From the desk of Stephen Cabot: Angela Greiling Keane reported on Bloomberg News that the U. S. Postal Service negotiated a 4 ½ year contract with the American Postal Workers, which has 202,000 members. She quotes Representative Darrell Issa, a California Republican, as stating: “We have deep concerns that some of the provisions of the contract may in fact be the wrong direction, to less flexibility, less ability to trim the workforce and less ability to in the future make the kinds of investments we need to make.”

The new contract will not stem the tide of enormous losses; and it will certainly not lead to a renaissance of profitability for the postal service, which has suffered losses for the last five quarters. Its labor costs are a whopping 80% of its total budget, while labor costs for UPS are 69% of its operating budget, and 43% for the operating budget of FedEx, which is staffed by a combination of employees and independent contractors.

Until the postal service can bring its labor costs in line with private sector employers such as UPS and FedEx, it will continue to run huge billion-dollar deficits. The sorry state of the U. S. Postal Service is just another example of how public-sector unions drive companies into the ground. The goals of the governors of Ohio and Wisconsin should become the goals of a fiscally responsible federal government.

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From the Desk of Stephen Cabot: Following the lead of Wisconsin and Ohio, Governor David Heineman of Nebraska and Republican lawmakers have decided to rein in the ever-growing power of public sector unions. They have introduced legislation that would curtail the power of the state’s Commission of Industrial Relations, which adjudicates labor disputes. The proposed legislation would not only curtail the power of the Commission (which many view as pro-labor) to set wages and work conditions, but it would also remove its jurisdiction over retirement and healthcare benefits, especially for teachers. Not only are lawmakers dissatisfied with the Commission, but they are worried about the state’s budget deficit which is projected to be $943 million over the next two years. The Commission was created in 1947 as a result of a debilitating utility workers strike, and Nebraska became one of 31 states with commissions that adjudicate labor disputes. Governor Heineman has declared that if the reform of the Commission does not take place, he will work to generate a ballot initiative that would call for the elimination of the Commission. The ongoing efforts to increase productivity and reduce the power of public-sector unions are fast becoming one of the most important labor relations trends of the year; and if those efforts are successful, all Americans will benefit from reduced taxes and higher levels of employment.

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FROM THE DESK OF STEPHEN CABOT: Tax payers, long upset about the extortionate powers of public-sector unions, are giving their whole-hearted support to courageous governors who are determined to curtail the inordinate money grabs made by those public-sector unions.

It started in Wisconsin, where Governor Scott Walker stood his ground against aggressive and often abusive pro-union demonstrators, and it has now spread to Ohio, where Governor John Kasich is proving to be even tougher than his neighbor Governor Walker.

While the Wisconsin law would permit workers to negotiate inflation-adjusted wages based on seniority, the law proposed in Ohio by Governor Kasich would permit workers to negotiate wages based on performance and merit only. In the private sector, workers normally receive salary increases based on performance and merit. The two are naturally tied together. And Governor Kasich would like to public-sector workers to be as responsible as private-sector workers are.

In addition, Ohio, unlike Wisconsin, would restrict negotiations on health insurance, sick leave, and vacations to the same level as those enjoyed by non-union government workers. In other words, there should be one rule for everyone: union workers should not be entitled to greater benefits than their non-union colleagues.

Again, unlike Wisconsin, Ohio would not permit unions to negotiate levels of staffing, teacher-student ratios, disciplinary procedures, and outsourcing. And binding arbitration to settle contract disputes would be eliminated. Finally, the same rules that don’t permit police and fire fighters to strike would apply to all government employees.

States, counties, and cities can no longer afford to spend outrageously large sums of money to meet the demands of avaricious unions. Debts are crippling states, and taxes are over-burdening the middle class. It’s time for public-sector unions to live by the same rules that govern free markets.

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