All Episodes
Previous Next
Feb. 28, 2011 - Rush Limbaugh Program
36:48
February 28, 2011, Monday, Hour #1
| Copy link to current segment

Time Text
Welcome to today's edition of the Rush 24-7 podcast.
That is absolutely right, Johnny.
And surprise, surprise, ladies and gentlemen, the show is coming to you from the Heritage Foundation in Washington, D.C.
And that's because I don't want to go up to New York to do the show because of those critters that they have up there that haven't killed altogether.
Anyway, why Rush is not here is that he has a cold and he can't hardly talk.
And radio is not the best job for someone who cannot talk.
So Rush has taken off and I am filling in for him.
And so we have a dynamite show in store and we're going to look at a number of issues.
And the people, I should say, the people at Heritage Foundation are doing a wonderful job in helping me out to do the show.
Anyway, let's start off talking about the, I guess, one of the most popularly talked about things right now, and that has to do with public employee unions.
Now, with all this strife that's going on in Wisconsin, Indiana, New Jersey, and their indications of more to come in other places, it's probably time to shed a little bit of light on unions as an economic unit.
First, let me get one matter out of the way so I don't get any ugly calls.
I believe that people have the right to freedomly, to I support freedom of association.
And matter of fact, non-association as well.
And I support freedom of association even in ways that are not often popular or sometimes deemed despicable.
I support a person's right to be a member of a labor union, and I support a person's right not to be a member of a labor union.
Now, from my point of view, and from many, many Americans' point of view, I believe, I would hazard a guess, the only controversy regarding unions is what they should be permitted and not permitted to do.
Now, let's look at a few statistics.
According to the Department of Labor, most union members today work for state and local governments and the federal government.
Matter of fact, 40% of public employees are unionized.
And as such, they represent a powerful political force in elections.
Now, if you are a candidate for governor, a candidate for mayor, or city council, councilman, you surely want the votes and campaign contributions from public employee unions.
And in my view, that's no problem.
The problem arises that after you win office, let's say you're the governor or a city councilman, after you win office and sit down to bargain over pay and working conditions with unions who voted for you, that's a big problem in my book.
And matter of fact, Chris Christie, he's a governor from New Jersey, and he's under siege.
And he said that, and I quote him, he says, the kind of thing, you know, unions are talking about the sanctity of collective bargaining.
And Mr. Christie said he had no plans to take away collective bargaining rights in New Jersey.
But collective bargaining is not the way unions go when they don't get what they want.
What they do, if they fail to get what they want through collective bargaining, then they go to the legislators who they help put in office and they get what they cannot get at the bargaining table.
Now, so given the relationship between politicians and public employee unions, we should not be surprised that public employee wages and benefits often average 45% higher than their counterparts in the private sector.
Often they receive pension and health care benefits to which they make little or no contribution.
Now you might say, well, how is it that public employee unions have such a leg up on their private sector brethren?
Well, the answer is not rocket science.
That is, employers in the private sector have a bottom line.
And if they overcompensate their employees, well, company profits are going to sink.
The company might even face bankruptcy.
Of course, if private companies can count on the federal government to bail them out, as General Motors, as in the case of General Motors and Chrysler, well, then they can maintain a comfy relationship with their labor unions.
But the kind of bottom line that exists in the private arena, the private sector, that is the bottom line of profits, does not exist in the government sector.
That is, politicians have every reason to grant benefits to their political allies.
In this case, public employee unions.
They don't pick up the tab.
Who picks up the tab?
It's unorganized taxpayers who face higher taxes.
And Wisconsin's Governor Scott Walker says that stripping workers of collective bargaining rights and limiting talks, bargaining talks to the subject of basic wages, is necessary to give the state flexibility to get its finances in order.
Now, it's just not Wisconsin.
I mean, consider the cushy deal for many of California's unionized state and local police, firemen, and prisoner employees.
They have something that's called a 3% at 50 formula that determines their retirement check.
Okay, here's how it works.
This formula is based on 3% of the average of the three highest years of the employee's career multiplied by the number of years on the job.
Now, so what that means is that an employee with 20 years service can retire at age 50 and receive 60% of his salary.
Now, it's boosted by the fact that employees often boost their retirement income by putting in a lot of overtime hours during their last three years or getting a lot of promotions.
Now, here's the problem.
