SB5 Exposes Fundamental Problems

The Ohio Senate chamber has been packed for multiple days by people wishing to express their opposition to Senate Bill 5 that was proposed by Senator Shannon Jones. The bill could effectively dismantle collective bargaining and binding arbitration for public employees via their unions. I am even personally aware that Governor Kasich and Senator Jones have been advised and are considering private security due to the threats their positions may possibly bring.

Many of my friends and family have expressed their vehement stand against SB5 by attending rallies at the State House or by commenting on social networks like Facebook. Some of these are traditional conservatives who would not typically be involved, but they believe their livelihoods could suffer. The common thread among them is that it must be stopped so public employees can have a reliable future.

Well, I'm not writing this to argue the merits or downfalls of unions, but it has caused me to take a serious look at what is really occurring here. If we cut through all the talking points, it's about protecting their own interest. I do not fault anyone for planning their material existence and future through career choice, wages or retirement, but we must start looking at hard cold realties.

Municiple, State and Federal governments are broke. They spend more than they take in and have grown more than the private sector can support. These facts cannot be disputed. I don't care what someone's political ideologies are at this point; we must make cuts in terms of spending and scope of services. Cuts must be across the board and go from the bottom to the top and some programs may even warrant complete termination. Simple budget cuts however, are not going to solve long term problems. It's time to fundamentally analyze the role of government and what we expect from it.

Whether we chose to admit it or not, we all have become overly dependent on government in many areas. The list is long and includes basic services, entitlements, and education. There is a fine line to walk in regards to balancing the role between what is most needed and what is not, yet the conversation must begin to make some of these sustainable. Something they have not been to date.

My public sector and unionized friends must try to understand, my frustration is not with them or the services they provide but rather how our government and we as taxpayers unconditionally fund them. We all must understand that the largest expenditures are typically in entitlements (primarily Medicare) and retired worker packages.

Since we are focusing on SB5, the purpose of every contract negotiation centers around money. That is wages, salary, benefits, pensions and retirement. Work conditions and productivity expectations are also included but this correlates to money too from a managerial standpoint. If the State is to get a handle on some of its largest expenditures, then it is certainly understandable why we must address costs that are unsustainable.

No matter how rediculous, some would have us believe that this is being driven by a petty dislike of public workers or unions. Let's be serious! The sponsors of SB5 and those who support it are not trying to shaft public workers. In fact, most appreciate the fine services provided by Police Officers, Firemen, and Teachers. We simply cannot accept the continuation of digging a hole of debt for promises that should never have been made from the beginning.

If we examine retirement packages, "30 and out" is attractive but how fiscally realistic is it? With life expectancies into the 80 range, that calculates to 30 years worked and 30 additional years of legacy costs. Adjusted for inflation, that means a worker earns about 60 years worth of wages and benefits in 30 years. That sheds a little light into the mantra overworked and underpaid. Workers must see the big picture. We earn a salary; it typically has periodic increases (at least over 30 years), factor in cost for vacation and paid time off, we receive benefits like health, vision, dental, possible life insurance and disability coverage, and employer provided retirement contributions. At retirement, even with wage adjustments of 90, 80 or 70% of salary, other benefits cost continue to rise and that can make 30 years of retirement benefits cost as much if not more than the 30 years worked.

In January of 2009, a "Troutspout" post proposed that public employees pay more into their benefits packages more in line with private sector trends. This is one of the key provisions that SB5 proposes. It could save far more money than laying off workers. Government administrations however, are attracted to the threat-like tactics of reducing essential services in order to increase revenues through higher taxes or by receiving federal funds which in turn solves nothing.

Public employee costs are only one of many areas that need addressed. It is however a large piece of the pie and justifies examination and possbile cuts. This will understandably be tough and painful for those that it affects (which will be all of us), but isn't that what the private sector has been dealing with for the last few years? No one is immune from bad practice and policy.