Further Fiscal Meltdown From Union Wages, Unemployment, Rising Commodity Prices

Posted on November 20, 2010


The lame duck Governor, Chet Culver of Iowa has agreed to an unbelievable union contract presented three days after the November 2 election. It will cost residents over $100 million:

The wage hike plan would give members of the American Federation of State, County and Municipal Employees, better known as AFSCME, a 2 percent across-the-board increase for the fiscal year that begins July 1 and another 1 percent raise the following calendar year on Jan. 1, which is what the group had requested. This 2- and 1- percent increase, under the contract, would be given in each of the next two contract years.In addition, many union members who are not at the top of their pay grade would receive an additional 4.5 percent raise, known as a step increase, for certain professional milestones or for job longevity and other career advancements.

“The state accepted the union’s proposal,” said Homan [union spokesman]. “I believe that probably ends this process.”

Homan noted that the union had decided what it would request from the state before the Nov. 2 elections, even though the contract proposal was formally submitted on Nov. 5. [Desmoines Register]



The battle to keep taxes down begins at the local level.  This week in one western New York town, a hotly debated 2011 budget just passed. There were layoffs and few pay raises and non-union employees were asked to contribute to health care costs. Union workers got a 3% pay increase and did not participate in any sacrifices.   Town services will be affected . It means one less snow plow driver this winter and winters in western New York are brutal. But the Town Supervisor and a majority of the board were forward-looking, expecting further economic hardships citizens might have to face in this economy.

Days after the budget was approved, the local university laid off over 40 people.  That will be forty plus people who will not be coming to the town to spend money.  For those who live there, it will mean people struggling to pay higher taxes to make up for lost revenue.  The fallout from the international economic meltdown is really just beginning to be felt at the local level.

To add to the sadness, many people will not have their unemployment funds extended.  What will they do?  Who will help them?  Again, the fallout from the economic meltdown is just beginning to hit home.

Somehow the message must reach local and state officials and union members that they cannot continue to expect raises at a time when people are struggling with no pay increase or the loss of work.  For people on Social Security, there has not been an income benefit raise in two years.  We are living in a changed world and we have to stop kidding ourselves that things will be as they were anytime soon.

We already are grappling with rising fuel costs, but commodities experts are forecasting skyrocketing food prices. [see FOX News video at Diary of a Mad Conservative]  Within the next ten years, we could see corn at $11 an ear. Now consider that corn is in the food chain for feed for livestock and recalculate the cost of meat.  Other grains will be in short supply and a loaf of bread could cost as much at $20.  Add to this the fact that each year an exploding international population ads immeasurably to pressures on limited resources and you do not have a very bright picture going forward.  What is needed is reduced spending now rather than later. One wonders what it will take for people to grasp the big picture that is slowly coming into focus.

©On My Watch…the writings of SamHenry.  Registration pending.