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Archives for Unions (page 1 / 2)

My View on Unions and the Middle Class

This morning, a friend linked to an article on Salon.com, "The conservative plot to destroy the middle class: Scott Walker, 'right-to-work' and America’s new Gilded Age". I read it and I had some issues with how it portrayed the labor history of the last 100 years. In order to agree with Thom Hartmann's polemic, you have to agree with his assumptions about what happened and his implications about what caused various changes.

Allow me to summarize. Pre-unions, Americans were split into the super poor and the super rich. Then FDR passed the Wagner Act, giving unions the strength to fight for workers. From that time forward, the US middle class sprang into being and grew into a strong backbone of society. The forces of evil fought back and worked to weaken unions. The American middle class began to stagnate and to fall behind. If we don't fight to keep unions strong, the American middle class may disappear forever.

I disagree with Hartmann's history of labor and the middle class. I think unions helped some, but also caught the pre-existing wave of economic growth. The growth before WWII was caused by technological innovation, aided by the Harding and Coolidge efforts to cut government spending and debt.

The tremendous economic growth after WWII came out because the European economies had been literally bombed into oblivion. American factories grew explosively, producing all of the goods that European citizens were demanding. American workers were the beneficiaries of this flood of wealth.

Over time, the European economies recovered and the Europeans rebuilt their manufacturing base. The Japanese began to emerge and fight for their own slice of the global market. As worldwide competition increased, American businesses had to economize and cut costs, including labor costs. This eroded the wage premiums that unions had previously demanded for their members.

As American businesses were facing competition from abroad, American workers faced increased competition at home. During the 70's and 80's, more and more American women entered the workforce. This increase in the labor supply had its own impact, helping to hold down wages and benefits.

The American family also began to change, with more single parent households and more single (working) women. This increased the number of households in the country and decreased the average number of wage earners per household. This, in turn, caused the measured statistics of "income per household" to decline. The net change was that, even as the economy continued to grow, the statistical picture looked as though the middle class was stagnating.

That's my story and, given enough time, I can conjure up links to various charts and graphs that explain why I believe this story.

Right now, I'd rather point out why I don't like Hartmann's story. I'll list out the points of disagreement and give a thumbnail capsule of why I disagree with each point.

From the Gilded Age to the Great Depression to today, the economic agenda of conservatives has been easily summarized in two words: “cheap labor.”

That's an opinion and it's Hartmann's opinion. As a libertarian who supports right-to-work, I'd summarize my agenda as "freedom". I believe it leads to cheaper labor for some, more expensive labor for others.

Nowhere is this more apparent than in Republican efforts to make as many states as possible “right-to-work” states—more accurately described as right-to-work-for-less states.

Sure. Let's go ahead and redefine terms to create an emotional preconception against the thing that you're arguing against. It's a fine demagogic technique, but let's not pretend that it's entirely honest. This also ignores the fact that working for less can be a good thing. If a business is struggling, would you rather work for less or be laid off because your union refused to agree to a wage cut? If you're an inexperienced worker, would you rather work for less while you gain experience or be frozen out of a job entirely, because you're not worth the high starting wage that the union negotiated?

Only two entities have the power necessary to stand up for working people against the massive control of oligarch employers: government and unions.

There are three assertions in this sentence. I don't agree with any of them.

  1. Employers are oligarchs who exert massive control over working conditions and compensation.
  2. Governments are capable of protecting all employees.
  3. Unions are capable of protecting all employees.

I'd say the first is only true if you can easily list off all of the employers in your area. If you can and the list is small, those employers may have oligarchic control. If you can't, if there are too many employers to count, it's likely that none of them have oligarchic control over employment in your area.

Governments are often captured by special interests and used by those special interests to give themselves special privileges. An especially egregious example was when white southerners, of all economic statuses, used Jim Crow laws to mandate discrimination against minorities. In that time and place, the government most emphatically did not have the power to stand up for working people of color.

Unions are the very definition of a special interest. They exist to protect the employees in specific businesses and industries. They do this by fighting for special conditions; whether in wages, working conditions, or benefits; that are not available to all employees everywhere. They make life better for employees in the union at the expense of employees outside of the union. (If they weren't able to do this, there wouldn't be a reason to freely join the union.)

Instituting right-to-work-for-less laws is a not-so-subtle plot to starve and destroy one of the only two institutions that can stand up and demand a decent living wage for American workers.

Biased assertion of motive. As a backer of right to work laws, that's absolutely not my motive, nor is it the motive of the other backers that I know.

Right-to-work-for-less laws ensure the cheap labor conservatives have sought for generations.

This is an assertion of debatable fact, without evidence.

Unions have been a bulwark of the middle class ever since the presidency of Franklin D. Roosevelt. Prior to Roosevelt’s 1935 Wagner Act, which guaranteed workers’ rights to unionize, America had been mostly either very rich or very poor.

... Following the Wagner Act’s implementation, and Roosevelt’s raising of the top marginal income tax rate on multi-millionaires to 90 percent, the first true American middle-class came into being.

