are so low paid and since many of them are seasonal, the government may well begin subsidizing them. But at least U.S. citizens will have some work. Also, mark my words, where it becomes impractical to find cheap labor, plants will turn to even more mechanization.

I have watched first hand a robot machine that stacks pallets of potato boxes quite nicely.

Okay, I originally posted this with the headline “There are jobs out there”, and maybe just by itself that was a bit misleading. There’s really a lot more to all of that, and of course low-end jobs that I was referring to don’t offer much hope and may not even be practical.

The key to getting jobs, as anyone would know, is having skill or skills at something or preferably many things. Young people need to know this and plan their lives accordingly. They don’t necessarily need to go to conventional college, but they need to do something. For the rest of us, we just have to do what we can do (I mean I attended the conventional four years of college, not all at once, and I drive a truck and am happy as can be to have a job at 62).

I do not think it has turned out to be practical to have the government through its various social programs be the guarantor of a certain standard of living for us all, that is not to say the government should not be there to help. Of course it should — otherwise what is it for? But we all have to take on personal responsibility.

Once upon a time, labor unions went with the attitude that labor is labor and management is management and it was solely up to management to makes things work economically so businesses could stay in business, but labor had to be guaranteed a certain standard of living. While I do think that employers do have a certain social responsibility, in the practical world they have to do what they have to do to stay in business. Labor has to do what it can to make itself worthy the cost. In this world of rapidly changing technology that can be a real challenge.

I could see in the not-to-distant future a situation in which the majority of people in the world have nothing to do thanks to technology. Now that will be a problem. We will have no practical way of distributing the tokens we call money. But that day has not come — even though it seems like it almost.

Right now the major economies of the West subsidize their low-end labor to some degree. They also subsidize or support many of those who do no work at all.

This is starting to bankrupt these economies.

One of the big problems in the United States is that not only do we not have enough jobs to go around (well that is debatable if we have illegal aliens filling many jobs), we have for decades now been encouraging young people to just take it easy, don’t make any decisions too soon, maybe go to college and find yourself, and so on (the smart and/or motivated ones don’t take this path). Well that doesn’t work so well. But this has led to what at times seems like a food stamp/welfare nation.

But even with all this, the fact is we need more jobs. That should be the number-one effort of the president and congress. Forget foreign wars and intrigue and forget prohibiting homosexuals from getting married, and mind your own business about women’s reproductive rights.

P.s.

But when I say forget foreign wars, I do no mean forget about defense and things happening around the globe that could affect our defense. The development of nuclear weapons by outlaw nations, such as Iran, cannot be ignored. But it is not practical, especially in the economic sense, either that the U.S. be in a perpetual state of war.


Remember or learn what happened a hundred years ago at the Triangle Shirtwaist Factory before you turn your back on labor…

March 14, 2011

A lot of times people, including me, will describe public broadcasting as being a little left leaning and therefore slanted a little toward the point of view of, say, labor in labor versus management.

Well sometimes when you tell a story, even if you try to balance it out, the facts just lean that way by themselves — but the story is still essentially balanced.

I mention this in relation to the ongoing push by some on the right to curb public funding for public broadcasting and more importantly because a hundred years ago this March 25 there was a fire at the Triangle Shirtwaist Factory in New York City in which 146 workers, primarily woman and young girls, toiling in abysmal working conditions, perished in a fire in a building in which doors were locked, cutting off an escape route.

PBS provides a good documentary on the story (see link at bottom of blog post).

There had been labor unrest in the garment industry and at that factory. There had been a walkout, but the Triangle owners held out.

The union gained public sympathy and support after the fire. The owners escaped criminal convictions on manslaughter charges and faded off into the background with their insurance money. The workers’ families got little to nothing.

I watched the PBS documentary video on the incident just before posting this. Actually I believe I have seen it previously and certainly I have known of the famous incident, but watching the video refreshed my memory and this time I picked up on what you might say is the other side of the story.

