Government Pays the Unions to Extract More from Government


July’s employment figures are out for Oregon and they confirm two things: Oregon’s economic outlook is dim, and the public employees unions are still in full control of state government.


Oregon’s employment numbers increased by anemic 300 jobs in July but that is hardly the whole picture. State government added another 800 jobs in July, which means that the other sectors actually lost 500 jobs. During this period of continued jobs lost in the private sector, Gov. Kitzhaber has increased the number of state public employees to the highest level in the state’s history. 


You may recall that during the recent gubernatorial campaign, Mr. Kitzhaber declared that, because of his previous terms as governor and the public employees unions’ ties to the Democrat party, he was the only candidate that could effectively deal with the unions in tight economic times. So let’s see how Mr. Kitzhaber has done.


But first you need to understand the impact of the public employee unions on state government and visa versa.


To insure that the public employee unions are well funded for the political season, the Oregon State Department of Administration collected nearly $19.6 Million dollars from public employees in 2010 and remitted it quarterly to the four largest public employee unions in Oregon. That means nearly $39 Million each election cycle available to the public employee unions for political activities. That amount does not include similar collections by various city and county governments or the various school districts and university systems. An extrapolation based on the number of state employees versus all other local government employees suggests that the amounts remitted to Oregon public employees unions exceeds $100 Million each election cycle.


And Mr. Kitzhaber was a significant beneficiary of those collections.


Of the slightly over $7 Million contributed to Mr. Kitzhaber’s gubernatorial campaign, over $1 Million came from direct contributions by the unions. This amount does not include the amounts of money given to the state and national Democrat Party or the Democratic Governors Association by the unions which in turn made contributions in excess of $500,000 to Mr. Kitzhaber’s campaign. It also does not include the variety of front groups to which the unions make contributions that in turn contributed to Mr. Kitzhaber’s campaign. It also does not include the hundreds of thousands of dollars for “political education” paid by the unions or the millions spent by the unions on the Get Out the Vote activities. No matter how you cut it, the unions were the dominant force in Mr. Kitzhaber’s election campaign.


In turn, the tough talking Mr. Kitzhaber demonstrated how he deals with the public employee unions in tough economic times.


  1. He failed to do anything about the bloated and gold-plated Public Employees Retirements System (PERS) which currently has an unfunded future liability far in excess of the biennial general fund budget. The state continues to make the employees’ six- percent contributions in addition to its own liability for pension benefits. A recent article by Dan Re noted that the state budget for PERS payments now exceeds the state general fund budget for education by $2 Billion. Mr. Kitzhaber proposed increasing PERS funding by $1 Billion for the new biennium while holding education spending flat. If you wonder why there are not enough teachers, or that classroom sizes are two big, thank Mr. Kitzhaber and the public employee unions for maintaining the abuses of PERS.
  2. Mr. Kitzhaber gave the union workers an average raise of between $2,250 and $2,750 salary increase while the average Oregonians income increased by a mere $900.
  3. While Mr. Kitzhaber won a minor concession from the public employee unions requiring its members to pay between $600 and $900 for their health insurance which costs taxpayers between $12,000 and $18,000 per employee annually. In some instances, the state will provide an additional subsidy of $480 per year to help cover the $600 contribution.
  4. Mr. Kitzhaber has increased the number of public employees to 81,700 – the highest number in state history. Each additional employee adds to the coffers of the public employee unions.


But the most important fact is the one overlooked by the major media outlets. All of this is paid by you, the taxpayers. And when the payments are made to the public employee unions, the taxpayers are funding an organization that exists primarily to extract even more money from the taxpayers.


Great system!