This is an assertion of debatable fact, without evidence. Additionally, Hartmann commits the post-hoc fallacy, in asserting that the Wagner Act gave rise to the middle class.

[The Taft-Hartley bill] was an early domestic version of the “free trade” disaster we’re seeing now with NAFTA, GATT/WTO, CAFTA and coming soon, the TPP—a race to the cheap labor bottom that started to take root in the American south right after passage of Taft-Hartley.

As I discussed above, the downward pressure on wages is a result of the fact that America lost its manufacturing monopoly as the rest of the world's economies grew out of the post WWII era. The increased competition in producing goods and services strongly limits the prices that any one manufacturer can demand, in turn limiting the salaries that they can pay. It's not a matter of employer greed but a result of consumer demand for more affordable goods and services.

From then until the end of the Jimmy Carter presidency, unionization, and thus, average worker wages in the United States, only gradually declined.

This is a repeat of the assertion that unions were responsible for keeping average worker wages high. If I wanted to engage in my own post-hoc fallacies, I could say that this proves that Taft-Hartley didn't actually have that much of an impact on the middle class.

When Ronald Reagan came into office, a quarter of the American workforce was unionized, meaning half of Americans could raise a middle-class family on a single salary.

There's an important unstated fact here: roughly one-half of the potential American workforce was sitting on the sidelines, as unemployed (mostly married) women. I would argue that this limited supply of labor had something to do with the level of wages and that changes in the workforce had something to do with average household income falling.

But then Reagan declared war on the middle class, starting with the air traffic controller’s union (PATCO) during his first year in office.

Uhhhm... PATCO was illegally striking. It's hard to argue that opposing an illegal strike was an assault on the middle class. Hartmann gives no evidence of Reagan's war on the middle class except for this one supposed example.

While gutting the American middle-class, conservatives also launched a well-funded propaganda campaign, using right-wing “think tanks” and talk radio to convince workers that their growing economic woes were the fault of minorities (“affirmative action”) and the poor (“welfare queens”).

These talking points coming to you courtesy of left-wing "think tanks" and Hollywood personalities. No, I don't actually think that left wing think tanks are made up of morons. But it would be offensive if I did. And it's equally offensive for Hartmann to imply that think tanks he doesn't agree with are nothing but fakes staffed by enemies of the middle class.

At the same time, they began stacking federal benches with conservative judges, and passing thousands of federal, state, and local laws, ordinances, and regulations that further weakened the powers of organized labor and their ability to unionize.

Such as? I'm not impressed by assertions without any evidence whatsoever.

The result has been an explosion in CEO and executive pay, a rush of wealth to the conservative elite (the top 10 percent of Americans now own 75 percent of the nation’s wealth), and preferential capital gains taxes continue to consolidate wealth for those who “earn their living” by sitting around the pool waiting for their dividend checks to arrive.

I have three complaints in one sentence. First, post-hoc fallacy of nebulous "federal, state, and local laws, ordinances, and regulations" that were responsible for changes in CEO and executive pay. Second, an unsubstantiated assertion that most of America's wealthy are conservative (without Googling can you name wealthy conservatives other than the Koch brothers?). Third, an implicit assumption that capital gains taxes are a good thing and that low capital gains taxes contribute to income inequality.

“fair share” union fees—money paid by workers who decline membership in their union, but receive massive benefits (in increased pay, benefits and job security) from their union that is required by law to represent them, even though they are not members and don’t pay full dues.

“Fair share” fees help curtail the problem of these “free riders.” And the Supreme Court upheld them in the 1977 case Abood v. Detroit Board of Ed.

Again, this is an assertion of opinion, not a fact. I would define "fair share" union fees (if Hartmann gives me the scare quotes, I'll use 'em) as the reward that the union gets for forcing you into a job contract that you may not agree with, negotiated by people that you may neither agree with nor like. It may be my share, but I don't agree that it's fair in all circumstances.

There are other points I could quibble with. But those are the things that bothered me the most.

This entry was tagged. Unions Income

Peru cop who Tased Alzheimer's patient won't get his job back

This closes the loop on a story that I first noted back in July 2012.

According to police reports, Officers Gregory Martin and Jeremy Brindle entered Howard’s room in the locked-down Alzheimer’s unit and told him to enter the ambulance.

When Howard did not respond to commands, Martin unholstered his Taser and told him he would be Tased if he didn’t comply.

Brindle attempted to gain control of Howard’s arms to restrain him, and a struggle ensued. When Howard turned towards Brindle, Martin then Tased him, which caused Howard to drop to the floor.

Howard was then Tased by Martin two more times while on the ground after ordering him multiple times to roll onto his stomach. Police said Howard resisted constraint and attempted to fight them while on the floor.

Brindle then handcuffed Howard, which left a large, bloody gash on his wrist and escorted him to Duke’s Memorial Hospital. Officers said he was combative in the ambulance until his wife arrived at the hospital and calmed him down.

Howard’s wife, Virginia, ... said her husband was diagnosed with Alzheimer’s 13 years ago and doesn’t understand the simplest directions or commands like “sit down or pick up a book.”

