Why Public Sector Unions are “Special” Special Interests

California’s November 2012 statewide ballot included Prop. 32, the “Stop Special Interest Money Now” initiative. Among the provisions included in this campaign finance reform measure was the requirement that public sector unions obtain permission from each member prior to using a portion of their dues to support political campaigns.

It’s hard to precisely determine just how much public sector unions spent to immolate Prop. 32, since their campaign material often combined “Yes on 30” (new taxes), with “No on 32,” meaning resources were being directed at both initiative campaigns. Also, hard dollar campaign spending was only part of the effort; an army of union operatives were activated to defeat Prop. 32 – from public school teachers influencing students and parents to precinct walkers to labor friendly slate mailings. Overall, the unions probably spent about $100 million to defeat Prop. 32.

And their message was consistent: Prop. 32 targets “working families,” it attempts to “silence our voices,” it is “deceptive,” it provides “special exemptions” to the real special interests, “corporations and billionaires.”

Let’s review the veracity of these claims one at a time:

–  The average unionized government worker in California earns total compensation that averages well over $100,000 per year, about twice what the average private sector taxpayer earns per year. These are not typical “working families.”

–  Prop. 32 merely attempted to require public sector unions to do what every other political participant must do; use money that donors contribute voluntarily. Yet the public sector unions alleged that merely requiring political contributions to be made on an opt-in basis would “silence our voices.”

–  Prop. 32’s opponents tagged it the “special exemptions act,” because they felt it was unbalanced – they claimed it targeted public sector unions but didn’t include sufficient campaign finance restrictions on billionaires and corporations. Notwithstanding the fact that Prop. 32 did pretty much everything constitutionally allowable to restrict the campaign spending of all special interests, there is a rank hypocrisy in this statement that deserves further exploration. Because public sector unions are an integral part of America’s special interest elite.

Characteristics of the Special Interest Elite:

(1)  Their political agenda differs from – and is often in conflict with – the public interest.

(2)  Their top priorities are not informed by ideology, but rather by whatever means achieves their ends.

(3)  They will work to influence whatever political party and politicians are amenable to their agenda.

(4)  They hold inordinate influence over elections and policymaking.

(5)  They have an identity of interest with other elite special interests.

If you review these five characteristics it is certainly arguable that public sector unions belong among the special interest elite. One can suggest that public sector unions are overwhelmingly democratic, and informed by leftist ideology (item 2), but to do so is confusing cause for effect. The priority of government worker unions is money and power, and the ideology of the left supports these ends.

What is often still overlooked by critics of public sector unions, and dismissed by their supporters, is item five: There is an identity of interests between public sector unions and other elite special interests. In fact, public sector unions are the critical, primary broker among elite special interests. Without them, the power and influence of America’s overbuilt financial sector and anti-competitive corporations would be diminished, not enhanced. This is counter-intuitive, but is an utterly crucial point that reformers need to impress upon idealistic, left-leaning voters.

Why Public Sector Unions Are the Most Elite of All Special Interests:

(1)  All other powerful special interests have narrowly focused agendas that pertain to their specific industries. This means their participation in politics is generally sporadic; they emerge when there is a threat or opportunity affecting their business, then they withdraw. Often their agendas are in conflict with each other, which tends to attenuate if not cancel out their power.

(2)  Public sector unions have one broad agenda – more pay and benefits for public sector workers, and more public sector workers. This agenda supersedes whatever other redeeming programs and rhetoric they may adopt. Ultimately, this agenda is corrupting, because it is utterly apolitical and intrinsically disconnected from any qualitative analysis of what programs and policies are in the public interest.

(3)  Unlike all other special interests, public sector unions are inside the government. As term-limited elected officials come and go, the ranking employees of public sector unions know that the union leadership delivers the true continuity. And if other special interests want favorable legislation, or special treatment by the bureaucracy, they know where to go first – not to the politicians, but to the unions.

(4)  There is no source of money pouring into politics at nearly the scale and consistency of public sector union dues – in California these dues total well over $1.0 billion per year. Public sector unions deploy these massive sums in order to be actively involved in every political contest, no matter how big or small.

This reality, that public sector unions operate at the heart of the corporate and financial elite, that they broker, enable and corrupt corporate and financial power, is the tragic irony that is lost on California’s electorate. Public sector unions are the foot soldiers of corporatism, because without their blessing and support, crony capitalists would not as successfully lobby for anti-competitive laws, pension bankers would not have a taxpayer-guaranteed virtually unlimited source of funds to invest, and bond underwriters would not be collecting commissions on hundreds of billions in bond issues necessitated by spending deficits. Public sector unions are also the facilitators of authoritarianism, because every new law and every new intrusion on civil liberties is accompanied by a need for more unionized government workers.