While most of the workers were poor recent immigrants to America, so were the owners when they started the business. They sacrificed so they could better their lot in life and in so doing provided jobs for hundreds more. The owners resented efforts by workers and third parties, and even socialists, to interfere with their business and tell them how to run their factory. They were also contending with being undercut in their production costs from competition — right here in America, in New York City. So there is your balance. I got that from the PBS video. Also, I don’t think anyone is for sure what caused the fire. It was supposedly set by a discarded match — there was supposed to be no smoking in the workplace, but some workers snuck smokes in — got that from the video too. It was suggested the doors were locked in part to keep people from smuggling merchandise or supplies out (not really a good reason to block safety exits).

The women were not even allowed restroom breaks. I’m not sure how you balance or explain that one.

Today in the U.S. we have strict safety regulations and things like the Occupational Safety and Hazard Administration (much maligned by the right wing, and perhaps on occasion a little unreasonably bureaucratic). But we have moved away from the industrial base and in so doing away from unionization, except in public employment where unions still rule and up until now have seemed quite strong. And with the bleak job market and the heightened competition for the few jobs that remain, the labor movement has been weakened and the sympathy for those who labor has seemingly waned. Besides a lot of people, even me included, hate to think of themselves being in an adversarial relationship with their employers.

In addition, I think, a lot of people, including myself, do not necessarily think that pay ought to be an issue decided by a group of workers or a third party calling itself the union, but rather essentially a deal between the employer and employee. We may think we ought to get paid more on the basis or our own merits rather than a group. And, as pointed out in the video I referred to, even if you have sympathy for the plight of workers, you may see robust capitalism, only lightly restricted, as the best means of innovation in and invigoration of the economy.

But let us learn and/or never forget from the past.

It is worth your while to watch a video or read about the Triangle Shirtwaist Factory Fire, whether it is for the first time or to refresh your memory.

While I personally think that in at least some cases unions, especially in, but not only in, the public sector are responsible for what I would call economic abuse or outright greed, I also know full well that forces representing business interests use our present economic ills and the fears of the working public scared that they will lose their jobs or never get their old ones back as a device to turn back the clock to a time we never want to see again.

Watch the video: http://www.pbs.org/wgbh/americanexperience/films/triangle/player/

P.s.

As an added bonus, you find out what a shirtwaist is.


Unions pitted against each other; doing a good job can be security in itself, but not always…

February 25, 2011

Sometimes I just have to turn the radio off. You know, when someone says something so contradictory or outlandish or infuriating, as when I was listening to a local radio station commentator (out of Sacramento) doing a brief obligatory right-wing (local-yokel these days is all right wing all Clear Channel Radio) hit piece on unions.

I’m not a union member, but what infuriated me is that he took the line so many regular citizens even seem to take: Unions once served a purpose but they have gotten out of hand.  Actually that may or may not be true, but I think it is too often just a non-thinking short-hand that turns a blind eye to history. Whether you are union or not, you probably would not want to go back to the non-union world of the first half of the 20th Century or earlier — but history is not a popular subject, it seems. Even baby boomers don’t really know first hand what is was like. People these days take so much for granted.

It is true there are a lot of protections for workers in law these days (law pushed long ago by unions and others), but those protections can be repealed by way of blaming all our ills on “costly” protections for workers and so on.

(Civil rights leaders and older minorities lament the younger crowd is unmoved or ignorant of history too.)

But even more infuriating is the common theme I have been hearing: unions are bad, except my union.

Yes, unions are now pitted against each other — well that certainly works into the hands of the anti-union crowd.

The radio guy admitted at the end of his piece that he was a member of a union (actually I think he said two unions), but allowed as he was not really happy with it (them), but also admitted he got good benefits though them.

I also heard a policeman call into a talk show and suggest that police should be made an exception to any move to de-unionize or take away collective bargaining from public employees.

People are like that. They always seem to be against something, except in their own case.

Now here’s something else on the current union debate (started in Wisconsin where the governor wants to do away with public employee collective bargaining rights in the name of fiscal austerity, but as most realize also for the purpose of the Republican Party preference to do away with unions altogether):

Talk Show host Tom Sullivan (not the un-named guy previously mentioned) claims that unions are not really needed to protect workers because anyone who does a good job is automatically protected by the fact that he or she does a good job. Really, I would think — as a matter of fact, I almost know — that he is smarter than that, but saying such a thing sides with his ideological-driven take on reality.

