Last week, New Hampshire Senators took their traditional one week annual break. There was just one public meeting in the Senate and when I stopped in the office on Thursday, things were pretty quiet. The House, for the first time during my time in Concord, chose to not take a break.
I find our break to be very valuable. For me, it was off to Portland, OR to be with an eight year old grandson, William, and his five year old brother, Alex. Nothing like a couple of highly energized young boys who seem to have grown by a foot since I last saw them in August, to adjust your focus.
A few days away also gave me an opportunity to catch up on some reading and find personal perspectives on some issues of the day. I noted the importance in last week’s column of reforming the New Hampshire State Retirement System. But from a broader perspective, underlying the retirement reform discussion is the question of the future of public service unions in the country.
The Washington Post Columnist Robert Samuelson’s article entitled "Decline and fall of the union empire" ran in The Oregonian last Monday. He noted that "by the mid-1950s, unions represented 36 percent of private-sector workers." Samuelson continues "Labor’s fall has been stunning. In 2010, unions represented 6.9 percent of private-sector workers. That’s lower than the 12 percent in 1929 before passage of the 1935 Wagner Act" that gave workers the right to organize and be recognized by employers.
While private-sector union membership was falling, the growth for the unions has been in the public sector. "Among government workers, 36.2 percent are unionized, "writes Samuelson, "But the huge loss of state and local government revenues has … transformed the economic and political climate." The current battles across the country including the debates in New Hampshire over a proposed 10 percent reduction in state employees, the reform of the retirement system, and other state employment issues reflect the new financial reality.
The issues are not partisan. Governors of both parties are trying to lead their states to overcome the deficits from the recession while trying to put tax and spending policies in place that are affordable long term.
Samuelson summed up his article with an admonition to union leaders and members: "Striving too hard to protect existing wages and benefits will stimulate more political opposition." He continues "private-sector unions couldn’t solve this dilemma; they never reconciled past successes with future survival. So Big Labor became Little Labor. If public-sector unions fail, Little Labor could become Mini Labor."
Economic declines and especially long and lingering recessions always impact public policies. That is what we are seeing in New Hampshire and across the country.
This year I have suggested the meeting be public as citizens other than labor union members may have an interest in participating. The meeting likely will be the third week of March in Claremont and I will include the details in next week’s column.
Back from Oregon, at the end of the week I was off to Providence, RI for a meeting of New England Fiscal Leaders to discuss significant financial issues that are impacting our states. It was hosted by the National Conference of State Legislatures which sponsors regional and national meetings to help legislators do their jobs better.
I stopped in at an NCSL meeting in Washington a few years and that experience confirmed that I’m not much on going to big meetings. But the idea of meeting with colleagues from other New England states did have appeal and it turned out it was worth the time and effort to attend.
What were some of the key points to take away?... The Pew Center for the States reported on the underfunding of retirement systems state-by-state. For our state, they said "New Hampshire’s management of its long-term pension liability is cause for serious concern and the state needs to improve how it handles its retiree health care and other benefits obligations."
Like New Hampshire, about half of the states are working on changes to their state pension systems this year. In the years 2005-2010, more than 30 states made changes to their systems, and with exception of minor changes to increase benefits in Maryland, every other state has reduced benefits or increased employee contributions or both.
John Sugden from Standard and Poor’s reported that states are well positioned to have access to credit markets as well as to pay their bond obligations. He refuted much of the near hysteria you hear on some talk shows pointing out that only one state has defaulted on its bonds. That was Arkansas in 1933.
The final session on the new federal health care law (Patient Protection and Affordable Health Care Act) helped explain some of the complexities of the new law, a most difficult schedule required for implementation and major financial and management issues about to burden state governments. Most unsettling is the uncertainty about so many elements of the law that, if it moves forward, states will be scrambling to keep up.
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