How Much of that Flat Hourly Fee Would Be Overtime?


International Brotherhood of Workers…

In the Orange County Register, Pacific Research Institute's Jason Clemens proposes putting government employees back on something like a contract basis. Urging Gov.-elect Jerry Brown to acknowledge that "employers, in this case, the state government, don't, or shouldn't, care about the composition of employee compensation," Clemens suggests bringing in public sector unions as administrators over a payment pool:

Our new governor should submit a proposal for completely overhauling the compensation system of all unionized state workers. Specifically, the state should, beginning in 2011, compensate all unionized employees with a flat hourly fee. The fee would include all sources of compensation (i.e. pay and benefits) and would be based on private-sector equivalents…

Have the state government remit the flat per-hour payment to the respective unions, which then would be charged with determining the preferences of their members, in terms of the mix of pay and benefits to come from the flat payment. If workers want to retain gold-plated pensions, for example, that's fine under this system, except that the cost of those pensions would result in less straight pay and other benefits.

The key under this approach is that the unions would be responsible for fitting the pay and benefits into a single envelope of compensation based on the flat hourly fee paid by the state.

In addition, the unions would be free either to contract out the management of their benefits (health and pensions) or provide them internally. The government would no longer be responsible for any shortfalls nor would it benefit from any surpluses. Instead, the union and its members would now be responsible for the proper management and funding of its health and pension benefits.

It's fair to say this is more in the realm of speculation than a practical proposal, so I hope it won't seem forward of me to point out some problems, starting with the claim that employers "don't, or shouldn't, care about the composition of employee compensation."

Private sector employers do take a very close interest in the composition of compensation. Since first arriving in these colonies under an indenture, I have been paid in part with: comparatively generous health insurance; gym, club and entertainment discounts; the opportunity to run a side business storing and putting out beach chairs for rich people; stock grants; stock options; employee stock option plans; a decent weed connection; a better 401(k) match; title inflation, and other lures. One prick even got a piece of work out of me in exchange for the opportunity to sell ads in his paper.

…gets its ass kicked by International Sisterhood of Workers.

I don't know whether these employers should have been offering all these shiny beads (rather than handing me a bag of dollars or pesos or Ayn Rand silver coins every two weeks). I just know that they did. They might have been better off doing the lump payment Clemens describes: I, like many people, only pay real attention to the dollar figure I sign for and regard all the rest as happy accidents. But there is a clear advantage to an employer in micromanaging compensation: You want to pay in the asset that costs you the least to give away.

To make the conversion Clemens suggests making, you'd also have to factor in the future value of pension payouts. The amount of up-front hourly pay would not be small. This is because the unions are better bargainers – at the contract table, in the legislature, and in the streets – than the government is.

Which gets to the real weakness in this proposal. It leaves intact the public sector unions. Unless I'm missing something, it gives the unions even more power over their workers than they have now – and makes it unlikely that a future Gov. Schwarzenegger would be able to exert pressure on union members to wring compromises out of the leadership.

As Larry Elder pointed out to me this morning, it was Franklin D. Roosevelt who recognized that the "very nature and purpose of government makes it impossible for administrative officials to represent fully or bind the employer in mutual discussions. The employer is the whole people who speak by means of laws." 

Public sector collective bargaining is a relatively new development in American history. It is not hallowed by time. Based on five decades of results, it has not been ratified by history. End it don't mend it is a perfectly respectable option.

I realize the probability that Jerry Brown will repeal his own collective bargaining law is even lower than the probability that he'll institute Clemens' proposal. But if you're going to build castles in the air, they should at least be cool-looking castles.  For example, teachers—who don't work in a particularly hazardous job—are exempted from the Social Security system. What's the argument for continuing that sweet ride? Given that these people are teaching civics and government to children, is it even appropriate that they never know the pain and humiliation of seeing a chunk of their own money eaten up forever by FICA?

The public pension crisis is a symptom of the disease. The disease is unionization of government employees.

NEXT: The Wikileaks Twist

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  1. Yeah, we wouldn’t want individuals working for the government to share information and coordinate their efforts in bargaining with the government because the poor angelic government will be taken advantage of.

    Somehow this is a “libertarian” position?


    1. No, the libertarian position is that all these people should be fired and the bullshit services they claim to provide should be eliminated. As noted, this is just a thought experiment dealing with the mess people like you have created.

      1. People like me? I’m not a government official or employee, never have been.

        Unlike Walter Williams who (horrors) works for a public university (double liberal!!!)!!!!

        1. No, you are mearly the biggest queer on the Internet attempting to be the Perez Hilton of H&R.

      2. I’ve got another thought experiment: Would you have voted for Obama if he were white?

        1. What do you mean if?

          1. Then I don’t have to replace the sign on my lawn jockey.

    2. So, you’re cool with monopolies that work hand-in-hand with government too, right? What’s that, labor-marketing co-ops are different?