I mean certainly in theory and in a perfect world that would be the case. I’ll even admit that is the way I like to see things. But then there is the real, not always fair and certainly not always logical or reasonable world. Good workers get fired, pushed out, harassed, or otherwise discouraged all the time.

I think Mr. Sullivan’s problem is that most of his working background (not all) has been in the financial world and tied to sales. You keep your numbers up and, yes, more than likely your job is secure, or if not, someone else wants you.

Someone near and dear to me once advised that the higher-paying jobs are closer to the money, such as in sales (too bad I did not take that advice to heart). People who work in support capacities often do not make as much.

At the small newspapers I once worked at, even though we were newspapers, most of the owners (not all) saw the news staff as at best a necessary evil, but at the same time almost unnecessary. You see, the money is made (was made?) by selling advertising space. Folks do not pay directly for news (the copy cost for a newspaper, I was always told, just helps pay the cost of printing and delivering it). A good ad salesperson directly brings in the revenue and gets a cut — a commission — as well as a salary (in most cases).

A good journalist might help make the product being sold (and I hate to use the word “product” in that context, but that is business talk) more attractive and thus contribute to a higher circulation and in turn create a situation for higher advertising rates, but that is all intangible.

(The upper echelons of broadcast news pay astronomical salaries because it is show business not real journalism.)

I’m really getting off the subject here, but this makes me think of the time I worked for a newspaper and the chain that ran it came in and supposedly did a salary study. I left before it was completed, but my old boss told me they concluded they were paying too much. Let’s see it was 1978 and I was taking home about $600 per month and trying to support a family. Yep, overpaid. (The starting wage for a clerk typist over at the county courthouse at the time was $1,000 per month — no wonder people like government jobs.)

But I got way off the track here. But what I was really trying to say is that while I like the theory that simply doing a good job, or even an excellent job or going along with the attitude that take care of your job and your job will take care of you is one that I like, it may not always work that way. There are a lot of variables. If your pay structure is not directly tied to your performance the theory might not hold true. And not all work can be tied directly to performance, especially since performance in many things is hard to accurately measure.

I do believe that taking pride in one‘s work is a moral responsibility and makes good sense and is in the best interests of the individual. Being good at what you do has to be a good thing.

Unions certainly have their drawbacks, especially when they promote silly work rules and protect mediocrity, and even more when they get too greedy and kill the goose that laid the golden egg.

Unfortunately, many in the business and management category when left to their own devices will not always do what is in the best interests of employees or even the company (go figure). To make things worse, many in that category seem to be of the opinion that workers are lower class and deserve to be treated as such.

But you know? We can’t all be the boss.

But we all want to look out for our own interests.

 P.s.

I’m not schooled in the field of business or economics, but I think to advance my argument that things don’t always work the way they should in a Tom Sullivan perfect world I will say this: That small newspaper I once worked for that did the salary study still exists today, although under a different ownership. But I think it was and is in a kind of protected situation. I know under the previous chain it was called a “cash cow”. It was not necessary to pay people particularly well and quality was not so important because it had no direct competition. Everyone who worked there had their own story: just helping his or her spouse pay the bills, going to move on some day, couldn’t do better, no opportunity somewhere else, and so on. But  a lot of people in a lot of different jobs all over the country are in this situation, and employers take advantage.

In the past, sometimes people stuck working for low pay outfits got on with the government, a lot of  times a job for the city or country. You know?  Civil Service protections and unions.

And now the powers that be want to screw that up.

Looks like a race to the bottom for the working class.

P.s. P.s.

And yet I am more comfortable as a non-union worker. I tend to want to work and satisfy the one who signs my check and in my type of work (over-the-road truck driver) I basically work independently and don’t need any union bosses or fellow union brothers looking over my shoulder and telling me how hard to work or not to work. I stand by my own work and don’t need a union to speak for me. But that’s just me. And in a different time and different place, I might see things differently.