The bargain public sector unions have made with the relentlessly consolidating corporate and financial elite is completely at odds with their supposedly egalitarian, supposed ideology. Using their virtually unrestricted, awesomely potent ability to control our politicians, they have carved out for themselves the biggest special exemption of all – they have negotiated an immunity to the economic challenges facing every private sector taxpayer who must compete in the global economy.

Put that into a 30 second television commercial.

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UnionWatch is edited by Ed Ring, who can be reached at

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Collective Bargaining is a Privilege, not a Right

Collective bargaining in the private sector is a time-honored and respected means of resolving differences between a company’s employees, who have organized willingly absent union intimidation, and the ownership/management of a private company. Collective bargaining is productive when conducted in a civilized manner, free of coercion, and not for political gain. Unfortunately, collective bargaining in the public sector is nothing more than a monopolistic process dominated by big labor and politicians to the ultimate expense of the taxpayer. There is no system of checks and balances as big labor often is negotiating with the very politician it elected. President Roosevelt, a champion of labor unions, realized the potential for political corruption and union monopolies and warned that public sector employees should not be provided the right to organize. However, in 1962 as a payback to big labor, President Kennedy issued Executive Order 10988, public sector employees to organize. Since that time, monopolistic public unions have become the sustaining money pump for the Democratic Party.

It is inconceivable that people at either end of the political spectrum would believe that collective bargaining with a politician elected through massive campaign funds is a fundamental right (see There is No Right to Collective Bargaining). Common sense would dictate that elected officials cannot be objective in negotiations with public unions. Unlike private sector employers, elected politicians have no personal stake in the outcome of collective bargaining, as any costs are ultimately covered by taxpayer money.  These politicians, therefore, are concerned only with the political ramifications of opposing collective bargaining demands. Ultimately, their decisions are politically expedient. They cave to union demands in order to avoid the negative publicity and lack of support, which would follow if they were to voice opposition (see Why I’m Fighting in Wisconsin). Big labor and the politicians that support them, however, consistently convey the inaccurate proposition of collective bargaining as a fundamental right, a legacy that should survive in perpetuity (see Behold. Your Public Sector Unions at Work). This is a classic example of the fox guarding the hen house. Despite their rhetoric, Big Labor’s protection of the collective bargaining “rights” of public employees has nothing to do with “fundamental human” rights, but rather a veiled attempt to save themselves and the politicians dependent on them from extinction.

As recently witnessed in Wisconsin, supporters of collective bargaining (including the liberal media) utilize a number of arguments to justify their position that collective bargaining rights of public employees should be maintained. They argue that corporations and businesses control the political process through massive campaign contributions. However, public data shows that unions pour as much money into political campaigns as do corporations.  They also incorrectly misrepresent that current local, state and federal deficits are due to low tax rates on business. This is clearly disputed in The Laffer Curve: Past, Present, and Future. Despite the misrepresentations, the truth is that businesses cannot “bargain” for tax rates. Like any party with an interest in legislation passed in Washington, they can only use their lobbying power and their political contributions to effect policy.  Meanwhile, labor unions, which have the same rights of lobbying and political contributions, are in an advantageous position due their “non-profit” status. They pay no taxes at all, yet are able to donate money foisted from their membership to elect officials who in turn provide substantial political paybacks through collective bargaining.

Labor unions also mischaracterize dealings between government officials and the business sector as cozy, corrupt affairs when, in fact, business is done at arm’s length, with multiple bidders involved. The same cannot be said about the monopolistic bargaining public unions enjoy, which at best is a form of “political incest” (see article Political Incest). Despite big labor’s claims, employers do not enjoy a “buddy system” arrangement similar to the corrupt collective bargaining process currently in place for public unions.

Big labor argues that it is unfair and wrong for conservative politicians to attempt to pass bills that they consider to be “union busting,” even when these politicians have won fair elections on such platforms. They use these misrepresentations and arguments to then justify walking out on sessions and promoting “rent-a-riots” to intimidate conservatives into backing down and withdrawing the bills (see Unions Advertising on Craigslist for Rent-A-Mob Protesters. and The Re-Education of Wisconsin). These and other coercive methods (as are described in detail in The Devil at My Doorstep) are consistent with union tactics that create an unlevel playing field when they cannot win by the rules. It is the typical Saul Alinsky approach described in  his book “Rules for Radicals” and vividly displayed  in the article, Police Thugs Lean on Mom and Pop, and video Crossroads GPS “The System” (see also  Rules for Wisconsin Radicals). The rules only pertain to the other side. If the roles were reversed, they would expect the conservatives to stay and do their job and live with the bills pushed through by the liberals. They are good at “do as I say not as I do” and lecturing that “elections have consequences” as long as they are on the winning side.

