Nor would the public tolerate continued union resistance to efforts to improve the quality and efficiency of government services. Through tax caps, outsourcing and charter schools, governments were already finding ways to circumvent public employees unions and limit their political power. Unless the unions moved quickly to strike a new “grand bargain” with government officials and taxpayers, Bluestone wrote, they would soon face an even more painful “day of reckoning.”
Barry Bluestone is not just any economist. He is the son of Irving Bluestone, a legendary UAW negotiator, a reliably liberal, union-friendly scholar who has spent a career studying the declining fortunes of the American working and middle class. And since his op-ed, things have only gone from bad to worse in terms of the financial distress now faced by all levels of government. The “day of reckoning” that Bluestone forewarned has now arrived.
A recession-weary public is now well aware of New York firefighters who retire after 20 years at half pay, of California prison guards who rake in $120,000 a year and of New Jersey teachers who pay little or nothing for health insurance. A parade of actuaries and economists has stepped forward with estimates of unfunded retiree obligations for state and local governments that now top $1 trillion.
Reflecting the frustration with the lack of progress on school reform, no less a liberal than Davis Guggenheim, director of Al Gore’s “An Inconvenient Truth,” is now out with “Waiting for ‘Superman,’ ” a scathing critique of teachers unions. Rahm Emanuel, running for mayor of Chicago, has vowed to cut pension benefits not just for future city workers but current ones as well. And in solidly Democratic New Jersey, Republican governor Chris Christie has become something of a folk hero for taking on his state’s once-formidable public employees unions.
All the while, public employees unions and their leaders remain in a defensive crouch, refusing to accept any responsibility for looming service cuts and tax increases. Many are launching last-ditch political efforts to hold on to what they still have, but so far their appeals to working-class solidarity have largely fallen on deaf ears.
The better approach for public sector unions would be to acknowledge that the status quo is unsustainable and take up Bluestone’s suggestion of a new “grand bargain.”
Such a bargain inevitably begins with a freeze on current wages in exchange for future increases when the economy improves. Going forward, unions might propose tying overall compensation to the rhythms of the business cycle, making up in good times what is lost in bad.