Showing posts with label Collective Bargaining in the Public Sector. Show all posts
Showing posts with label Collective Bargaining in the Public Sector. Show all posts

November 1, 2014

The California municipalities of San Bernardino, Vallejo and Stockton filed for bankruptcy; Stockton’s Chapter 9 filing represents the largest such case in U.S. history. Continually depressed home prices have led to unusually high foreclosure rates in these markets. According to foreclosure data from RealtyTrac, a site that tracks housing data, these cities had among the worst foreclosure rates in the country.

Stockton, California Statistics as of September 2012

Decline in home prices: 62.8%
Unemployment rate: 15% (12th highest)
Median home price: $170,000 (76th highest)
Foreclosure rate: 1 in 66.2 housing units (the highest)

When Stockton filed for bankruptcy in June 2012, it became the largest-ever U.S. city to do so, according to the Wall Street Journal. The city’s economy has been plagued for years by falling home prices, which declined at an annualized rate of 16.6% between the first quarter of 2007 and the first quarter of 2012. Stockton also has one of the nation’s highest unemployment rates, at 15%, and a foreclosure rate that leads the nation, with one in every 66.2 homes in foreclosure. Though Fiserv projects home prices will rise at an annualized rate of nearly 6% between the first quarter of 2012 and the first quarter of 2017, the housing market remains weak: 54% of all second-quarter home sales were foreclosure sales, and the number of property listings in July was down more than 40% from a year earlier.



What led the city of Stockton to insolvency?

Stockton is a fairly large city of 300,000 or so, located about 80 miles east of San Francisco and about 50 miles south of Sacramento. With housing prices in those cities out of reach for many workers, long-distance commuting to Stockton became commonplace.

Stockton’s economy was largely dependent upon real estate prices, and the city flourished as home prices soared. Then came the crisis in late 2007, and Stockton was hit extremely hard by the ensuing recession. Property values declined by 60% from their highs in 2007 and at one point Stockton trailed only Las Vegas in terms of total number of foreclosures.

The graph above shows the steep decline in median home prices in the city. The problem in Stockton is exacerbated somewhat by California’s Proposition 13, which restricts annual increases in assessed value. As a result, even as the housing market recovers, the city’s recovery will lag.

The housing market decline resulted in draws on the city’s general fund as expenditures far outpaced incoming revenues. Stockton’s generous labor contracts and retiree benefits made reducing expenditures extremely difficult.

The pie chart on page two shows Stockton’s 2013 pro-posed budget. Even after layoffs and some concessions, the police and fire departments make up over 74% of Stockton’s general fund budget. Debt service accounts for 1%. In fact, even if Stockton were to default on all of its municipal debt, the city still projects a $100 million deficit over the next decade.

Contributing to the problems faced by the city were the extremely generous benefits granted to employees. Anecdotally, according to a 2012 Bloomberg report:
“Police Chief Tom Morris was supposed to bring stability to law enforcement when he was appointed to the job four years ago. He lasted eight months and left the now-bankrupt city at age 52 with an annual pension that pays more than $204,000 – the third of four chiefs who stayed in the position for less than three years and retired with an average of 92 percent of their final salaries.”
While these luxury pension plans aren’t the norm, they are also not altogether uncommon.

Given that Stockton’s credit issues are due in large part to the generous benefits provided to employees, it is perhaps appropriate that the crux of the Chapter 9 case revolves around the treatment of those benefits under bankruptcy protection.

While the municipal market waits patiently for a decision in the Stockton case, the lessons learned for investors should be clear:
  • Avoid municipalities that were hit the hardest by declining home prices.
  • Be aware of the portion of the budget that is being spent on labor; these contracts are difficult to amend, leaving the municipality little flexibility.
  • Avoid municipalities with large unfunded pension obligations.
Thornburg Investment Management has no exposure to the City of Stockton, but we will continue to monitor the situation closely. In the meantime, we will continue to be guided by the basic lessons above, along with rigorous, bottom-up, fundamentally driven credit analysis designed to steer the portfolios clear of future credit issues — both in California and across the country.

Stockton bankruptcy ruling preserves city pensions

Bankruptcy Court Judge Christopher M. Klein’s ruling will set a precedent that will have a far-reaching impact. All municipal investors should be watching this case closely. Not since the collapse of the bond insurers in 2008 has a single event had the potential to fundamentally alter the analysis of municipal credit risk. Should he rule in favor of pension holders, protecting their benefits above the claims of bondholders, it would essentially subordinate bondholders to the claims of public workers. A ruling of that type would immediately decrease the credit quality of all municipal bonds. In the future, public employees would have no incentive to negotiate with stressed municipalities, knowing that their benefits are protected. The result could be an increase in Chapter 9 filings as municipalities lose the flexibility to control future expenses. On the other hand, should Judge Klein rule that public employees must take a haircut in line with other creditors, municipal bondholders will benefit. Under that scenario, public employees would be much more willing to come to the bargaining table if they believe their benefits are no longer protected under Chapter 9. [Source]
Bankruptcy Court Judge Christopher M. Klein approved Stockton's bankruptcy recovery plan, allowing the city to continue with planned pension payments. (U.S. Bankruptcy Court).


Stockton's plan slashes city spending, cuts salaries and eliminates jobs — but preserves worker pensions. Also, companies owed money by the city will get back only a fraction of what they're due.

The case was being closely watched after the judge ruled this month that the city's payments to the California Public Employees' Retirement System could be cut in bankruptcy, just like any other obligation.

If Judge Christopher M. Klein had rejected Stockton's plan and forced the city to reduce its payments to CalPERS, it could have opened the door for other financially ailing cities struggling with escalating pension costs to follow suit.

The decision was good news for public workers and retirees statewide, said CalPERS Chief Executive Anne Stausboll, whose agency fought any pension cuts as part of the Stockton bankruptcy proceedings.
"We will continue to champion the integrity and soundness of public pensions to protect the benefits that were promised to the active and retired public employees," she said.
Pension reformers were not happy. They criticized the decision, saying the city's rising pension costs would continue to take money from essential services and keep Stockton on the brink of a second insolvency.
"The city of Stockton missed an opportunity to use a powerful tool to save their city's finances that's only available in Bankruptcy Court," said Dan Pellissier, president of California Pension Reform.
Stockton officials had argued that it was not possible to cut pensions or to create another retirement plan for city employees. They said employees would leave Stockton for other cities offering retirement benefits through CalPERS.

CalPERS had said that if Stockton left the state retirement system, the city would immediately owe it $1.6 billion — far more than the city's current bill to the pension plan.

On Thursday, Klein said the city's 1,400 workers and 2,500 retirees had already taken enough hits in the bankruptcy.

Stockton's salaries and benefits for workers had been higher than those at other cities, the judge said, but workers had agreed after the bankruptcy filing to take big cuts, including eliminating the free medical care they received in retirement.
"It would be no simple task to go back," Klein said, "and redo the pensions."He added, "This plan, I'm persuaded, is the best that can be done."
Klein said that rejecting the plan after two years in court and tens of millions of dollars in legal and other fees would have put the case back to "Square One."

Stockton's plan sharply cuts payments to its creditors, including Franklin Templeton, an investment firm that holds more than $36 million in bonds the city used to borrow money. Franklin had asked Klein to reject the city's plan so that it could get more of its money back.

Franklin's financial expert used the city's own projections to show that it would soon be paying CalPERS nearly 19% of general tax revenue — up from 11% today. Franklin had argued that the increasing cost of pensions would put the city at risk of another bankruptcy.

But Klein said Thursday that Stockton's plan for paying creditors over the years was adequate and passed all legal tests.

City Manager Kurt Wilson said after the ruling that it "confirms that Stockton is fiscally stable and on the road to recovery."
"We are going to have stability that impacts our ability to attract and retain employees," he said.
It was a turnaround from Klein's oral ruling Oct. 1, when he said public workers' pensions were not sacrosanct and could be reduced in a bankruptcy.
"It looked like he was telling cities they had an easy offramp" to rising pension costs, said Harvey Leiderman, a lawyer at Reed Smith who advises CalPERS and other retirement funds. "Now he's shut down that offramp."
Klein explained in court what happens when employees and retirees are given equal standing in bankruptcy compared with all other creditors. The workers and retirees then far outnumber the other creditors and would have the power to veto any decision that is not favorable to them.
"You'll never come out of bankruptcy, and that's what he recognized," said Leiderman, describing Klein's decision.
In recent years, pensions have been a political hot potato in Stockton. Overly large pensions approved by city officials for employees are among the reasons that Stockton found it could no longer pay its bills, critics say.

Stockton's promised pensions for police and fire employees are some of the highest in the state, according to an analysis by Franklin's expert. The city is now paying the equivalent of 41% of police salaries to CalPERS for future pensions — an amount that will increase to 57% in five years.

As a result, the city will face continued challenges in the years ahead.
"They're betting on a rosy scenario for years to come, said Pellissier of California Pension Reform. "Only time can tell whether the city of Stockton can continue to provide services without relief from its unsustainable pension obligations."

Stockton and San Benardino, California ranked last in national survey of economic conditions in the nation's 150 largest cities

Sacramento Bee
October 8, 2014

The national economic recession ended five years ago, but recovery has varied widely and California doesn’t fare particularly well in a national survey of economic conditions in the nation’s 150 largest cities.

In fact, Stockton and San Bernardino, two California cities that have filed for municipal bankruptcy, were ranked 149th and 150th in the survey. The highest mark for any California city was San Francisco’s No. 20.

The city-by-city evaluation of economic conditions was conducted by Wallet Hub, a website that gathers and disperses personal economic data.

Its team of university economists assembled 18 key indices of economic health, including employment and unemployment data, personal income changes, real estate values, poverty rates, personal bankruptcies, personal debt and crime rates with scores for each.
“Whenever a city is left behind in a recovery, collateral effects are bound to afflict already struggling economies,” Wallet Hub said in its report. “From a public standpoint, this could lead to further complications: Crime rises, education suffers, local administrations collapse.

“In the private sector, property values decline and businesses shut down. If and when that happens, skilled workers are forced to seek better opportunities in more thriving communities. And a town that had little hope remaining is completely crippled.”
Two cities in Texas, Laredo and Irving, were ranked No. 1 and No. 2 in the survey and most other high-ranking cities were in the South and Southwest, although Denver was No. 4 and Minneapolis No. 7.

Among California cities, Bakersfield, which is experiencing an oil boom, came in at No. 23 and San Jose, in the heart of Silicon Valley, was No. 35. Los Angeles, the state’s largest city, was ranked No. 99, but it outranked the second largest city, San Diego, which was No. 103, followed by Sacramento at No. 104.

Beyond Stockton and San Bernardino, other California cities low in the rankings included Fresno at No. 125, Long Beach at No. 129, Riverside at No. 140 and Modesto at No. 146.


Read more here: http://www.sacbee.com/news/politics-government/capitol-alert/article2605288.html#storylink=cpy

April 26, 2013

The New Face of the Union Movement: Government Employees

By James Sherk, The Heritage Foundation
September 1, 2010

Abstract: Unions have been a familiar part of American working life for more than 70 years. Less familiar is the state of the union movement today: More union members now work for the government than for private employers. The above-market salaries and benefits that government employees receive are paid for by taxpayers. So, the union movement that began as a campaign to improve working conditions and salaries for workers in the private sector, now pushes for ever-higher taxes to increase the generous compensation that government employees enjoy. Heritage Foundation labor policy expert James Sherk details the changes in the union movement, and explains how Congress can react to this new reality.

The American union movement has reached a historic milestone—more union members currently work for the government than for private businesses. As a result, the union movement’s priorities have shifted. Because taxes fund government pay and benefits, unions are now pushing for tax increases across the country. The union movement that once campaigned to raise private-sector workers’ wages has transformed into a government union movement that campaigns to raise their taxes.

How did this happen? Union organizing surged after the passage of the National Labor Relations Act (NLRA) in 1935. But because union contracts raise costs, unionized businesses generally grow more slowly than non-union firms. Market competition has caused union membership to gradually fall in the private sector since the 1950s. The new government unions created in the 1960s could safely demand inflated pay without putting their jobs at risk. Now most union members work for the government.