In August 2012, the Peru, IN police department fired Gregory Martin. Martin immediately appealed his firing and the case went to court. On September 5 2013---more than a year later---the appeals court denied Martin's appeal. It's now official that Martin won't be going back to the Peru, IN police force.

I'm glad this case is finally over and that justice ultimately was served. But this case illustrates why I believe that police unions are a bad idea. In a normal business, you could fire an employee for this kind of overreaction and walk away, confident that the firing would stick. The city of Peru fired Martin and then had to fight multiple battles to ensure that the firing would stick.

This kind of long drawn process gives too much power to the police department, to our civil "servants". It mights it too costly to get rid of bad actors and makes it more likely that the bad actors stick around, causing more problems down the road.

Union defenders claim that the government unions are necessary, to protect employees against abusive employers and managers. But the city of Peru is ultimately responsible to its citizens. Police who think they are wrongly treated can make their case at the ballot box. They shouldn't be able to use the coercive power of unionization to dictate terms to the citizens who ultimately pay their salaries and employ them.

Why Firing a Bad Cop Is Damn Near Impossible →

Hey, look! It's yet another area where public sector unions are making the world a worse place. I'm 100% in favor of getting rid of police unions.

All of these Rhode Island cops, and many more like them across the county, were able to keep their jobs and benefits—sometimes only temporarily, but always longer than they should have—thanks to model legislation written and lobbied for by well-funded police unions. That piece of legislation is called the "law enforcement bill of rights," and its sole purpose is to shield cops from the laws they're paid to enforce.

The inspiration for this legislation and its similarly named cousins across the country is the Police Officers’ Bill of Rights, introduced in 1971 by New York Rep. Mario Biaggi (D), at the behest of the Police Benevolent Association. Having once been the most decorated police officer in the country, Biaggi didn't need much convincing to put forward the union-friendly bill.

Biaggi pushed for the POBOR until March 1987, when he received two indictments back-to-back. The first was for accepting a paid vacation from Brooklyn Democratic Leader Meade H. Esposito in exchange for using federal funds to bail out a company in Esposito's neighborhood. A second indictment handed down three months later charged Biaggi with extorting $3.6 million in cash and stock options from a small Bronx machine shop called Wedtech. Both charges resulted in convictions and Biaggi's resignation from Congress.

While Biaggi's bill never made it through Congress, police unions didn't wait for city managers or police department higher-ups to write their own. Benevolent associations in Maryland successfully pushed for the passage of a police bill of rights in 1972; Florida, Rhode Island, Virginia, New Mexico, and California followed suit before the 70s were over. The 1980s, 90s, and 2000s saw still more states adopt police bill of rights at the behest of police unions.

Obama’s Auto Bailout Was Really a Hefty Union Payoff →

GM did go bankrupt – filing for Chapter 11 protection against its creditors on June 1, 2009. It’s what happened next that the president can take credit for – a handout of $49.5 billion in taxpayer money to GM, some $27 billion of which remains outstanding, and another $17 billion to its financial arm Ally Financial, which still owes $14.7 billion.

Where did that money go? Mainly, it went to paying off debts owed by GM and Chrysler, and – in an historic distortion of our bankruptcy proceedings – to securing the pensions and livelihoods of UAW workers. It turns out the real debt was that of Mr. Obama to organized labor, which had ponied up some $400 million to help him defeat John McCain.

The Obama administration strong-armed the auto companies’ creditors into accepting undeniably unfair terms – terms that saw pensions obliterated for non-union workers but saved for those carrying a UAW card. Terms that saw non-UAW shops close but UAW factories stay open. Terms that doled out ownership in GM with political favoritism as a guiding principle.

These charges are not at issue. In the government-managed reorganization of GM, bond holders (secured bond holders, who normally are at the top of the pay-out chart) were given equity in the carmaker at a price of $2.7 billion per one percent ownership. The government ended up paying $834 million for every one percent it claimed; the UAW paid only $629 million.

It was not only the ownership share that was skewed towards the UAW. As jobs began to come back, it was the UAW plants that kicked into high gear. Workers at GM’s plant in Moraine, Ohio, who had been laid off in 2007, were not included in the re-hiring. Why? Because they did not belong to the UAW. The Moraine plant was reportedly one of GM’s most productive, but under the terms of GM’s reorganization, its workers were “banned from transferring to other plants,” according to Sharon Terlep at The Wall Street Journal.

Moraine was not the only non-UAW facility to fall under the knife; a truck plant in Ontario organized by the Canadian Auto Workers also went down.

Top grads want to teach. Why don't they get hired? →

Here's another indication that unions are hurting education.

The awkward fact is that teaching in America has become a quasi blue-collar profession mostly shunned by top college graduates. The countries with the best education systems recruit from top graduates. What about our top graduates? A good barometer is Teach for America (TFA), which in 2011 drew nearly 48,000 applicants for 5,200 teaching positions. Those applicants included 12% of the seniors at Ivy League schools.

