Showers of gold

I belong to a faculty union, now in it's third year of contract negotiations (for a contract which lasts four years).  The sticking point, unsurprisingly, is not money.  No one expects any of that–no one other than the administration, the top rung of which has been lavished with raises equal in some cases to my entire full time Assistant Professor salary.  No one is complaining; their punishment is that they get to be administrators.  The sticking point is workload. 

But that's not really want I wanted to talk about.  I'd like to talk about promises.  David Leonhardt, writing in the New York Times, writes:

To be clear, I’m making an argument that’s different from “Government workers are overpaid.” I’m saying that they are paid in the wrong ways — in ways that make life easier on union leaders and elected officials, at least initially, but that eventually hurt both workers and taxpayers.

The best example is health insurance. Health plans for union workers and retirees are much more likely to require little or no co-payment, which leads to lots of medical treatments that don’t make people any healthier, and to huge costs. Ultimately, some of these plans will probably prove so expensive as to be unsustainable. Workers would have been better off accepting a less generous benefit package and slightly higher salaries.

 Got that.  He's not saying they're overpaid.  He's saying they're overpaid.

On a different point.  Workers negotiated those plans on purpose.  They accept lower salary in favor of better health and retirement benefits, because they understand that this is part of their compensation.  The responsibility for making these deals sustainable belongs not to them, but to the people with whom they negotiated.  If it doesn't, then Leonhardt has justified negotiation in bad faith, and has placed the blame on failing to follow through on promises with the promise breaker. 

In the moral universe, promises such as those outlined in contracts entail moral obligations to uphold them–however "unsustainable" they may be.  If they turn out, in this case, to be unsustainable, the fault lies with the promiser. 

**In other news.  Corporations have no personal right to privacy:

“Two words together may assume a more particular meaning than those words in isolation,” he wrote, adding that “personal privacy” suggests “a kind of privacy evocative of human concerns.”

The chief justice had examples here, too. “We understand a golden cup to be a cup made of or resembling gold,” he wrote. “A golden boy, on the other hand, is one who is charming, lucky and talented. A golden opportunity is one not to be missed.”

I wonder if Roberts noticed all of the clerks laughing.

12 thoughts on “Showers of gold”

  1. Ahhh….The title of this piece now makes sense. You are the new Subtle Doctor.

  2. It could be argued that the elected officials were irresponsible for negotiating contracts of that nature. Generous retirement benefits tend hide the true cost of the employees, or at least postpone the problem of paying for them until later. By paying them more upfront, you may avoid the problem of having a amount that you can't pay in the future. Think credit cards. But paying as you go is a less attractive option for most elected officials. By negotiating contracts that postpone the cost of government employees until later, politicians negotiate contracts that not only placate the unions that contributed to getting them elected, but that allow them to momentarily obscure the true cost from the electorate. Yes, a promise is a promise, but this is a promise made with someone else's money. Not only that, but the contracts negotiated by politicians are often in payment to the unions that got them elected. Rather than the more adversarial relationship between private company management and employees, government contracts are often a form of nepotism that pay back the organizations that got them elected. I agree that morally you have to pay them everything that they are owed, but I also believe that the electorate would be better off demanding their elected officials pay higher salaries with lower retirement benefits. 

  3. "Health plans for union workers and retirees are much more likely to require little or no co-payment, which leads to lots of medical treatments that don’t make people any healthier, and to huge costs."
    1. We are to take that on faith? No source is provided in support of the claim.
    2. Why am I to believe that it's an occasional, extra office visit by some subset of workers with good health insurance plans that's driving up health care costs for these plans, as opposed to the management of chronic conditions, acute medical conditions including serious accidents, serious medical illnesses such as cancer, and for retirees, end-of-life care?
    3. Assuming that a worker with good insurance is in fact more likely to see a doctor when faced with a $5 copay as opposed to, say, $20-$25 (is there a magic dollar figure or percentage copay we should have in mind here),
    4. Again, assuming that workers with good insurance get more treatment, why are we assuming that the net effect is to drive costs up instead of down? Some subset of these workers will be diagnosed earlier with serious or chronic health issues, which should reduce the cost of care. And if the response is, "It drives up long-term costs because they live longer due to the early diagnosis and treatment", what can I say….
    5. How many people are in fact attracted to these jobs by virtue of the benefits package, as opposed to being attracted to the policy and coming to love the benefits when they, their spouse or their child, a colleague, or a member of a colleague's family becomes seriously ill?
    6. Which health insurance plans does the author see as sustainable? Is the growth in the cost of the plans under discussion significantly greater than, say, those with 20% copays and $2,500 deductibles?
    "Not only that, but the contracts negotiated by politicians are often in payment to the unions that got them elected."
    Says… you? Seriously, I get that right-wing talking point. But where's your evidence? Is it the conduct of recently elected Governor Scott Walker, or would he be held out as "the exception who proves the rule"?