      1. WTF are you talking about?

        1. “Sharing information and coordinating efforts in bargaining” is utterly indistinguishable from price fixing. Would you also be fine with government purchasing services from an industry where all players openly engaging in price fixing and negotiate their contract with the government through a singular “trust”?

          1. I believe in the anti-trust exemption for labor as combinations of individuals selling their labor worry me much less than combinations of capital. The former offsets an advantage in bargaining the latter compounds it.

            1. “I don’t have principles, just a side.”


      1. We can’t help it!

    4. Let them collectively bargain all they want. Doesn’t mean we have to hire them.

      1. It does if half your neighbors plus one think we should hire them.

  2. I guess we also should not allow corporations or business groups to negotiate government contracts because, you know, they are part of the people that the government represents (looking at you Walt Williams)!!!

    The horror, the horror.

    1. Sounds fine to me.

      1. So you are against privatization of many government services? Good to know!

        1. Since the only valid government services are justice and national defense, absolutely.

          1. So you want to steal money from me to fund a police force to protect you from robbers and rapists?


            1. you are a disingenuous tool.

              1. Yeah, I guess it is impolite to note how the “slaver” meme rests on a premise that could be turned against any minarchist. Since you never thought that, or questioned much the axioms that undergird the slogans of your ideology I guess it’s kind of an ego-defense for you to assume that I’m being “disingenuous” for pointing that out…

              2. Yet it’s a worthwhile point — saying you have a right not to be robbed or murdered is a negative right. Saying you have the right to use force to protect yourself against robbery and murder is a negative right. Saying you’re entitled to have other people expend part of their resources to protect you against robbery and murder is a positive right.

            2. i hope you have enough kleenex for all the jizz you spewed as a result of reading my comment

            3. National defense is to protect from foreign armies and agents, not your fellow citizens.

              1. tell that to the TSA.

    2. we also should not allow corporations or business groups to negotiate government contracts

      No, we shouldn’t. That’s part of the problem. Bids, fine. (And not the no-bid Halliburton contracts like the Obama administration gave away)

      Negotiations? What’s to negotiate, other than graft?

      Actually – negotiations are where all the slime comes from – pubsec unions, crony capitalists, etc.

      Of course, the negotiations have to be secret, right? Otherwise the taxpayer might be pissed.

    3. Multiple unions compete in open bidding for government contracts? I had no idea.

    1. Of course, it would be very easy to fund this bill, but Hobie Hanson wouldn’t dare cut any other government programs or bloated public sector pay in order to feed starving children.

      1. Yawn. If “you too!” is you’re best response, I don’t know why I bother posting here.

        1. Yeah, that well wasn’t already poisoned…

        2. Does anyone know?

    2. As if you and every other member of a freely associated group of dedicated “Starver Stoppers” couldn’t possibly raise enough money amongst yourselves to feed the starving children. It’s much easier to have the government steal the money, dilute it through bureaucracy, and feed some of the starving children whether they are actually starving or not.

    3. If you’re looking to call out Republicans, go somewhere where people give a fuck about republicans.

      1. Seconded! If you want to piss off Timmeh, you have to diss Obama, the man he voted for because of the color of his skin. Get with the program, troll!

        1. Dude, what are you, the libertarian Inquisition? Everyone knows that an individuals vote is not going to decide the Presidential election. Given that Tim could think that supporting a welcome historical change such as having a black man elected President was worth that vote without having to throw away his libertarian decoder ring. Grow up.

          1. Besides Obama was really really smart and cool and the over guy was gross.

            1. The other guy also joked and sang about bombing Iran and had long been hated by libertarians. War being the health of the state I guess one could forgive a libertarian for thinking that guy was the greater of the two evils…

              1. I’ve never heard Bob Barr sing about anything.

                1. I’ve never heard Bob Barr sing about anything.

                  Then you haven’t lived.

                  1. LOL! Thank you for that.

          2. Why is voting for someone based on the the color of his skin a laudable act?

            1. Maybe when your nation has a history of crapping on people with that color of skin?

              1. This board has a long history of crapping on trolls… does justice then demand we elect you our President?

              2. The ‘nation’ doesn’t have a history of crapping on anyone–it’s a place. Some people IN the nation crapped on black people. They’re called Democrats. You know, the people that wanted slavery, that founded the KKK, that passed Jim Crow laws? Those people.

                How brain damaged does a black man have to be to consider himself one of them?

                So, not only isn’t it laudable to vote for someone solely for their melanin content, it’s wrong to vote for someone so dangerously insane.

              3. It’s still PC to tell jokes about Polish people and stereotype the Irish. Maybe I should run.

                Besides, from a purely ancestral standpoint, Obama has more in common with the slavers than with the enslaved. So even on the extremely tenuous grounds of trying to compensate for the crime of slavery, voting for him fails.

