A full-page ad in the Dispatch decried the impending layoffs of
city of Gilroy employees. The ad complained of overspending,
”
gambling with City loans on Wall Street,
”
the Taj Mahal police station, borrowing money to buy Bonfante
Gardens, and double-digit executive raises
– most of the reckless decisions that I have complained about
over the years.
A full-page ad in the Dispatch decried the impending layoffs of city of Gilroy employees. The ad complained of overspending, “gambling with City loans on Wall Street,” the Taj Mahal police station, borrowing money to buy Bonfante Gardens, and double-digit executive raises – most of the reckless decisions that I have complained about over the years.
Who paid for this ad, I wondered. Some taxpayers group that I had never heard of? Who is this AFSCME? So I went to their Web site, afscme57.org, and burst out laughing because they are a union of local government employees.
If you, dear reader, do not see the humor in this, you are probably a government employee, and I will have to explain the joke. Government employees favor overspending, passing bonds (also known as gambling on Wall Street), building huge elaborate government buildings, buying parks, and paying humongous salaries to employees. They lobby for increased spending… right up until the inevitable bankruptcy threatens and pink slips are handed out. Then and only then do they suddenly become pseudo fiscal conservatives.
During the dotcom bust in 2002, the company my husband works for, like every other capital equipment company in Silicon Valley, had a bad year. Its sales declined from $8 million to $3 million. No one was buying manufacturing equipment. Everyone was waiting for the economy to turn around. Everyone was hurting. The company faced a hard decision. Business had become so bad that the company’s income was only paying for 80 percent of its expenses. The CEO called a company-wide meeting.
“We need to cut salary expenses 20 percent,” he explained. “We can either lay off about one-fifth of you, or we can cut everybody’s salary 20 percent. That’s everybody’s. Mine. The assembly workers’. Everybody’s. I want you all to vote on this: layoffs or salary cuts. This afternoon. Secret ballot.”
Now, just imagine that you are a competent employee, the best in your department, and you know you will be the last person laid off in your department. How would you vote? When the vote was counted that afternoon, it was unanimous for a 20 percent salary cut. Salaries were accordingly cut, giving the company till March to make money before they went bankrupt. My husband worked 50 and 60 hours a week, no OT pay, to design the new machine. The company president, at age 72, took out a personal loan against his home to fund operations.
After about eight months, the company made enough money to pay back the president and go back to paying full salaries. That is what private enterprise does when times are tough. AFSCME is not suggesting that employees agree to a temporary salary cut. Oh, no. They have their solution on their Web site: increase taxes on “the rich.”
Their rationale is as follows: they want to continue to provide services to the poor, because the poor turn around and spend every dollar they are given. The “rich” don’t; they invest their earnings or “buy luxury goods” from overseas. The part that AFSCME fails to understand is that private companies, such as the little bitty company my husband works for, look like “the rich” in the tax structure.
The company does $8 million worth of business in a good year and employs 30 people. It also buys materials from 20 vendors and sells machines all over the world. Increasing taxes on California businesses will drive them bankrupt or out of the state. California, Santa Clara County and Gilroy voters in the last election voted to raise taxes, build more elaborate government buildings and railway projects, gamble on Wall Street with bonds, and drive the egg and chicken industry out of the state, maybe out of the country.
We will definitely be paying higher taxes for our folly. It is questionable whether we will get any increase in goods or services. For example, even though we are paying more in property tax for our new library, property tax revenues are so far down that they might not accrue enough money to actually fund the building. Same for BART and sales tax. The great thing about democracy is that we get exactly the government we deserve. God help us.
