Reality Check for Labor Unions

Let's stop pretending we have the money to pay for Rolls-Royce healthcare plans and golden pensions

Oh the guilt. For all us unlucky folks who aren’t part of organized labor, how can we not feel at least a little conscience-smitten? After all, we are taking full advantage of that end-of-summer holiday honoring “the working class,” a.k.a. “labor.”

And nowadays, if your goal is to join a union, you would indeed be “lucky” to achieve that, since only 12 percent of the workforce is now unionized, and when you factor out the public sector workers, that number plummets to seven percent. Far from the heyday when nearly 40 percent of the nation’s workforce belonged to the union.

It would seem, then, that for the nine out of 10 Americans who aren’t considered “working people”—which must mean they don’t work—every day is a holiday. So taking advantage of Labor Day just seems like another way to put the screws to the unions.

But what else is new? Public sector unions have seen their pay scales, benefits and pensions under constant attack recently from dastardly Republicans trying to stave off bankruptcy. The nerve!

Think about it. For some teachers’ unions, that might mean giving up paying … absolutely nothing toward their healthcare, such as those in the Neshaminy district, where their Rolls-Royce plan, courtesy of taxpayers, costs $27,000, per teacher, per year. How could any taxpayer or elected official be in favor of making teachers pay five or, God forbid, 10 percent of that cost? Disregard the fact that for most in the private sector, contributing 10 percent toward guaranteed healthcare in a virtually guaranteed job would be a dream, since they pay far more—if they have any coverage at all.

Far “worse,” some Republicans, in an effort to get their states back in the black, have made it possible for public sector union members to negotiate with their prospective employer individually, with free market-type incentives allowing for a fair offer—fair for the employee, and fair for the “employer” (the taxpayer).

An offer would be made—salary, healthcare, benefits—and the individual could choose to accept or decline it, just as it’s done in the free market. Accountability and efficiencies would increase, and unmotivated, bureaucratic sloths would be eliminated in favor of those willing to be good stewards of taxpayer money.

Sound simple and fair enough? It is, and it’s called the elimination of collective bargaining, but union leaders have demonized all who support such a plan, instead fighting to continue a system that is completely broke.

And when it comes to retirement issues, voracious union opposition rears its head at any attempt to replace costly and antiquated pension plans—which are draining government coffers at an exponential rate—with 401k retirement plans for new public sector employees.

So why all the “unfairness” toward the public sector unions?

Because they are such an inviting target, and it’s just … fun to attack them! Or so many union leaders would have you believe. But the reality is entirely different.

Truth be told, it’s not the GOP that is putting the screws to the unions. They just happen to be the ones cleaning up the mess, especially in states like Ohio, Indiana and Wisconsin. (Noticeably absent is Pennsylvania, where it’s Business As Usual.)

For decades, unions have been reaping the rewards of promises that were ultimately empty and could not possibly be kept. But those Ponzi scheme “pay-me-later” deals, made between corrupt union bosses and gutless politicians (from both parties) only interested in self-preservation, have now finally come due. It’s time to pay the piper, and kicking the can down the road just isn’t an option anymore. That “strategy” is a dead end.

Math doesn’t lie. There is simply not enough money to continue paying such high wages and, in many cases, extremely lavish benefits and pensions.


The way the system was originally intended, joining the public sector was a trade-off: You wouldn’t make as much money as someone in private industry, but you would receive a healthy pension and job security. But all that changed, in large part because millions in union dues (taxpayer money, no less) were allocated to defeat any politician who dared cross the unions.

Now, many public sector union workers make more than those in the private sector, and their pensions are so extravagant that Wall Street-ers blush with envy.

But with the economy in shambles (and no, we are not headed into “another recession”; we never got out of the first one), tax revenue is down and the pension obligations are simply unaffordable. The current system is unsustainable, and no argument can be made to the contrary.

Is it right? Don’t public sector union members deserve what they were promised?

Not to be callous with people’s livelihoods, but those questions are irrelevant. If there is not enough money, there is not enough money. Unlike the feds, states and municipalities can’t print cash, so governments have to cut back and reform everything, including the big-ticket items like labor costs.

If they don’t, the alternative is far worse: bankruptcy. And yes, municipalities can and are declaring. From Rhode Island to Alabama, the message is simple: Agree to cuts, or risk losing everything.

Obviously, it’s not fair. The rank-and-file union member who worked hard his whole career was promised an unattainable bill of goods by now long-gone hacks who don’t have to answer for their irresponsibility. But as Jack Kennedy once said, anyone who believes in fairness in this world is seriously misinformed.

And before we hear the clamor that unions are being singled out and targeted, look at the private sector, which has experienced even greater losses. Pensions there have been battered too, with some retirees receiving just pennies on the dollar. And private industry job losses are hemorrhaging at a much higher rate than those in the public unions. That’s not fair, either, but it’s reality. Deal with it.

So what now?

Instead of engaging in a full assault against politicians trying to clean up the mess left by their predecessors—fighting for monies that just aren’t there—union leaders would do well to realize that the rules of the game have changed, and they are never going back to what they were.

Tone down the hype, stop the personal attacks, and come into the real world. The new reality is that reforms of the public sector unions are imminent, and not because of political will or the (mistaken) perception that Republicans are anti-Labor, but because there is simply not enough money to fulfill those long-ago promises. There are no other options.

Failure to agree to common sense reforms will only result in a protracted battle that the unions cannot win, virtually guaranteeing an (unnecessary) level of pain and suffering to rank-and-file union members.

Union bosses would do well to remember that their job is to represent the best interests of their members, and it would behoove union members to hold their leaders accountable—something they have not done particularly well over the years. On three big issues that mattered to the rank and file—defeat of NAFTA, defeat of Most Favored Trading status for China, and stemming job-killing and wage-depressing illegal immigration—the union leaders have batted zero.

Only common sense and a genuine willingness to work together for fair solutions will resolve the difficult situation facing public unions, states and taxpayers.

While that will never be a perfect “union,” anything less will result in a Labor Day—with no Labor.

Chris Freind is an independent columnist, television commentator, and investigative reporter who operates his own news bureau, Readers of his column, “Freindly Fire,” hail from six continents, thirty countries and all 50 states. His work has been referenced in numerous publications including the Wall Street Journal, National Review Online, foreign newspapers, and in Dick Morris’ recent bestseller Catastrophe. Freind also serves as a frequent guest commentator on talk radio and state/national television, most notably on FOX Philadelphia. He can be reached at