Another day, another budget battle between public unions and newly elected officials over how to address states’ deficits and debts. Ohio is now about to follow Wisconsin’s lead in requiring its public unions to contribute more toward their own benefits and in limiting their legal rights to bargain collectively.
An Ohio firefighter said that his the bill will cut his family’s income by 10%, adding that he has stopped contributing to his son’s college savings to pay his monthly bills. Though regrettable, this strikes me as perfectly natural, and indeed necessary. Resources are scarce, so all of us must make difficult choices about how to allocate them. And usually when resources are devoted to one use, they cannot be devoted to others. That means that we all face tough choices all the time. Part of becoming an adult is facing this reality and dealing with it prudently.
When others have been subsidizing one’s living, however, it means that one’s pool of available resources is, though still limited, artificially expanded. That means that one has not been exposed to the full costs of one’s decisions about how to allocate. If the time should then come—as it has in Wisconsin, in Ohio, in New Jersey, in New York, in California, and soon in other states across the nation—when the third-party subsidies of one’s standard of living are reduced, one is forced to make new decisions on how to allocate one’s remaining resources. The pool is reduced, and that means that some of the things on which one formerly spent one’s resources will have to be foregone. That new reality is reflected in the Ohio firefighter’s laments.
What is important to keep in mind, however, is that these reductions, though painful, are not penalizing. That is, they do not constitute a penalty that is being imposed on the firefighters or other public sector union members. Instead, they are reflections of the reduced ability of the state to pay. If the reduction in my own income—and my income has gone down this year due to increased health care costs—means that I do not go to my local coffee shop or out to dinner as often as I used to, that does constitute a marginal reduction in revenue for the shop or diner, but it is no penalty to them. Although they might have hoped for my continued business, they had no reasonable expectation of it, and so cannot reasonably demand it or claim injustice.
By contrast, the public sector workers negotiated contracts that do stipulate certain wage, benefit, and bargaining conditions; those contracts gave rise to reasonable expectations, which are now being threatened or removed. So I think they have far more justification for complaint. Not getting something one hoped for is disappointing; not getting something one expected, and something to which one is (was) contractually entitled, is frustrating and infuriating.
The generous benefits and wages contractually negotiated with public sector unions were indeed too generous and thus should never have been made. I do not blame the workers for getting whatever they could—who among us would turn down a raise?—but the politicians making those promises were obligating other people, including future generations, to pay for them, and thus they had no moral right to do that. We are left, then, with a real difficulty: public-sector workers who have legitimate, because promised, expectations of high wages and generous benefits, and an economic reality that those promises cannot be kept.
What should we do? The economic reality leaves us, unfortunately, with no real option. The promises will have to be broken. Though it will be little consolation to the affected public-sector workers, those promises should never have been made. The people who made them were either crooks or ignoramuses or both; they include both the politicians and the labor leaders, both of whom should have known better. Let us hope they are held accountable.
In the meantime, however, I have a proposal to make to help alleviate the difficulties public-sector workers will face as they recalibrate their lives in accordance with their new economic realities: Start a charitable Gap Fund for Public Workers. Solicit private, voluntary donations to help fill the gap between what these workers expected to have and what they will in fact have. I see no political or strategic reason (from the public-sector workers’ perspective) not to do this, and by making it voluntary it will not further indebt or obligate people who had no say in creating their expectations. It will also offer a way of measuring actual public sentiment in favor of the workers, as opposed to rising sympathetic poll numbers, which reflect only costless verbal solidarity and thus are not as indicative of real sentiment.
It is a regrettable, unfortunate situation for the public-sector workers. They have been betrayed by all the people who pretended to protect and represent them. Perhaps they, like investors in Bernard L. Madoff Securites LLC, should have mistrusted the lavish promises, but still the promises were made. A charitable Gap Fund will not give them everything they were promised, but it might be a way to mitigate some of the temporary hardship, while at the same time softening some of the opposition they are facing and even generating.