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Civil Service?

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By JOHN REINIERS, More Than Words

Hernando Today

Published: August 13, 2008

By Executive Order 10988 ,President John F. Kennedy granted federal employees the right to bargain collectively. This resulted in the abolition of the Civil Service Commission in 1977. The "merit system," in the public civilian sector was gradually replaced by collective bargaining. Meritocracy was out. Unions were in. (Ironically, The Pendleton Civil Service "Reform" Act was enacted during the Chester Arthur administration, and marked the end to a failed "spoils system.")
A corollary to the common law rule that the sovereign (the government) is immune from civil suits, is that government employees should have only those rights that government permits them to have. Logically, government can't share its powers with others – or, it isn't an elected government. There is a fundamental conflict between these doctrines and collective bargaining because an elected government has the responsibility to act on behalf of all the voters – not a few.
This fundamental conflict is painfully obvious in California, which is bankrupt to the tune of a $15.2 billion deficit. It has enough money to last through September. Democrats oppose a cap on spending and want to raise taxes again. Gov. Arnold Schwarznegger laid off some 10,000 temporary, part-time and contract workers and wants to roll back selective state salaries. The Service Employees International Union responded by suing the governor. So, here we have a double whammy departure from "tradition." Not only is a sovereign state being sued in a civil action, but by its very employees who were permitted to unionize.
New York is in the same pickle with a projected $26 billion deficit in the next three years. The governor – a Democrat – wants to trim the state's workforce, cut spending and cap property taxes. The head of New York's largest public employee union says reducing the workforce to solve the state's fiscal problems would be a "sham." The Public Employees Federation agrees, and the powerful New York State United Teachers (600,000 strong), have lobbied against the property tax cap.
Florida won't know its budget deficit numbers until Aug.15 when the state economists finish tallying up the bad news.
What has changed? Nothing really from an economics viewpoint. Economic cycles come and go, but public sector unions have a life of their own. The U.S. Department of Labor Statistics report that workers in the public sector have a union membership rate nearly five times that of the private sector (35.9 percent). Union members have median weekly earnings of $863 (excluding benefits) while non-union workers were at $663.
More than a year ago Hernando Today published a piece I wrote about state and local governments that employ more people than any other sector of the economy with a headcount of over 12.2 million – more than the population of 45 states. (Not including the federal government – that's another story.) State and local government employees receive 31 percent more pay and 60 percent higher benefits. Should they apologize for being so successful? Well no, if they can continue to get political support. And make no mistake about it, public sector unions are a political force.
But when I wrote that piece I warned about a political backlash. Now states like California and New York and maybe Florida will need to counteract the enormous political leverage of public-sector unions.
In 1987 Gerald W. McEntee, president of the American Federation of State, County and Municipal Employees (AFSCME) said, "Labor relations in the public sector have been relatively quiet in recent years ... We can detect a new degree of militancy out there, a feeling that people aren't going to take it anymore." Well, the worm may have turned since 1987, and the taxpayers may be the ones who will "not take it anymore," simply because they either don't have the jobs or don't earn enough to afford paying the property, sales or income taxes for these public-sector salaries and benefits that they would kill for. (McEntee's salary alone is $585,000.)
I have this thing about the counter-culture of the 1960s as being a defining moment in American history. Society was shedding traditional American benchmarks of morality. Societal changes were everywhere – militancy against our value system, freedom of personal expression, materialism, alternative lifestyles, communes, drugs, the anti-war movement, hippies, you name it – or as David Brooks says, "If you are a '60s guy, it's all about you." This was also the defining moment for public unions, which became militant and cleverly aligned themselves with the civil rights movement.
But think about it: One was a moral imperative to overcome years of inexcusable racial discrimination. The other was a clever political strategy riding on its coat-tails. The '60s was the beginning of the explosive growth of public employee unions and their ascent to political power, much like labor unions generally.
There is a parallel with the auto industry and its explosive growth. After World War II the United Auto Workers signed a series of contracts, beginning with General Motors, known as the "Treaty of Detroit." It granted the UAW generous pension, cost of living and health benefits in return for peace. They simply passed the cost off to consumers. When General Motors reached the point of 2.5 retirees per one active worker – all receiving benefits, the house of cards collapsed. The industry could not compete with Toyota and the like with legacy costs alone of $2,000 per car just for retirees.
State and local governments are following the same path. (The city of Vallejo, Calif., filed for bankruptcy protection with a $16 million budget deficit because of labor contracts with its city workers.) California, New York and Florida are feeling the heat. Our auto industry had an aristocracy of blue-collar workers that mirrored what we now see in state and local governments. And government employees – even at the federal level – are a huge block of voters who are part of the Democrat coalition.
The majority of us Americans came of age after the demise of civil "service," after which a government job (even at an elected level), became simply a job that paid well, better benefits, boilerplate union protocols and less stress. They see a crunch coming, but by then most figure they will have put in their time, get their pensions and other benefits or double-dip in some DROP program.

John Reiniers, a regular columnist for Hernando Today, lives in Spring Hill.

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