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Sarasota Thursday, Nov. 19, 2009 10 years ago

Our View


The union bosses don’t get it.

Game over.

The Sarasota Orchestra musicians union is doing what all unions do — working hard to make management look like the bad guys to gain public sympathy, all the while ignoring economic and business realities.

It’s a losing strategy for everyone, especially, in the end, for the musicians.

The dispute between the orchestra board and the musicians union, the American Federation of Musicians, centers around the orchestra board and management wanting to cut musicians’ salaries by 8% and reduce the season from 37 to 34 weeks. The musicians union offered a 5.4% pay cut in return for a three-year contract that would restore wages and benefits by the end of the contract.

No corporate management in its right mind would agree — especially in this economic climate — to restore wages and benefits by the end of the contract. So many businesses, and that especially includes not-for-profit arts organizations, are struggling now just to make it through the next day, the next month and, with luck, the next year. They can’t even begin to contemplate or make guarantees on where they will be three years from now.

But the musicians, who don’t know what it takes to meet a payroll or raise contributions in a recession, think the orchestra’s management and board are trying to shaft them and aren’t managing the business properly. This is what labor always thinks — that it can do a better job than the bosses.

On one point, the union is right. The orchestra’s administrative staff appears out of scale — a staff of 37 (not all full time, mind you) versus 41 musicians. For comparison, the Florida Orchestra in Tampa Bay shows an administrative staff of 23 compared to 78 musicians. To be sure, there are reasons and circumstances for the disparities. But when it comes to a not-for-profit, quasi-public arts institution in conflict with a union, the union bosses will always win the public’s sympathy by portraying its members as the underpaid starving artists.

Let’s put that in some context, however. Sarasota Orchestra musicians earn $27,600 to $64,000 in a 34-week season. They also receive health insurance benefits, short- and long-term disability and a retirement plan with employer match for a 12-month period. At Sarasota Ballet, the season this year was cut to 32 weeks; every dancer earns less than $26,000; and there are no disability insurance and pension benefits. Like most artists, the dancers dance because they love the art. They also know that what they do is their choice. There are always hundreds of dancers who could and would take their place.

Yes, it’s a pity what musicians and dancers earn in the United States. But it is what it is. And union bosses carrying on public campaigns against management aren’t going to change anything for the better.

To the contrary. As they continue their whining, yes, they’ll garner public support from others who always subscribe to management being evil, overpaid and incompetent. And every day this public confrontation persists, it will damage the orchestra. Givers will give less, and public support will wane.

Before the union bosses know it, they will have nothing —no paycheck, no pension, no orchestra.

Boards of directors have a fiduciary duty to manage an organization’s resources to the best of the directors’ ability. It’s in the board’s best interest to keep an organization financially sound, short and long term. Unfortunately, especially in times like these, that requires difficult decisions.

Cut to the quick. In tough times, businesses face a harsh economic reality: Do nothing and go out of business. Or make tough, painful choices and stay in business for the long term.

The musicians union must recognize: This is what every business in America has been doing for the past three years.

+ Perils of protectionism
Though not the least bit funny to the executives of Barton Malow, the construction firm that last week lost the bid to refurbish Ed Smith Stadium, we cannot help but chuckle at the consequences the Sarasota County Commission has wrought.

They were so predictable.

Protectionism is an illusion. It produces more losers than it does winners, and that’s exactly what’s in store if Sarasota County sticks by its new policy. Even though Michigan-based Barton Malow finished the bidding process with a perfect score — five 90s — the county awarded the construction project to the partnership of Sarasota-based Halfacre Construction and Miami-based Turner Construction because Halfacre satisfied the county’s local-business criteria. Halfacre-Turner, by the way, received only one perfect 90 from five judges.

Many Sarasota-based businesses will applaud this outcome. Heaven knows, our local construction industry can use the jobs. And better to keep local tax dollars recirculating here than flowing back to Michigan.
But are the consequences of forced local-contractor laws worth it?

Consider the hypothetical. Which would you prefer: A stadium built by an expert at stadium construction at a lower, more efficient price or the stadium constructed by a lesser, local contractor at a higher, less efficient price?

Or look at it this way: If the out-of-town, expert contractor charges $100, and the hometown, less-efficient contractor charges $120, the buyer of the less-efficient contractor’s services and the hometown economy both lose.

For one, the buyer is out $20 he would have been able to use to satisfy another want, need or enjoyment. Second, the local economy suffers because, even though the $120 remains in the local economy by going to the less-efficient contractor, without the force of protectionism, the $20 would have been spent on another good or service outside of construction.

As Frederic Bastiat put it: “To use force is not to produce, but to destroy.”

+ Medicaid burden to grow
The more you read H.R. 3962, the more lethal grenades you’ll find in the proposed legislation.
All the more reason to urge your senators to kill it.

One of the biggest bombs in the Pelosi health-care bill is how it will affect Medicaid, the federal program that pays the health-care bills for the uninsured and poor.

Taxpayers get zinged twice for Medicaid. In Florida, federal taxes (which you pay) cover 45% of the cost and 55% of the cost comes from state taxes (which you also pay).

For the fiscal year that began in October, that means Florida’s taxpayers will contribute $18 billion this year to cover health-care costs for the uninsured and poor. That’s 26% of the state’s $69 billion budget, the largest cost.

If Obama-Pelosi-ReidCare is approved as it is written, Florida Senate President Jeff Atwater says the state’s taxpayers will have to pay another $1 billion toward the state’s Medicaid expenses.

Says Atwater: “Their plan will swell Medicaid enrollment and mandate state taxpayers pick up the excess tab, adding a greater tax burden to working families and businesses that will surely stifle economic recovery and job growth.”

+ Seniors would lose
Here’s yet another reason to call Florida Sen. Bill Nelson and demand that he oppose Obama-PelosiCare:
In Sunday’s Washington Post, Staff Writer Lori Montgomery wrote:

“A plan to slash more than $500 billion from future Medicare spending — one of the biggest sources of funding for President Obama’s proposed overhaul of the nation’s health-care system — would sharply reduce benefits for some senior citizens and could jeopardize access to care for millions of others, according to a government evaluation released Saturday.

“The report, requested by House Republicans, found that Medicare cuts contained in the health package approved by the House on Nov. 7 are likely to prove so costly to hospitals and nursing homes that they could stop taking Medicare altogether.

“Congress could intervene to avoid such an outcome, but ‘so doing would likely result in significantly smaller actual savings’ than is currently projected, according to the analysis by the chief actuary for the agency that administers Medicare and Medicaid. That would wipe out a big chunk of the financing for the health-care reform package, which is projected to cost $1.05 trillion over the next decade.

“More generally, the report questions whether the country’s network of doctors and hospitals would be able to cope with the effects of a reform package expected to add more than 30 million people to the ranks of the insured, many of them through Medicaid, the public health program for the poor.

“In the face of greatly increased demand for services, providers are likely to charge higher fees or take patients with better-paying private insurance over Medicaid recipients, ‘exacerbating existing access problems’ in Medicaid, according to Richard S. Foster of the Centers for Medicare and Medicaid Services.

“Though the report does not attempt to quantify that impact, Foster writes: ‘It is reasonable to expect that a significant portion of the increased demand for Medicaid would not be realized.”

“The report offers the clearest and most authoritative assessment to date of the effect that Democratic health reform proposals would have on Medicare and Medicaid, the nation’s largest public health programs.”

“‘This report confirms what virtually every independent expert has been saying: Speaker Pelosi’s health-care bill will increase costs, not decrease them,” said Rep. Dave Camp, R-Mich., the senior Republican on the House Ways and Means Committee.

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