The early trade unionists did not believe that unions had a place in government. They believed the purpose of unions was to redistribute profits from business owners to workers—and the government makes no profits. The government labor movement has become a powerful special interest lobby to raise taxes on working Americans to raise the level of compensation for government workers. Taxpayers should not have to subsidize this lobbying. Congress should prohibit federal unions from using the federal payroll system to automatically deduct union dues from government employees’ paychecks.

New Government Labor Movement
 
The American labor movement marked a historic shift in 2009. For the first time in U.S. history, more union members worked for the government than worked in the private sector. The U.S. Postal Service employs three times as many union members as the domestic auto industry.[1] Table 1 shows union membership in the United States in 2009 and through the first seven months of 2010.

Union Membership in the United States

Overall union membership dropped again in the first half of 2010: down by 603,000 members to 11.9 percent of all employees. Private-sector and public-sector unions both lost members. Private-sector unions lost 323,000 members, dropping to 7 percent of the private-sector workforce. A smaller proportion of private-sector workers belong to unions now than at any point since the Supreme Court upheld the National Labor Relations Act. Union membership also fell by 281,000 members in government, dropping by 1.7 percent of the government workforce.

However, well over one-third (35.7 percent) of government employees still belong to a union. The 7.6 million union members who work for the government make up 51.7 percent of all union members in the United States. The new face of the union movement is the clerk at the Department of Motor Vehicles, not the worker on the assembly line.

Private-Sector Strikes Rare. As the labor movement’s membership has moved toward government, so have its priorities. Labor unions once focused on improving private-sector working conditions, but now their efforts have shifted toward increasing government pay and benefits.

The frequency of private-sector strikes demonstrates the union movement’s changed priorities. Threatening strikes is the main tool that unions use to win concessions from private employers. Now strikes have become exceedingly rare.

Unions used to launch hundreds of strikes a year—often at considerable cost to the economy. In 2009, unions initiated only five major strikes that involved 1,000 workers or more. The recession does not explain why unions so rarely strike. In 2007, the last year before the recession, unions engaged in just 21 strikes.


New Labor Priority: Political Influence. The union movement’s priorities have shifted from the picket line to politics. Many government unions are prohibited from striking by law, so to raise government pay unions must influence the legislative processes that determine their wages.

The union movement has ample money at its disposal. In states without right-to-work laws, unionized employees must pay union dues or lose their jobs. State and local governments use their payroll systems to collect dues for the union. The government automatically deducts the dues— typically 1 percent to 2 percent of a government employee’s pay—and deposits it in the union’s bank account.

One percent of the pay of several hundred thousand government workers is a lot of money. The New Jersey Education Association has 179,000 active members who each have to pay union dues of $761 every year.[2] That works out to more than $136 million in dues a year. The American Federation of State and County Municipal Employees (AFSCME) national headquarters brought in $193 million in union dues in 2008. AFSCME’s local affiliates raised hundreds of millions more.[3]

The union movement spends much of this money on politics. In election year 2008, AFSCME spent $63 million on political campaigning and lobbying. That was 32 percent of its overall budget and well more than the $39 million it spent representing its members.[4] In 2009, the American Federation of Labor and Congress of Industrial Organizations (AFL–CIO) spent $29 million on representational activities and $47 million on political campaigning and lobbying.[5] The amount spent on politics represented 25 percent of the AFL–CIO’s budget.[6] The AFL–CIO and the Service Employees International Union (SEIU) just announced their intention to spend $100 million on electing sympathetic candidates in this year’s midterm elections.[7]
 
This political spending gives unions considerable political influence. Government unions use this influence to press Congress and state legislatures to raise government salaries and to hire more employees. They have largely succeeded. The average government employee earns more than his counterpart in the private sector.

Government Pays More. The average federal employee earns hourly cash wages 22 percent above what a similar private-sector worker receives. Adding in the value of non-cash benefits raises the federal compensation premium to between 30 percent and 40 percent a year.[8]

Unions have also successfully raised the pay of state and local government employees. While their hourly wages are no higher—and in some cases slightly lower—than those of similar private-sector workers, they make up for it with benefits. Specific benefit packages vary across states, but state and local employees generally have excellent health coverage to which they contribute little. They also receive generous pensions unavailable to most private-sector employees. Many state and local government employees can retire in their 50s with a substantial defined-benefit pension.

In California, state employees can retire at 55 with a pension worth 2 percent of their highest year’s earnings multiplied by their years of service. California highway patrol officers get an even better deal; they can retire at 50 with 3 percent of their final salary multiplied by their years of service.[9] That means that a worker with 30 years of experience can retire in his 50s and enjoy 90 percent of what he earned on the job until he dies. Including the value of these benefits, state and local employees’ total compensation is significantly higher than that of private-sector workers.[10]

Government Job Security. Government unions have won another perk for their members that few workers in the private sector enjoy: extremely high job security. Federal law makes termination of ineffective government employees extremely difficult.[11] Many states have similar civil service codes that make it difficult to fire underperforming government workers. The Chicago Teachers Union, for example, filed a lawsuit after the Chicago public school system responded to budget cuts by laying off teachers with “unsatisfactory” performance ratings.[12] The union insists that all layoffs must occur on the basis of seniority, not performance.

Government employees also have less reason to worry about elimination of their jobs during a recession. Since the start of this current recession in December 2007, private-sector employment has fallen by 6.8 percent. Federal employment, however, has risen by 10 percent while state and local government employment has only fallen slightly. Taxes and deficit spending have kept government payrolls going even as the economy has experienced its worst slump since the Great Depression. Government employees generally experience little of the uncertainty of a recession.

Since the Recession, Private Employment Tumbled and Federal Employment Grew

Government Pay Costs Taxpayers. The cost for such generous pay and benefits is great. Paying federal employees’ inflated compensation will cost taxpayers $47 billion in 2011.[13] Nonpartisan estimates indicate that state and local retiree health care and pension plans face a cumulative $3.1 trillion funding shortfall.[14] The money to cover these costs comes from taxes. The more taxes the government collects the more employees it can hire and the more it can pay them. Since most union members work for the government, unions strongly support higher taxes. The federal pay premium alone takes up 5 percent of federal income tax revenues.[15]

Government Unions Campaign for Tax Increases. The union movement now consists primarily of government employees lobbying for more government and higher taxes. An examination of union activity across the country illustrates the union movement’s strong advocacy for tax increases:
  • Arizona . Public-sector unions spent more than $200,000 to campaign for a successful ballot measure in May 2010 that raised the state sales tax by 1 percent.[16] The Arizona Education Association also successfully lobbied against a repeal of a $250-million-a-year statewide property tax in 2009.[17]
  • California . The California Teachers Association spent $2 million gathering signatures for an initiative on the November 2010 ballot that would raise business taxes by $2 billion a year.[18] Separately, public employee unions protested at the state capitol demanding the legislature raise taxes by $40 billion a year, including raising the top state income tax bracket to 11 percent, applying the sales tax to services in addition to goods, and increasing the state’s vehicle license fee by 2 percentage points.[19]
  • Colorado . Led by the National Education Association’s $450,000 contribution, government unions spent $806,000 campaigning for a failed 2008 ballot initiative to roll back taxpayer rebates and use that money to increase education spending.[20] That year, government labor unions also gave $244,000 to a committee campaigning for Amendment 58, an initiative that would have raised taxes on oil and natural gas companies had the voters not defeated it.[21]
  • Delaware . Democratic Governor Jack Merkle proposed closing the state’s budget gap in 2009 with an 8 percent across-the-board cut in state employee pay. In response, labor unions united in a large coalition (State Workers United for a Better Delaware) to oppose the pay reductions. The coalition pressed the governor to look to tax increases instead of cutting government union members’ pay.[22] The legislature ultimately cut state employee pay by 2.5 percent.
  • Florida . The Florida Education Association unsuccessfully lobbied for a 1 percent increase in the state sales tax in 2009.[23] Labor unions also spent $1.3 million in an unsuccessful attempt to defeat a 2008 ballot initiative that expanded the state’s property tax exemption.[24]
  • Georgia . The Georgia Association of Educators, the state-level affiliate of the National Education Association, has begun campaigning for a 0.5 percent increase in the state sales tax.[25]
  • Hawaii . The Hawaii State Teachers Association is campaigning for a $500 million annual hike in state taxes, including increasing the top state income tax to 13 percent and raising business and capital gains taxes.[26]
  • Idaho . Government labor unions spent more than $2 million promoting an unsuccessful ballot initiative in 2006 that would have raised the state sales tax by 1 percent and directed that money to public education.[27]
  • Illinois . AFSCME Council 31 and other government unions are pressing the state legislature to close the deficit with a $6.4 billion tax increase instead of cutting spending. The unions want state lawmakers to increase the state income tax from 3 percent to 5 percent and to expand the sales tax to cover certain commercial services.[28] The unions spent heavily in 2009 on television and radio ads pressing for these tax increases. In April 2010, government unions organized rallies outside the state capitol shouting, “Raise my taxes! Raise my taxes! Raise my taxes!”[29] At that rally, a government union member was caught on camera chanting, “Where’s the money?” and “Give up the bucks!”[30] In July 2010, 40,000 unionized state government employees received a 7 percent raise and are scheduled to receive another 7 percent raise in 2011. These raises will cost Illinois taxpayers $500 million.[31]
  • Iowa . In 2009, AFSCME Council 61 unsuccessfully fought for tax increases instead of requiring state employees to take a five-day furlough. In the eyes of the union’s president, the state’s deficit “is not a spending issue, this is a revenue issue.”[32]
  • Kansas . The Kansas Organization of State Employees boasts that it “mobilized more than 300 activists for a Lobby Day in February and formed ‘gauntlets’ outside each chamber in order to prevent spending cuts that would have eliminated 1,000 government jobs, urging wavering legislators to stand with them. They were relentless and creative—flooding House and Senate offices with hundreds of phone calls, faxes and e-mails, and utilizing social media to provide Twitter updates and action alerts.” They were successful. In May 2010, the Kansas legislature passed a budget that raised the state sales tax by 1 percent. The budget also raised the pay of many state employees between 2 percent and 10 percent.[33]
  • Maine . Maine citizens voted on a ballot initiative in November 2009 that would prevent government spending from growing faster than the combined rate of inflation and population growth and would require the government to return excess revenues as tax rebates. The Maine Municipal Association, the SEIU, the Teamsters, and the Maine Education Association collectively spent hundreds of thousands of dollars to campaign against the initiative, and it was ultimately defeated by a wide margin.[34] In 2010, government unions lobbied state legislatures to raise the state sales tax by 1 percent, or the state cigarette tax by $0.50 per pack.[35]
  • Maryland . Maryland added four new state income tax brackets in 2008. That was not enough for government labor unions. The state affiliate of AFSCME lobbied the legislature to raise taxes by another $2 billion, including expanding the state sales tax to cover additional services and increasing alcohol and gas taxes.[36]
  • Michigan . Government unions, including members of the AFL–CIO, the Michigan Education Association, and the Michigan Nurses Association launched “A Better Michigan Future” campaign in September 2009. They called for a $2.7 billion tax increase. Their proposals included expanding the state sales tax to cover a variety of services, and raising the top state income tax rate from 4.35 percent to 6.9 percent. The Michigan legislature decided against raising taxes in a state badly hit by the recession.
  • Minnesota . AFSCME Council 5 unsuccessfully lobbied state legislators to override Governor Tim Pawlenty’s veto of a $1 billion tax increase in spring 2009.[37] In December 2009 Council 5 lobbied for a $3.8 billion tax increase.[38]
  • Montana . The Montana Education Association– Montana Federation of Teachers (MEA–MFT) union openly portrays itself as a supporter of tax-and-spend politics. As MEA–MFT president Eric Feaver boasted, “Were it not for us almost any one of the…anti-tax-and-spend ballot issues proposed in the last 25 years would have passed.”[39] The union pursued tax-and-spend politics in 2009, unsuccessfully lobbying the state legislature to raise taxes on oil and gas companies.[40] The MEA–MFT also lobbied the legislature for a 6 percent raise for state workers. Despite the recession, it did not come away completely empty-handed. The final plan boosted government employee compensation, although not as much as the union wanted. As the union put it, “the pay plan amounts to $24 million in new money for state employees, and that’s no small change at a time when the economy is crashing.”[41]
  • Nebraska . Labor unions contributed 60 percent of the $2.5 million spent in 2006 to defeat Nebraska Measure 423. The ballot initiative drew the fire of government unions because it would have capped state spending based on population growth and inflation.[42]
  • New Jersey . Newly elected Governor Chris Christie took office in 2010 facing an $11 billion budget deficit. He closed the deficit without raising taxes by reducing spending. This drew the fire of government unions in New Jersey, especially the New Jersey Education Association, which opposed the governor’s proposal to freeze teacher pay and require teachers to contribute 1.5 percent of their salary toward their health insurance premiums. Up to then they contributed nothing. The union spent heavily on television, radio, and print advertisements critical of the governor.[43] Public-sector unions in New Jersey also fought to keep the state’s top income tax from falling to 9 percent from 10.75 percent and against a proposed cap on property tax increases. The leadership of Communication Workers of America (CWA) District 1—a union representing 40,000 state workers—proposed raising member dues to fund a $2 million advertising campaign against Christie. Union membership, however, voted against the proposal by 62 percent to 38 percent.[44]
  • New Mexico . The New Mexico AFSCME local lobbied the state’s legislature to raise taxes to deal with its budget deficit.[45] The union got its wish, but it was not the wealthy who paid. The legislature increased the state’s gross receipts tax on goods and services and reinstated a 2 percent sales tax on food.[46]
  • New York . New York government unions spent millions of dollars in 2009 on television ads opposing Governor David Paterson’s property tax cap plan and attacking his budget that did not contain the tax increases they wanted.[47] After heavy lobbying, the governor finally agreed to raise taxes to help close the budget shortfall. Among other tax increases, he raised the state’s top income tax rate to 9 percent and the combined state and New York City income tax to 12.85 percent.[48] Unionized employees at the Metropolitan Transit Authority were not complaining: more than 8,000 of them made over $100,000 in 2009, including one recently retired rail conductor who pulled in $239,000 in his final year on the job.[49]
  • North Dakota . Government unions, including the National Education Association and the North Dakota Public Employees Association spent $500,000 to defeat two ballot initiatives in 2008. One would have reduced the state’s income tax by 50 percent; the second would have established a trust fund for oil and gas tax revenues.[50]
  • Ohio. SEIU District 1199 produced and ran advertisements campaigning for a rollback of scheduled income tax cuts. They wanted taxes to remain higher to prevent government spending cuts.[51] In Columbus, AFSCME pushed a referendum on a 0.5 percent increase in the city income tax to victory. The union boasted that “members of Locals 1632 and 2191 stepped up to the plate, helping to make thousands of phone calls to potential voters and delivering 5,000 door hangers to homes in high-turnout Democratic precincts.… The efforts of Council 8 members proved essential: Out of more than 89,000 votes cast in last summer’s special election, the tax increase passed with a margin of just 3,050 votes.”[52]
  • Oklahoma. The Oklahoma Education Association placed Question 744 on the November 2010 ballot. The measure would increase spending on public schools by $1 billion, necessitating tax increases or spending cuts elsewhere to balance the state’s budget.[53]
  • Oregon. Public-sector unions provided over 80 percent of the $8 million spent to pass Measures 66 and 67 in January 2010, ballot initiatives that raised income and business taxes by $727 million.[54] Government unions outspent the business community by a three-to-two margin to pass the new taxes.[55] However the tax increases have not solved the state’s budget crisis. State budget analysts have estimated that the state still faces a $577 million shortfall.[56]
  • Pennsylvania. Unions representing 1.1 million Pennsylvania workers have created the Coalition for Labor Engagement and Accountable Revenues (CLEAR). The union coalition wants Pennsylvania lawmakers to “find new fair and equitable revenue sources to fill the state’s budget gap and not close the gap by cutting services.” The coalition particularly warns that the state should not furlough government employees, privatize their jobs, or reduce the retirement benefits of state employees.[57]
Unions consistently press for higher taxes and more government spending across America. The labor movement has made higher taxes and more government spending one of its top priorities. But unions are self-interested advocates of tax increases: They oppose tax increases that significantly affect their members. During the congressional debate over health care reform, for example, the union movement lobbied heavily against taxing high-value health care plans. Union members tend to have generous health coverage, and that tax would fall heavily on them. That is especially true of government union members. The union movement threatened to oppose the entire health care bill unless Congress scaled back that tax increase. Congress did so.