Mixed emotions on unions, but union or not, most of us are workers and receive at least indirect benefits from unions; A segment of society wants to kill unions…

February 19, 2011

At the rate technology is advancing the whole battle between labor and management might in the not-so-distant future be over a moot point, because there may be little to no need for workers — only a slight exaggeration or maybe not.

I don’t watch television anymore, but I hear a computer was able to out-think contestants on Jeopardy, and I have read about robotic computers that do everything from wait on tables in China to teach school In Japan. And I know that in Asia there was an experiment with a driverless truck run over the roads by remote control (that hits home; I’m a truck driver).

But until this all comes to pass for real — and when it does civilization is over — the fact is that most people are workers.

It seems that many of the people who run businesses, be they the owners or CEOs, and others who live off of their investments and don’t report to a regular job have great disdain for lowly workers and think they should have no rights and take what their masters hand them out of benevolence.

(Remember that the old line on the plantation was that the masters took good care of their workers — black slaves — and they really had things better off than if they were on their own — oh sure the masters occasionally had to whip them into shape, but…)

I don’t know, maybe none of us should work for anyone else. Maybe each and every one of us should be independent contractors. Would we have rights in the eyes of business people then? (And I know they like to pretend some hourly employees are independent contractors to get out of paying regular wages and benefits, but I’m talking about real independent contractors — not working for anyone else as a mere employee).

In my last post I mentioned that public workers have had clout because the politicians tend to cater to them to take advantage of their voting block.

And currently the issue of unions and collective bargaining is in the news because the governor of Wisconsin and the state’s Republican lawmakers want to strip state workers of their collective bargaining rights, ostensibly to make it easier for the state to balance its budget. Several other states are considering such a move and even more may well follow — it’s a trend.

And I just read that a bill to eliminate the requirement that federal construction jobs pay the so-called prevailing wage (actually the higher union wage) was introduced but defeated in Congress. The argument for repeal of the current law was that it favored larger union contractors because smaller contractors could not compete and that inflates the costs of public projects. That may be essentially true (but then again, some small-time operators do not always do quality work and many skimp on safety, especially when they don‘t have the union looking over their shoulder).

But the battle in Wisconsin is over collective bargaining. Workers in the United States in private industry have a right to collective bargaining through a 1935 law, the National Labor Relations Act.

I’m not sure that all states allow their government employees the right to collective bargaining — and we are talking union representation here really — but many do. President Kennedy signed an executive order giving federal employees a right to collective bargaining. 

I do recall how President Ronald Reagan fired all the air traffic controllers after they went out on strike (that‘s a public safety issue, I think, that I address a  paragraph down).

I’m of mixed minds on labor unions in general and public employee unions.

I don’t think public safety employees should be allowed to strike, because that would endanger the public, and I am not even sure I think any public employee should be allowed to strike (and the threat of a strike is part of collective bargaining). My rationale is that it is the citizens’ government, so if you strike and disrupt the work of the government you are going against the best interests of the citizens as a whole.

For that matter I am not too hot on mandatory union membership, or the “closed shop”. Some states have so-called right-to-work laws that prohibit a worker from being required to join a union. But then one wonders, would a non-union member turn down higher wages bargained through a union?

But it does seem to me that no one should have to give part of his or her pay to a union. And I don’t like the idea of a union as a third party in the employee-employer relationship if an individual has not asked for it.

And I don’t like the idea of unions interfering with the conduct of a business. I don’t think that those who run a business, be they small or huge enterprises, should have to go through a union to tell them how to conduct their own business. Taking the hard line, I would say if you as a worker don’t like what you are getting the best option is to move on — easier said that done, I know, in many cases. And that may be a reason why young people should get as much education and wide-ranging skills as they can so that they can take advantage of the best that is being offered.

(Sometimes employees band together and buy a business. Well how does that work? If they do not do a good enough job do they fire themselves? Just wondering.)