                There’s a word that describes making decisions on based on the race of those involved. We see it around here a lot in jest…

      2. “Reason” has a loving article about Paul Ryan on the blog, just below the attack job on Fareed Zachariah about ending the tax cuts. To your credit you don’t have any posts supporting hunger for children, but your general attitude toward using government as a positive tool makes me think you stand with the Republicans on that too.


          1. SHUT UP EPISIARCH

        2. I fucking love it when children starve. Turns me on.

          1. They can choke on my rat-fucking monocle for all I care.

      3. Hey, now. All the various Johns post here too.


      1. Can’t…stop…

  3. I must of missed something. What’s with the vertical line through all the posts and comments?

    1. I saw that too until I hit refresh.
      or had 8 beers.
      or both.

    2. It’s part of Obamacare. Didn’t you see that on page 8,374 of the bill?

  4. The biggest flaw of this plan.

    Step 1. Unions accept pay plan only after fighting to get a raise out of the deal.
    Step 2. They don’t change a goddamned thing.
    Step 3. They immediately cut back on some services (garbage pickup is every other week now, school buses axed entirely) to dramatically inconvenience citizens, while leaving bullshit bureaucracy work un-axed.
    Step 4. Complain loudly that these “horrendous, job-killing budget cutbacks” are the reason why everybody’s trash is piling up etc. until the politicians/taxpayers capitulate.
    Step 5. The union agrees to go back to the old system, but only if they can get a raise all around. Partying continues into the early hours.

    1. I don’t think the union gets to decide on the services to be provided — that’s part of the contract. If they unilaterally renege in protest, that’s breach of contract, and financial penalties could result.

      Granted, enforcement would require that they carry assets that could be taken in compensation, since it’s not like a union has much capital. Could be done, though.

      1. Retirement funds = assets. You can bet that would encourage folks to abide by their contracts.

  5. I like the idea of paying the wages to the unions first as an intermediary. Don’t play their game; let them ay it themselves and force the unionized employees to recognize the logical result of the path they’ve chosen. Let them essentially work for the latter-day Twentieth Century Motor Company and see it for what it is.

  6. The proposal does have one good feature. If the rank and file accept it, shortfalls and mismanagement will highlight the corruption of the union leadership, because the rank and file would have no choice but to look to them for answers. That’s why the leadership wouldn’t go for it: they don’t want the limelight to shine on their sorry asses.

    1. Yeah, if you assume that the public sector unions are not going away (a safe assumption) then this could be a step in the right direction.

      1. Actually, you could look at it as taking all unionized public employees off the books and replacing them with contractors, because it’s functionally the same.

        I would be more concerned that the cops have a loyalty to their employer rather than the people under this scenario if that wasn’t already the case now.

        1. Eh. No sovereign immunity either.

      2. All California actually has to do is pass the following proposition:

        1. It is unlawful for any representative of the State of California or any subdivision thereof to enter into or renew any contract with any collective bargaining agent.

        2. It is unlawful for any representative of the State of California or any subdivision thereof to withhold or collect dues on behalf of any collective bargaining agent, or to require its workers be associated with any collective bargaining agent, except as specifically required by a valid contract.

        3. It is unlawful for any representative of the State of California or any subdivision thereof to allow representatives of or paid by any collective bargaining agent to involve themselves in any matter of hiring, firing, worker grievance, discipline, or similar matter, except as specifically required by a valid contract.

        Five years later, California has no public sector unions, at least of any significance, as the old contracts expire and no new ones take their place.

        The real problem is that nobody’s actually trying to pass such a proposition in California.

  7. I think this might be worth doing for the single reason that it removes back-loaded pension & health care costs from future taxpayers, and makes the state pony up the money in the year it was spent.

    So now instead of paying $30/hr for a meter reader, then having taxpayers that haven’t been born yet pay $60 in pension costs down the road, you have to pay the $50 right now (or negotiate better.) The best medicine for structural deficits is preventing politicians from taking on huge future liabilities with no up-front costs.

    1. Thanks for posting this. That’s exactly my position and you said it better than I would have.

  8. Since this is California, under this plan, would immunity to traffic fines and parking tickets be recognized as a perk, and be figured into the take-home pay package?

  9. I believe in the anti-trust exemption for labor as combinations of individuals selling their labor worry me much less than combinations of capital.

    Even though the former has destroyed many companies, and may well, in the form of government unions, have bankrupted cities and entire states.

    The former offsets an advantage in bargaining the latter compounds it.

    Whatever the merits of this argument in the private sector, it is clearly and obviously inapplicable to government unions.

  10. a decent weed connection

    C’mon man, cough up those digits, I’m getting dry. There should be some sort of law.

  11. “teachers are exempted from the Social Security system”

    WTF?! How is that even remotely acceptable to anyone who isn’t a teacher?

    1. It’s also not true, so there’s that.

  12. nies under an indenture, I have been paid in part with: comparatively generous health insurance; gym, club and entertainment discounts; the opportunity to run a side busines

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