In Search of a Legitimate Labor Movement

UnionSarah has worked for a major grocery store chain for the past 25 years. Adjusting for inflation, she makes less now than she did over a decade ago, especially since her hours were cut in order for her employer to avoid being required to offer her health insurance. Even more difficult, she is “on call” most of the week, without a reliable schedule, which makes it impossible for her to take on a 2nd part time job to help make ends meet. Including benefits, Sarah is lucky to make $30,000 per year. Now in her early 50s, she will need to work for as long as there is strength left in her body to do the job.

George works for a fire department serving an affluent suburb on the California coast. Taking into account the vacation time he earns as a 25 year veteran, he works less than two 24 hour shifts per week before qualifying for overtime. Since five-day weekends are overkill, he often works one or two extra shifts a week, doubling his pay. When he goes on calls, 98 percent of the time they are medical emergencies, not fires. Including moderate amounts of overtime and the employer’s payments for his benefits, George makes about $250,000 per year. Now in his early 50s, he will retire in a year or two and collect a pension and health benefits package worth well over $100,000 per year.

Both of these individuals are hard working, honest and conscientious. Both of them perform jobs that have a vital role to play in our society. Both of them deserve to be treated with dignity and respect. Neither of them wrote the rules. And both of them are represented by unions.

While these individuals and the work they do is beyond reproach, the unions that represent them leave much to be desired. In Sarah’s case, typical of tens of millions of private sector workers, the unions who represent her have ignored economic reality in pursuit of ideological fantasies. Almost universally, to cite a particularly wounding example, these private sector unions have supported immigration policies that increase the supply of semi-skilled workers who compete with Sarah for work hours. Also common are the pragmatic alliances these unions form with extreme environmentalist organizations who have bottled up development of land and energy, driving the cost of living beyond the reach of an ordinary worker. One may cogitate endlessly over what constitutes optimal and humane policies with respect to immigration and the environment. But to agitate for higher wages and benefits in a society awash in cheap labor and artificially inflated costs for basic necessities is a fool’s errand.

In George’s case, which is equally typical, at least in California, the unions that represent him should not even be permitted to exist. Associations of government workers who engage in collective bargaining are not unions in any traditional sense of the word. They elect their own bosses, they take money from taxpayers instead of competing for consumer spending, and they operate the machinery of government which lets them intimidate or co-opt any special interest that might oppose them. They have priced normal government services beyond the capacity of ordinary taxpayers, and bred cynicism about government into the heart of any financially literate American. And government unions have even less interest than private unions in acknowledging the complexity of issues such as immigration or environmentalist overreach. In both cases, policies that harm the aspirations of private workers have the opposite effect on them, enhancing their job security.

A legitimate labor movement is easy to justify in the abstract. If not unions, what sort of movement will speak for ordinary workers in an era when jobs are being relentlessly automated, global competition is tougher than ever, and the cost of living is punitive? What sort of movement can speak for ordinary workers if, along with these challenges, the nation is gripped by a deep recession brought on because interest rates can’t go any lower and stimulative debt can’t go any higher?

The reality today is that much of America’s labor movement has gone astray. Private sector unions often put ideological goals ahead of the economic interests of their members. And public sector unions, which are not unions in any traditional sense of the word, and which represent the economic interests of their members all too well, are an abomination. They have corrupted our democracy, they are a corrupting influence on government workers because they have exempted them from the economic challenges facing private American workers, they are driving our governments at all levels towards authoritarianism, they are bankrupting our cities and counties and states, and the pension funds they control epitomize the most corrupt elements of America’s grotesquely overbuilt financial sector. Maybe what would remain after abolition, still very powerful voluntary associations, could start fighting for CEQA reform, for example, to benefit all workers instead of just themselves. Before unions infested our governments, that’s what public service meant.

Envisioning exactly how the labor movement might best operate in the interests of the American worker is difficult but necessary. It requires balancing libertarian and mixed-capitalist economic world views. But two reforms would be a very good start. First, outlaw collective bargaining in the public sector. Second, the leaders of the private sector labor movement need to starting caring more about American workers, and less about their elitist ideological fantasies.

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Ed Ring is the executive director of the California Policy Center.

