Reforming Public Sector Unions

In the wake of the 2010 mid-term elections there are several state governors and legislatures exploring ways to limit the influence of public sector unions. This is occurring primarily in states that are newly under Republican control (26 states have Republicans controlling both state houses, 29 states have republican governors, and and impressive 21 states have both republican governors and republican control of both state houses, ref. State Politics & Right-to-Work Laws), but is also cropping up in states still under the control of Democrats.

The bipartisan nature of public sector union reform emanates from a simple fact that liberals are finally grasping: Public sector unions do not operate in the public interest, they operate in the interests of themselves and their members. The looming schism between Democrats who want to preserve social programs and infrastructure projects and the union special interests who want to preserve over-market pay and benefits for unionized government workers cannot easily be overestimated. It may eclipse the chasm between libertarians and social conservatives in the Republican party. Even the liberal New York Times recognized this, in an article published on January 17th by Monica Davey entitled “Budget Worries Push Governors to Same Mind-Set.”

Here are some telling excerpts from Davey’s article:

• “John Kitzhaber, the new governor of Oregon, elaborately described the state, which needs to bridge a projected budget deficit of $3.5 billion, as an old house in need of an overhaul… ‘the cost of keeping this house is more than the family can afford'”

• “In New York, Gov. Andrew M. Cuomo, another Democrat, sounded a similar call. “We must right-size the state government for today,” said Mr. Cuomo, who added that New York had no future if it intended to be ‘the tax capital of the nation.'”

• “In California, the new Democratic governor, Jerry Brown, lists as one of his guiding principles (second only to his tenet to “speak the truth”) support for new taxes only if voters want them.”

• “The rhetoric has grown very similar,” said Scott D. Pattison, executive director of the nonpartisan National Association of State Budget Officers. “A lot of times, you can’t tell if it’s a Republican or Democrat, a conservative or a liberal.”

It is surprisingly hard to find information on exactly what levels of unionization are permitted in various states, but an article by Kris Maher, published in the Wall Street Journal in June 2010 entitled “Bill Gives Public Workers Clout,” provides a good summary of how unions of public safety workers are regulated by state:

• Only two states prohibit collective bargaining completely,Virginia and North Carolina.

• Four additional states, Arkansas, Tennessee, Alabama and South Carolina permit collective bargaining if local employees choose to organize unions, but contract compliance is voluntary.

• Eleven additional states, Arizona, Colorado, Kansas, Texas, Louisiana, Mississippi, Indiana, Kentucky, Georgia, West Virginia and Maryland permit collective bargaining if local employees choose to organize unions, and contracts are legally enforceable.

• Four states permit collective bargaining by firefighters but not police.

In all states, what classes of public sector workers may engage in collective bargaining differs, so the above summary of how safety worker unionization is regulated by state provides an indication of how public sector unionization in general is regulated, but is by no means definitive.

Another New York Times article, this one by Steven Greenhouse, published January 3, entitled “Strained States Turning to Laws to Curb Labor Unions,” summarizes some of the “far-reaching, structural changes that would weaken the bargaining power and political influence of unions, including private sector ones.”

• “For example, Republican lawmakers in Indiana, Maine, Missouri and seven other states plan to introduce legislation that would bar private sector unions from forcing workers they represent to pay dues or fees, reducing the flow of funds into union treasuries. In Ohio, the new Republican governor, following the precedent of many other states, wants to ban strikes by public school teachers.”

• “Some new governors, most notably Scott Walker of Wisconsin, are even threatening to take away government workers’ right to form unions and bargain contracts.”

• “Of all the new governors, John Kasich, Republican of Ohio, appears to be planning the most comprehensive assault against unions. He is proposing to take away the right of 14,000 state-financed child care and home care workers to unionize. He also wants to ban strikes by teachers, much the way some states bar strikes by the police and firefighters.”

• “Mr. Kasich also wants to eliminate a requirement that the state pay union-scale wages to construction workers on public contracts, even if the contractors are nonunion. In addition, he would like to ban the use of binding arbitration to settle disputes between the state and unions representing government employees.”

In California, where public sector unions spend approximately $250 million per year on political activity (ref. “Public Sector Unions & Political Spending“), a bipartisan consensus may finally emerge to curb their power. But the power of public sector unions in California is so entrenched that several measures may be necessary to effectively combat their dominance.

A ban on collective bargaining, for example, would free government agencies from honoring agreements that were “negotiated” between unions and the politicians they elected – agreements that are bankrupting California – but the unions would still have the same amount of money to buy elections and control politicians.

An imposition of right-to-work laws would remove the obligation of employees in unionized workforces who opt out of union membership to pay “agency fees” which is where most of their money – especially the union’s “soft money” comes from for politics. But how many union members would quit and stop paying these fees? While many public sector union members are disillusioned with their union and its political agenda, most of them probably realize by now that they are reaping financial rewards far in excess of what they’re going to get in the private sector; will they continue to support their unions to protect their economic interests?

It may be that campaign finance reform that eviscerates the ability of public employee unions to engage in political activity at the scale they currently do is the ultimate solution. And a reform of that nature may also have to apply to corporate political spending to be politically palatable to Californians. Is that possible, is that desirable, and would that be the secret to forging a bipartisan consensus?