Here's the question that never gets asked: What happens to the 43,000 top graduates who wanted to teach but didn't get an offer from TFA? Nearly all seek other careers.

For the best and brightest college graduates in this country, jobs offered by regular school districts lack prestige. Their accountability-free practices give the best teachers no way to stand out. These young TFA applicants rose to the top of their high schools classes and won admittance to the top tier colleges. They want a shot at shining on the job as well.

More Importantly, Why Did the Janesville Plant Close? →

Wisconsin's own Christian Schneider talks about the forces that drove GM to close the plant in Janesville, WI.

While plant closings are always complex issues, two main issues (both somewhat embarrassing to the Left) played a large role: the heavy burden of organized labor and misplaced government intervention in the automotive marketplace.

As George Will wrote at the time, by 2005, GM had essentially become a health-care company that also happened to make automobiles.

American Airlines Enters Bankruptcy →

Megan McArdle, on my American Airlines is entering bankruptcy.

But airlines do have another problem that's special to them: their unions, which are both powerful, and plentiful.

Whatever you think about the United Autoworkers, at least there's only one of them. The union doesn't want to kill the company any more than management does. In theory, at least, you should be able to work something out.

But when there are three or four unions--pilots, flight attendants, mechanics, and baggage handlers--things get complicated. All of those groups are completely necessary to make sure that the plane gets in the air. If one of them doesn't show up, you lose all the money on every seat.

... But when times aren't so flush, this dynamic becomes a problem. The company's past labor agreements don't leave much margin for error--particularly when there were sizeable pensions, as there have been at most of these legacy airlines.

It's not clear what will happen to American's $8 billion worth of pension obligations, which are underfunded by billions, but I'd expect that the company will push hard to shed them. It will also want the judge to rewrite its labor contracts.

This entry was tagged. Unions

In Detroit, Two Wage Levels Are the New Way of Work →

Interesting. Companies that have the freedom to set their own pay and benefit scales are able to create more new jobs than they would otherwise be able to. That's certainly unexpected.

They are a cornerstone of Chrysler’s unlikely comeback: 900 employees turning out a Jeep Grand Cherokee sport utility vehicle every 48 seconds of the working day at an assembly plant here. Working for Less

Nothing distinguishes them from other workers at the Jefferson North plant, except their paychecks. The newest workers earn about $14 an hour; longtime employees earn double that.

With the economy slumping and job creation once again a pressing issue in the White House and Congress, the advent of a two-tier wage system in Detroit is spiking employment for one of the country’s most important manufacturing industries.

This entry was tagged. Jobs Unions

District swings from deficit to surplus →

As changes to collective bargaining powers for public workers take effect today, the Kaukauna Area School District is poised to swing from a projected $400,000 budget shortfall next year to a $1.5 million surplus due to health care and retirement savings.

“These impacts will allow the district to hire additional teachers (and) reduce projected class sizes,” School Board President Todd Arnoldussen wrote in a statement Monday. “In addition, time will be available for staff to identify and support students needing individual assistance through individual and small group experiences.”

The district anticipates that elementary class size projections for next year will shrink from 26 students to 23 students. Class sizes for River View Middle School are expected to fall from 28 students to 26 students.

Kaukauna High School classes could be reduced from 31 students to 25 students.

Huh. That’s certainly … unexpected.

(Hat tip to Glenn Reynolds, Ann Althouse, and the Milwaukee Journal Sentinal.)

Silly Unions, Act 10 Doesn't Violate Civil Rights

After Governor Walker's budget repair bill (AB-10) was re-instated by the Wisconsin Supreme Court, our unions immediately ran off to Federal court to claim civil rights violations.

At the time, I thought that their case was exceedingly weak and more in the vein of a stupid Hail Mary attempt than a serious effort at practicing law. Today, I saw that the United States Court for the Western District of Wisconsin appears to agree with me. They denied the unions' request for a temporary restraining order and/or preliminary injuction in quite plain terms. Check out the ruling [PDF].

If you don't read the ruling, the breakdown of their argument shows you pretty clearly what they think. It’s not a final ruling yet but, if this is representative of what the court is thinking, the final ruling could be even more fun.

  • “There Is A Rational Basis For The Differing Treatment Of General Employees And Public Safety Employees”
  • “Plaintiffs’ Attempt To Reduce Act 10 To Crass Political Payback Fail”
  • “Plaintiffs Have No Probability Of Success On The Merits Of Their First Amendment Claim, As That Claim Is Without Merit”
  • “Plaintiffs Misstate The Nature Of Their Alleged Irreparable Harm”
  • “The State And The Public Interest Will Suffer Great Irreparable Harm By The Issuance Of A Preliminary Injunction”
  • “Plaintiffs Seek To Alter The Status Quo, Not Maintain It, By Asking For A Remedy That Will Result In A Completely New Set Of Collective Bargaining Statute”

The ruling is all kinds of good fun.