Conflict of Interest. Labor unions’ political activism creates a conflict of interest in government. In the private sector, employer pressure to cut costs balances excessive union wage demands. In the government, unions can use their political influence to elect sympathetic politicians, and then labor and management work together to raise government pay. No one at the bargaining table speaks for the taxpayers.

Departure from Labor’s Roots 
 
This shift to government has brought the union movement far from its historical roots. The 19th-century founders of the U.S. labor movement believed that the profit motive would lead employers to exploit workers. They saw unions as a vehicle to get workers a greater share of the profits that they helped to create.[58] The economic tool they used to do this was the strike.

However, this model does not apply in government. The state does not earn profits that it divides between shareholders and labor. For the same reason, the government has no incentive to pay low wages. A strike by government workers would interrupt vital functions such as police protection and education. Consequently, the founders of the labor movement did not believe the union movement had a place in government and they did not attempt to organize government workers.

Some labor leaders rejected government unions as intrinsically undemocratic. Collective bargaining gives government employees the power to tell voters how to spend their tax dollars instead of the other way around. As recently as 1959, the AFL–CIO Executive Council stated that “government workers have no right [to collectively bargain] beyond the authority to petition Congress—a right available to every citizen.”[59]
 
Rise of Private-Sector Unions. When Congress passed the National Labor Relations Act in 1935 to encourage collective bargaining, the NLRA did not apply to government employees. Union leaders at the time believed this made perfect sense. As former AFL–CIO president George Meany wrote in 1955, “it is impossible to bargain collectively with the government.”[60] The man who created the AFL–CIO would not recognize today’s union movement.

Only a small portion of workers belonged to unions until Congress passed the NLRA. The act promoted collective bargaining in the private sector by requiring management to bargain with unions as workers’ “exclusive bargaining representative.” Once the Supreme Court upheld the constitutionality of the NLRA in 1937, union membership grew rapidly. By 1947, 24 percent of the labor force belonged to unions.[61]
 
This gave labor unions great economic power, but they did not always use it responsibly. The United Mine Workers aroused national outrage when they shut down coal production in 1943, harming the war effort. Postwar strikes in the steel, coal, and auto industries paralyzed large portions of the economy. Congressional investigations also uncovered ties between major unions and organized crime.

These actions caused public support for unions to cool, and Congress passed the Taft–Hartley Act in 1947 to address union abuses. When Congress passed the NLRA 12 years earlier, it had not foreseen that some unions would pressure workers into unionizing. Taft–Hartley complemented the NLRA’s protection of the ability to bargain collectively by protecting workers’ rights to choose not to do so. The act established the secret ballot as the normal means of unionizing, gave workers the right to decertify their union, and prohibited many forms of economic pressure that unions applied to workers who did not want to unionize.[62]

Chart 3 shows union membership as a percentage of the labor force from two separate data sets collected by the Department of Labor.[63] Union membership peaked at 26 percent of the labor force in 1953, and has gradually declined since then.

Union Membership as Percentage of Labor Force

Creation of Government Unions. Wisconsin became the first state to pass a law permitting government employees to collectively bargain in 1959. This followed the decision of New York City’s Mayor Robert Wagner to do the same in 1958.[64] In 1962, President John F. Kennedy signed Executive Order 10988 that permitted collective bargaining with federal employees.

Throughout the 1960s and the 1970s, collective bargaining rapidly spread throughout state and local governments. To prevent public-sector strikes, most states established binding arbitration for government unions. These laws vary across states, but under binding arbitration, contract disputes between the government and government unions are decided by an arbitrator who hands down a binding contract.

Competition Eroded Private-Sector Unions. At the same time that unions were rapidly organizing government workers, market competition began undermining unions in the private sector. Unions raise business costs.[65] This, and the fact that unionized companies invest less in capital and research and development, makes unionized firms less competitive.[66] This does not hurt unions if their competitors are unionized or they compete in heavily regulated markets.

But in the 1970s and 1980s, Congress made the U.S. economy much more competitive. Deregulation and free trade forced many unionized firms to compete against more efficient non-union firms. They could not keep up. Non-union businesses charged less than unionized firms and won their customers.

Across the country non-union manufacturing, construction, and trucking companies grew while their unionized competitors shrank. Between 1973 and 1998, non-union jobs grew by roughly 3 percent a year while 3 percent of union jobs disappeared annually.[67] Competitive pressures have steadily shrunk private-sector unions to their current levels: 7 percent of all private-sector workers and 6 percent of the private-sector labor force.

Public-Sector Union Workers Outnumber Private-Sector Union Workers

Government Unions Immune to Competition. Competitive forces have not undercut government unions: The government has no competition. It has a monopoly on providing its services. Taxpayers cannot purchase less expensive police or education services from another state without moving there.

Consequently, government unions can negotiate generous benefits without worrying about putting their jobs at risk. Unlike the private sector, governments almost never go bankrupt. They can always raise taxes to cover their costs. So once unions organize a government department, those workers remain organized.
By 1977, a total of 35 states had passed legislation regulating collective bargaining with state employees.[68]

That year, 33 percent of government employees belonged to unions, which accounted for 26 percent of all U.S. union members. Since then, government union rates have stayed in the mid to high 30 percent range.[69] Even as private-sector unions have lost members, public-sector unions have grown. In 2009, those paths crossed and now most union members work for the government.

What Congress Should Do
 
The union movement has transformed over the past generation; it now primarily represents government employees. Three times as many union members now work for the U.S. Postal Service as for the auto industry. The mandatory union dues that the government collects on behalf of its unionized employees raise billions of dollars a year. The union movement spends a substantial amount of this money aggressively advocating higher taxes and increased government spending.

This creates a situation in which both government labor and management have an incentive to promote higher taxes. Congress should take several steps to restore equity between government employees and taxpayers:
  1. Congress should recognize that the union call for raising taxes to pay for more and more highly paid government employees is narrowly self-interested. Congress should reject union lobbying for tax increases. Every major school of economic thought agrees that the government should not raise taxes during a recession. Congress should not raise taxes to insulate unionized government employees from the recession.
  2. Congress should reduce the pay of federal employees to market rates. Congress can do so by adopting performance pay based on market signals of labor demand, hiring more contractors, and reducing the generosity of federal employee benefits. This would save taxpayers $47 billion in 2011.[70]
  3. Congress should not force states that do not collectively bargain to begin doing so. Legislation currently before Congress, the Public Safety Employer–Employee Cooperation Act of 2009 (H.R. 413, S. 3194), would require all states and local governments to collectively bargain with police and firefighters. Congress should respect the decisions of states that find government unionism counterproductive.
  4. Congress should stop requiring taxpayers to subsidize the collection of government union dues. The federal government uses its payroll system to automatically deduct the dues of federal union members from their paychecks. Federal unions use these dues to lobby for higher taxes. Unions should use their own resources to collect dues from their members. Congress should end the automatic deduction of federal union dues.
Congress should adapt the law to appropriately respond to the reality of the new government union movement. It is the right thing to do.

—James Sherk is Senior Policy Analyst in Labor Economics in the Center for Data Analysis at The Heritage Foundation.

Related:

February 20, 2011

Collective Bargaining Gives Enormous Political Power to Public Sector Unions


The collective bargaining laws have given enormous political power to the public sector unions. No matter what the real intent of these laws, by any objective standard they are not in the public interest. They represent an expression of the selfish self-interest of public sector union organizers and, indirectly, the interest of the politicians who enact them in order to curry favor with the union's political operatives.

