Will Silicon Valley’s elite take on public sector unions?

Mark Zuckerberg - wikipediaMarch 27, 2013

By Ed Ring

The San Francisco Bay Area is one of the most liberal metropolitan areas in America. Democrats are typically favored over Republicans in elections by margins up to 50 percentage points. The SF Bay is also perhaps the wealthiest region in America, with a GDP of over $500 billion, and more than 10 percent of the nation’s billionaires. Not least, as the global center of information technology, attracting top talent from around the world, the SF Bay region probably has one of the smartest populations in America.

So when are they going to take on their public sector unions?

One of the Silicon Valley’s newest billionaires is Facebook Chairman and CEO Mark Zuckerberg, who burnished his liberal credentials a few years ago by hosting President Obama at a town-hall meeting at Facebook headquarters. But earlier this year Zuckerberg committed to raising funds for embattled New Jersey Governor Chris Christie, who has vaulted to the national stage because of his refusal to bow to the demands of public sector unions.

Could it be that public sector union reform is a bipartisan issue? A lot of Democrats agree with that thought, mostly in private; but they aren’t billionaires, and they aren’t raising funds for Gov. Christie.

It’s important to reflect on what this could represent, because Silicon Valley has been relatively absent from politics until recent years. As a source for political fundraising, it is probably the biggest ATM machine in the nation, but in terms of aggressively lobbying to influence policy in California, it’s been punching way under its weight. At the risk of being presumptuous, one might argue the two primary reasons the Silicon Valley leadership are almost all Democrats is because they are social liberals, and because they have never encountered serious attempts at union organizing at their companies. But unions are alive and well in the Silicon Valley in the public sector and the high-tech billionaires are starting to take notice.

Education

The first example of this is public education, where the teachers’ unions exercise veto power over virtually any innovations affecting education policy in California. This has already led to clashes between teachers’ unions and members of the business community, nearly all of them faithful Democrats, who want a better trained workforce.

The second example is more recent, and concerns the troubled finances of local governments. Public sector unions have been unrelenting in their push for higher tax revenues to sustain services, which in turn is calling attention to the pay and benefits of unionized civil servants. Here are calculations from a recent California Public Policy Center study showing the median total compensation for San Jose city employees, using detailed data provided by their payroll department:

San Jose police officer, 2011 median total compensation = $189,411
San Jose firefighter, 2011 median total compensation = $205,557
San Jose other city employees, 2011 median total compensation = $120,092

By contrast, the average 2010 household income in San Jose was $76,495.

A veteran firefighter who (taking into account vacation) works two 24-hour shifts per week before overtime, and makes more than $200,000 per year in total annual compensation, may not seem extraordinarily well compensated to a billionaire. But to a self-employed veteran of Silicon Valley start-ups, who enjoys no job security, has no pension, struggles to maintain continuity of health insurance and pays (including “special assessments”) property taxes at a rate of 1.5 percent on homes that cost over $500 per square foot — it is unfair, extravagant, expensive overkill.

The billionaire business leaders of Silicon Valley are smart enough to know it is economically impossible to pay every skilled worker total compensation averaging between $150,000 and $200,000 per year. And the information technology industry is itself living testimony to the power of innovation to lower the cost of living. The irony is real; if public sector employees made less, and if their unions didn’t ceaselessly lobby for inefficient work rules designed to increase headcount, they could afford to make less. Implementing measures to lower the cost of living through increased private sector competition and more efficient government is the solution — and a big part of doing this requires confronting public sector unions.

Success and failure

Mark Zuckerberg parlayed world-class talent, a brilliant vision, hard work and fortuitous timing to build one of the most spectacular success stories Silicon Valley has ever seen. But for every start-up entrepreneur and the employees who join them to achieve such glory, there are thousands more whose ventures languish or fail. This is the harsh but necessary essence of Silicon Valley culture, the rich innovation ecosystem that the world tries to emulate.

