Ah, thank you David Brooks, for pushing the latest anti-union, economic meme: "States with public sector unions tend to run into fiscal crises." As Matt Yglesias says, "This is true because 'states with public sector unions' are a sub-set of 'states' and in the United States of America 'states tend to run into fiscal crises.'"
But Mike Konczal does the best debunking.
Amidst all the public debate about how states are being bled dry by militant public unions, you wouldn’t know that we just had a major housing bubble across the country followed by a financial system near-collapse and the most prolonged downturn since the Great Depression.
Riffing off of a couple of graphs at The Monkey Cage showing the correlation between union membership and state and local debt, especially this one:
Mike charts the relationship between state budget shortfalls and negative equity&151;the percentage of mortages in the state that are have negative and near negative equity.
Negative equity is correlated with all kinds of other bad things like unemployment, but from my point of view it’s a good first approximation for how devastating the housing bubble was to a community. The more the bubble popped, the more people that were hit by falling house prices, the more negative equity grows as a percent of mortgages....
Significant (t-stat of 3.53), and it is significant with or without that outlier in the upper-right corner (Nevada). The mechanisms for how this contributes is important – is it the unemployment? Is it that state governments with a larger housing bubble got more confident and spent as if all those property taxes were on their way? Are there other important, casual mechanisms? These are all good and crucial questions for us to answer, ones we should take up when we finish scapegoating teachers.
I'd suspect it's all of the above, but especially high unemployment and plummeting income and property tax revenues from the double whammy of a burst housing bubble and high unemployment. In fact, in some areas of extremely high unemployment, public employees are probably the largest sector of employed people keeping local economies afloat.
So, hey, how about some replacement revenue? There are certainly those whose share of the sacrifice could be a hell of a lot larger, and they'd hardly notice it.