This entry was tagged. Unions Wisconsin

The White House vs. Boeing →

Senator Lamar Alexander (R-Tennessee) says that Tennessee attracted thousands of auto industry jobs because of its right-to-work laws. This

This reminds me of a White House state dinner in February 1979, when I was governor of Tennessee. President Jimmy Carter said, "Governors, go to Japan. Persuade them to make here what they sell here."

"Make here what they sell here" was then the union battle cry, part of an effort to slow the tide of Japanese cars and trucks entering the U.S. market.

Off I flew to Tokyo to meet with Nissan executives who were deciding where to put their first U.S. manufacturing plant.

... In 1980 Nissan chose Tennessee, a state with almost no auto jobs. Today auto assembly plants and suppliers provide one-third of our state's manufacturing jobs. Tennessee is the home for production of the Leaf, Nissan's all-electric vehicle, and the batteries that power it. Recently Nissan announced that 85% of the cars and trucks it sells in the U.S. will be made in the U.S.— making it one of the largest "American" auto companies and nearly fulfilling Mr. Carter's request of 30 years ago.

This is directly applicable to today's battle between the NLRB and Boeing, over whether or not Boeing can open a production line in a right-to-work state.

This entry was tagged. Unions

How the Budget Repair Bill Passed →

Minority Leader Miller made it quite clear, in a letter to Majority Leader Fitzgerald, that the Democrats had no intention of returning until and unless the collective bargaining provisions were stripped from the bill.

Senator Taylor requested an absentee ballot for the April 5 spring election.

Republican senators were convinced that the Democrat 14 weren't interested in true negotiations, only in posturing and obstruction. So they voted to pass the bill anyway, after making sure that the slightly altered bill was legal.

This entry was tagged. Unions Wisconsin

Badgering the Witless →

Iowahawk returns to the subject of whether or not Wisconsin's unionized school system trumps the non-unionized nightmare that is the Texas public school system.

Spoiler: it doesn't.
Further spoiler: Wisconsin is not doing well, at all, in educating minority students.

The Unions Didn't Agree to Anything →

Wisconsin public unions have been saying for weeks now that they had agreed to Governor Walker's benefit cuts and that the Governor should leave their collective bargaining "rights" alone.

Well, they've been busy signing new 2-year contracts that either don't include the cuts or (in some cases) actually have pay and benefit increases. Guess they haven't been quite honest with people of Wisconsin after all.

This entry was tagged. Unions Wisconsin

Is a Texas Education That Bad? →

Iowahawk steps out of character for a moment to set Paul Krugman straight. Krugman has been claiming that Texas, without collective bargaining, has an education system that ranks far, far below the education system of Wisconsin, which does have collective bargaining.

It turns out that, once you control for the ethnicity of the overall population, Texas students out perform Wisconsin students, ethnicity by ethnicity.

Union Power, By the Numbers →

A look at the top 10 political donors.

That's five unions to two businesses and three other groups. Five out of ten is half, by my always-suspect English-major math. And who are those other groups? ActBlue is a Democratic clearinghouse, the trial lawyers are super-lopsidedly Democratic, and four out of five of the Realtors' top campaign-cash recipients are Democrats.

This entry was tagged. Spending Unions

Skewed Sample Data Used In PPP Wisconsin "Do Over" Poll →

PPP's recent poll of Wisconsin voters appears to overcount union voters by 6% and undercount Walker voters by 6%. It may not be trustworthy.

This entry was tagged. Unions

On Teachers and Others →

In judging teachers' claims, we might compare their lives with the lives of, say, farmers or welders or interstate truckers.

Victor Davis Hanson compares his experiences as a farmer and as a teacher.

This entry was tagged. Unions

I Support Governor Walker

A little over 2 weeks ago, Governor Walker introduced his Budget Repair Bill for the 2009-2011 biennium. This bill includes several changes related to collective bargaining for public sector employees.

Here is the Wisconsin State Journal's summary of the changes:

Makes various changes to limit collective bargaining for most public employees to wages. Total wage increases could not exceed a cap based on inflation unless approved by referendum. Contracts would be limited to one year and wages would be frozen until a new contract is settled. Collective bargaining units are required to take annual votes to maintain certification as a union. Employers would be prohibited from collecting union dues, and members of collective bargaining units would not be required to pay dues. Changes would be effective upon expiration of existing contracts. Law enforcement, fire employees and state troopers and inspectors would be exempt from the changes.

These changes have been heavily protested ever since the bill was introduced. Protesters have been occupying the state capitol building for over a week. They have constantly protested that the governor is attempting to take away workers' rights and virtually enslave the people who make Wisconsin great. They have even compared Governor Walker to Hitler, saying that Hitler's first step on the path to genocidal dictatorship was breaking the unions.

I find all of the emotion and rhetoric to be over the top and ridiculous. First of all, unions are a great answer to a problem that doesn't really exist any more. Secondly, this is about the rights of the workers but it's different than you might think. Collective bargaining laws do protect the rights of some workers but they also deprive workers of other rights too. It's not a simple matter of rights versus no rights. Rather, it's a competition between rights and I think the governor is tipping the balance back towards the right kind of rights. Finally, public unions are different from private unions and protesters seem to be completely unaware of the difference.