There is a paradox here of sorts, though. Even if you as a worker are not a union member, it may well be that whatever wage and benefits you earn, they would be far lower if unions did not exist.

In the past at least, some industries or individual factories or firms have kept wages and benefits up just to discourage their employees from unionizing.

Currently I work as an over-the-road or long-haul truck driver as a company driver. Contrary to popular belief most or all long-haul drivers are not members of the Teamsters or any other union. But a few years back I worked for a trucking company that had both union and non-union terminals. I worked for a non-union terminal. We non-union drivers were paid as much or more than the union drivers (although they had some different work rules) and our benefits were as good or better, and we did not have to pay the dues. I can only think what was going on there was that the company was glad we were not unionized and that they were not hamstrung by unnecessary work rules and wanted to keep us happy — and as far as I am concerned, they did, keep us happy (and of course it is easier to cut wages when times are not so good when you don‘t have to deal with a union). 

But then the Great Recession hit. There was a lot less work and some of the older drivers got nervous and they did the card check thing (I was no longer with the company then, but another driver told me). The union was able to get enough drivers to sign union cards, thus forcing even the ones who did not want to unionize to be dues-paying members of the union. Ironically, the former non-union drivers who were paying nothing for their health insurance now have to pay for it through the union.

On the other hand, those union drivers make a lot more than I do now. If I had to support a family on what I make, well, I could not do it (and now I qualify or amend what I just wrote in this sentence in Add 2 at the bottom of this post — you can read it if you get that far; I do go on at times).

And that is really what it is all about. There is a certain segment of the society that wants to destroy the rights of workers to make a decent living and along with it they will destroy the middle class (and once the middle class is gone we are a third-world country without a real democracy). There is another segment of society that goes along with them because they are ignorant of the fact that the so-called conservatives whom they support really have no concern for the workers.

In some cases it might be argued or even proven that unions have run companies into the ground. But if a private company fails, some other business will come along to fill the gap.

If the government comes to a standstill over union pressure, no one can fill the gap.

Government employee unions have too much clout. In California where I live the most egregious example is the prison guard union (on one radio talk show I listened to a prison guard called in and complained that it was false that guards made $100,000 per year. He actually stated point blank: “no guard is making $100,000 per year“. Strangely he went on and contradicted his own statement, admitting, or at least claiming he made $100,000 per year via overtime, and admitted that many or most of the guards work overtime. Why the state does not hire more guards if so much overtime is required is a question (I think it is true, though, that the prison guard union supported the three-strikes law that has swelled the prison population).

But all government employees are not necessarily overpaid and it is too bad that they have to all be lumped together.

I think the concern among reasonable people is that in some sectors salaries and benefits have far surpassed the private sector and at a time of tight budgets the taxpayers (and that is all of us) need some relief.

—————–

ADD 1:

Just scanned over some stories on the web that suggest that what is going on in Wisconsin and elsewhere is more about scapegoating on who’s at fault for the respective budget crises (I’m sure it is a shared blame among the politicians, government workers, and don’t forget the voting public who demands everything but fails to see the need for higher taxes, always attributing increased costs to waste).

Also I read about a poll that shows the majority of Americans think that the government spends too much overall, but start listing specific programs and they don’t want them cut. Same with unions. In the abstract they are bad. But begin listing ones people belong to or their neighbors belong to, they are not anti-union.

Public school system teacher salaries are wide ranging depending upon the different localities and states and time in service, but I think it is safe to say that they probably range from as low as $36,000 (lower?) to into the 90s, but with most probably in the 40s to $50,000. And a California prison guard — no college required — can pull down $100,000 per. I don’t know, but I think something is wrong here. I don’t think most beat cops make that much.

