In yesterday’s election the voters of Ohio rejected by 62% to 38% a state law that limited the ability of public sector workers to collectively bargain and to strike. It’s a remarkable reflection of how Ohio voters feel about their government – I mean, who do state employees work for if not the people of the state? Ohio employs 769,000 people in government which represents only 13% of the labor force, substantially less public sector employment than in other states. Union membership as a percentage of the labor force in Ohio is less than 14%, although modestly above the national average of 11.9%.
The law that the Republican-controlled legislature had passed included limits on the ability of public sector workers to collectively bargaining or strike and required greater contributions to their retirement and health plans. The average voter in Ohio must think that all these public sector workers work for some foreign government. I think they’re emulating the Greeks. Perhaps it’s because I grew up in Britain during the 70s when unions periodically held the country to ransom. At times in Europe they still do.
But as an investor you take the world as you find it. I don’t have any plans to invest in Ohio, nor live there. Democracy allows people to vote for concepts that are not obviously good for them. Ohio is adopting some of the values of Europe that have created the current Euro sovereign debt crisis.