Remember AB 340, the pension reform successfully pushed by Democratic Governor Brown, that even Governor Brown acknowledges is only a first step towards making public employee pensions financially sustainable?
Well even AB 340 goes too far according to Obama’s new Secretary of Labor, Thomas Perez. As Dan Borenstein of the Contra Costa Times reports on August 16th, “unless California lawmakers exempt transit workers from the pension changes, the feds could cut off up to $4.3 billion of transportation funding, according to an estimate by the California Transit Association. That includes $174 million for BART, $225 million for Santa Clara Valley Transportation Authority and $12 million for AC Transit.”
The immediate negative economic impact of this is huge: Bill McMorris, reporting for the Washington Free Beacon on August 16th, writes “The federal government has withheld more than $500 million in funding to local California transportation agencies since January and could withhold $1.6 billion for the year as the result of a complaint filed by transit union members, losses that could cost the state tens of thousands of jobs.”
As we reported in our editorial of July 9th, BART workers aren’t exactly being exploited: Their average total cost of employment – pay plus employer paid benefits – averages $116,306 per year. They get 13 paid holidays and veteran workers get six weeks vacation per year. Their sick time, holidays and vacation accrue without limit and can be cashed out when they retire. They can even apply the unused time to stretch their years of service, increasing their pensions. And BART employees personally contribute nothing to their pensions.
Here’s a comment that appeared below the July 9th editorial that exemplifies how corrupt much of BART’s unionized workplace culture has become:
“I have a friend who just started working for BART as a train-car maintenance person. He was telling me that everyone in his shop gets 1 paid sick day per month, so they have a scam going where they use this sick day to get thousands of dollars in overtime each year. Once a month, they decide which day to start and everyone knows what is going to happen in advance. As an example, there might be 5 mechanics scheduled for the morning shift, so they have one person call in sick. This forces one of the people who just finished the previous night shift to stay on another 8 hour shift and make double time pay. Then another worker who is scheduled for the evening shift calls in sick and one of the 5 day workers stays on into the evening and gets double time. Then one of the night shift guys calls in sick and whoever hasn’t worked double time yet stays on… this goes on through the week and everyone uses their sick day (paid sick day) and these guys end up making 30 to 40% over their base pay in overtime!”
Similar games to turn sick time into overtime occur throughout California’s unionized public sector, but that’s another story.
BART workers, few of whom are paying off six-figure loans for higher education, are currently makingtwice what the average worker in California earns in pay and benefits, and they’re getting paid time off benefits that exceed virtually anything offered, anywhere in the private sector. The pension reforms introduced by Gov. Brown via AB 340 are tepid, timid steps forward that can barely be seen to even inconvenience current workers. Yet AB 340 is what is being aggressively opposed by the federal government.
The power of public sector unions pits Democrats against each other, because the impact of public sector unions is bankrupting our state and local government agencies, including BART. Whenever there is a surplus, the unions take everything off the table. No new investment. No new services. No new infrastructure. Just more pay and benefits for government workers. Democrats are waking up, and a schism is developing between the ideologues and the pragmatists.
What Republicans and Democrats might recognize together is the fact that unions – especially public sector unions – are monopolies, just like corporations and banks. They are anti-competitive, exclusionary special interests whose agenda is often not aligned with the public interest. And by breaking up monopolies – all of them – and reintroducing competition, you lower the cost of living. This should be the policy priorities of a bipartisan coalition, because lowering the cost of living benefits everyone, whereas preserving excessive and financially unsustainable pay and benefit packages for unionized public sector workers hurts far more people than it helps.