ADD 2:

Somewhere above I wrote that at my current rate of pay I could not support a family (those days are in the past for me anyway). But you know? a lot of people say things like that. The reality today, unlike when I grew up, is that mom has to work too — except that so many children grow up in single-parent households these days, and that puts extra pressure on those households because everything is based on the mom and dad both working model. But what I really want to say here is that people can do a lot with a lot less if they live within their means, but as a society we have grown accustom to living beyond our means and were ill-prepared for the Great Recession. We are so many generations into living beyond our means now that few people seem to have any concept of how to economize, except that maybe they learn when it is forced upon them — no actually they don’t, they go squawking to government while simultaneously showing disdain for government — and I realize these are not always the same people, but then again sometimes they are. It’s all very complicated and yet all quite simple at the same time: if we as a nation started living within our means and taking personal responsibility we would all be a lot better off and a lot stronger, and gee don’t I sound like a true right-wing nut? No, I’m middle of the road. I believe in free enterprise, social programs for the public good, environmental protection with practical but not excessive rules, and as much personal freedom as possible while maintaining civility.


Over-generous retirement benefits bankrupting local governments…

June 14, 2010

State and local governments, municipalities large and small, are facing near or actual bankruptcy, and besides or adding to the problem of the current Great Recession, a major culprit is over-generous retirement benefits. In some cases, as I understand it, they are eating up as much as 70 percent of the budgets.

Once upon a time, it is said, public employees were not paid as much as ones in the private sector, but a draw was job security and those retirement benefits. And when times were good, oh did local governments and the states (in many cases) go crazy with the retirement benefits.

In San Francisco, I heard on a radio talk show, some employees retire with 90 percent of their regular salary. And in many cases in that city, employees did not even have to contribute to their retirement. There is a move afoot via a proposed ballot measure to change that. The move is to force employees to contribute and/or contribute more.

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ADD 1: I don’t live in the big city. Up where I live at the northern end of  the Sacramento Valley, my hometown city council is asking some of its non-union employees to start paying 50 percent of their retirement contributions and may eventually demand that they pay all or make their own arrangements.

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(I’m not going to get into the specific issue of allowing police and fire personnel to retire early, 20 years, because of the special risks and possible health problems on their jobs. There is room for debate on that, but I think that gets off the general subject.)

Also, studies show that in most cases, government employees most everywhere make more than in the private sector.

If I had any sense — which I have never been accused of — I would have settled down in the small town in which I attended high school and got a job with local government. The pay is better than in the private sector and the retirement is better.

Having once been a newspaper reporter covering county government, I’ll give you a clue as to why county employees are treated so well. They are a tremendous voting block. Elected county supervisors who want to hold their own cushy positions often feel it necessary to curry favor with the employee unions.

I know elected county supervisors in the area where I live do a tremendous amount of work — that is they spend a lot of hours with county issues — and the pay for their positions varies from county to county. But it is extra pay, and it is often as much as many of their own constituents make at their regular jobs. And all these elected board members have their own businesses or employment. And there is no actual legal requirement they do anything, other than show up for meetings — but of course most of them spend a lot of hours at the task nonetheless.

But back to paid government employees (as opposed to elected officials), for my part, I think government employees should be paid well, but not above their closest counterparts in private industry. But they should have job security to the greatest extent possible.

And right now I’ll interject a thought here. I just read that President Obama wants to supply special federal aid for some local government employees, such as teachers and policemen and firemen, to head off layoffs due to the recession. I’m not sure that is such a good idea, at least not without a requirement that local governments agree to put up some matching funds. It’s about time local governments took more responsibility with the dollars they spend. It’s also about time local voters started to realize how much things really cost and make prudent decisions rather than pass the costs on to taxpayers elsewhere. That does not mean there should not be some type of federal aid or revenue sharing, but it needs to require some major commitment from local taxpayers first. Otherwise, what is the use of local government?

But back to these over-lavish pensions, which can be found in burgs large and small. There is a limit to what the public can afford. Government should not go into deficit spending to pay its workers. A private company could not do this and survive (And I know someone will say something to the effect that the law does not even allow their local government to deficit spend, but the states and federal governments do, and much of that cost is from having to bail out local governments).