The existence of public sector collective bargaining makes public employees "super citizens" and relegates the rest of the public to second class status. Rising public discontent has focused on the public employee, while public employees increasingly take a hostile attitude toward the public. Why is no one pointing out that unions are supposed to be for the people against the corporation, not for the people against the people?

Public sector strikes enjoy a heightened degree of effectiveness not shared by private sector work stoppages. There is little question that strikes against government are intolerable. Therefore, collective bargaining as an institution is inappropriate to government. Strikes destroy democratic government by giving the public sector union -- a very small special interest group -- disproportionate influence and therefore effective control of the public decision making process. Binding arbitration completely removes elected officials from the process.

The whole concept of public servants being able to unionize is abhorrent and should be outlawed. Public service unions and the politicians they "negotiate" with are not on opposite sides of the bargaining table like private sector unions and corporate management. They sit together and share a quid pro quo relationship over the plundering of public funds. The politicians that agree to deals with the unions have nothing to lose because it is other peoples' money they are negotiating with; and the unions' negotiating tools are campaign donations taken from the dues collected from its members whose incomes are paid for by tax dollars. The unions make donations in support or against the politician they are negotiating with. Any sort of relationship like this in the private sector would be considered 100% illegal. FDR was right when he declared public employee unions to be immoral, and Reagan was right when he fired the air traffic controllers. Unions have certainly done a lot for changing working conditions, compensation, and benefits for generations of workers in the private economy, and they have a place there; but when it comes to organizing in the public sector, they are fundamentally immoral and unethical due to the unique relationships that exist between workers, politicians and the taxpaying public. [Bill, February 25, 2011]

Collectivists advocate controlled elections, controlled media, controlled education, the elimination of free speech, disarmament of the population, fiat money, a cartelized health-care system, military imperialism, and global government. Individualists advocate honest elections, a competitive media, an educational system responsive to parents, encouragement of free speech, a well-armed citizenry, sound money, freedom-of-choice in health care, a non-interventionist foreign policy, and national sovereignty. [Freedom Force International]

Between 1958 and 1978 the public sector work force grew by 83% while the private sector work force grew by only 39%. New data from the Bureau of Labor Statistics (BLS) show that a majority of American union members now work for the government. The pattern of unions adding members in government while losing members in the private sector accelerated during the recession. Representing government employees has changed the union movement's priorities: Unions now campaign for higher taxes on Americans to fund more government spending. Congress should resist government employee unions' self-interested calls to raise taxes on workers in the private sector.

One must try really hard to ignore the distinctions between public and private unions. It is those disparities that produce disproportionately rich salaries and benefits for public-sector employees and that burden state budgets. You would think that more politicians and pundits on the left, who have so many creative ideas for spending the taxpayers' money, would recognize that it's their agenda as well as the country's political health that is imperiled by the public employee union racket. [Jennifer Rubin , Public employee unions vs. the rest of us, Washington Post Voices, February 22, 2011]

It is becoming very, very difficult to live a middle class lifestyle if you do not work for the government. More than 40 percent of Americans who actually are employed are now working in service jobs in the private sector, which are often very low paying. So the tables have turned: the private sector now works to service the public sector, the last great source of middle class.

The public sector, in most instances, is a monopoly. The public sector provides essential services. It is the very nature of government to provide on a monopoly basis those services which everyone needs. Public sector decisions are political decisions no matter how great their economic impact. Government makes decisions every day that have profound economic consequences, but these decisions are based on political, not economic, considerations. In the public sector, decisions that are politically popular but economically ruinous can get you reelected; decisions that are economically sound but politically unpopular are ruinous. The private sector is competitive; there are alternative sources of supply for the goods and services produced. The private sector provides nonessential services. Private sector decisions are economic decisions no matter how great their political impact. In the private sector, economic decisions that have bad political consequences can make you unpopular, but decisions that are politically popular and have bad economic consequences can put you out of business.

There is ample evidence that the growth of teacher unions was a factor in the decline of the quality of public education. The dramatic rise in teacher union membership and collective bargaining in public education began in 1962. By 1976 teacher union membership had more than doubled. The decline in SAT scores began in 1963 and continued throughout this period. Yet all of the studies on the state of public education in America and the challenges it faces in the future completely ignore the question of the union role in the decline of quality.

Saul Alinsky, the radical leftist who trained so many union organizers, told his students that they must "make the enemy live up to their own book of rules." This tactic gives the unions a big advantage. Organizers seek out, not avoid, controversy, resorting to lies if necessary. In outlining the principles of community organizing in his book “Rules for Radicals,” Alinsky wrote that an organizer “must search out controversy and issues, rather than avoid them, for unless there is controversy people are not concerned enough to act.” Alinsky said an organizer acts with the “conviction that all the angels are on one side and all the devils on the other.” It’s not enough to demonize the opposition, the president must also convince us – and perhaps himself – that heaven is on his side.

Time and again public officials have described their shock and disbelief at what a union had done to them personally during organizing campaigns or labor disputes. Such activity was entirely predictable because it was almost textbook Alinsky. Their response has generally been that, if they had only known what to expect, they could have prepared for it and taken steps to neutralize its worst effects. Alinsky emphatically states that the end justifies the means but cautions that extreme means are only justified in certain situations. He also had a set of rules for what he called power tactics" or the means used to "take." He described it as "how the Have Nots can take power away from the Haves." Even a cursory review of Alinsky's 'Rules for Radicals' reveals that a union activist schooled in them will have no compunction about using almost any tactic in a conflict with a public agency. In fact, radicals must often create issues to stir up problems in order to radicalize their potential followers. The tactic that seems to shock public officials most is the personalization of the attack -- union leaders use the "pick it, freeze it, personalize it and polarize it" tactic no matter how distasteful this might be -- Alinsky says that, even if the decision is 48% to 52%, once it is made the opposition becomes "100 percent devil." Even if public officials are not willing to respond in kind to this sort of tactic, a great deal can be accomplished before a conflict by warning audiences what will happen.

Federal employees do not have collective bargaining and we're doing OK. We got a pay freeze this year, but all in all we're doing OK. We pay, like most in the private sector, 7 to 8% for our pension plans [actually, they pay less than 1% while taxpayers pay almost 12% toward federal employee pensions]. We also pay quite a bit (depending on which plan you choose) for our health plans. There are just as many states in the USA that do not have collective bargaining as compared to those who do. Collective bargaining is not a "right" like so many commentators have stated during this debate. States are sovereign entities that may or may not choose to allow collective bargaining. When you think of all the time, effort and money spent on an annual basis connected with school boards negotiating teacher contracts with professional union negotiators, it's horrendous. The system has been stacked in a lopsided way to favor the unions. Then let's take a look at how things really work. Unions give boatloads of money to the democrats (legalized bribes - campaign contributions), the democrat lawmakers make sure legislation then favors the unions, unions then continue to collect forced union dues through public worker's paychecks, then that money then gets recycled back to the democrat politicians. The union reps are fat, dumb, and happy, the public employees get unbelievable benefits paid almost in full by the taxpayers, and it goes on and on. This is why collective bargaining needs to stop. This system is corrupt with union dues mandatorily being confiscated from union workers then laundered into campaign donations back to the democrats. My hat goes off to Governor Walker!! This is not about rights. It's about corrupt unions wanting to keep their coffers intact. [DOD Employee - Navy, February 24, 2011]

Public workers, state or federal, should not be able to unionize. Unions have forced benefits that can not be sustained. Why should union employees not contribute to their health care or pensions? There should not be ANY defined benefit plans, and public employees should pay an appropriate portion of their benefit cost. It is time our entitlement society grew up and faced reality. One more thing -- it is not just Republicans that are trying to bring spending down to a sustainable level, but all fiscal conservatives, regardless of party. [Fedagainstunions, February 24, 2011]



Beyond Public Sector Unionism: A Better Way

By David Y. Denholm, Public Service Research Foundation
Copyright 2001

Introduction

The movement toward public sector unionism and collective bargaining began in the late 1950's. Its proponents ought to be forgiven for their failure to foresee just how harmful it would be to our nation's governmental institutions. They had no empirical evidence on which to base their ideas.

Now, almost forty years later, the politicians who insist on perpetuating the compulsory public sector collective bargaining laws that have given public sector unions disproportionate power in determining the size, cost and quality of public services are less easily forgiven. The record is clear. It is an unmitigated disaster.

But, politicians are, after all, politicians and the laws that gave public sector unions so much influence on government decisions have also made them into very powerful political forces throughout the country.

Fortunately, there is a new mood sweeping the country and the public is not content to allow politicians to maintain business as usual with special interests.

Already, in small ways all across the country, public sector union power is being successfully challenged. But, Rome was neither built nor burnt in a day. There is a long way to go to restore the proper balance between the public interest and the interests of public employees.

I hope that this fourth edition of Beyond Public Sector Unionism: A Better Way will continue to have a positive influence in that direction.

The ideas in this booklet are constantly in process. I welcome all comments and suggestions for consideration in future editions.

David Denholm
Vienna, Virginia
October 1994

Contents

The Case Against Public Sector Collective Bargaining
The differences between the public sector and the private sector. Monopoly v. Competition - Political v. Economic -Sovereign v. Free Contract

The nature of unionism. Adversarial - Monopoly - Equals at the table - Impasses.

The public interest. Harmony - Equity - Employee rights v. Union Privileges - Public Control

Beyond Public Sector Unionism: A Better Way
The historic perspective. Union penetration in the work force - Government support of unions - Competition and technology - Unions and quality-Empowering workers -Communications - Dues check-off - Union political spending - Sources of support.

Saul Alinsky's Rules for Radicals


The Case Against Public Sector Collective Bargaining

Public sector collective bargaining is a creature of the late 1950s and 1960s. The academicians and politicians who theorized about it and legislated its beginnings can be forgiven for having erred because they were working in a void with no empirical evidence as to how it would work.

Public sector collective bargaining as we know it in the 1990s is a failure. There is a very strong case against it but the laws which mandate it have created and added to the political power of the public sector unions. They will not lightly relinquish the power they have achieved. Therefore, the case against public sector unionism must have both theoretical and political dimensions.

To understand the utter futility of using the collective bargaining process to establish equity and harmony in public employment, it is necessary to briefly review the basic premises of our system of government and the fundamental nature of unionism and collective bargaining.

Differences between the Public and Private Sectors 

We live in a society with two distinct sectors--the public and the private. 

Unionism and collective bargaining are products of the economic decision making process of the private sector of our society. Despite this, the National Labor Relations Act, which was designed in and for our private sector, has been used as a model for all public sector bargaining laws, with minor variation. Those who imposed collective bargaining on the public sector failed to appreciate the differences between the public and private sectors.

The public sector is monopolistic; there is a single source of supply for government services. There is only one fire department, one police department, one system of public education.

"The public sector provides essential services."

The private sector is competitive; there are alternative sources of supply for the goods and services produced. There are a multitude of choices in everything from automobile dealerships to grocery stores.

The public sector provides essential services. It is the very nature of government to provide on a monopoly basis those services which everyone needs.

The private sector provides nonessential services. There are public choices involved as to what sort and how much of private sector goods and services to buy and use, whether it be an automobile or a television or what brand of gas to buy or what channel to watch or whether to drive a car or to watch television at all.

This is not to say that some private sector goods, such as food, are not essential. But, in many cases, the government provides essentials through programs such as food stamps. Also, some may choose to argue that many government services are far from essential, but that is an argument against government providing that sort of service rather than an argument against the premise.

Political v. Economic

Public sector decisions are political decisions no matter how great their economic impact.  

Government makes decisions every day that have profound economic consequences, but these decisions are based on political, not economic, considerations. In the public sector, decisions that are politically popular but economically ruinous can get you reelected. Decisions that are economically sound but politically unpopular are ruinous.

Private sector decisions are economic decisions no matter how great their political impact. In the private sector, economic decisions that have bad political consequences can make you unpopular, but decisions that are politically popular and have bad economic consequences can put you out of business.