I keep coming back to one fundamental fact. The government of the State of Wisconsin exists to fulfill certain indispensable roles (law and order, for instance) and to provide certain basic services (education, safety nets, etc) for the citizens of Wisconsin. It is fully funded by those same citizens. They are entitled to the best possible services at the lowest possible costs. The State does not exist to provide a jobs program or a model for employment. I agree with Megan McArdle's view of state employment:

I don't think of state employment as a way to create, in miniature, my ideal labor utopia. I think of it as a way to procure services. I define people as being "overpaid" not if they are paid more than someone with a similar level of education, but if they are paid more than I need to pay to attract adequate workers.

If the State can save money by outsourcing functions or automating functions, it should do so. If they State can save by hiring fewer, higher quality, workers at higher pay, it should do so. The State should do whatever is necessary to provide its citizens with the best services at the lowest cost.

I believe these changes would make the State closer to being able to do that. Limiting wage increases to the rate of inflation would set a baseline expectation that the cost of government services shouldn't increase any faster than general costs in the rest of the economy. At the same time, local governments would be able to pay more for needed work, if the voters directly approved. That seems imminently fair to me.

Limiting contracts to 1 year instead of 2 years, would give local governments the ability to react quicker to changing economic conditions. They wouldn't necessarily be stuck with a contract that no longer reflects reality on the ground, in the event of a sudden economic swing (good or bad).

I very much like the fact that unions would be required to recertify annually. This will absolutely not be a problem for any union that enjoys the full support of its membership. For unions that are accurately and fairly representing their covered workers, this should be a routine humdrum sort of affair. A union would only fail to be certified if a majority of workers either fail to vote at all (indicating that they don't really care about the union and don't need it) or if a majority actively vote against it. In the latter case, that could only mean that they're unhappy with their representation and desire better representation. That's the ultimate in workplace democracy and can only lead to continued, high quality union representation.

Finally, the State would be out of the business of collecting union dues and employees would no longer be forced to pay union dues. This will have several positive effects. First, it will restore employees' free speech rights. They will no longer be forced to fund political positions that they disagree with. They will also no longer be forced to fund positions that they do agree with, if they find that they have better uses for their money. Union dues sometimes amount to nothing more than a political tax on employees. This provision will remove that tax and will ensure that employees only pay it if they feel that they're receiving something of value in return. This change will only cripple the unions if workers find that they don't agree with how their money is being spent and don't receive something of value in return. That will be another factor forcing unions to be more responsive and accountable to their members.

I strongly support the collective bargaining provisions of the Walker Budget Repair Bill.

Finally, a closing word about the political rhetoric that's been deployed against Governor Walker. I'll let David Harsanyi speak for me.

According to Nobel laureate and raconteur Paul Krugman, Gov. Scott Walker and "his backers" are attempting to "make Wisconsin — and eventually, America — less of a functioning democracy and more of a Third World-style oligarchy."

Now, it's common knowledge that throwing around loaded words like "socialism" is both uncivil and obtuse, so it's comforting to know we can still refer to people as "Third World-style oligarchs." And boy, that kind of Banana Republic doesn't seem very appealing.

Democracy, naturally, can only be saved by public sector unions, which attain their political power and taxpayer-funded benefits by "negotiating" with politicians elected with the help of unions who use, well, taxpayer dollars. And you know, that doesn't sound like an oligarchy at all.

While Walker, who won office using obnoxious Third World oligarchic tactics like "getting more votes than the other candidate," is a cancer in the heart of democracy, union-funded Democrats evading their constitutional obligation to cast votes are only protecting the integrity of representative government by completely avoiding democracy.

This entry was tagged. Unions Wisconsin

Unions: Public Sector Unions Are Different

Not all unions are created equal. Public sector unions are fundamentally different from private sector unions. While private sector unions can serve a valuable function, public sector unions exist in a different world, with different constraints and a different history.

Private and public sector unions are different historically. While there's a long of history of private sector unions (based on both negative rights and positive rights), public sector unions have only been around since the late 1950's. The shape of that history has also been dramatically different. Take it away, Jonah Goldberg:

Traditional, private-sector unions were born out of an often-bloody adversarial relationship between labor and management. It's been said that during World War I, U.S. soldiers had better odds of surviving on the front lines than miners did in West Virginia coal mines. Mine disasters were frequent; hazardous conditions were the norm. In 1907, the Monongah mine explosion claimed the lives of 362 West Virginia miners. Day-to-day life often resembled serfdom, with management controlling vast swaths of the miners’ lives. Before unionization and many New Deal–era reforms, Washington had little power to reform conditions by legislation.

Government unions have no such narrative on their side. Do you recall the Great DMV Cave-in of 1959? How about the travails of second-grade teachers recounted in Upton Sinclair's famous schoolhouse sequel to The Jungle? No? Don't feel bad, because no such horror stories exist.

Government workers were making good salaries in 1962 when President Kennedy lifted, by executive order (so much for democracy), the federal ban on government unions. Civil-service regulations and similar laws had guaranteed good working conditions for generations.

