Labor Pains: Because Being in a Union can be Painful

“When you study it more it seems like there are some serious unintended consequences”

“When you first hear about it, it seems like, ‘Yes, this looks like an appealing way to generate a lot of revenue,’ but when you study it more it seems like there are some serious unintended consequences,” said Rep. Brian Baird of Washington, a member of a coalition of centrist Democrats who often play a deciding role on business and tax bills.

That’s from a front-page story in this morning’s Wall Street Journal and it refers to the union-driven plan to increase taxes on hedge funds. I didn’t want the day to end without noting it, because it’s an important reminder that a lot of propositions put forth by people at the very top of labor unions don’t always help the people at the bottom.

What do I mean? The Journal notes that, “Among other things, lawmakers say they worry a tax boost could take a bite out of public pensions’ investment returns” — and “Washington Sen. Maria Cantwell fears it could reduce returns for her state’s public-employee pension plan, which has reaped benefits from private-equity investments. Sen. Ron Wyden of Oregon says he would prefer to focus on more-comprehensive tax reform.”

Now may be a good time to recall just who has been driving the rhetoric to attack hedge funds and private equity groups — it was the honchos at the Service Employees International Union. SEIU, by the way, is the second-largest public services unions (“serving” the people whose pensions would reportedly be hurt by this move.)

A consequence not intended? Maybe. Slam to union members, pushed by union leaders? Absolutely.