Unions

I have long been a proponent of private company unions but opposed to public unions. At the end of WW 2 over 30% of workers were members of private unions but today that figure has fallen to 6% and in the process wages for working people have stagnated. The growth in public sector unions has been the reverse going from less than 4% in 1950 to 32% today. Public unions create inherent conflicts of interest and lack market constraints since they negotiate with taxpayer money. The result has been long term debt accumulation by states and the federal government. Public unions have kept defined pension benefit plans while most private companies have moved on to the far less costly 401k plans. A simple example clearly explains the problem. John starts his career working for the state at age 24 and retires at age 62. His final salary is $80,000. He contributes $4,800 (6%) into his pension. He pays $6,120 (7.65%) into social security/Medicare. He pays $6,931 in federal income tax and $3,625 in MN state income tax. His take home pay is $58,524. At retirement his pay is 1.7% times the number of years he worked (38) times his final salary of $80,000 or $51,680. His social security benefit is 19,000 for total gross income of $70,680. After tax he takes home $60,431 which is more than he was making while working. All states are in debt, primarily because of pension obligations but some states like California, New York and Illinois are particularly egregious. The public unions in California are in many ways running the state. The number of California retirees collecting a public pension of more than $100,000 hit an all time high of 79,235 last year, up 85% since 2013. Of these 13,000 are teachers. President Franklin D. Roosevelt opposed public sector unions because he believed the government employer is the public itself. He argued that a strike by government workers was an intolerable effort to obstruct the operations of government, and that democratic processes—not collective bargaining—should dictate public policy