Many states, many states like California, New York, Illinois, Ohio, and New Jersey, as well as the federal government, they're on the verge of bankruptcy.
And large cities like Los Angeles, Chicago, New York, Washington, D.C., Newark, and Detroit, they're facing bankruptcy as well.
So the question, ladies and gentlemen, is that this tells us something.
And what it should tell you is that we can no longer afford to do what we've done in the past.
That is, I think that cities ought to be able to tell the workers: look, we'll give you this kind of salary.
These are your working conditions.
Do you want the job or not?
That is, unions now determine working hours, hiring criteria, the quantity of output, the number of sick and vacation days and holidays, and how their performance can be evaluated.
No longer can an employer make an offer for a job with requirements that fit the needs of the public institution.
And so I think that we must make serious large cuts in spending.
And I might add that spending on public employee salaries is just a drop in the bucket.
We have to make huge cuts if we are to survive as a nation.
And we'll be back with your calls after this.
This is Walter E. Williams sitting in Verush who has a coal, but I think he'll be back.
He's going to recover.
Anyway, if you want to be on the show with us, the number is 800-282-2882.
And we're talking about unions, but before I go to the phones, I just want to talk about unions in general just for a little bit, because a lot of things people don't take into account.
First of all, you hear many union leaders saying that the strike is our most powerful weapon, most powerful tool.
Well, that's not true at all.
And what is the union's most powerful weapon is their power, either through the government or through violence, their power to stop the employer from hiring other workers in their place.
And you see this, a good example of this is you ask yourself, how come during the Reagan administration, the air traffic controller strike failed, failed miserably?
Well, it failed because the air traffic controllers union could not prevent the government, the government, from hiring other workers in their place.
Now, If unions cannot prevent the employer from hiring other workers in their place, well, a strike is just simply a mass resignation.
Another key point is that many union leaders will say, well, in the private sector or whatever sector, maybe even the public sector, they'll say, our struggle for higher wages is against the employer.
Well, that's not true at all.
That is, a union's struggle for higher wages is with other workers.
That is, in order to get higher wages, they must prevent the employer from hiring other workers in their place.
They have to somehow make laws and regulations, unfair bargaining, et cetera, et cetera.
You see it in the National Labor Relations Act.
And so unions, again, as I said at the beginning of this talk, that I value freedom of association and people have the right to form unions, but I don't think that they have the right to use the government to enforce various kinds of union collusions.
Let's take a call and let's go to Eric in La Crosse, Wisconsin.
Welcome to the show, Eric.
Thank you for taking my call.
I just wanted to comment.
You had said about the state employees being able to retire at age 50.
I just want to let you know that the only people in Wisconsin that can retire at age 50 are people that are called in a protected status, law enforcement, corrections, et cetera.
And that's actually a pretty small percentage of the union public workforce.
Well, I was giving the example of California's rules, the 3% at 50.
And California has many, many policemen, firemen, and prison officials and prison workers.
Sure.
Okay.
But even if you're a fireman, a prison officer, or a police officer, how in the world should you be able to retire at 50 and receive 60, 70, and 80% of your salary for the rest of your life?
And that doesn't include health care benefits.
That's correct.
And actually, I'm not sure if they did get away from this, but in the state of Wisconsin two years ago, if you retired with a balance on your sick leave, you could use that to pay for your state health insurance after you retired.
That's right.
An individual from a state park that I worked with had 3,200 hours of sick leave built up when he retired.
Oh, my God.
And that could be hundreds of thousands of dollars.
Oh, absolutely.
Absolutely.
Thanks a lot, Eric.
Let's go to Mike.
Mike from Riverside, California.
Mr. Williams, thank you for taking my call.
I had two points to make, actually.
The first, I got a little bone to pick with you.
The first one would be that when you were talking about the California public employees, you almost made it sound like the collective bargaining is a unilateral thing that's wages, hours, and working conditions are determined only by the unions.
Those are actually negotiated for with the cities that they work with.
Oh, absolutely right.
And then if they don't get what they want through the negotiation process, they go to their legislatures and the legislators will pass a regulation or a law.
This is what the Governor Chris Christie of New Jersey said.
Okay.
Well, I'm not familiar with the state level things, but I'll tell you that I do work for a small municipality.
And during our negotiations, I mean, that's, you know, it's something that's agreed with, you know, and it's a contractual obligation because both parties agreed to it.
My second question is.
But let me interrupt you for a minute.
