No more free rides for public sector unions
Both in public and private sector unions it has been too easy to make promises about future pension payments for both sides. The results has been unfunded obligations that are now bumping up against budget realities in tough times. Both the political subdivisions and the unions are going to have to work out a rational plan. If not there will be big layoffs and potential bankruptcies.
Major clashes are breaking out between public-sector unions and state and local governments seeking to steady their wobbly books by scaling back employee benefits, pitting labor's political clout against lawmakers eager to avoid raising taxes or cutting programs.
From New York to California, state capitals and city halls facing huge budget deficits are fighting with unions to slash costs through pension cuts or freezes and worker furloughs and by renegotiating contracts with unions that represent civil servants, teachers, police, firefighters and other public servants.
"A lot of state and city governments' backs are against the wall; they can't go on borrowing forever like the federal government," said Chris Edwards, the director of tax-policy studies at the Cato Institute, a free-market think tank.
"It's a giant battle, and these are only the opening salvos."
Putting more pressure on historically sticky relationships, government officials say that public employee unions for decades have pushed labor costs above acceptable levels by demanding exorbitant benefits packages.
The unions, in turn, say it's not their fault that governments have mismanaged pensions funds and that workers unfairly have been cast as scapegoats for budget deficits.