By Alex Blair
Douglas Turner auditioned for a spot on Fox News in the July 7, 2007 edition of the Buffalo News. In one of the never-ending series of attacks on the efforts of workers to earn a decent living, he uses a heap of incomplete and irrelevant facts to add to the News’ charges that unions are destroying the economy of New York State. In this particular case, Mr. Turner compares the limping New York State economy with the “Virginia Miracle.”
Essentially, for Mr. Turner, Virginia’s economic miracle—it’s remarkable performance vis-à-vis New York—boils down to two things. First, Virginia has a right-to-work law that requires unions to represent workers who don’t pay dues. Second, Virginia has no public sector unions to speak of.
Just as an aside, it is quite interesting to note Mr. Turner’s position that unions are destroying New York State while he enjoys union wages and benefits. As a man of apparent principle, shouldn’t we expect him to somehow surrender those wages and benefits as an example to us of how much improved life would be without union wages, benefits and retirement plans?
But back to the matter at hand. After blaming especially public sector unions for all of New York ills, Mr. Turner paints a remarkable picture of Virginia as a land of low unemployment, low property taxes, low income taxes, and booming private sector employment. I needed to investigate this nirvana.
“Virginia’s sales taxes are three to four points than in New York,” writes Mr. Turner. According to taxfoundation.org, Virginia’s state sales tax is 5% and New York’s is 4%. In Virginia, food is taxed at 1.5% and not in New York.
As we know, New York counties add their share and here in Erie County, our sales tax is 8.75%. In Virginia, counties also add their share. In Arlington County, sales tax is 8% and food of course is taxed. Let’s call 3 or 4 points an exaggeration.
“[R]eal property taxes are a fourth of New York’s,” he writes. This is complicated as each locality determines its own level. I’ll give him this one while also noting that Arlington County, Virginia, assesses annual taxes of 5% of every vehicles value.
“[T]he income tax is about half of the vampire state’s,” he concludes. According to taxadmin.org, New York’s taxes range from 4% to 6.85% with the lower rate starting at $8,000 and the highest starting at $20,000. Virginia’s, on the other hand, are lower ranging from 2% to 5.75% with higher deductibles and the rates kick in at lower levels ($3,000 for the lowest and $17,000 for the highest). Slight edge to Virginia.
Superficially, it’s truly remarkable what union’s do and the miracle that is Virginia. But that’s the way of Fox News and its apparent applicant Douglas Turner.
Because there are two Virginias, the first question that needs to be answered is which Virginia is Mr. Turner writing about. Northern Virginia, part of the Washington DC metro area, is truly an economic miracle. Of the four counties (and one city) making up the area, the poorest in 2004 was Arlington County with a median household income of $66,206. But Loudoun County is where you want to live. Median household income there was $94,225.
In short, northern Virginia is where you want to be. The four counties (and Falls Church City) account for 40% of the state’s total income while composing less than a quarter of its population.
And they need that income. A one bedroom, one-bath home in Arlington County (the poorest county) can be had for $344,800. It’s very attractive with many amenities.
As you move away from the DC metro area, the miracle is less, well, miraculous. The four poorest counties in Virginia are in the southwest corner of the state and are as far from the DC area as you can get and still be a cavalier. The benefits of low unionization, right-to-work and no public sector unions are quite clear here. Median household incomes in these counties range from $25,549 (Buchanan) to $29,645 (Russell). For a comparison, economically devastated Erie County’s median income for the same year (2004) was $42,122.
We now have the real answer for Virginia’s miracle and it doesn’t take much research to find it. Get a map. Got one? Virginia’s miracle is to be next to Washington DC. Virginia’s miracle is government employment (and the public sector unions that go with it) and employment related to government. After all, the “business” of the DC metro area is government and the employment of its hangers-on.
As a recent visitor to the capitol, I can tell you it is indeed booming. Throughout the capitol and across the Potomac, cranes dot the skyline. Lobbyists, political consultants, defense and other government contractors, lawyers, news organizations, and so on all need offices.
Tax dollars and the corporate dollars that follow flow to DC, Maryland and, yes Douglas, Virginia. Why Virginia? Geography.
How much money is it? According to taxfoundation.org, in 2005, for every dollar Virginia sent to the federal government, it received $1.51 in return. The state received $34.9 billion more from the federal government than it sent. New York, on the other hand, wasn’t quite so fortunate. For every DC-bound dollar, we received 79 cents in return. In 2005, that meant that $23.8 billion left New York State never to return.
No wonder Virginia is doing so well. We’re sending them money by the truckload. What if we just got back what we sent? What if Virginia wasn’t the recipient of our largesse? We’re forced to give money away and then being blamed for not having any. Nice trick that.
So what’s Virginia’s miracle? It’s the miracle of government—and union represented workers. In fact, 31.5% of federal workers are covered by union contracts.
Given that government and unions are at the root of Virginia’s miracle, how can we blame unions in New York for preventing us from becoming Virginia?
I know—we can blame them for not moving us next to Washington DC.