How California’s State and Local Governments Can Save $50 Billion Per Year

Photo Courtesy of 401(K) 2013, Flickr

Photo Courtesy of 401(K) 2013, Flickr

Back in the early 2000s, in the aftermath of the internet bubble’s collapse, California’s state and local governments endured a period of austerity that resulted in “furloughs,” where, typically, employees would take Fridays off in exchange for a 20 percent cut in their pay. That is, they worked 20 percent less, and made 20 percent less in pay – but their rate of pay was not cut.

This display of “sacrifice” was an eye opener for private sector workers, especially salaried employees of small businesses, who endured cuts to their rates of pay at the same time as their hours of work increased. Most people in the private sector back in the early 2000s felt lucky to have a job, even if it meant working harder and making less.

There’s a lesson to be learned from the period of state and local government “furloughs” in California: California’s government functioned just fine with 20 percent fewer hours spent at the job, overall, and California’s government workers got by, overall, making 20 percent less money. So since we know these cuts are feasible, it is interesting to estimate just how much money Californians would save, if there were a 20 percent reduction to California’s state and local government workforce, and then there were a 20 percent reduction to the pay and benefits collected by those state and local government workers who remained employed.

Getting information on just how much California’s state and local workers make is notoriously difficult. California’s state controller’s Public Pay database collects the data, but presents “averages” that include part-time employees in the denominator, and do not consolidate the data. Transparent California, a public information project jointly produced by the California Policy Center and the Nevada Policy Research Institute, provides very good information on individual pay and benefits, but also does not consolidate the information.

A California Policy Center study, “How Much Do California’s State, City and County Workers Really Make?” uses 2012 raw data from the state controller that screens out part-time workers to develop averages for city, county and state workers.

California’s State and Local Government Employees
Average Compensation by Entity – 2012

20140131_CA-Gov-Pay_Table2-b

A recent UnionWatch analysis of Los Angeles Unified School District provided a baseline estimate for total teacher compensation – although in variance to the table, please note the same analysis adds an estimated value of $4,033 per teacher to take into account the state’s direct contribution to CalSTRS. As a representative example of total teacher pay, LAUSD is pretty good; the California Dept. of Education reports the Statewide Average Teacher base salary averaged $69,324 during 2014, nearly identical to the LAUSD analysis.

Los Angeles Unified School District
Average Compensation by Job Class – 2013

20150303-UW_Ring-LAUSD-Actual

Armed with this information, and cross-referencing with the U.S. Census Bureau’s estimate of current numbers of full time state and local government employees in California (ref. Government Employment & Payroll, and select “state” and “local,” in each case selecting “California”), we can make a reasonable estimate of how much our full time state/local workforce is currently costing taxpayers. We can also estimate how much a 20 percent reduction in workforce combined with a 20 percent reduction in total compensation would save taxpayers each year:

California State and Local Government Employees, Est. Total Cost per Year
Projected Annual Savings via 20% Reduction to Headcount and to Compensation

20150512-UW_20percent-solution

While this thought exercise may seem to be an exercise in futility, the fact is, we’ve tried it once already, and it worked. That is, during the furloughs of the early 2000s, California’s state and local government workers got by just fine with a 20 percent reduction in pay, and California’s state and local government services functioned adequately even though 20 percent of the workforce was absent (i.e., they were all taking Friday’s off).

It is fair to ask why the focus must always be on austerity. Why not pay everyone more in the private sector? That’s a good question and the answer is simple: It’s impossible. The average total compensation in California’s private sector is roughly half what public employees make. There isn’t enough money in the world to pay everyone this much money, and it is grossly unfair to taxpayers and private workers to treat public sector workers as a privileged class, exempt from the economic challenges facing everyone else.

The problem is even deeper than just one of inequity and insolvency. The problem with creating a privileged class of government workers is that they no longer make common cause with the people they serve. This consequence should trouble social liberals at least as much as it troubles fiscal conservatives, because the most powerful bloc of voters in California, unionized, politically active government workers, are putting their personal financial interests ahead of other worthy government projects. Imagine what $52.7 billion could buy.