The argument for public unionization wasn't moral, economic, or intellectual. It was rankly political.

Traditional organized labor, the backbone of the Democratic party, was beginning to lose ground. As Daniel DiSalvo wrote in “The Trouble with Public Sector Unions,” in the fall issue of National Affairs, JFK saw how in states such as New York and Wisconsin, where public unions were already in place, local liberal pols benefited politically and financially. He took the idea national.

The plan worked perfectly — too perfectly. Public-union membership skyrocketed, and government-union support for the party of government skyrocketed with it. From 1989 to 2004, AFSCME — the American Federation of State, County, and Municipal Employees — gave nearly $40 million to candidates in federal elections, with 98.5 percent going to Democrats, according to the Center for Responsive Politics.

Private and public sector unions also face different bargaining conditions. Private sector unions bargain with employers who face competition of their own. The employer must find ways to satisfy the union demands for pay and benefits without paying so much that it goes out of business. The union (mostly) recognizes this and limits its demands accordingly. Private sector unions are also paid with money earned from selling products or services to consumers who bought them voluntarily.

Public sector unions bargain with a single employer who faces no competition whatsoever. The employer satisfies the union demands for pay and benefits not with its own money but with money taken from the public purse. This limits the incentive of the employer to drive a hard bargain. Unions recognize this and increase their demands accordingly. Because public sector unions are paid with money taken from taxpayers who have no choice in the matter, taxes can always be raised to compensate for increased demands.

Private and public sector unions have different effects on the rest of the population. Private sector unions work for employers who provide goods and services as part of a free wheeling market place. If a private sector union strikes, it risks having consumers permanently move to a competing supplier. If a public sector union strikes, it deprives the citizens of an urgently needed service -- generally one that isn't provided by anyone else. A striking public union holds citizens hostage to its demands.

(Peter Kirsanow, a former member of the National Labor Relations Board, lists other constraints that apply to private sector negotiating but not to public sector negotiating.)

Public sector unions also deprive the voters and their representatives of the final say over government spending. A huge percentage of the government's budget -- of any organization's budget -- is spending on salary and benefits. But in areas with public sector unions, the government doesn't directly set salary and benefits. Instead, it can only set the amounts that the unions will agree too. This ultimately gives the union final authority over the government's budget. This was recognized by a 1943 New York Supreme Court decision.

To tolerate or recognize any combination of civil service employees of the government as a labor organization or union is not only incompatible with the spirit of democracy, but inconsistent with every principle upon which our government is founded. Nothing is more dangerous to public welfare than to admit that hired servants of the State can dictate to the government the hours, the wages and conditions under which they will carry on essential services vital to the welfare, safety, and security of the citizen. To admit as true that government employees have power to halt or check the functions of government unless their demands are satisfied, is to transfer to them all legislative, executive and judicial power. Nothing would be more ridiculous.

Even Franklin Delano Roosevelt recognized that public sector unions were a bad idea.

All government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into public service. It has its distinct and insurmountable limitations when applied to public-personnel management. The very nature and purposes of government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with government employee organizations. The employer is the whole people.

There is one, final, crucial difference between private and public sector unions. Public sector unions get to pick their own bosses, their own negotiators. This turns them from just an organization that protects their members to an organization that acts as a giant special interest. They are able to take the union dues that their members are forced to pay and spend a large portion of those dues on political lobbying.

As they sit across the negotiating table, they are able to implicitly threaten the negotiator with a loss of his own job or to implicitly support him with future campaign contributions. Nothing is said openly. Nothing needs to be said openly. Everyone at the table knows how the game works. The representatives and negotiators who play nice will be handsomely reward during the next election campaign. Those who do not can expect to be attacked endlessly.

This is not just a theoretical concern. Professor Bainbridge reviewed the evidence against public sector unions and found it persuasive.

Research by Terry Moe (22 J.L. Econ. & Org. 1) into the electoral power of teachers' unions finds just such an outcome:

The first study ... provides evidence that teachers, acting through their unions, are quite successful at getting their favored candidates elected to local school boards. When a candidate is supported by the unions, her probability of winning increases dramatically, so much so that the impact of union support appears to be roughly the same as the impact of incumbency. In terms of total impact, union influence may be even greater than this suggests, because union victories literally produce incumbents—and the power of incumbency then works for union candidates to boost their probability of victory still further in future elections.

The second study ... shows that public bureaucrats' turnout advantage over other citizens is much greater than the existing literature would lead us to expect. It also offers persuasive new grounds for believing that their high turnout is indeed motivated by occupational self-interest—and more generally, that they are actively and purposely engaged in an electoral effort to control their own superiors.

Moe concludes:

The prevailing theories treat bureaucrats as mere subordinates, controlled from above by political authorities. But the control relationship can run both ways, and not just because bureaucrats have expertise and other sources of private information. In a democratic system the authorities are elected, and this gives bureaucrats an opportunity to exercise electoral power in determining who will occupy positions of authority and what choices they will make in office. It would be odd indeed if public bureaucrats and their unions did not invest in this kind of reverse control—and there is ample evidence that they do.