    Aaron, to be clear, I was mostly thinking of pensions. I don't know whether there are costs to be saved in terms of health care. But your point about co-pays is answered with simple economics. If you put "Quantity" on the X-axis, "Price" on the Y-axis, and draw a downward slanting line, you have your demand relationship. Besides, I've seen first-hand how even small co-pays discourage people from making more regular visits. It's a way of rationing what would otherwise a unlimited. As far as your other point about preemptive care, I would just say that it's a complicated topic. Certainly, some amount is saved by preemptive care, but saying definitively how much is obviously not easy. It's possible that even a slight co-pay is enough to discourage hypochondriacs but not enough to scare away people with serious problems. Bottom line, I have no clue whether there is money to be saved there, but I am certain that it's a complex question either way. 
    As far as your point about unions, it just seems obvious that unions help get politicians elected. Obviously, union support plays a role in getting politicians elected. Unions can make or break a candidate in certain constituencies and especially in the primaries. This doesn't mean that every politician is elected by unions. Obviously, in the case of Walker, he wasn't. It just means that they can have an enormous influence. Just a observation: I think it's interesting to note that most of the big budget problems are in blue states with higher union influence. My point is little different than what I would point out about the relationship between Republicans and Big agriculture or oil. 


  5. According to the Bureau of Labor Statistics, unions represented 11.9 percent of the workforce in 2010.  Enormous influence. 

  6. From this 11.9% (which isn't equally distributed btw), unions collect union dues, make campaign contributions, endorse candidates, organize protests, and tell their members who to vote for. This obviously can have an enormous influence in an election. Not to mention, Wisconsin is a good example of how hard it is to go up against a union. 

  7. The issue of faction is hardly a new one – our system of government was constructed with faction in mind. See Federalist #10,
    "By a faction, I understand a number of citizens, whether amounting to a majority or a minority of the whole, who are united and actuated by some common impulse of passion, or of interest, adversed to the rights of other citizens, or to the permanent and aggregate interests of the community.
    There are two methods of curing the mischiefs of faction: the one, by removing its causes; the other, by controlling its effects.
    There are again two methods of removing the causes of faction: the one, by destroying the liberty which is essential to its existence; the other, by giving to every citizen the same opinions, the same passions, and the same interests.
    It could never be more truly said than of the first remedy, that it was worse than the disease. Liberty is to faction what air is to fire, an aliment without which it instantly expires. But it could not be less folly to abolish liberty, which is essential to political life, because it nourishes faction, than it would be to wish the annihilation of air, which is essential to animal life, because it imparts to fire its destructive agency.
    The second expedient is as impracticable as the first would be unwise. As long as the reason of man continues fallible, and he is at liberty to exercise it, different opinions will be formed. As long as the connection subsists between his reason and his self-love, his opinions and his passions will have a reciprocal influence on each other; and the former will be objects to which the latter will attach themselves. The diversity in the faculties of men, from which the rights of property originate, is not less an insuperable obstacle to a uniformity of interests. The protection of these faculties is the first object of government. From the protection of different and unequal faculties of acquiring property, the possession of different degrees and kinds of property immediately results; and from the influence of these on the sentiments and views of the respective proprietors, ensues a division of the society into different interests and parties."
    The people who get bent out of shape over union contributions to politicians do not seem to be bent out of shape about Citizens United, corporate contributions to politicians and parties, or the contributions made by powerful trade groups. When you look at actual legislation and government policy, you can see which groups have the greatest political clout. We're at the tail end of a period of decades in which laws, court rulings and policies have eroded the rights and power of organized labor, and the membership base from which they can draw support.

  8. How is Wisconsin "a good example of how hard it is to go up against a union" – as with Indiana, it's quite the opposite. The only reason that the unions haven't been steamrolled is that the Senate Democrats are exploiting a technical rule in order to avoid a quorum.

  9. I'm having some trouble with the claim that unions are basically financing the Democratic party through tax-payer dollars, and are therefore somehow subverting the democratic process. Unions  would support the Republican party if the Republicans cared about the rights of workers (they do not). The Democrats just so happen to promote policies that protect the rights of workers, such as by maintaining benefits packages and retirement money that many folks feel are just. 
    Furthermore, the claim that benefits offered to workers are too generous and economically unsustainable is absurd. The U.S. has money. It is being spent on things it should not. Cutting the defense budget in half should provide ample money. Creating a single-payer health care system should also significantly decrease government expenditures. Increasing the tax on capital gains, etc. 
    TLDR: pay the workers, cut spending on the military, and raise taxes on earnings from the financial sector.

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