The quote in an otherwise depressing story was enough to make you laugh. Attributed to an anonymous source within the administration of Gov. David A. Paterson, the quote referred to the refusal of unionized state workers even to discuss any kind of cost cutting. Said the source: “I think they’re disconnected from the real world.”

It’s funny not only because it is so obviously true—public employee unions generally operate with a 1930s damn-the-consequences mind-set—but because the pot is calling the kettle black. If public employee unions are disconnected from the real world, it is largely because Albany lives on its own planet.

State employee contracts were negotiated by the state, which has happily given away the store for decades in exchange for the backing of labor groups at election time. It was a bad deal because public-sector unions know that, however difficult economic conditions become, their employer won’t go out of business. New York will still be there. Counties, cities and school districts will continue to exist. That, together with state labor laws, has given unions the upper hand in negotiations.

Private-sector unions understand better the reality of arithmetic. The United Auto Workers, for example, has taken a very practical approach to contract negotiations over the past two or three decades. The UAW came to understand, as one local union leader put it, that the employer wasn’t the enemy—and that it could go out of business, as General Motors and Chrysler nearly did last year.

Back to the aide’s quote: Its context was Paterson’s threat over “massive” layoffs if unions don’t agree to concessions to help the state cut its $9 billion deficit. Good luck getting them. Unions have learned that they’re better off giving nothing and that the state usually finds a different way out of its problem—usually by borrowing money that burdens future budgets and future taxpayers.

What is more, Paterson pledged a no-layoff deal with two big unions—the Civil Service Employees Association and the Public Employees Federation —in exchange for their support for a bill that created a new pension plan that conceivably will provide some taxpayer relief when people hired today are ready to retire. That pledge expires on Dec. 31, the same day Paterson’s governorship expires.

The state can’t borrow enough to completely close its financial structural deficiencies. Absent a new degree of realism from the unions, it seems likely there will be significant layoffs in the public sector before 2011 is very old. That will be unfortunate for all concerned—the New Yorkers who count on the services provided, the workers whose jobs could have been saved and the unions who would have forfeited the chance to make their way into the real world.