Where does the taxpayer come in?
That is, should this burden of these very plush working conditions that public employees have, should that be picked up by taxpayers?
I mean, such large amounts of it by taxpayers.
And California is on the verge of bankruptcy.
It's like Greece.
Well, that may be true.
That may be true.
These are basically services that are being paid for by customers.
It's frustrating as a public employee to hear that there's a bunch of half-truths out there, that the unions wield this giant bat that they can just hit anybody with.
Why don't you tell the audience, why is it that public employees receive pay in some cases that's 45% higher than their counterparts in private industry?
Because those were the terms negotiated with the city.
And that's exactly what I said during my opening remarks.
That is, the public employees, they vote for politicians.
They give campaign contributions and they vote for them.
And then when the politicians get into office, then they pay off these guys by giving them all kinds of benefits and all kinds of higher wages.
And you're going to call that negotiation.
But where does the taxpayer come in?
Should the taxpayer pick up anything that politicians and labor unions say that they should pick up?
Oh, that's a good question.
I don't have an answer for that.
Well, I think somebody needs to think about it.
That is, what's happening in California, a beautiful state, a state that has the history of being very prosperous, is going down too.
Matter of fact, my wife and I, in 1961, we moved to Los Angeles for opportunity.
We saw that it was the place of opportunity.
Now, what's happening to California?
People are leaving California because the taxes are high, the living conditions have deteriorated.
There's all kinds of crime and other kinds of problems in many of California's big cities.
Los Angeles is nowhere near the city and the place of opportunity that it was in 1961 and later years for my wife and me.
So do you want to say, well, oh, the heck with what's happening to our state, the heck what's happening to our locality, just give me mine.
I don't think that's right.
I disagree that that's a prevailing union attitude because union members are also feeling the pinch as much as anybody else is.
Despite what all the half-trus and rumors that are going around in the media, you'd made a statement earlier in your opening statement that California public employees are able to spike their average three highest years with overtime.
That's incorrect.
But no, no, no, that's we might come back to that after the break, but we have to go right now.
But look, folks, if you want to be on to talk with us, call 800-282-2882.
Well, it's Walter Williams sitting in for Rush.
Actually, it's Walter E. Williams.
And the reason I insist on that E is because there's an imposter at University of Washington, a Professor Walter Williams Emeritus, and he writes a lot of, and he's an economist, and he writes a lot of left-wing stuff, and people send me letters, say, Walter, how can you say this?
I say, look, it's not me.
Look for Walter E. Williams.
And I'm going to insist that you say Walter E. Williams until I get this guy to change his name.
But anyway, I am substituting for Russia.
He has a cold, not very serious.
And you can be on, if you call, 800-282-2882.
And we're talking about labor unions this first hour.
And let me just kind of give you some other tidbits because a lot of people just don't know.
They just think, oh, labor unions are, they're godsends.
Well, not for everybody.
Let me give you one example.
And that example is really talked about in a forthcoming book of mine.
It's called Race and Economics.
It'll be out towards the end of March or something like that, maybe April.
And in one of the chapters, I talk about wages, the minimum wage.
And I talk about a super minimum wage, and it's called the Davis-Bacon Act of 1931.
And here's what the Davis-Bacon Act, and unions push for this.
They spend a lot of money.
And matter of fact, they still push to support the Davis-Bacon Act.
And here's what the Davis-Bacon Act does.
And it turns out to be very costly.
It requires on all federally funded and federally assisted projects, construction projects, that workers receive what's called the prevailing wage.
And the Department of Labor illegally decides that the prevailing wage is the union wage in the area or higher.
And so, of course, unions give a lot of support for the Davis-Bacon Act.
But if you go to the congressional record, you see some of the history of it.
If you go to the congressional record, March 31st, 1931, page 6513 of the congressional record, you can read some of the debate, the congressional debate, what was argued by congressmen in support of the Davis-Bacon Act.
One congressman said, all good.
Is Congressman all good?
He said, and I'm virtually, I'm just paraphrasing him, but I'm pretty close to the quote.
He said, see that contractor over there.
He brings cheap colored labor up from the South and puts them in cabins, and it is labor of that kind that's competing with white men around America.
And you find similar statements in support of the Davis-Bacon Act by other congressmen.
And the thing is, the Davis-Bacon Act was written to exclude non-union laborers from construction projects.