For Silicon Valley’s wealthiest citizens not to confront the public sector unions who control our cities and counties is to turn their backs on the vast majority of workers who helped get them to where they are today.

Forming a coalition to reform public sector unions will not be easy. In California’s current political landscape, consultants who take on anti-union campaigns risk being blacklisted. Donors risk harassment at their homes and businesses. Companies risk being targeted with a “corporate campaign,” where the unions launch a multi-pronged attack directed at employees, shareholders, clients, vendors and the media. In private meetings, union operatives openly threaten the leadership of business associations to follow their agenda. But even California’s all powerful public employee unions cannot withstand a sustained and determined reform effort led by Silicon Valley’s elite.

For Democrats, advocating for union reform is problematic. Unions provide much of their financial support, even in the wealthy, Democratic Silicon Valley. But reform is inevitable because without it, schools will continue to deliver sub-optimal results and more cities and counties will go bankrupt. Democrats are destined to be as bitterly divided over the public sector union question as Republicans currently are over social issues.

Along with declaring his support for Christie, Zuckerberg has formed a political organization to promote education reform, immigration reform, increased spending on research and economic growth. He may wish to consider adding to his political list public sector compensation reform, and public sector union reform. It is an innately bipartisan imperative on which liberals and conservatives alike may find common cause.

Ed Ring is the executive director of the California Public Policy Center, and the editor of UnionWatch.org

13 comments

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  1. CJ
    CJ 27 March, 2013, 12:03

    The view from Ground Zero is that the guilty white busybody “liberals” who populate the top ranks of Silicon Valley LOVE the unions, LOVE taxes, and LOVE big government projects.
    Years ago, they extended the SJ light rail system out to Lockheed in Sunnyvale. The route they chose, instead of going through the heart of Silicon Valley, went along the outer edge.
    Since then, Lockheed has essentialyy imploded from layoffs and restructuring and the light rail travekls like a ghost ship once the sun goes down.
    Organizations like the Silicon Valley “Leadership” Group have never seen a parcel tax or school bond they did not giddily endorse.
    The Bay Area is up to its armspits in “institutes,” foundations, and “community” groups that all feed off the governmetn adn eac other.
    All these “nouveau etat riche” progressives can afford to pay their powjn freight yet their lives are dedicated to taking ever one more dollar from the wallets of the average taxpayers.
    Meanwhile, after dark and in the shadows, they usher in ever more “victims” into the state for us to pay freight for.

    Reply this comment
  2. Brown delta trout
    Brown delta trout 27 March, 2013, 14:08

    It would be easier to take out the mob. And no one has been able to do that. Enjoy the fishing and don’t eat the salmon eggs.

    Reply this comment
  3. Dyspeptic
    Dyspeptic 27 March, 2013, 15:21

    Here is a fairly safe prediction – IT AIN’T GONNA HAPPEN.

    These Silicon Valley billionaire tech oligarchs will not risk social rejection, angry confrontations with union thugs, being ostracized by their own party, boycotts or nasty journaliar hit pieces just to do the right thing. Since their own businesses aren’t unionized they have no economic incentive to antagonize the single most powerful political force in the state.

    They wouldn’t just be sticking their necks out, they would be putting their heads on the chopping block too. I think they would rather chase trophy wifey around the mansion or cruise over to Chez Escargot in their Maserati Testosteroni than invite that kind of grief.

    Reply this comment
  4. Reality Check
    Reality Check 27 March, 2013, 16:28

    This says it all:

    “A veteran firefighter who (taking into account vacation) works two 24-hour shifts per week before overtime, and makes more than $200,000 per year in total annual compensation, may not seem extraordinarily well compensated to a billionaire. But to a self-employed veteran of Silicon Valley start-ups, who enjoys no job security, has no pension, struggles to maintain continuity of health insurance and pays (including “special assessments”) property taxes at a rate of 1.5 percent on homes that cost over $500 per square foot — it is unfair, extravagant, expensive overkill.”

