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The Union Gravy Train
Posted: Wed Nov 21, 2012 3:04 am
by _bcspace
The Federal-Postal Coalition -- a group representing more than two dozen federal employee unions -- pleaded with Congress on Monday to spare their members in any deal related to the "fiscal cliff."
Federal workers, the coalition wrote in a letter, have contributed more than their fair share toward reducing the debt and are the only group that has been targeted so heavily.
“Federal and postal employees and their families are hardworking, middle-class Americans who are struggling during these tough times just like other Americans,” the group wrote. “No other group has been asked to financially contribute the way they have, and it is time our nation’s leaders found other ways to reduce the deficit than continually taking from those who have dedicated their lives to public service.”
According to the coalition, federal employees have funded $60 billion in budget savings in 2011 and 2012 as a result of their ongoing pay freeze and an additional $28 billion in savings will be derived from the freeze extension through March 2013.
Federal workers also contributed $15 billion toward the budget in 2011 when the contribution rate toward retirement pensions was raised to 2.3 percent for new employees.
Top Democratic lawmakers on committees related to the federal workforce told Government Executive last week that they would like to leave federal-employee benefits out of any potential debt deal. After President Obama’s reelection, top federal unions said they were confident their members would not be targeted in such a deal and a pay raise would be instituted.
In recent negotiations, Republicans are beginning to show signs they will agree to create new revenues from top earners, while specifics of spending cuts still are being hammered out.
http://nationaljournal.com/congress-legacy/federal-workers-to-congress-leave-us-out-of-deficit-deal-20121120
Re: The Union Gravy Train
Posted: Wed Nov 21, 2012 6:13 pm
by _cinepro
I love it. They "contributed" by not getting a raise, and they "contributed" by making new employees (not existing ones) pay slightly more towards their pensions.
So in other words, existing employees contributed by getting paid the same and contributing no more towards their pensions.
I was hoping to raise my salary to $1million in 2012, but my company didn't do quite so well, so I'm not getting a raise. But I'll tell my employees that I saved the company $1million dollars this year.
Re: The Union Gravy Train
Posted: Wed Nov 21, 2012 7:38 pm
by _beastie
cinepro wrote:I love it. They "contributed" by not getting a raise, and they "contributed" by making new employees (not existing ones) pay slightly more towards their pensions.
So in other words, existing employees contributed by getting paid the same and contributing no more towards their pensions.
I was hoping to raise my salary to $1million in 2012, but my company didn't do quite so well, so I'm not getting a raise. But I'll tell my employees that I saved the company $1million dollars this year.
So accepting a pay freeze means nothing.
Re: The Union Gravy Train
Posted: Wed Nov 21, 2012 10:33 pm
by _EAllusion
Because of inflation, a pay freeze is effectively a pay cut. You earn less in real dollars the following year. You might not feel that's enough of a concession, but it clearly is a concession.
Re: The Union Gravy Train
Posted: Wed Nov 21, 2012 10:52 pm
by _EAllusion
I'm not sure what current projections are, but let's assume that next year inflation will be a historically modest 3%. If you do not receive a raise next year, that means your annual salary will have lost 3% of it's total value +/- the breaks in what inflation hits. Food might be more expensive. Property taxes might go up due to housing prices increasing. And so on. 3% might not seem like a lot, but if you draw 50k a year, that represents about $1500 in value. That's not an insignificant amount of money to be losing, and it would definitely be felt by someone making 50k a year.
If you do think that piddly 3% doesn't mean much of anything, while I disagree, you also should then have a hard time arguing that a few % increase on the marginal tax rate on income in excess of 250k is going to mean a lot to those people. It will, but it's hard to see you make that argument without being a hypocrite. The difference just isn't that great.
Re: The Union Gravy Train
Posted: Thu Nov 22, 2012 12:07 am
by _moksha
Unions helped end the British social class system. This lead to uppity servants at Downton Abbey. Made Ed Smart seek out the homeless for yardwork and odd jobs around the house. Ended the career of the little match girl. Took away much topical material from a reanimated Charles Dickens.
