18 February 2011

Union Math

Something that seems to keep coming up over and over again with unions...

The people paying them tell them that if a concession over pay or benefits isn't made; they will have to close or have layoffs.

The unions invariably choose a zero compromise path.

The recent kerfluffle in Wisconsin is a decent example.  The state is telling the teachers that they need to partially pay for their retirement benefit (around 1/8th of the total contribution) out of pocket or there would have to be 6,000 fewer teachers.  The union response is tantamount to a general strike.

The math problem is simple.  Which is more; 87% of an average of $52k or 100% of zero?  Do you need a calculator?  Yes, having to pay into your retirement account is a loss of take-home pay.

The unions seem to not be noticing the lack of sympathy for their "plight".  Many of us mere working stiffs are lucky to be able to plunk down a meager 5% into a 401k and we're even luckier if our employer has some sort of matching.

Oh, the state is not taking 13% of the teachers income either.  They are saying that the teachers need to pay 13% of the contribution.  For example, if working stiff is paying 5.3% of their income with a 100% match from the employer that means that 10.6% if the employee's base pay is going into a 401k every payday.  If the employee makes $52k a year that's an annual contribution of $2,756 out of the employee's pocket.  What Wisconsin is asking the teachers to do is to pay 13% of that 10.6% or 1.378% of their base salary or an annual contribution of $716.56 on a salary of $52,000.

EDIT: It would appear that the numbers posted above, which I got from searching for Wisconsin teacher salaries and retirement contributions are in conflict with what I have been reading at MSNBC and Fox.

A normal citizen is paying nearly four times as much out of pocket for the same benefit.  This is why there's not much sympathy out there for the teachers, especially since many normal people can't afford to pay that 5.3% at all any more while the teachers still get 10.6% plunked down at no cost to the teacher.

The teacher's unions are going to be getting a dose of reality soon.  The voters are awake and if the current crop of politicians doesn't start it; pretty soon the electorate will get some who will.

Special thanks to Gov Christie for starting this snowball and showing other governors how to fight the unions.

1 comment:

  1. I am not at all convinced that public employees of any sort should have unions. The deal used to be that if you worked for the gov't, you maybe wouldn't ever get rich off your salary (legally, that is) but you wouldn't be likely to be fired. Unfortunately, they were allowed to form unions, and these days they're the backbone of Big Labor.

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