    If firefighters are the heroes they claim to be, they will renounce their unions and accept cuts to their pay and benefits.

    Then they can fight for economic reforms that will lower the cost of living for everyone, instead of just looking out for themselves.

    Reply this comment
  5. us citizen
    us citizen 27 March, 2013, 17:27

    bahahaha…….throw out the unions in CA……….only when hell freezes over. Between the unions and the illegals…….this state is doomed.

    Reply this comment
  6. stolson
    stolson 27 March, 2013, 18:50

    Actually know some of these wonder types in SF and suburbs–removed from the average person’s life and issues. They mouth the Socialist doctrine but don’t follow it. Feel good about helpng those (ahem) less fortunate, donate and let it go. Their aim is to grow the money, enjoy life, stay away from the masses, and mingle with those who can help them. Unions and high pensions are not in their thoughts. Let someone else fight that.
    When they feel the pain, they will step in and make some noise. Between setting up various trusts, sheltering money, using the best tax attys, they can avoid some tax hits. When CA hits them too much, they will hit back someway. Hasn’t happened yet.

    Reply this comment
  7. Bob Smith
    Bob Smith 27 March, 2013, 19:24

    A firefighter doesn’t work 48 hours a week. Of those 48 hours he actually works 16, sleeps 16, and is on call 16. Heck, call it 32 hours of on call if you want. In either case, I dare you to find a private sector employer who wouldn’t laugh at you for suggesting that was a full work week, or for suggesting you should get overtime even though you’re salaried.

    Reply this comment
  8. stolson
    stolson 27 March, 2013, 19:28

    When I was younger, my town had a very good and hard working volunteer fire dept. I say, towns strapped for cash revert to this. It would instill some pride in living in America too.

    Reply this comment
  9. BobA
    BobA 28 March, 2013, 11:25

    What the oligarchs want the oligarchs usually get because that’s who our politicians cater to. It takes money to run for elections and politicians serve the interests of those who can provide that. And no one gives large sums of money to a politician without attaching a few strings. Ergo it is fair to say that we have the best government that money can buy.

    Unions are tolerated by the oligarchs as long as they don’t pose a threat to their interests. The minute they do the politicians will admonish the unions for overstepping their bounds and will exact a political price if necessary for doing so. It is naive, foolish and to think otherwise.

    All oligarchs have an agenda and the strings attached to the money they give to political campaigns are there to get the attention and cooperation of the receivers of their largess when it becomes necessary to do so.

    Reply this comment
  10. Ted Steele, Associate Prof.
    Ted Steele, Associate Prof. 29 March, 2013, 06:50

    LOL— Bobo learned a new word.

    Reply this comment
  11. eatingdogfood
    eatingdogfood 29 March, 2013, 15:31

    If The Democrats Didn’t Give ” Sweetheart Deals ” To Your Public Service Union.
    Goon Employees To Get Reelected; You Would Have Plenty Of Money and The.
    Taxpayer would have Some Spare Change in His Pockets! Democratic Hustler
    Politicians + Corrupt Union Goons = BANKRUPTCY BABY! Time To Bring.
    RICO Conspiracy Charges Against The Hustler Corrupt Democrats and the.
    Criminal Unions!

    Reply this comment
  12. eatingdogfood
    eatingdogfood 29 March, 2013, 15:43

    Isn’t It Time For The Abused Taxpayers Of California To Leave In Masses.

    In Order To End This Unholy Conspiracy Between The Totally Corrupt.

    Democrats And The Equally Corrupt Public Service Unions? It Is Really.

    The Only Way To Finally End This Criminal Activity! Did Anybody Ever.

    Hear Of RICO?

    Reply this comment
  13. SkippingDog
    SkippingDog 29 March, 2013, 16:56

    I don’t personally care if you post your kooky nonsense on every blog in existence, eatingdogfood, but would you at least make some minimal attempt to avoid experimental punctuation and spelling? There’s an app for that.

    Reply this comment

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