The late economist Herbert Stein offered what’s probably the greatest economic wisdom of the past century. He stated that when trends became unsustainable, they usually don’t last. Which brings us, of course, to housing. Truly, the skyrocketing value of housing could not last. Government policy and Wall Street greed created an artificial market that has now crashed and about taken our economy with it.
This issue should take more of the blame than unions or international trade treaties for wages and benefits that are out of line with the current market. When builders, carpenters, suppliers and manufacturers were making lots of money the apparent wage package wasn’t enough of an issue to cause the destruction of collective bargaining. Now the jobs related to the construction and manufacturing booms are gone and if you can find a job – the wages are much lower. This creates the need to adjust public sector wages.
Arbitration should also get tossed into the fight. Public sector arbitration was poorly designed from the beginning and should have had a major overhaul ten years ago.
Still, there should be a place for public sector bargaining. Disengaged elected officials can be some of the toughest task masters out there. One sided relationships are the breeding grounds of abuse.
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