Unions Can't Stop the Coming Tide of Pension Reform

Unions Can't Stop the Coming Tide of Pension Reform

Last night, while Scott Walker was expanding his 2010 margin of victory, voters in California signaled what may be the death knell for public sector unions and their platinum benefits packages. Voters in San Diego and San Jose overwhelmingly approved significant cuts to their city workers’ pension benefits. Its the start of a wave the unions will be unable to stop. 

From The Associated Press:

SAN DIEGO (AP) — Voters in two major California cities overwhelmingly approved cuts to retirement benefits for city workers in what supporters said was a mandate that may lead to similar ballot initiatives in other states and cities that are struggling with mounting pension obligations.

The measures were especially significant, because they covered current workers, not just new hires. San Diego approved its measure with 66% of the vote. In the more liberal San Jose, the measure won 70%. 

It isn’t hard to understand the voters’ frustration with the unions. In recent years, the pension costs in both cities have skyrocketed; San Diego now spends 20% of its general budget on pension costs. In San Jose, the figure is almost 30%. This has forced both cities to dramatically cut back city services and lay off workers. In San Diego, fire stations had to share engines and trucks. The generous benefit packages unions have won from politicians are simply unsustainable. Even voters in California have had enough. 

Make no mistake; mayors and governors across the country were closely watching last night’s results. Cities and states nationwide are struggling with the soaring costs of union benefits. They are increasingly difficult to defend when private sector workers have to adapt to reduced benefits and increased job insecurity. 

And, reforming public sector pensions works. Wisconsin has already saved $1 Billion without cuts to services, lay-offs, or tax hikes. Cities and states around the country could save tens of billions of dollars with similar reforms. 

The unions know this, which is why they poured so much money into these fights. Every responsible elected official knowns pension obligations have to be tackled if they are to get their fiscal houses in order. Unions needed to show that the political risks in doing so would be too great. Their failure was catastrophic. 

Not only were the politicians championing these reforms not punishe; they thrived. Walker got more votes than he received in 2010. Carl DeMaio, chief proponent of the reforms in San Diego, is the leading frontrunner to win the Mayor’s office. In San Jose, its measure was championed by Mayor Chuck Reed, a Democrat. 

A wave for reforming public unions is building nationwide. There is nothing the unions can do to stop it.