Sovereign v. Free Contract

Government--the public sector--is sovereign, and no other institution or enterprise in our society is sovereign. Sovereignty is the power to use force--to compel. Under our democratic system only government is sovereign. Governmental sovereignty is derived from popular sovereignty which we as citizens give to government, within constitutional limits through our elected representatives, in the interest of order, security, and the public good.

Government's sovereignty is obvious in such things as compulsory school attendance laws, in its power to collect taxes and in its power to violate personal and property rights in the public interest.

"A government which is not sovereign is a contradiction of terms."

All economic and social activity in the private sector is governed by free contract. You only have a free contract when both parties want one. You cannot be compelled to buy the product of a particular company. Businesses cannot be compelled to join a business or trade organization. Support of churches is entirely voluntary. The list goes on and on.

Sovereignty is misunderstood. Many think of it in terins of the "divine right of kings." It is useless to argue that sovereignity is an outdated concept. Sovereignity is not something that government can choose to have. A government which is not sovereign is a contradiction of terms. No matter how pluralistic our society becomes, it is the sovereign nature of government which guarantees the order necessary for the participation in that pluralism by the individual citizens.

It may be argued that there are compulsory public sector bargaining laws in many states and that public order has not broken down. This also misses the point. Every time that we elect representatives to run the public's business and they cannot carry out their programs because of opposition from public sector unions, sovereignty has broken down and we have all lost.

That said, let's take a look at the nature and basic premises of unionism and American labor policy.

The Nature of Unionism
Adversarial 

Unions view the employer-employee relationship as an adversarial one. The unions believe, or at least want their members to think, that employers are by their nature exploitative and that without the collective power of the union, the individual unorganized employee is helpless against the various forms of capital formation which employers represent.

While this may be true in the private sector, there is no reason to believe that it would be true in the public sector. The private sector is governed by the economic incentive known as the profit motive. This system of economics has provided Americans with more goods and services and a higher standard of living than any other economic system in the world, but it is not applicable to many areas of the public sector of our economy. Competition and the profit motive are at the heart of the union contention that employers are exploitative, and that viewpoint leads the unions to an adversarial relationship.

The absence of competition and the profit motive should cause us to then ask whether an adversarial relationship is necessary or desirable in public sector employer-employee relations.

Government is in the business of providing services. Providing these services well is what gains votes, the bottom line in politics. To do this requires well trained and reasonably well satisfied employees. Government is in competition with the private sector to hire these workers. This gives government ample incentives to treat employees well and compensate them fairly. In fact, it is likely that public officials, both elected and appointed, will find themselves as allies with government workers rather than adversaries in many instances.

Monopoly

Unions insist upon a monopoly in representation. If a majority of employees in a bargaining unit desires representation by a union, the union then imposes its representation on the minority. In the private sector this is harmful to the interests of some employees, but in the public sector it results in a system contrary to the fundamental guarantee of liberty under the Constitution. The First Amendment to the Constitution of the United States guarantees citizens the right to petition the government.


Granting unions the exclusive right to represent government employees in their employment relationships with the government denies public workers this right in one of the most basic areas of concern--their jobs.

"The effect of giving unions monopoly bargaining power is to make the union the workers' economic sovereign."

The effect of giving unions monopoly bargaining power is to make the union the workers' economic sovereign. The union decides the terms and conditions under which an employer may offer employment, and the union has the exclusive right to represent employees in grievances. This puts the public employee in the situation of having two sovereigns, the government and the union.



Equals

In theory, collective bargaining brings the employer and the employees to the bargaining table as equals. This is a concept appropriate only to the private sector. Government, because of its sovereign nature, is in great peril when it recognizes any small special interest group as its equal. A truly equal relationship causes broad public concern about the effectiveness of representative government, yet a less than equal role for the unions causes frustration for employees who have been led to expect too much from unionism. The only truly satisfactory situation for the union is that of superiority. Such a situation, of course, causes widespread voter/taxpayer dissatisfaction with government.

Impasses

This brings us to the final element in the nature of collective bargaining-impasses. In collective bargaining it is the role of the unions to make demands and the role of management to respond to those demands. At some point management is bound to find itself unable to satisfy all the union demands. When an impasse occurs, the union must have some means of enforcing its demands. The traditional means of response to management recalcitrance is to threaten a strike.

"In the public sector the strike is a political weapon."

In the private sector the strike is an economic weapon. The employer faces economic losses through lack of business, and the employee faces economic losses through loss of wages. If there is a strike at one provider of a good or service, consumers - the public - can shift to another provider or not purchase at all.

In the public sector the strike is a political weapon. The employer does not suffer an economic loss and in many cases, particularly in education where most public sector strikes occur, neither does the employee.

Because of its political impact, the public sector strike is disruptive of the normal political process. Under normal circumstances, divergent interest groups within society, all of whom have a legitimate interest in public policy questions, exert pressure from various directions on elected representatives. Of these groups, a union of public workers is the only group which has the power, if not the legal right, to unilaterally deprive the rest of society of an essential service. Once this occurs, divergent political forces show a strong tendency to coalesce into a unified voice demanding a restoration of service.

The only way to restore the service, in most instances, is to give in to the union's demands. Thus the union, by using a strike or the threat of a strike, can dominate the decision process and control the size, cost, and quality of government service.

The proponents of unionism and collective bargaining in the public sector based on the private sector model ignored the essential differences between the decision making processes in the two sectors and the conflicts inherent between the nature of unionism and the nature of government.

An even better appreciation for the full ramifications of this problem can be found in studying the conflicts between unionism and the public interest.

The Public Interest

In order to fully appreciate the case against public sector unionism, it is important to understand why public sector collective bargaining is contrary to the public interest.

To do this, we must determine what is the public interest in public employment. This may prove to be many things to many people, but there should be universal agreement that it includes the following:
  1. A peaceful, stable employer-employee relationship;
  2. Protection of the rights of all public employees;
  3. Protection of the right of the people through their elected representatives to control government policy and the cost of government;
  4. Providing governmental services in the most efficient and orderly manner possible.
Based on any objective standard, collective bargaining, as it has developed in the industrial or private sector of America's economy, does not enhance any of the above in the public sector.

"Compulsory collective bargaining is destructive of a peaceful, stable employer-employee relationship."

In 1959 Wisconsin was the first state to enact compulsory public sector bargaining legislation. Since then more than forty states have followed suit in one form or another. The proponents of bargaining were astute. They knew that if they told the public that unionism and bargaining in the public sector were intended to give unions a disproportionate amount of influence in the decision making process, no one would have bought the idea. So they talked in terms of equity and ensuring harmonious employer-employee relations. On both scores the results of compulsory public sector bargaining have not only failed to fulfill their promise but have had an effect completely contrary to their intended purpose. As a result, public employees are increasingly hostile to their employers, and there is increasing public hostility toward public workers.

Harmony

The imposition of collective bargaining on public sector employer-employee relations results in an increase in strike activity. In 1958, before the passage of the first public sector collective bargaining law, there were 15 strikes against government. By 1980, after thirty-seven states had enacted compulsory public sector bargaining legislation covering one or more groups of public employees, there were 536 strikes.

After President Ronald Reagan's firm handling of the PATCO strike in 1981, the number of strikes against government declined by about 50% and the Bureau of Labor Statistics ceased reporting on strikes in the public sector, making further analysis of this issue impossible. But, it is worth noting that between the period 1958 to 1980 in no case did passage of a public sector bargaining law result in a decrease in strike activity.

Compulsory collective bargaining is destructive of a peaceful, stable employer-employee relationship. This is true statistically, from the facts available from areas which have experimented with it, and can be deduced from the very nature of the collective bargaining process.

But, the proponents of compulsory public sector collective bargaining have argued that such laws would serve to reduce public sector strike activity. They claim that forcing government to recognize and bargain with unions would remove the cause of strikes by providing formal channels for the resolution of differences.

It is claimed that bargaining legislation, by reducing the number of recognition strikes, would result in a net reduction in public sector strike activity. Jack Stieber, author of a Brookings Institution study entitled Public Employee Unionism, is often cited out of context to support this contention.

Clearly, there is little relationship between the incidence of government strikes and state laws regulating labor relations in public employment. Michigan, one of the three states with the largest number of strikes, has had a comprehensive law since 1965, while Ohio and Illinois, the other two, have no state statute providing collective bargaining for public employees. Other state patterns are similarly inconclusive. The one effect of laws that can be documented is that they reduce greatly the number of strikes over the issue of union recognition...

In fact, Stieber recognizes the true relationship between bargaining laws and strikes. The rest of the text indicates this:
But other issues, particularly wages, have apparently increased the number of strikes sufficiently to more than compensate for the elimination of union recognition as an important issue in states with public employment laws. (Emphasis added)

"In states which have adopted compulsory public sector bargaining laws, there is a tremendous increase in the number of strikes whether legal or illegal."

The Bureau of Labor Statistics of the U.S. Department of Labor began to keep detailed statistics on public sector strike activity in 1958. This database allows us to examine strike activity before and after enactment of bargaining legislation.

A study of this data covering all strikes against government from 1958 to 1980 show that in most states which have adopted compulsory public sector bargaining laws, there is a tremendous increase in the number of strikes -- whether legal or illegal.

A comparison of strikes before and after the enactment of a public sector bargaining law shows a correlation between passage of such laws and a fourfold increase in strike activity on a national average. These figures are dramatized by examples such as Michigan where there was one strike against government between 1958 and 1964. In 1965 a public sector collective bargaining law was enacted which made strikes illegal. Between 1965 and 1980 there were 759 strikes against government in Michigan. In Pennsylvania there were 72 strikes in the twelve years prior to the passage of a compulsory public sector collective bargaining law which legalized strikes in 1970, and 767 strikes in the eleven years followmg enactment.

On a national average, there have been 1.34 public sector strikes per year in states prior to passage of compulsory public sector bargaining laws and an average of 5.00 strikes per year after passage of such laws.

Equity

Unions in the private sector speak of equity in terms of the workers "fair share" of the value of production or of profits. No such measure is available to the public sector worker.

If we define equity for public sector workers as compensation comparable to their counterparts in the private sector, it is easily demonstrable that unionism and collective bargaining have as a natural consequence disequity rather than equity.

In the private sector there is little argument that a unionized worker earns more than a nonunionized worker doing the same work. Despite the obvious fact that our national labor law gives considerable advantages to unions in organizing campaigns, only about 11 percent of the workers employed in the private sector have elected to be represented by unions.

Since unionism is more concentrated in the basic industries where employment is in larger units, it is safe to say that far less than 11 percent of the employers offer employment under the terms of a union contract. The average compensation for work in the private sector is certain to be less than the union negotiated wage. If a consequence of unionism is higher than average pay, how can this be called equity?

That unionism has the same impact in the public sector is shown by postal wage activity since passage of the postal Reorganization Act in 1967. In 1970 the average postal worker earned $7,777 per year, while the average manufacturing worker in the private sector earned $7,440 per year. The Reorganization Act imposed the NLRA on employer-employee relations in the postal service, ignoring the monopoly essential/political/nature of the service. (The postal service work force is very heavily unionized.) By 1976 the average pay of a postal worker had risen 69 percent to $13,127, while the average manufacturing worker's wage had increased only 57 percent to $11,703.

Rising public discontent has focused on the public employee, while public employees increasingly take a hostile attitude toward the public. Because public sector collective bargaining is a sacrosanct institution and is very poorly understood by both groups, it is not recognized as the source of the problem.

Employee Rights v. Union Privileges

It is also a widely held misconception that compulsory public sector bargaining laws somehow guarantee "rights" to public employees. Nothing could be further from the truth. In fact, close examination reveals that, if anything, the opposite is true and that compulsory public sector bargaining laws give powers and privileges to unions at the expense of the rights of individual public employees.

Public employees, like all American citizens, have the right to join a union. This is a right protected by the First Amendment to the Constitution of the United States. No law is needed to guarantee it and no law can violate it. Beyond this, all the so-called rights contained in compulsory bargaining laws are union rights, not employee rights.

"Compulsory public sector bargaining laws give powers and privileges to unions at the expense of the rights of individual public employees."

