Public Sector Unions Spend $4.0 Billion per Year in U.S.

March 23, 2012

In an earlier post, “Public Sector Unions & Political Spending,” we tried to estimate political spending by public sector unions in California. The top-down analysis used was straight-forward and conservative: assume 1.0 million unionized public sector workers, times average dues of $750 per year, times one-third (the proportion of dues used for political activity), and voila, public sector unions spend $250 million per year in California to influence elections at the federal, state, and local level. No wonder the politicians in California do whatever they’re told to do by the very government workers they are supposedly elected to manage. And no wonder California is broke.

One might challenge the estimate that one-third of public sector union dues in California go to support political activity. But for public sector unions, the distinction between political and non-political spending is largely irrelevant. Because virtually every expenditure by a public sector union, whether it is collective bargaining, lobbying, contributions to candidates, independent expenditures, or educational outreach, has one primary goal: The expansion of their membership and the expansion of the pay and benefits for their members.

From this perspective, California’s public sector unions are not deploying $250 million per year to influence the political process in support of their agenda, they are deploying at least $750 million per year. How much is being spent across the United States by public sector unions to pursue this same agenda?

According to the U.S. Census Bureau, there are 12.2 million local government employees across the United States. There are 4.4 million state government employees, and there are 2.6 million non-military federal government employees. In all, 19.2 million American’s, excluding military, work for the government.

According to a report released in January 2012 by the U.S. Dept. of Labor’s Bureau of Labor Statistics that surveyed union membership in the United States in 2011, there are 7.6 million government workers belonging to labor unions, about 39%. If you include those government workers who are required to belong to a bargaining unit as a condition of their employment, but managed to opt-out of full union membership, there are 8.3 million government workers who belong to unions in the United States.

Determining the total revenue available to public sector unions in the United States each year is a simple matter of multiplying the total number of government union members in the U.S. by the average dues they are required to pay each year. An excellent recent study authored by Daniel DiSalvo, a senior fellow at the Manhattan Institute and professor of political science at The City College of New York, entitled “Dues and Deep Pockets: Public-Sector Unions’ Money Machine,” provides several sources of data on this question. Based on analysis of several representative samples from across the U.S. and across job descriptions, DiSalvo estimates the average annual dues for a government union member at $500, an amount he acknowledges is probably conservative. This means, at the least, public sector unions in the United States are collecting and spending $4.0 billion per year to pursue their agenda.

Because these unions represent public sector workers, their agenda is explicitly political. Whether they are bargaining over work rules, pay and benefits, or actually engaging in political lobbying and campaigning, they are deploying $4.0 billion per year to influence how our government is operated.

The consequences of this level of influence are manifold. Government workers, despite having greater job security, greater access to health care, and far more generous paid vacation benefits than private sector taxpayers, now make as much or more than private sector workers; in fact, the average base pay for a government worker – not including benefits – now exceeds private sector averages by over 50%. For California, we have documented this in previous California Policy Center studies such as “Calculating Public Employee Total Compensation,” and similar disparities exist across the U.S. And probably the most obvious, and biggest, disparity between public sector and private sector compensation is with respect to pensions, where the average government worker retires 10-15 years earlier than the average private sector worker, and receives a pension that averages 2-3x more per year than what a private sector worker can expect from social security.

There is nothing wrong with paying government workers well. But disparities of this magnitude carry a crippling economic cost, and can’t possibly be extended to all workers. For example, in California there are approximately 10 million people over the age of 55. If all of them received the average pension currently issued to state and local workers in California after 30 years of work, which is over $65,000 per year, that would cost $650 billion per year, nearly 40% of California’s entire gross domestic product.

Public sector unions have quietly become the most powerful force in politics in the United States, not only because they spend more than any other significant actor, but because until recently, their efforts have been completely unopposed. Corporate political expenditures are almost always limited to the narrow economic interests of each corporation or industry, and almost always balanced by expenditures by a competing corporation or competing industry. Historically, no special interest group has ever arisen to effectively oppose public sector unions.

Over the past century the character of unions in the United States has changed completely. They have converted from being the courageous underdog, representing the downtrodden and underpaid working class, to the biggest, meanest dog in the pit, representing the overpaid political ruling class. The core agenda of government worker unions, backed by at least $4.0 billion per year in cold hard cash that, ultimately, originates from taxpayers, is intrinsically oriented towards bigger government – more programs, more regulations, more pay and benefits, more workers – regardless of the cost or benefit to society.