And today, the Davis-Bacon Act is still on the books.
And it is supported tooth and nail by construction unions, well, by labor unions in general.
And what I find amazing, truly amazing, is that black congressmen also support the Davis-Bacon Act.
And they do it because they are handmaidens of the labor unions.
They know, and I've been writing about the Davis-Bacon Act for decades, and they know the legislative history of the Davis-Bacon Act.
They know the effects.
But they do the bidding of labor unions against the welfare of the people that they say they're going to support.
And what labor unions do, in return for the support that black congressmen give for the Davis-Bacon Act, well, unions always support food stamps and other kinds of handouts, CETA jobs, make-work jobs.
And so in exchange, the black congressmen vote for laws that hurt their people, but in return, the unions vote for food stamps and welfare.
And I think that that's a bad bargain.
But anyway, you could read about it in one of my chapters in my forthcoming book, Race and Economics.
And speaking of books, I just, you know, you people in the audience for years, you say, well, Walter, all these stories that you tell, you ought to write an autobiography.
Well, I have written an autobiography, and it's been out for a month or so, a couple months, and it's called Up From the Projects.
But let's go to, let's take some calls, and let's go to Cheryl in Scandia, Michigan.
Welcome to the show.
Good afternoon, Doctor.
It's a pleasure to talk to you.
Well, thank you, Cheryl.
Thank you.
I'm very, very interested in what you've been saying.
It's just amazing.
I'm looking forward to reading your new book.
Oh, yes, yes.
And matter of fact, are you talking about my autobiography?
Well, the one that you talked about, the race and economics.
Oh, yeah, okay.
It's a fascinating book.
Oh, it's fascinating.
And I have several chapters on a whole range of topics and topics looked at in a way that's not widely discussed.
Oh, well, that's so typical nowadays.
And that goes to my point that I want to make.
One thing that's not being very made very public, you know, a couple of weeks ago or whatever, Mr. Obama came out and made a remark that he thought what was going on in Wisconsin was tantamount to union busting and that it was terrible to even think about taking away the bargaining rights of these union workers.
Yet what he doesn't talk about is the fact that all of the federal employees all over the country and in Washington, D.C. do not have collective bargaining rights.
They have them since somewhere around 1978 when they passed the Civil Service Reform Act.
And I bet that a news person has not asked the president about that.
No, and they won't.
And I understand there was an article in the Wall Street Journal recently that addressed this issue.
And I haven't heard anything about it.
I haven't even heard it on Fox News yet, which is kind of surprising because they usually pick up on that kind of stuff.
But, hey, if it's good enough for the federal employees, and they seem to be doing very well, Congress has been very generous with their raises.
I understand that they have a commission that votes the raises based on inflation and other local pay factors and things of that nature.
And I'll tell you what else.
And they vote on the vote for those things, and they predicate it on how much money they can squeeze from the American taxpayers to pay all those wonderful things.
I don't doubt that.
But it's just a little disingenuous on his part to take that kind of aside.
And then, of course, you know, nobody's going to confront him about it, but I just think it should be made more public so they understand this isn't such a terrible thing.
Times have changed.
They've changed drastically.
And we can't sustain these union salaries the way that we may have been able to do years ago when times were good.
I think when times were good, people didn't care.
And Cheryl, one of the points is that politicians were very slick about it.
That is, what they did with their public employee unions, they didn't give them as much cash as they otherwise would have given them, but they pushed all of these pay increases into their retirement and health benefits.
And that's kind of a sneaky way of giving them a raise, but we see the sneaky stuff is coming to the fore right now.
Matter of fact, here's a report from the L.A. Times.
And it says that the 10 largest public pension systems in California had a $240 billion shortfall in 2010.
This is what politicians have been doing.
They've been pushing all these goodies and payments into unions, and they were doing it since the 60s and 70s and 80s, and now it's come up in time.
We'll be back with your calls after this.
We're back, and it's Walter Williams, Walter E. Williams, sitting in for Rush.
Rush has a coal, and he's getting over it, and he's expected to be back tomorrow.
Anyway, you can be on with us by calling 800-282-2882.
Let me say something else about labor unions.
And again, to talk about labor unions is not the same thing as saying, well, I don't believe in freedom of association.
I just don't believe that people have the right to form collusions and use coercion.
However, if you look for a tip, folks.
If you want to find a seller collusion, look for a minimum price.