In effect, public sector unionism thus means that representatives of the union will often be on both sides of the collective bargaining table. On the one side, the de jure union leaders. On the other side, the bought and paid for politicians. No wonder public sector union wages and benefits are breaking the back of state budgets. They are bargaining with themselves rather than with an arms'-length opponent

Nor are these the paranoid delusions of far-right anti-union agitators. Union leaders recognize their power over their employers.

the Michigan Education Association has distributed a 40-page instructional manual for local leaders that's entitled "Electing Your Own Employer, It's as Easy as 1, 2, 3." And as one high-ranking state union official told me when I wrote Revolution at the Margins, "We knew the school system wasn't moving to Mexico," so there was no reason to work with the state negotiator on establishing a prudent salary structure.

Even when unions don't directly control the officials they're negotiating with, they can strongly influence the negotiations through political means.

Professor Bainbridge quotes from the 1971 book, The Unions and the Cities.

No such market restraint exists in the public sector except in theory since discharging teachers, sanitation workers, or police- men as a result of granting higher benefits raises very real political pressures from within the affected government department and from an inconvenienced public. Government employers too frequently yield to constituents by a grant of increased benefits to employees and then either bury the increases in the "bowels of an incomprehensible municipal budget," seek new funds, or reduce other services by reallocating the city's treasury. Thus, normal market restraints are often supplanted by political restraints regardless of economic or social impact.

Increases can be buried if the public doesn't realize exactly how well employees are paid. A teacher's listed salary may only be $35,000 or $40,000 a year. The rest of the teacher's salary is hidden inside the benefits. The Wall Street Journal did an analysis of the fringe benefits for Milwaukee public school teachers. The top of the line number may be surprising: for every $1.00 in salary that they receive, they receive another $0.72 in benefits. These benefits include a total of $0.22 put into pension plans and $0.38 put into healthcare benefits.

Benefits are also hidden from casual view by specifying that they're for life. For instance, Milwaukee school teachers receive district funded healthcare for life. The district pays 100% of the cost of healthcare at the teacher's retirement and the teacher is only responsible for the annual increase in the cost of healthcare. Historically, these promises have not been pre-funded and the future costs do not show up on the district's budget.

Here's another way that benefits can be hidden. You know that public school teachers get healthcare as part of the compensation. But do you know how they get that healthcare? Did you know that WEA Trust, an insurance company affiliated with WEAC, provides health insurance to nearly every public school employee? And that that healthcare is significantly more expensive than comparable insurance from companies not affiliated with WEAC?

BigGovernment.com provides an overview.

WEA Trust has grown very fat on public school dollars, with a net worth of $316 million and a team of 12 administrators all receiving compensation packages worth six figures per year.

Sadly, this insurance swindle is endorsed by state law.

The pressure derives from state law, which makes the identity of a school’s health insurance carrier a topic of collective bargaining between local unions and school boards. That allows union representatives to come to the table demanding expensive WEA Trust coverage, and frequently school boards give in.

[snip]

Once school districts sign up for WEA Trust coverage, and write the carrier into collective bargaining agreements, the shackles are on. And they aren't easily removed.

Local unions often refuse to have the provision stricken from school labor contracts in subsequent negotiations. If a school board presses the issue in an effort to save money, WEAC will frequently take the case to arbitration.

The Trust's business practices also complicate the problem.

Districts need employee claim histories to provide to potential bidders, but WEA Trust sometimes refuses to surrender the information, making it more difficult, if not impossible, for competitors to draft an accurate insurance estimate.

WEA Trust also reportedly threatens districts with higher premiums – by removing them from regional insurance pools with lower rates – if they consider a cheaper carrier.

Some districts have managed to break WEA Trust's shackles and the savings tell the story. Officials from 15 districts recently told EAG that they saved six figures the first year under new coverage, while still providing quality health benefits for employees. They also say the cost of their new coverage has remained steady in subsequent years.

But there is a catch. Officials at all of the breakaway districts said they had to surrender, or at least share, the insurance savings with their local unions, generally in the form of salary increases. That left them with little or no extra revenue to cover other costs.

Last year, Milton's school district was able to switch from WEA Trust to Dean Health and save $382 per month, per employee. That's not exactly chump change. This is something that other school districts around the state would also like to be able to do.

Yes, public sector unions are almost completely different from private sector unions. They are not at all the same thing and shouldn't be treated the same either by the general public or by the government. They should be treated like what they are: a special interest that looks out for its own interests at the expensive of everyone else's, like any other special interest does.

But they're not just any other special interest. They use their position as public "servants", providing crucially needed public services, to make demands of the general public. If they're rebuffed they don't just respond by campaigning politically as other special interests do. They also do whatever is necessary to inflict pain upon the general public, in an effort to further pressure government representatives. This pain can take the form of protests, slow downs, or stoppages thus depriving citizens of the services on which they depend.

Because of all of this, I do not find public sector unions to be admirable. I despise them as much as I despise every other special interest.