To illustrate this point, almost without exception, such laws require that the union be the sole or exclusive representative of all the employees in a unit. This denies employees the right to represent themselves individually or to be represented by another organization of their own choosing. This monopoly power granted to the union is usually carried to the point of denying the individual employee the right to meet with the employer to discuss a grievance unless the union representative is given the opportunity to be present.

Unions commonly exploit their monopoly bargaining power by insisting that because they are "forced" to represent all employees, that all employees, having lost the right of representation to the union, should be forced to join or support the union as a condition of employment. This violates each employee's right to freedom of association and gives the union greatly increased power in determining the employment destinies of the employees.

"Public sector collective bargaining makes public employees super citizens' and relegates the rest of the public to second class status."

Granting unions monopoly bargaining privileges and the power to compel membership or support cannot be construed as guaranteeing any "rights" to public employees.

The proponents of compulsory public sector collective bargaining laws play upon the public's sense of fair play by saying that denial of public employees' right to collective bargaining makes them "second class citizens." There is no "right" to collective bargaining in either the private or public sector.

The U.S. Supreme Court has been quite clear about this in several decisions.

Rather than the lack of collective bargaining privileges for public sector unions making public employees second class citizens, the existence of public sector collective bargaining makes public employees "super citizens" and relegates the rest of the public to second class status.

Public Control

Nor can it be said that public sector bargaining laws protect the right of the public to control government policies and costs through its elected representatives.

The most fundamental violation of this principle is inherent in the very nature of the laws and leads to their designation as "compulsory" bargaining laws.

Public sector bargaining laws "compel" elected public officials to recognize and bargain with unions. This immediately deprives the representatives of the people of the power to determine whether such recognition and bargaining are, in fact, in the public interest.

"Collective bargaining laws create an adversary relationship between union and employer."

This compulsion to bargain is normally defined as an obligation to bargain "in good faith." There is no clear definition of "good faith," but experience with similar provisions in other laws leads to the conclusion that, despite legislative language to the contrary, the courts have ruled that in order to bargain "in good faith," the employer must be willing to grant some concessions to unions' demands. Thus, the elected official is in double jeopardy; not only must he bargain, he must make concessions.

By making the union a full and equal partner at the bargaining table, compulsory public sector bargaining laws deprive the public of its right to participate in policy making. This point was emphasized in a US District Court opinion which upheld the constitutionality of a North Carolina law, which declared public sector union contracts to be void. The Court said:
Moreover, to the extent that which public employees gain power through recognition and collective bargaining, other interest groups with a right to a voice in the running of the government may be left out of vital political decisions. Thus the granting of collective bargaining rights to public employees involves important matters fundamental to our democratic form of government. The setting of goals and making policy decisions are rights inuring to each citizen. 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.
By their very nature, collective bargaining laws create an adversary relationship between union and employer. This makes strife inevitable. Most public sector bargaining laws, in the realization that they are creating problems, provide for a system of impasse resolution. Usually, this takes the form of mediation, fact finding and arbitration. These systems further serve to deprive the elected representatives of the people of their responsibilities.

The unions believe that no employer will seriously consider a union demand, if it knows that the union has no power to enforce it. To enforce their demands, unions must have the power to strike. As Sylvester Petro put it,
"Collective bargaining unsupported by the strike is a sham institution; government whose employees may strike is no less a sham."
Another scholar from the opposite side of the ideological spectrum on the question of unionism, Theodore Kheel, expressed the same sentiment,
"Collective bargaining and strikes are like Siamese twins."

"Thus, public sector strikes enjoy a heightened degree of effectiveness not shared by private sector work stoppages."

Most concern about strikes in the public sector focuses around the deprivation of public services. There is no doubt that this is a very real problem, but it distracts attention from an even more important consideration. Strikes against government are disruptive of the normal political process because they tend to coalesce divergent political views for a brief time into a single demand for the restoration of public service. This gives the union disproportionate power and results in government decisions which have short-term political benefits and disastrous long term consequences.

The usual public reaction to the strike is pressure on elected officials to restore the disrupted service. Thus, the victims become the unwitting ally of the union. If the cost of restoring the disrupted service is capitulation to union demands, elected officials, caught between angry strikers and an angry public, usually must do so. Thus, public sector strikes enjoy a heightened degree of effectiveness not shared by private sector work stoppages.

"Therefore, collective bargaining as an institution is inappropriate to government."

Professors Harry H. Wellington and Ralph D. Winter, in their Brookings Institution Study, "The Unions and the Cities," focus on this problem concerning the strike weapon:
The trouble is that if unions are able to withhold labor -- to strike -- as well as to employ the usual methods of political pressure, they may possess a disproportionate share of effective power in the process of decision. Collective bargaining would then be so effective a pressure as to skew the results of the 'normal' American political process.
...Since interest groups other than public employees, with conflicting claims on municipal government, do not, as a general proposition, have anything approaching the effectiveness of the strike -- or at least cannot maintain that relative degree of power over the long run -- they may be put at a significant competitive disadvantage in the political process.

"Binding arbitration, by the very nature of the process, is a 'no lose' proposition for the unions."

There is no doubt that collective bargaining means strikes. There is also little question that strikes against government are intolerable. Therefore, collective bargaining as an institution is inappropriate to government.

Some states in an effort to avoid this problem have instituted compulsory binding arbitration as a means of resolving labor disputes in the public sector. If anything, binding arbitration is worse than strikes.

Strikes destroy democratic government by giving the public sector union - a very small special interest group - disproportionate influence and therefore effective control of the public decision making process. Binding arbitration completely removes elected officials from the process.
Binding arbitration, by the very nature of the process, is a "no lose" proposition for the unions. An arbitrator will never award a settlement that is anything less than management's final offer. The union is therefore able to obtain everything possible through the bargaining process aided by its political influence and then go to arbitration knowing that it can do no worse.

In many states which have enacted binding arbitration laws there are active movements to repeal them. But repeal is difficult because the collective bargaining laws greatly increase the political power of the unions.

State legislators often approve binding arbitration because its effect is felt at the local government level. One striking example of this is in Michigan where State Senator Coleman Young was the sponsor of a binding arbitration law. Later, as the Mayor of Detroit, Young said,
"We know that compulsory arbitration has been a failure. Slowly, inexorably, compulsory arbitration destroys sensible fiscal management." Arbitration awards "have caused more damage to the public service in Detroit than the strikes they were designed to prevent."
Clearly, laws which compel elected officials to recognize and bargain with unions in no way serve to protect the right of the citizen-taxpayer to control their government.

Finally, do compulsory public sector bargaining laws in any way promote more efficient or orderly delivery of public services?

As already noted, there is a strong and direct correlation between collective bargaining and strikes which disrupt public services.

Beyond this, union contracts tie the hands of elected officials and make it impossible for them to respond in a timely fashion to economic or natural disasters and emergencies. One only need look at New York City's financial default in the 1970's to see how completely destructive absolute power in the hands of public sector unions can be.

In addition, public sector bargaining tends to telescope the government decision-making process.
Public sector union contracts frequently deal with subjects beyond wages, hours, terms and other conditions of employment. These have a direct impact on a very broad variety of public policies.

It is the nature of negotiations to make concessions and compromises when faced with a deadline. As a result, many contract agreements are made at the last moment. The elected representatives of the people are then faced with the need to consider, in a very brief time, a document which will effect a wide range of other decisions. There is not time under these circumstances for public review and for informed comment from other interest groups.

Most public sector bargaining bills, in realization of the fact that they create more problems than they solve, provide for the establishment of a public employment relations board to resolve problems which arise under the law. These boards are cumbersome new bureaucracies which greatly increase government costs. They are given broad regulatory powers from which locally elected public officials have little or no recourse.

"No matter what the real intent of these laws, by any objective standard they are not in the public interest."

Public sector bargaining laws also lead to such inefficient practices as the collection of union dues at the tax payers' expense, and giving union officials, who are public employees, time off at full pay while engaged in union activities.

It is clear, therefore, that no matter what the real intent of these laws, by any objective standard they are not in the public interest. They represent an expression of the selfish self-interest of public sector union organizers and, indirectly, the interest of the politicians who enact them in order to curry favor with the union's political operatives.

Since public sector collective bargaining is so contrary to the public interest, it is also essential to understand how it became so widespread. Actually, public sector collective bargaining is a relatively new phenomenon.

In the middle of the 1950s some academicians began to toy with the idea that collective bargaining might lead to more harmonious and equitable employer-employee relationships in the public sector.
In 1955 George Meany, the President of the AFL-CIO, said,
"It is impossible to bargain collectively with the government."
And as late as 1959 the AFL-CIO Executive Council was on record as believing that, "in terms of accepted collective bargaining procedures government workers have no right beyond the authority to petition Congress - a right available to every citizen."

At about the same time, however, union membership as a percentage of the work force began to decline and the number of people employed by government began to grow. Union officials saw the emerging public sector as the new growth industry to replace the dues dollars and political clout they were losing from their decline in the private sector.

In 1958 public sector union membership was only 1,035,000 or 12% of a work force of about 8.5 million. At that time the private sector work force was about 43 million and union membership was 16,933,000 or 39%.

In the next two decades, the federal government and most states instituted comnpulsory public sector bargaining schemes. In addition, unions found that they could use their political power to prevent any employer resistance to union organization in the public sector at the local level once a state enacted a compulsory public sector collective bargaining law.

Between 1958 and 1978 the public sector work force grew by 83% while the private sector work force grew by only 39%. Public sector union membership grew to 6,019,000 which was 39% of a public sector work force by then numbering 15,630,000. By 1978 private sector union membership had risen to 18,116,000 but was only 20% of the work force.

The decision to push for compulsory public sector bargaining laws was indeed a profitable one for the unions. On the other hand it was a failure for those who thought that it would lead to better government.

In 1978, Cornell University law professor, Robert S. Summers, concluded his monograph entitled Collective Bargaining and Public Benefit Conferral: A Jurisprudential Critique by saying,
Collective bargaining and the process of democratic public benefit conferral are not felicitous bedfellows. While it is possible to shore up these processes through the promulgation of codes for neutrals (and through other reforms), the extent its unhappy effects can be reduced or ameliorated by these means is limited. Abandonment of bargaining is necessary, for this and other reasons.
Dr. Myron Lieberman, whose book Education as a Profession in 1956 was one of the first to advocate collective bargaining for teachers and who was at one time a candidate for the presidency of the American Federation of Teachers, AFL-CIO, later became a collective bargaining practitioner. In his 1980 book entitled Public-Sector Bargaining, Lieberman turns full circle saying,
It would be desirable to have a new organizational structure to replace public sector unionism, but such a structure is not required to justify deunionizing public employment... The choice is not between public-sector bargaining and something better. Without in any way idealizing what preceded public-sector bargaining, it was better.
But, even if one wanted to, it is impossible to go back to the way things were before public sector collective bargaining. It is time to move ahead. The collective bargaining laws have given enormous political power to the public sector unions. At the present time repeal of these laws, no matter how desirable, is not feasible.

It is time for the public officials and the people they serve to devise new strategies for doing things a better way and going beyond public sector unionism.

Beyond Public Sector Unionism

Developments in public sector labor relations have been based upon and have followed the private sector model. Unionism in the private sector is in decline and has been so since 1954. The Bureau of Labor Statistics reports that in 1995 union membership constituted 10.3% of the private sector work force--down from a high of almost 40% in 1954.1

Private sector unionism went through an evolutionary process which is repeating itself in the public sector.

Unionism established itself in the private sector over a long period beginning at different times in different industries. This includes the evolution of craft guilds into labor unions. In many instances because of the historic master-journeyman-apprentice relationship, and because unions maintained high standards, employers found voluntary cooperation with unions to be to their advantage. The early history of the Operating Engineers union is a good example of this. It was not uncommon for employers to insist that Operating Engineer union members run the boiler rooms in their plants and they quite gladly gave the union "closed shop" contracts.

As unionism grew beyond the initial stage and sought contracts on a less than mutually beneficial basis, employers engaged in resistance. Anti-union campaigns and the so-called "yellow dog" contract--a contract under which an employee agreed not to become a union member as a condition of employment were typical of this stage. During this stage, employers also encouraged and established "company unions" -- unions which were controlled by, or at the least, friendly to the interests of the employer.