Re: The Union Gravy Train
Posted: Sat Nov 24, 2012 7:37 am
by _cinepro
EAllusion wrote:I'm not sure what current projections are, but let's assume that next year inflation will be a historically modest 3%. If you do not receive a raise next year, that means your annual salary will have lost 3% of it's total value +/- the breaks in what inflation hits. Food might be more expensive. Property taxes might go up due to housing prices increasing. And so on. 3% might not seem like a lot, but if you draw 50k a year, that represents about $1500 in value. That's not an insignificant amount of money to be losing, and it would definitely be felt by someone making 50k a year.
If you do think that piddly 3% doesn't mean much of anything, while I disagree, you also should then have a hard time arguing that a few % increase on the marginal tax rate on income in excess of 250k is going to mean a lot to those people. It will, but it's hard to see you make that argument without being a hypocrite. The difference just isn't that great.
That's all well and good, but it's still disingenuous to imply that they have "funded $60 billion in budget savings" when in fact there has been no "savings". If that were the case, then the government should agree to pay federal employees $20 trillion next year, and then rescind it and tell the American public that they cut $20 trillion from the budget (in a single year!)
If the employees are getting hammered by inflation (like everyone else), then they should protest the Fed's inflationary policies.
Re: The Union Gravy Train
Posted: Sat Nov 24, 2012 3:51 pm
by _EAllusion
cinepro wrote:That's all well and good, but it's still disingenuous to imply that they have "funded $60 billion in budget savings" when in fact there has been no "savings". If that were the case, then the government should agree to pay federal employees $20 trillion next year, and then rescind it and tell the American public that they cut $20 trillion from the budget (in a single year!)
Those pay raises in that industry are considered automatic with their normally negotiated contract. By giving them up, they've have conceded that amount of money. Your example doesn't hold because they aren't conceding some pretend amount of money they were never going to get anyway. They are conceding something they would normally bargain for and get in a way that will cause some financial pain. It's perfectly fine to call that a savings. My company has held salary increases for managers at bay for 3 years. We call that an efficiency, which is corporate-speak for a cost-savings.
If the employees are getting hammered by inflation (like everyone else), then they should protest the Fed's inflationary policies.
Inflation would happen without the Fed. A modest amount of inflation is a sign of economic health. We're all waiting for the other shoe to drop on the Fed's loose policy right now, but it hasn't yet.
Re: The Union Gravy Train
Posted: Sat Nov 24, 2012 6:52 pm
by _Gadianton
I also consider this an effective pay cut, and when it happens multiple years in a row, it's a compounded one. The Federal pay scale in your local area is a great baseline for industry standard pay, so these workers may not be alone losing out this year.
The employees absolutely should fight for their money and protest if such measures are available. But that's as tautological as saying I believe when gas is 4.96$ a gallon, that gas stations absolutely should raise prices if they can do it, and have a real complaint if they can't. It's also reasonable for competition to chastise "takers" on moral or any other grounds that would paint those benefiting in a bad light. However it may be, they are not behaving irrationally. Even when it's exploitation, as students of the market, we know that exploitation is rational.
Of course, the lobbyist argument is lame overall. I worked for the government long ago, and I don't recall too many proud civil servants who had "dedicated" themselves to public service. I do remember jokes abounding about low standards being "good enough for government work." That's sort of aside the main point, but I'm just pointing out that all parties involved are going to do the best lawyering they can to make their case, including when making the case utilizes incorrect reasoning.
Re: The Union Gravy Train
Posted: Sun Nov 25, 2012 7:17 am
by _cinepro
EAllusion wrote:Those pay raises in that industry are considered automatic with their normally negotiated contract. By giving them up, they've have conceded that amount of money. Your example doesn't hold because they aren't conceding some pretend amount of money they were never going to get anyway. They are conceding something they would normally bargain for and get in a way that will cause some financial pain. It's perfectly fine to call that a savings. My company has held salary increases for managers at bay for 3 years. We call that an efficiency, which is corporate-speak for a cost-savings.
That's all well and good, but I strongly suspect the wording is chosen to make people think there has been some sort of actual cutting (of salaries or the number of workers, or both), when in fact that isn't the case. I don't care if a future raise was carved in stone and sealed with blood, foregoing such a raise isn't a "cut". I suspect if unions and politicians keep playing semantic games, it will only increase antipathy from the general public and hasten their demise.
And the example does hold, because, as the unions are apparently finding out, their expected salary increases
were a pretend amount of money that they were never going to get anyway. They just didn't know it at the time.