Andy's Blog

Tuesday, September 05, 2006

Labor Hinders Solution in City's Health Care Benefit Crisis

For most people, politics are distasteful. Many turn their backs to politics because of perceived cronyism, mud slinging, and the decisions that often get hammered out behind closed doors. Yet, politicians continue yearning to hold public office. Most politicians are well-intentioned and want to do right by their constituents. Nonetheless, over long periods of time, certain cultures develop that reflect the politician’s need to get reelected. After all, politicians need affirmation. And that affirmation often comes at the expense of instilling some kind of institutional culture that makes most people feel good about their decisions.

Unfortunately for Duluth, we have been caught in a culture that is reflective of the labor movement. Now, to be sure, there is nothing wrong with labor. People should be paid a fair wage for a fair day’s work. Without labor, business cannot move forward. However, our fair city and its politicians have allowed labor too much influence. This is evidenced by the labor contracts that hamstring the city. Specifically, overly generous lifetime insurance, labor inflexibility, overtime abuse and the protection of jobs at the expense of common sense. These factors are beginning to overwhelm those who pay the bills. Most outrageously, our city’s politicians, while trying to do the right thing many years ago, agreed to pay the health care costs for employees (and their families) who served a minimum of three years employment. As a result, the city currently owes approximately $300 million to the unfunded retiree healthcare liability.

If you took the taxable parcels within the city of Duluth and divided them into the $300 million, each parcel owner would owe approximately $72,500. To help offset the costs to property owners, the city council came up with a plan to solve the problem. The fourteen point plan included, among other things, seeking efficiencies in the system, raising utility rates by five percent, increasing taxes over time, and seeking concessions from its unions and retirees. To this, the Chamber agreed, saying that there is plenty of pain to go around and that the pain would be much worse if, in fact, the City of Duluth did nothing. Each and every resident, then, would help solve the problem.

If the fourteen point plan is instituted, many workers will not get the promised lifetime health care. It’s not fair that these employees will have to offer concessions; but it’s all part of the solution - and everyone has something to lose.

One would think the city was on the road to recovery, until last week when the labor union guised its effort to do its part, to take its dose of pain, to solve the problem by demanding a thirty percent raise over three years.

In this case, labor workers are fortunate to have someone advocating on their behalf. But what about those who don’t have a voice? The young family or the elderly on fixed incomes, for example? Or the business owner whose profits and ability to create jobs and pay taxes are dependent upon the bottom line? Who is looking out for them? At thirty percent, the labor movement is not.

It’s time for all of us to take a healthy dose of reality – our city depends upon it.

posted by Andy Peterson www.duluthchamber.com at

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