The next stage is characterized by government support, the passage of laws and the establishment of regulatory bodies which were intended to encourage the expansion of unionism and collective bargaining throughout the work force.

It is an accident of history that in the United States the early years of this period coincided with World War II and the Korean War. During these wars, war labor boards, in order to insure continued productivity, imposed union relationships, including union shops, on many employers.

The nation's first labor law was the Railway Labor Act of 1926, but its application was limited to a single industry, and it did not sanction any form of compulsory unionism.

It was the passage of the Wagner Act, the first National Labor Relations Act, in 1935 which extended government support of unionism and collective bargaining to most places of employment. This law and its successor, the Taft-Hartley Act, exempted both public employment and agriculture from its coverage. The Wagner Act included a sanction for the "closed shop" which was struck down by the U.S. Supreme Court in 1937.2

There is no way of knowing what the impact of the Wagner Act would have been in the absence of the war labor boards. Union penetration in the total work force, both private and public, which had been running at a fairly constant percentage for many years, was about 13% in 1935. By 1941 this had increased to almost 28%. At the end of World War II it was 35.5% and began to decline, but the Korean War gave it another boost until 1954 when it reached 34.7%. After this the decline became permanent.

In 1958 the Bureau of Labor Statistics began to keep track of public sector union membership and work
force penetration as a separate category. The table on the following page shows the changes in the work force and union penetration between 1958 and 1995.

The modern union movement blames much of its present decline on management's efforts to "bust the unions." The decline of unionism is due to a variety of factors including, but not limited to, the changing composition of the work force, the general level of educational attainment of the work force, the increasing role of women in the work force and legislated protections of the rights of workers.

No matter what factors were involved, the degree to which unions raised the price of labor as a factor in production above market rates contributed to the acceleration of the impact of each factor. 

Union Membership as % of Work Force
(Numbers in thousands)

Private Sector
% Union Members
Work Force
Union Member
1958

39.3
43,066
16,933
1995

10.3
91,681
9,432
Public Sector
% Union Members
Work Force
Union Members

12.4
8,297
1,035

37.7
18,358
6,927
TOTAL
% Union Members
Work Force
Union Members
33.2
51,363
17,968
14.9
110,038
16,360
Source: Bureau of Labor Statistics, 1958 figures based on employees in nonagricultural establishments, 1995 figures based on employed wage and salary workers.

This union influence reflected not just in wages but in work rules the cost of the negotiating process and the cost of the threat or reality of strikes.

In another sense the unions were responsible for their decline by lobbying for the passage of legislation to guarantee workers protections previously only available under union contract.

In theory, one might have supposed that by imposing the cost of these benefits universally on employers through federal law, the unions would make unionized employers more competitive and decrease resistance to unions. The lessened appeal of unionism to workers seems to have been a bigger influence.  

A recent study shows that the union wage differential is the largest single motivating factor in employer resistance and that employer resistance is the largest single factor in remaining nonunion (Freeman 1986).

There is no doubt that management in the private sector has realized that it is in its interest to move beyond unionism where possible and has set about to create an employer-employee relations climate in which unionism as we know it is outmoded and unnecessary. While there has always been union avoidance to one degree or another, its success and its prominence is a relatively recent phenomenon.

A policy of going beyond unionism could only succeed once unions were in decline. The decline was so much a creature of the union's own doing that making unions unnecessary was merely the employer's response to the situation which the union had created.

This sort of activity has taken many forms which are characterized by programs by employers to create an employer-employee relations environment where the majority of workers do not perceive the need for union representation, or even that they are better off without union representation.

The development of unionism in the public sector differs somewhat from that in the private sector but it is also similar. Most public sector unions evolved from employee associations. Many of these associations were fraternal in nature. Others were so all-encompassing that they tended to be dominated by people in top management positions.

"In the public sector votes, rather than dollars, are the bottom line."

The National Education Association, for example, started out as a very broad organization encompassing all elements of the education community. This is analogous to the guild phase of unionism.

The senior education officials, usually school superintendents, who dominated the NEA sought a more activist role for it in representing teacher interests in response to a perceived threat from "the union" -- the American Federation of Teachers, AFL-CIO. At that time NEA was the equivalent of a "company union."

Government support in the form of compulsory public sector collective bargaining laws ultimately turned the NEA into a full blown union.

Just as union excesses resulted in its demise in the private sector and forced management find a better way, so are the same forces at work in the public sector.

"A monopoly dealing with a cartel of labor has little problem passing on the costs inefficiencies and failures to the consumers."

Nowhere is this more evident than in the field of public education. It, of course, must be recognized that the public sector is different from the private sector in several fundamental respects.

In the public sector, votes, rather than dollars, are the bottom line. In most instances where union political power (votes) was an inhibiting factor in decisions about opposing the unionization of public employees, either in the case of a state legislature considering mandatory public sector collective bargaining legislation or in the case of a local public body considering whether to resist the unionization of its own employees, it was because the politicians feared the political consequence of being perceived as anti-union by the broader union community, including the private sector unions, rather than the political power of any public sector union constituency.

This pressure was felt not just by elected officials, but by professional managers of public agencies. It is common practice for public agencies to have policies which prohibit managers from doing anything which might be construed as opposing the unionization of the agencies' employees.

The decline of private sector union membership and political influence will open doors for public sector management to take a more realistic view of the need to challenge unionism.

Another extremely important difference between the public and private sector is that the public sector is, in most instances, a monopoly.

A monopoly dealing with a cartel of labor has little problem passing on the cost inefficiencies and failures to the consumers, particularly when the consumers are forced to pay whether they use or benefit from the service.

A good example of the symbiotic relationship between a monopoly and a labor cartel was the airline industry. Government control of routes and rates prevented competition in the industry. Deregulation created a competitive environment in which the cartel costs of labor could no longer be passed on to the consumer. Unionism in the airline industry declined rapidly.

The excesses of public sector unions have already forced changes which have begun its decline. Public sector union penetration in the work force peaked in 1976 at 39.8% (Troy 1984) 3 and, as mentioned above, is presently at 38.7%.

The next logical step is for public sector management to take steps to move beyond unionism. But, to create an environment where this can happen, competition is necessary.

Competition need not be direct. In public education, it is not limited to the choice between public and private schools or giving public school clients a choice of public schools within a system. Contracting for educational services is another alternative just as are efforts by industry to educate the products of the public education system.

Technological advances have already made it possible for educators to have simultaneous interactive relationships with classes all across the country. The rising cost of teacher salaries combined with severe shortages of teachers in certain specialties will soon make such alternatives economically attractive.

When these things occur, unions will stand out as major obstacles to advances and education managers and elected officials will find union avoidance both economically and politically attractive.

A good example of the same phenomenon is now taking place in the postal services, where unions are entrenched.

The U.S. Postal Service has a legal monopoly on mail delivery. Union excesses have forced up the cost and slowed the service to the point that alternative forms of competition such as fax machines, electronic data transfer and express delivery services have become increasingly attractive.

The postal service has installed labor saving devices which are made ineffective by union contract provisions. The postal service response has been to contract out operations so that the work can be done efficiently by people other than postal service employees.

"Postal Service management's only logical alternative is to find a better way to work without unions."

The postal unions have responded by boycott threats which have only been effective in certain heavily unionized areas because of support from non-postal unions.

Postal Service management's only logical alternative is to find a better way to work without unions. This will be increasingly politically attractive as rates increase and service worsens.

The unions, of course, are well aware of this problem and are doing what they can to prevent competition in any form. But, the forces of change at work in society make the expansion of competition in the provision of public services inevitable.

These forces are clearly at work in the field of public education with the rapid advance of technological change.

The present system dominated by unions is simply not capable of changing fast enough to keep up.

"The present system dominated by unions is simply not capable of changing fast enough to keep up."

Society recognizes a different value between a recreation supervisor and a computer programmer even though they may have the same level of education and work the same hours. A union, for internal political reasons, cannot afford to recognize a different value between a physical education teacher and a computer science teacher.

A union opposed to pay scales which recognize the different value of different knowledge and the different value of relative levels of teaching skills is not able to function in this changing environment.

There is ample evidence that the growth of teacher unions was a factor in the decline of the quality of public education. The dramatic rise in teacher union membership and collective bargaining in public education began in 1962. By 1976 teacher union membership had more than doubled. The decline in SAT scores began in 1963 and continued throughout this period.

Yet all of the studies on the state of public education in America and the challenges it faces in the future completely ignore the question of the union role in the decline of quality.

This is not because educators are unaware of the unions' influence but because the unions' political influence within the education establishment is so strong that no such study or report can be accepted without union participation and the unions' quid pro quo for participation is that the role of unions is a taboo subject.

It might appear at first blush that so long as there are state laws which require union recognition and collective bargaining combined with impasse resolution processes increasingly culminating in binding arbitration, there is little which can be done short of repeal of these laws.

The lessons of the private sector experience belie this appearance. As noted above, public sector collective bargaining laws are based on the private sector model. The economics and politics of the marketplace coupled with the decline of unionism brought about changes in private sector policies toward unionism without any changes or repeal of the National Labor Relations Act.

Even with a collective bargaining relationship imposed by state law, there are many potential avenues for moving beyond unionism in the public sector and, again, particularly in public education.

"The fact that employees are union members or are represented by a union does not mean that the employees like or support the union."

The increasing emphasis on decentralizing control of public services characterized by "site based management" and "quality of work groups" offers fertile ground for moving beyond unionism. Union propaganda stresses the role of unions in "empowering" workers. Decentralizing control will truly empower workers and make union contract provisions obstacles to worker satisfaction and productivity.

A perfect example of this is available from Indiana. The state legislature enacted an education reform program called 21st Century. Part of this program included decentralizing the public school decision making process and the establishment of school committees which included school employee, parent and community representatives.

After its enactment the Indiana State Teachers Association warned its local bargaining agents that the implementation of 21st Century would result in strife between the union and its members and urged them to secure compulsory agency shop agreements in their next contracts so that these teachers would be forced to continue to financially support the union.

The fact that employees are union members or are represented by a union does not mean that the employees like or support the union. A study by the Survey Research Center seems to indicate that union members are more concerned about what their union is doing than what their employer is doing. (Lipset 1986)

It is important to keep in mind the impression employees get about management's attitude about unions. There are several ways in which employees may get the impression that management approves of union activity.

"This gives employees the impression that management encourages support of the union and it greatly increases union income.

In many areas management still regards "membership in a professional organization" as a positive factor in evaluating employee job performance. When applied to union membership this sends the wrong signal to the employees.

Unless it is absolutely required by law, management should strongly resist giving unions dues check-off privileges. This gives employees the impression that management encourages support of the union and it greatly increases union income. In several instances on record, withdrawal of dues check-off privileges has resulted in substantially reduced union membership. It is not so hard for union organizers to pressure an employee into signing a check-off authorization once as it is to collect dues each month.

Union access to internal communication systems such as teacher mail boxes in the schools should also be avoided. It gives the employees the wrong impression about the unions legitimacy and facilitates the union's communications in its attacks on management.

Another means of creating a new opinion environment among employees is to keep them aware of union problems. Unions, like other institutions, suffer from corruption and internal strife. Keeping employees aware of these problems can put the unions on the defensive.

Many grievances are not grievances by employees against management so much as they are by employees against other employees. For example, if the grievance is about management's decision to promote or transfer an employee, it is really a question of why one employee was promoted or transferred rather than another. Creating a new environment in which unions are outdated can include letting employees know that when the union pursues such a grievance it is really against the employee, not management.

...a public employee can only be required to pay a union representative for the actual cost of representation..."

Unions in their representation function spend an inordinate amount of time defending the interest of employees who are in trouble for one reason or another. The employee most in need of representation is the one too frequently absent or whose behavior and relationship with coworkers results in problems.

The majority of employees are harmed by these few trouble makers or slackers. Making unions unnecessary can include a program to keep employees aware of the unions' role in the defense of these workers.

