Time to tell the truth about public service unions
By David H. Landon
How do we tell the police officer that risks his life for his community every time he goes to work that he has to begin paying a higher percentage of his health insurance premiums? Or tell the firefighter, who runs towards the fire that others are running away from, that he must begin paying a larger percentage of his income into his retirement plan? How do we tell the public employees in our state and local governments that the collective bargaining rules, under which they have enjoyed success in achieving wages and benefits that now significantly exceed the equivalent positions in the private sector, are being changed to their disadvantage? There is only one way to do so. We have to be honest with them. Many of them are our friends and some of the finest people we know. We have to explain that we made a mistake. We have to explain that when we allowed public employees to collectively bargain that it was bad public policy. In doing so we gave public service unions the tools to undermine our system of government and that the day of reckoning is now upon us.
Across the country in state after state, significant budget shortfalls are challenging state legislatures and making balancing the budget a painful exercise. In recent weeks the newly elected Republican majorities in Wisconsin, Ohio and other states have started the process of making cuts to the budgets and reigning in government spending. Wisconsin faces a shortfall of $1.5 to $3.3 billion, depending on whose numbers you accept. In Ohio, everyone agrees that we are looking at a deficit for the next biennial budget of somewhere in the $8 billion range. A controversial area has been cuts to the benefits packages paid to public employees and the proposal to end, or at least significantly modify, collective bargaining for public sector employees. Critics of Governor Walker and Governor Kasich argue that the legislation is not about balancing budgets; it is about busting unions. Maybe to achieve the former we need to accomplish the latter.
The National Labor Relations Act of 1935 extended the right to collectively bargain to private sector employees. However, it did not include such rights for public employees. Franklin Delano Roosevelt wrote at the time, “The process of collective bargaining, as usually understood, cannot be transplanted into the public service.” Ironically, Wisconsin in 1959 became the first state law allowing collective bargaining rights for public employees. It extended rights to local government. During the 1960s and 1970s many states, but not all, followed the Wisconsin model and granted collective bargaining rights to some or all public employees. Over the last 50 years, unions representing public sector workers have used collective bargaining to secure generous benefit packages that far exceed their private sector equivalents.
The gap between public and private sector benefits continues to expand. Last year, the average public employee earned $4.45 worth of health benefits per hour, compared to $2.01 in the private sector. In general, public employees have more generous health plans and pay a smaller portion of their insurance premiums. The area of retirement benefits is another area of hidden costs and a widening gap. The private sector employees average $0.92 per hour in retirement benefits, against $3.19 for state and local government employees. And the government figure is likely understated, because aggressive accounting strategies in public pension plans underestimate the present cost of providing future benefits.
The major benefit of having a government job used to be the job security it afforded the employee. In a bad economy, private sector jobs could disappear. Working for the government has always carried the bonus of stability. The government can’t go out of business. As a result of collective bargaining, those secure jobs are now the best paying jobs as well.
The primary purpose of private sector unions today is to negotiate on behalf of workers for a larger share of the profits they helped create. That’s not the case for public sector unions. The government is a monopoly and it earns no profits to be shared. Government is not just another industry and using collective bargaining against it yields unfair results to the public. Unlike the private sector, a strike by a public sector union does not put any economic burden on the employer. If teachers or sanitation workers strike, taxes are still collected by the government. Rather, the pressure public unions bring to any job action, is purely political. It is designed to hurt those who depend on the public services provided by the striking employees; the public. Unhappy citizens who can’t get their garbage picked up or their streets plowed make re-election of the elected officials problematic. This creates an inherent conflict of interest. Elected officials negotiating with unions is in reality government negotiating with government. The unions, in effect, sit on both sides of the table. This is a corruption of the democratic process. The taxpayer doesn’t have a seat at this table, and the cost of government continues to soar.
Like many corruption models, the best way to understand them is to follow the money.
Public unions collect huge sums of money in the form of dues. These funds are collected through mandatory dues, supplied by our tax dollars through the employees’ paycheck. In 28 states, state and local employees must pay full union dues or lose their jobs. These funds are then redistributed as campaign cash to help elect the politicians who are then supposed to represent taxpayers in collective bargaining negotiations. Ninety percent of the money used as political contributions goes to Democrat candidates. Collective bargaining is the most effective fundraising tool ever conceived. Taxpayers are funding the Democrat Party.
The cost of public sector pay and benefits, combined with hundreds of billions of dollars in unfunded pension liabilities for retired government workers, is a millstone around the neck of state and local government. Our current course is unsustainable.
David H. Landon is the former Chairman of the Montgomery County Republican Party Central Committee. He can be reached at email@example.com