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Friday, April 02, 2010 12:01 PM


LA Deputy Chief of Staff Says "Unions Have Priced Themselves Out Of A Job"


The Los Angeles city council is finally starting to get the message about union waste and extravagance. Unsurprisingly, the union termites have not yet gotten the message. Please consider the Wall Street Journal article Cash-Poor Cities Take On Unions.

Mayor Antonio Villaraigosa once organized for a teacher's union here, and later ran a branch of the American Federation of Government Employees. That makes him an unlikely advocate for cutting the benefits of the city's workers.

But with the city facing a budget deficit that could drain its reserves by summer, Mayor Villaraigosa wants to re-open contract talks with 45,000 cops, firefighters, librarians and other city employees in hopes of persuading them to contribute more to their pensions and health-care costs. His deputy chief of staff, Matt Szabo, puts it bluntly: "Unions have priced themselves out of a job."

In Memphis, the city's health-care committee recently recommended raising current and retired employees' health-insurance premiums by as much as 15%. And Toledo's city council last week wrung $3.1 million in concessions from its firefighters' union as part of a measure to close its budget gap.

In New Jersey, outrage over state deficits helped Republican Chris Christie defeat incumbent Democrat Jon Corzine last November. A few weeks after Mr. Christie's victory, a Quinnipiac University poll found that three-fourths of state voters supported a wage freeze for state workers, and 61% favored layoffs. Last month, Gov. Christie signed a set of bills that would, among other things, cut pension benefits for future employees.

Andrew Koenig, a Republican state representative in Missouri is sponsoring a bill in his state that, over the next several decades, would shift away from a defined-benefit plan, where an employer puts as much money into a pension fund as needed to cover future retirement benefits. It would be replaced with a 401(k)-type of plan (similar to those now in place at many private-sector employers) where workers absorb the market's ups and downs.

In Redding, Calif., the mayor and city council are asking city workers to contribute 7% to 9% of their salaries to their pension funds; currently the city picks up that tab. Patrick Jones, who runs his family's gun shop in addition to serving as part-time mayor, says if the council doesn't win concessions it might use a November ballot initiative to ask voters to demand that the city negotiate benefit cuts. That move, he said, would give the city leverage in any union negotiations. "We're just trying to get as many tools as possible to quicken the time it takes" to get concessions, Mr. Jones says.
New Jersey Governor Chris Christie Leads The Way On Tackling Unions

March 18: Governor Christie Calls Unions "Crass Bullies of State Street"; Says Unions Have a Choice "Givebacks or Layoffs"
Every time I listen to New Jersey Governor Chris Christie I want to stand up and salute. Today is no different. Christie says "This is the Moment to Fix It"
March 17: Christie to cut N.J. school aid by $800M
Gov. Chris Christie's budget includes an across-the-board cut in state aid to school districts that will equal up to 5 percent of their budgets for the current fiscal year, a move the administration expects to be challenged in court, according to three state officials familiar with the plan.
March 11: Hardball In New Jersey, No Balls In Virginia; Brass Balls In Las Vegas
New Jersey Governor Chris Christie is doing what he was elected to do, govern. And that means playing hardball with union termites who refuse to give an inch to help the state out of budget problems primarily caused by untenable union promises, union wages, and union pensions.
March 2: Governor Christie: "Time to Hold Hands and Jump Off the Cliff" - Chris Christie For President?
In an amazingly candid appraisal of the sorry state of affairs in New Jersey, Governor Chris Christie laid it on the line in a speech to about 200 mayors at the New Jersey League of Municipalities.

The speech is 24 minutes long and well worth a listen because it is both an honest admission of the problem, and a refreshingly accurate appraisal of what the solutions are. He chastised the legislature, unions, municipalities, and affordable housing initiatives while promising to do something about all of those.
The mayor of LA is yapping, but the governor of New Jersey is doing. In case you missed it, please click on the link immediately above and play Christie's speech to the New Jersey League of Municipalities. It is one for the ages.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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