The solution is to combine cutbacks in government employee compensation with investments in infrastructure and reductions in regulatory hurdles in order to reduce prices for goods and services. Government created artificial scarcity has raised the price of housing, energy, water and transportation to levels that only the elite can easily afford. If government workers were compelled to make common cause with other workers, instead of this elite, maybe they would finally support reforms to lower the cost of living.

Ed Ring is the executive director of the California Policy Center.

Pain-Pill Abuse Can Be Curbed Through Private-Sector Innovation

Picking the proper medication for our patients is a delicate nuance that is part of the art of medicine.  Cook book medicine does not often make a very good cake. Of late, government regulations have made it more difficult to find the right recipe for our patients particularly when they need pain relief.

Pain is a common problem.  Pain may be chronic or acute and may take on a life of its own particularly if it is not managed properly   I have seen patients with the kind of pain that makes living a normal life nearly, if not completely, impossible. Simple daily functions that most of us take for granted, such as walking or sleeping, can become insurmountable tasks.  Many of these patients unquestionably require the use of pain medication.  For them it is not a choice, it is a necessity.

Opioid pain relievers are almost never a first choice. The side effects are overwhelming particularly for the elderly. But, they can literally be lifesaving for these patients.  Unfortunately, the opioid abuse is a billion dollar industry and the government has decided to come in with an iron fist and impose regulations that neither curb the abuse or establish a means of reasonable accessibility for those who need the medication.

More than 60 people die every day in the United States from prescription drug overdoses.  6.5 million people abused prescription drugs in 2013, more than double that of heroin, cocaine and hallucinogens, combined.

According to a 2010-2011 government survey almost 1.5 million Californians, ages 12 and over, were estimated to have abused painkillers in the previous year. Seven percent of adolescents ages 12 to 17 in California used pain relievers for nonmedical reasons in the previous year, according to 2009-2010 figures.

Taxpayers are left on the hook for increased medical and policing costs, and abuse can also wreak economic devastation by reducing productivity.  Misuse and abuse of opioids is estimated to cost the U.S. $56 billion annually.

The opportunity to find a better means of administering opiods opened the door to the American entrepreneurial spirit and private industry has answers. By utilizing “abuse deterrent formulations” for opioid painkillers, we can significantly reduce the abuse of these drugs.

Breakthrough abuse deterrent formulations provide patients with the same pain relief as conventional opioid medications, but protect against abuse by making crushing, cutting and dissolving for injection extremely difficult and blocking the euphoric effect of the pills when manipulated.

While there are many contentious issues among those in the healthcare field, the facts in this situation are clear: pain management is a necessity for millions of people and non-medical use of these drugs is a medical, ethical and public safety problem that must be addressed.

The Food and Drug Administration considers the development of abuse deterrent formulations a high public health priority, and those of us in the medical community, along with policymakers in the Capitol, should as well.

Research on the relatively new abuse deterrent formulation of OxyContin, the first opioid approved by the FDA to make abuse deterrent claims, found that inhalation and injection abuse dropped from 70 percent to 40 percent, and poison control center calls declined by 32 percent.

It is estimated that utilizing abuse deterrent formulas can save hundreds of millions of dollars in medical and criminal justice costs.   These are dollars that would be far better spent elsewhere, as we struggle to rebound from the worst economic downturn most of us have ever seen.

Abuse deterrent formulations have received widespread support as part of a comprehensive effort to combat prescription drug abuse and promote appropriate pain management, including from the Office of National Drug Control Policy, the Community Anti-Drug Coalitions of America, members of Congress and the National Association of Attorneys General.

The California Medical Association approved a resolution in December 2014, supporting the FDA’s ongoing efforts to evaluate and label abuse deterrent technology and opposing the imposition of administrative deterrents that decrease access to and coverage of prescription drugs with abuse deterrent properties.

Our regulators need to open the doors for these new formulations rather than developing regulations that only hurt those patients who legitimately need these meds.  It is time that healthcare professionals, patient advocates, stakeholders and policymakers move forward to improve access to this new technology.  I welcome this rare opportunity where private industry can work productively with government to help America’s patient find a productive pain-free day.

Marcy Zwelling, MD, is Vice Chair, American College of Private Physicians