And while it is apparently quite legal, I feel that it should not be legal for public employees, local or state or federal, to strike. To do so is to defy the popularly-elected government. While I was never a fan of Ronald Reagan and don’t look back at him as being one of our great presidents (I’d have to re-assess his terms in my own mind), I do think he was right to can the striking air traffic controllers. It’s one thing to conduct a job action against a private employer, but quite another to threaten the safety and security of the nation’s citizens. And even a strike by federal custodians (not to pick on them — just an example) would be a challenge to the day-to-day function of the government, so I do not believe government employees should be able to strike anymore than I would support the right of, say, our soldiers, to strike. But that’s why I think there does have to be special civil service protections (as long as they are reasonable) for government employees.

But again, public employment is not private employment.

Public employment should offer reasonable wages and above all job security and in return public employees should be required to serve the public or let someone else do the job.

But it is partly the fault of the voters for not being alert to what their elected governing boards do, and it is certainly the fault of elected officials who let retirement benefits get out of hand.

As I understand it, when the economy was better the retirement costs were not as burdensome. In some cases the funds were self-sustaining with their money invested in the market. But now that things are not as good, the costs of agreed-to retirement benefits still have to be met. With already-existing contracts or agreements, perhaps not much can be done, unless parties are willing to re-negotiate. But one exception is if a government entity goes bankrupt — then, as I understand it, things can get ugly indeed. All parties can lose out. Some employee unions should think of this.

Going forward, government entities need to be more prudent when it comes to wage scales and retirement benefits. And if at all possible, over-generous existing benefit structures should be scaled back.

I don’t necessarily blame public employees for taking what they can get, but they should also remember that there is a real danger of killing the goose that laid the golden egg.

P.s.

The editor of the first newspaper I worked for wrote an editorial one day about the high cost of public employee raises. That evening when he arrived home he found his wife crying. She worked in a county office and was told she would not be getting a raise. Her boss read the newspaper.


To management: don’t put down labor — Labor: don’t bite the hand that feeds you…

June 4, 2009

When the big-time executive world of the good ol’ boy clubs makes it where each other is protected by golden parachutes and performance really means nothing, we call it “networking”.

When the working class joins together to improve its prospects for happy retirement and to protect itself from the ravages of health care expenses we call it “legacy costs” and left wing politics.

And when Wall Street bankers get paid million-dollar bonuses for losing money we call it contractual obligations that cannot under any circumstances abrogated.

But there is no obligation to those legacy costs or to hard-fought wage increases and benefits.

I haven’t got that quite right perhaps, but close enough. I’m no union person but at the same time since there are far more workers than big time executives it seems that the condition of workers ought to carry more weight.

What set me off here is when I saw outgoing GM executive Bob Lutz on a cable news show blaming GM’s woes on the so-called legacy costs of its retired auto workers. Did not GM agree to all of that in labor negotiations? And what about all those golden parachutes executives get and what about the fact that even though executives are paid in the millions they could not keep American-made cars competitive with those made elsewhere in the world?

(Actually I think maybe that consumers have been robbed over the years by a cabal of networked management and union labor.)

And by the way, under the leadership of folks such as Lutz, GM has filed for bankruptcy. His salary last year, according to Wikipedia, was estimated at $6.9 million.

Yes, I think that the auto workers did probably help cut their own throats and maybe that should be a message to other unions, but I also know this:

Even though in American labor’s history there have been episodes of leftist (communist) politics, for the most part and in these past several decades, the U.S. labor movement has been quite closely connected with mainstream capitalism; it just has done everything to get its share.

I once had a political science professor in college who expressed puzzlement as to why the labor movement in this country did not tend more toward socialism (maybe he just wondered that for purposes of instruction – I’m not sure).

My answer was something to the effect that the average American wage earner always holds out the promise that he and she can get ahead and once he or she is ahead would rather not be saddled with helping others do what they should do for themselves. We have the promise of individual opportunity.

But when business leaders casually dismiss the needs of labor or blame labor for business failures instead of themselves and excuse their own extravagances, they might do well to keep in mind that what keeps us a free nation with a capitalist system is that hope to create a better life. And the answer is probably not that everyone can be in business for himself. There will always be those who do the work for others.

Best to keep them happy.

And to labor:

Don’t bite the hand that feeds you or kill the goose that laid the golden egg.