Big labor and their supporters are masters at playing the class warfare card, insinuating that conservatives are attacking the middle class when, in fact, the polar opposite is true. They are masters at brainwashing those that are naïve, easily manipulated, or intimidated into believing that business is the big bad wolf, keeping people in poverty and decimating the middle class. It is their rallying cry for social justice and redistribution of wealth. As articulated in America at a Crossroads. As Wisconsin Goes, So Goes America, union collective bargaining tactics in the private sector decimated the steel and automobile industries and, in effect, created a super middle class that effectively reduced the size of the true middle class. In reality there is only so much money to go around and the unions redistributed the wealth from one part of the middle class at the expense of the remainder. This is now reflected in the situation in Wisconsin (see Wisconsin Union-Busting Drive Feeds Off Towns that are Shrinking).

About the author: David A. Bego is the President and CEO of EMS, an industry leader in the field of environmental workplace maintenance, employing nearly 5000 workers in thirty-three states. Bego is the author of “The Devil at My Doorstep,” based on his experiences fighting back against one of the most powerful unions in existence today.

There is no “Right” to Collective Bargaining

Protesters in Madison, Wis., and Columbus, Ohio, are defending the “right to collective bargaining.” Guess what? There is no right to collective bargaining. Collective bargaining is a legislated privilege given to unions by friendly lawmakers.

The federal courts have been very clear on this. A federal district court in North Carolina put it quite eloquently in a decision upholding the Tar Heel State’s law prohibiting public-sector bargaining, saying, “All citizens have the right to associate in groups to advocate their special interests to the government. It is something entirely different to grant any one interest group special status and access to the decision-making process.”

A law granting public-sector unions monopoly bargaining privileges gives a union, a special interest group, two bites at the apple. First, it uses its political clout to elect public officials. Then it negotiates with the very same officials.

When you consider that between 70 and 80 percent of all local government expenditures are personnel costs, you begin to get an idea of the magnitude of the power such laws give unions.

Not only is there no right to collective bargaining in public employment, it is wrong. Collective bargaining distorts and corrupts democratic government.

Collective bargaining is a process for employer-employee relations that was designed for the private sector. This process served as the model for the development of public-sector collective bargaining without taking into account the fundamental differences between the two sectors.

Government is inherently a monopoly. If you don’t like a decision of government, you can’t check with the competition to see whether you can get a decision more to your liking. Business, on the other hand, is competitive. If you don’t like the cars being made by one manufacturer, you can check with another to see whether you can find one you like better.

In business, the bottom line is dollars. No matter how politically popular a business decision might be, if it bankrupts the company it is a failure. In government, the bottom line is votes. No matter how financially ruinous a decision might be, if it gets you re-elected, it is a success.

More importantly, government is sovereign, while all other institutions in our society depend on free choice. Sovereignty is the right to use force to enforce decisions. We may not think about it in our everyday lives, but lurking in the background behind every government rule or regulation is the fact that government has the right and the power to use force to enforce it.

We might resent that when it comes to things like taxes, but we need it when it comes to things like murder and mayhem. A sovereign institution might choose to seek input from interested parties about a decision, but when the decision is made, it is the law.

How different this is from a typical public-sector bargaining situation which the union makes demands and those demands are backed up by the threat — whether legal or illegal — of a strike.

There is a consequence to this distortion. According to the Bureau of Labor Statistics in 2010, the total compensation costs of state and local government workers were 44 percent higher than private industry; pay was only 33 percent higher, but benefits cost 70 percent more.

Public-sector collective bargaining was a creature of the social revolution that took place in this nation in the ’60s and ’70s. It was the wrong thing to do, but unlike many other mistakes it created a very powerful institution that will fight furiously against any effort to repeal or reform it. That’s what’s happening now in Wisconsin and Ohio and in many different ways in states all around the nation.

David Denholm is president of the Public Service Research Foundation, a research and education organization that studies labor unions and their influence on public policy. This commentary first appeared on February 21, 2011 in The Washington Examiner and is published here with permission from the author.