Should governments be able to break union contracts, outside the normal negotiation process, to balance their budgets?

By PBN Staff
Posted 3/19/09

One of the reasons given for allowing AIG's derivative traders to collect bonus pay for 2008 is that they were part of the employment contracts the company signed with them.

At the same time, state and local governments in Rhode Island have been proposing changes to public sector employees that call for pension and health care changes that have not gone through the normal process of collective bargaining.

Should a government be allowed to impose unilateral changes in previously agreed-upon working conditions without either negotiating for the changes or declaring bankruptcy, which would allow all contracts to be canceled?

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C'mon everyone. A contract is a contract. It's ok to ask people to renegotiate, whether it's AIG or the teachers' union. And it's ok to apply pressure to bring people to the table. And it's ok to vote out people who signed contracts that turn out to be unwise. And it's good politics to back down from a contract and return bonuses (AIG) or ease up on health care payments (teachers) from time to time.

But we cannot give our congress or our president or our governor the power to unilaterally cancel contracts whenever they see fit. We need to keep, at least, this check on government power in place.

Thursday, March 19, 2009 | Report this

i have been on wall street and there is nothing guaranteed about a guaranteed bonus. Union contracts are also subject to limits. If the school committee agrees to a contract and the town does not fund it then the contract has to be redone and is not in force.No one is entitled to income for life. Not even teachers.

Michael G Riley

Thursday, March 19, 2009 | Report this
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