Debt Crisis Looms For Big Labor-Ruled States

Union Dons Push For Even More Spending Amid COVID-19 Recession

State and local pension plans suffered a steep downturn this spring due to the impact of the COVID-19 pandemic and the business lockdowns imposed by elected officials to contain its spread.

Of course, government pension underfunding is not a new problem.

In fact, a report issued by the American Legislative Exchange Council (ALEC) in June shows that, in FY 2018, long before anyone had ever heard of COVID-19, “unfunded pension liabilities totaled nearly $5 trillion nationwide.” 

The latest ALEC report on unfunded pension liabilities also adds to the mountain of evidence that union officials endowed with monopoly privileges routinely wield them to jack up governments’ long-term spending commitments.

As a consequence of Big Labor’s back-room deals and lobbying blitzes, states that give more special privileges to union officials routinely burden their citizens with more debt as well as heavier taxation.

National Right to Work Committee Vice President Mary King explained:

“According to ALEC’s current calculation, unfunded liabilities of state administered pensions add up to ‘$15,080 for every man, woman and child in the United States.’

“The 23 states that have yet to adopt Right to Work laws prohibiting forced union dues and fees have an average unfunded per capita pension liability of $19,028. In contrast, the 27 states with Right to Work laws in effect have a large, but more manageable per capita pension liability that is 40% lower.

“All of the seven states with the greatest per capita pension liability — Alaska, Illinois, Connecticut, Hawaii, Ohio, New Mexico, and New Jersey — foist forced union dues and fees on employees.” 

Laws Help Keep Politicians’ Irresponsibility From Getting Totally Out of Hand

Ms. King continued: “In contrast, all of the 10 states with the lowest per capita pension liability — Tennessee, Indiana, Wisconsin, Utah, Nebraska, Florida, Idaho, South Dakota, North Carolina and Texas — are Right to Work states.”

Expressed as a share of Gross State Product, the average unfunded pension liability for forced-dues states is 27.1%, compared to an average of 21.5% for Right to Work states.

It’s not difficult to see how Right to Work laws prevent politicians’ irresponsibility from getting completely out of hand.

In jurisdictions where forced union dues have been permitted and union monopoly bargaining in the public sector has been authorized for years, government employers negotiate exclusively with union bosses over civil servants’ pay, benefits, and work rules.

Meanwhile, for many years, government union chiefs funneled a large portion of the compulsory dues and fees they collected into efforts to influence the outcomes of state and local elections.

And those outcomes have often determined who represents the public at the bargaining table.

Union-Label Connecticut Governor ‘Doesn’t Want to Try Very Hard’ For Taxpayers

In 2018, the U.S. Supreme Court threw out a lifeline to fiscally troubled Big Labor stronghold states like Connecticut, Illinois, and New Jersey with its Janus decision.

Ruling in favor of independent-minded Illinois civil servant Mark Janus in a case argued and won on his behalf by Right to Work Staff Attorney William Messenger, the High Court found that extracting forced fees from public employees as a job condition violates the First Amendment.

“Janus was primarily a victory for individual rights,” said Ms. King.

“Its potential impact on state budgets is also vast. Janus is giving lawmakers in state after state an opportunity to reassert control over how public employees are compensated and protect taxpayers.

“But much remains to be done, as the recent experience of Big Labor-dominated Connecticut illustrates.

“On July 1, 5.5% raises for unionized state employees in Connecticut went into effect, at an additional cost of $350 million annually to taxpayers, even after many private-sector employees had just lost their incomes due to politicians’ response to COVID-19.

“As Manchester, Conn., opinion writer Chris Powell has pointed out, union-label Gov. Ned Lamont ‘doesn’t want to try very hard for taxpayers,’ because the monopoly-bargaining privileges government union bosses retain in his state make them a political powerhouse.

“Repeal of government-sector monopoly-bargaining statutes and passage of additional state laws protecting private-sector employees’ Right to Work are indispensable parts of public budget reform.”