Iam writing in response to a recent Your Turn guest column (“Even the Playing Field in School Negotiations”) by Marc Gaswirth, Ed.D., assistant superintendent of the Marlboro K-8 School District, that appeared in the Tri-Town News (Feb. 18) and a number of other Greater Media Newspapers publications over the past few months.
My initial reaction was similar to the one eloquently expressed by Jennifer Henning of Keyport in a (subsequent) letter to the editor. In fact, I have often heard of people from other states expressing amazement that the residents of a town the size of West Cape May (with a population of about 1,000) or even a town the size of Marlboro (with a population of about 40,000) would consider implementing the extra bureaucracy to have their own school district.
But it occurred to me that an even bigger and more insidious flaw in the reasoning of Dr. Gaswirth and others than ignoring the extravagance of New Jersey’s “home rule” mentality is blaming the remnants of organized labor in the United States for the major economic difficulties in which working people and retirees (aka “taxpayers”) and their dependents now find themselves.
The one-sided portrayal of labor unions soaking taxpayers for excessive benefits in particular is misleading. For example, the “Cadillac” health care plans that are central to the controversy over benefits for teachers and other unionized workers in this country would be considered a basic human right in any other industrialized nation, and should not even need to be a factor in the bargaining process.
Moreover, the costliness of these benefits in the United States has as much to do with the 30 percent to 40 percent in “administrative” costs – much of it accruing to CEOs and lobbyists – skimmed off the top by so-called “health insurers” as it does the actual cost of the health care being provided. (By contrast, the administrative overhead for Medicare is well under 5 percent.)
In fact, the five largest “health insurance” companies in the United States managed to rake in $12.2 billion in profits last year (a 56 percent increase over the previous year), while dropping 2.7 million people from their rolls.
More generally, it is becoming increasingly clear that the assault on organized labor that began with the mass firing of striking air traffic controllers by the FAA 29 years ago is partly responsible for our current economic mess in the first place.
The currently fashionable single-minded focus on the tax side of the equation ignores the fact that the gap between income and taxes has shrunk in part because wages have not risen faster than inflation over this entire time period.
This flattening of wages can be tied directly to the decline in union membership (from around 30 percent to around 15 percent of the work force), which has indirectly affected the tens of millions of nonunion workers who previously benefited from the rising wages won by unionized workers.
The inevitable result is a slowdown of the economy, as workers have less money to spend on goods and services.
(Equally problematic, of course, have been trade policies that provide incentives for large corporations to export jobs overseas to countries such as China, where costs associated with protections for workers or the environment have been greatly reduced or eliminated.)
P.S. How could New Jersey taxpayers afford even the true cost of essential public services (not to mention sensible investments in our crumbling infrastructure, etc.) given the current economic situation?
Tax cuts at the federal level over the past 30 years have favored the wealthy, with much if not most of the income of millionaires and billionaires now being taxed at the capital gains rate of 15 percent (compared with top marginal tax rates of 70 percent under President Nixon and 91 percent under President Eisenhower), resulting in a significant “trickle up” to this group of taxpayers from the middle class.
Given that one-fourth of all income currently goes to taxpayers with an annual income of $400,000 or more, it seems to me that reinstating the so-called “millionaire’s tax” or some variation of it would make a lot more sense than the current approach of cutting state funding to municipalities, which forces a greater reliance on regressive property taxes.
Kenneth J. O’Dowd, Ph.D., is a resident of North Brunswick.