The folks over at Reason.tv have produced a great video explaining how public sector unions are stifling economic recovery. It notes that unionized workers already made more than their private sector counterparts before the recession and that the pay gap has only grown since then.
Government jobs don’t create wealth because all the money they spend comes from tax dollars that are taken from another part of the economy. Government union jobs are not a net gain like a private sector jobs are.
With the Obama Administration hiring more and more government workers and making it more and more difficult for private sector companies to survive, it could be a long time before our nation’s unemployment rate returns to normal
California is an example of what not to do. Unions (because of the laws they worked to pass) have put California on the edge of bankruptcy and turned their bonds into junk bonds. The LA Times reported:
Institutions such as mutual funds and insurance companies are more likely than individuals to focus on the state’s low credit rating, a byproduct of Sacramento’s ongoing budget woes. Standard & Poor’s and Moody’s Investors Service both give California the lowest rating of any of the 50 states — A and A2, respectively.
This is due to the fact that public sector unions have forced California lawmakers to spend a certain amount of the budget on certain things (as the video points out, 40% of the budget just for education) which caused a budget crisis that lead the state to consider selling its landmarks.