And a good example of that is the minimum wage law.
And what is the effect of a minimum price?
Well, a minimum price tends to discriminate against those people getting employed who don't have the skills to be able to earn the minimum price.
You know, for example, if you tell a contractor, let's say with the Davis-Bacon Act, if you tell a contractor, any carpenter that you hire, you must pay him $25 an hour.
Well, what is the effect of that?
Well, it makes a carpenter who has skills that are only worth, say, $12 an hour.
It makes him unemployable.
That is, the Davis-Bacon Act or any kind of minimum wage discriminates against the employment of low-skilled people.
And that there's something else about minimum wages.
And it lowers the costs of racial discrimination.
And you say, oh, come on, Williams.
Well, let's look at it.
Let me just give you an example.
There's a very nice book written in 1989 or 1989, yes.
Very good book.
It's called South Africa's War Against Capitalism.
And its author is Walter Williams.
And I did a study of labor markets in South Africa.
And it turns out that in South Africa, this is during the apartheids, 80s, when there's gross discrimination against blacks, the major supporters for minimum wages for blacks were white racist labor unions that would never have a black as a member.
Now, why do you think they were arguing for minimum wages for blacks?
Well, it's very easy.
Look at, for example, let's say a laborer, a white laborer on a construction project, let's say he was getting, let's say, $5 an hour.
And a poor, discriminated black doing the same work would be willing to work for $1 an hour.
And what do you think employers are going to do when one guy will work for $5 an hour, and here's another guy who says, I'm going to work for $1 an hour?
Well, the employer has the incentive to hire the $1 an hour guy.
And so how can you make it impossible or how can you discourage the employer from hiring the $1 an hour guy?
Well, you just eliminate the $1 an hour.
You say, you get a law passed that the employer must pay $5 an hour to no matter whom he hires.
And that's how you can discriminate against the employment of less preferred people.
And people can be less preferred, not in the eyes of God, but they can be less preferred from an employer's point of view if they're a certain race or sex or nationality or skill level.
And so, matter of fact, in all of my research, I show that the minimum wage law is one of the most effective tools in the arsenal of races everywhere in the world.
Now, look, you'll say to me, well, look, Walter, labor unions in the United States, they don't feel that way.
Well, it doesn't make any difference whether labor unions feel that way.
That is, the intentions are irrelevant to the effects.
That is, for example, somebody could push me off the Empire State Building or I could trip.
Well, the law of gravity says that I'm going to accelerate at 32 feet per second per second.
It doesn't make any difference why I went off the top of the building.
It has no effect on the law of gravity.
And the same thing, that is, intentions have very little effect on economic outcomes.
So again, whenever you find a minimum price for something, you know you're dealing with a seller conspiracy or seller collusion.
And that applies not only to laborers, it applies to businesses because businesses have minimum prices, or let's say farmers support minimum prices, and they're collusions.
Let's go to Tony in Grass Valley, California.
Welcome to the show, Tony.
Thank you.
It's an honor, Walter E. I'm an employee of a small county in California, Northern California.
And recently, within the last two years, we were required to be in the union.
They had a vote, and you know which way the vote is going to go as to whether to close a shop or not.
I was always against it and still am, but I have to pay the dues now, and those dues go to supporting Democratic candidates for the most part, which I don't agree with.
And another point I wanted to make was we years ago gave up a lot of pay increases and stuff in order to get some benefits.
We were always a pretty poor county, so they couldn't afford to pay what private wage earners were getting at the time because the economy was really good.
So they couldn't hire good people unless they offered those kinds of things.
Well, we're up against the clock, Tony.
But let me just say this, that many times workers will prefer for a pay increase to come in the form of benefits, let's say health care benefits or dentist or eyeglasses.
The reason why is that they're not taxed.
We'll be back with your calls after this.
Well, this is Walter Williams ending the first hour of the Rush Limbaugh Show.
And as I said, Rush has a cold.
And we'll be back on the second hour.
And one of the things I'm going to talk, think about it while I'm gone, why we should not support a balanced budget amendment to the United States Constitution that's being pushed by many of the Republicans, members of the House, and also the Senate.
And then also in the next hour, I just want to give you some hints about what should be cut out of the federal budget, what we don't need.
And the clue to that is say, well, how do we go from 1787 until 1960 or 1970 or 1979 without the Department of Education?
How did we do it?
▲
Export Selection