In public education professional liability insurance is a very strong incentive for union participation. Teachers are told in college and by their union in the work place that this coverage is very important. It is provided to them as a benefit by the union out of union dues. This insurance is very inexpensive. It could be provided by the school employer at little cost and remove an incentive for employee participation in a union.

Several studies have shown that the political views of union leadership at the national level are not in sync with the majority of union members. Keeping employees aware of these policies when they are controversial helps create a climate of opinion suspicious of the unions' motives.

Even though bargaining laws require that unions be the exclusive representative of bargaining unit members in negotiations, there are many opportunities to involve employees in work place concerns which do not involve negotiations on terms and conditions of employment. Channeling such involvement through mechanisms other than the union can show employees how much can be achieved through cooperative rather than adversarial processes. This can be particularly useful when the cooperative solution to a work place concern runs counter to the union's self interest and the union is forced to explain to its own members why they are wrong.

Many public officials have told me that any attempt to communicate with employees outside the collective bargaining process draws an immediate filing of an unfair labor practice complaint by the union for bargaining with other than the exclusive representative. In one case putting a suggestion box in a fire house brought such a charge.

As noted above, most state public sector collective bargaining laws are based on the National Labor Relations Act. Many state public employee relations boards give significant weight to National Labor Relations Board decisions in making decisions about unfair labor practices.

Several NLRB decisions seem to indicate that "labor-management" collaboration is illegal under the NLRA. In recent decisions the NLRB has taken pains to make it clear that not all cooperation is illegal and has set forth specific guidelines for legal cooperative activity. In the initial stages of development, it is the willingness to communicate outside union channels rather than the precise method or topic that is important.

For far too long, public sector unions have violated laws and court orders with virtual impunity in pursuit of power. It is all too common to see public sector unions engage in blatant violations of the law and to offer as their defense,
"We don't want to be doing this but we're doing it for the (fill in the blank)." If it's an illegal teacher strike, you can fill in the blank with "children." If it's a hospital strike, you can fill in the blank with "patients."
They never say they are doing it for personal gain.

"It is high time that public officials took a page out of the unions' book by not being intimidated by union threats of unfair labor practice charges..."

Yet, when a public official even considers action that might be considered "anti union," the union threatens to file an unfair labor practice charge and the mere threat of such a charge is usually sufficient to deter the action.

There are many reasons for this. First is public misunderstanding. Too many people regard the filing of a charge as proof of guilt. Then, you have the cost of defending against the charge. The union already has attorneys in the state capital to pursue the charge with the public employee relations board, but the public entity, especially a small public entity, would have to spend a disproportionate amount of its budget sending an attorney to defend the charge. And, if they do, the union immediately attacks the public officials for "wasting the taxpayer's money defending their 'illegal' action."

Saul Alinsky, the radical leftist who trained so many union organizers, told his students that they must "make the enemy live up to their own book of rules." This tactic gives the unions a big advantage.

It is high time that public officials took a page out of the unions' book by not being intimidated by union threats of unfair labor practice charges and, in extreme cases, deliberately committing unfair labor practices when it is in the public interest. They should then go public with statements about the matter like "We don't really want to do this but, we're doing it for the (fill in the blank)."

They should pave the way for such action by communicating in advance about it with community opinion leaders like newspaper editors so that when the union files the charge, there won't be an assumption of guilt and the public will understand that it is necessary to expend the funds to defend against the charge.

On the subject of public employee relations board decisions, it must also be noted that unions frequently "pick on" smaller government units which do not have the resources to vigorously defend their interests or those with elected members who are very sympathetic to union interests when seeking board decisions to serve as precedents in their dealings with governments which have greater resources or whose elected officials are less sympathetic.

Management in the public sector must be alert to such union activity and be prepared to defend its interests, even when it is not directly a party in the dispute. Such actions may provide additional opportunities to communicate with employees about the problem of unionism.

Another area which should offer a fruitful ground for moving beyond unionism is the U.S. Supreme Court's decisions in a series of cases beginning with Abood (1976) and culminating in Lehnert (1991).

These decisions provide that a public employee can only be required to pay a union representative for the actual cost of representation and give employees due process rights in the determination of the size of the fee the union can charge.

After the decision, Abood which provided that nonmembers--agency fee payers--could not be charged for nonrepresentation costs, the unions were left in control of the determination of the amount. Generally, they said that 5% of dues were spent for nonrepresentation purposes.

For most employees who were not union sympathizers, 5% was not sufficient incentive to invite the wrath of union officialdom by switching from membership to a fee payer status.

The 1986 Hudson decision gave nonmembers due process rights in the determination of the amount of the fee. Due process includes notice of the amount to be charged with sufficient information on the determination, an independently audited statement of the unions finances and the right to resolution of challenges to the size of the fee by a neutral party.

Teacher union dues are quite high by most standards. Several court decisions based on Hudson have shown that a substantial amount of this money is spent for nonrepresentation purposes.

Public employers are liable for damages under Hudson for agreeing to a fee which does not comply with its standards. Often union contracts provide that the public employer will be indemnified by the union for any damages arising from the implementation of an agency shop clause in a contract. These contract provisions may give employers a false sense of security. Several recent court decisions have held that a union may not indemnify an employer for a violation of the due process rights of an employee.

In 1991, in Lehnert v. Ferris Faculty Association the Court established a three-part standard for determining whether a union can charge non members for an expense without impinging upon the non members' first amendment rights:
  1. Union expenses must be "germane" to collective bargaining;
  2. The expenses must be for activities that are justified by the government's vital policy interest in labor peace and avoiding "free riders"; and
  3. The expenses must be for activities that do not significantly add to the burdening of free speech that is inherent in allowing an agency shop or union shop.
It is not unrealistic, based on presently available information, to imagine that a typical agency fee determined in full compliance with Lehnert would be 50% or less of union dues.

Conceivably, the final result of this process would be to leave the union with far less than a majority of full members. The union would then lose interest in the unit and it would be ripe for de-certification.

Providing employees with information about their rights under these decisions and aggressive participation in the process by which the fee is determined, aimed at keeping the fee as low as possible, will lessen the attractiveness of unions in several ways. It will diminish the funds available to the union. It will increase the incentive for employees to convert from full member to agency fee payer status. And, it will further the impression that management is more concerned with the rights of workers than the unions.

"It cannot be overemphasized that being anti-union is not in any way being anti-employee."

The unions are not stupid and they know how much is at stake for them in this matter. It must be anticipated that programs aimed at moving beyond unionism will meet with strong union opposition. It is important, therefore, from the very beginning to build strong community support by sharing information about the negative impact of public sector unionism with business, civic and other community leaders.

It cannot be overemphasized that being anti-union is not in any way being anti-employee. The unions will attempt to portray any attack on the union as an attack on employee interests. Careful preparation and good communication will make such charges unconvincing.

Successful employer-employee relations may require some changes in management processes. One advantage enjoyed by the private sector is that managers are empowered to make many decisions at their own level. The more bureaucratic nature of the public sector frequently results in an inability of management to take actions to resolve problems rapidly.

Unions thrive on problems. Union organizers are schooled in techniques characterized by the slogan,
"When you don't have a problem, create one."
Where management can move quickly to resolve problems they are not allowed to fester. This denies opportunities to union organizers.

"Most of the knowledge about making unions unnecessary rests in the private sector."

The political side of management, the elected officials, may need to give managers greater decision making authority. An alternative to this which preserves political control of public institutions is for elected officials to become more involved in the day to day workings of the institutions they govern. The movement toward what is referred to a site based management in public education may help resolve the problems caused by bureaucratic slowness in decision making.

Support for moving beyond public sector unionism should come from a variety of sources. Organizations like state and national associations of elected officials and managers could provide information on a regular basis and conduct workshops on the subject at their meetings and conventions.

Most of the knowledge about making unions unnecessary rests in the private sector. Since the private sector relies on the efficient delivery of public service, it should have a strong incentive to arrange cooperative programs to share this knowledge with the public sector.

In the private sector, there are firms which specialize in designing and implementing programs to make unions unnecessary. In many areas, the present political climate might not allow the expenditure of public funds for this purpose. It is conceivable that a local private sector employer's group could make these funds available.

This should be particularly true in the field of public education because business presently spends millions upon millions of dollars every year educating the products of public education and because the largest teacher union, the National Education Association, has a decidedly anti-business bias in its political and ideological activities, which cannot help but in some instances spread down through the organization to the indoctrination of students in the classroom.

The question, thus, is whether present political and administrative management will move ahead with it or whether competition will replace them with others who will.

The above is intended to be suggestive rather than instructive. Public bodies considering a "Beyond Unionism" program would be well advised to consult with legal counsel. If counsel advises that it can't be done, seek a different attorney. The question must not be, "Whether or not?" but "How?"

Union excesses in the public sector, combined with the decline of public sector unions, have made it inevitable that management must find a better way to conduct its relations with its employees and to make the next logical step beyond unionism. The question, thus, is whether present political and administrative management will move ahead with it or whether competition will replace them with others who will.

1
The percentage of work force figures may differ from source to source depending on what work force definition is used.
Prior to 1981 the Bureau of Labor Statistics used both a "Total labor force" figure and another for "Employees in nonagricultural establishments." As an example of the difference, in 1978 the BLS reported a total labor force of 102,637,000 with a union penetration rate of 19.7% and employees in nonagricultural establishments of 85,763,000 with a union penetration rate of 23.6%.
Union membership figures were derived from reports from unions, which frequently included unemployed and retired members. It must be considered that union voting representation strength at AFL-CIO conventions is based on the size of union membership. Slight variations in the number of reported union members maybe due to internal union political considerations, which have more to do with convention voting strength and per capita dues payments than they do with the actual number of members the union actually has at the time.

The Bureau of Labor Statistics released no reports on this subject in 1981 and 1982. In 1983 a new reporting system was established. The defined work force was "Employed wage and salary workers." Union membership figures were determined from household surveys. No attempt has been made to correlate the data prior to 1981 with the data after1983. The post 1983 data is probably a more accurate reflection of the actual extent of union penetration in the work force.

In 1954 there were 49,022,000 employees in nonagricultural establishments of which 7,323,000 were government. Union membership was 17,022,000 of which about 1 million were in the public sector. This would indicate that private sector union penetration was about 38%, which is lower than the 39.5% presented elsewhere in this paper for 1958.

The apparent peak in union penetration in 1954 was due to a decline in the employees figure accompanied by an increase in the union membership figure.
2
In a "closed shop" a worker must be a union member in order to obtain employment. In a "union shop" a worker may obtain employment without being a member of a union but must join the union within a specified period of time, usually thirty days. A later court decision ruled that even in a union shop actual union membership was not necessary so long as the worker paid the union for representation. The court referred to this is "whittling down union membership to its financial core."
3
The growth in public sector union membership is sometimes hard to determine because of the distinction between unions and associations. In 1968, in recognition that employee associations in the public sector were acting as unions, the Bureau of Labor Statistics began to include tables on public sector employee association membership in their reports but maintained the distinction between the two. Much of the apparent growth of public sector union membership in the last fifteen years has come as a result of mergers or affiliations of associations with unions. This has served to inflate the union membership figures without actually adding to the number of employees who were members of organizations which were functioning as labor unions. In 1978 the 260,000 member New York Civil Service Employees Association became a part of the American Federation of State County and Municipal Employees, AFL-CIO, bringing its membership above the1 million mark. The next year the Bureau of Labor Statistics reported a 250,000 increase in the number of public sector union members. In 1984 the 97,000 member California State Employees Association affiliated the Service Employees International Union, with AFL-CIO. This affiliation increased SEIU's membership to 847,000.
References

Freeman, Richard B. (1986). The Effect of Union Wage Differential on Management Opposition and Union Organizing Success. Nashville, Tennessee: The American Economic Review, Vol.76, No.2. (92-96).

Troy, Leo & Sheflin, Neil (1984). The Flow and Ebb of U.S. Public Sector Unionism. Vienna, Virginia: Government Union Reveiw, Vol. 5, No. 2.

Lipset, Seymour Martin (1986). Unions in Transition: Labor Unions in the Public Mind. San Fransisco, California: Institute for Contemporary Studies.

Rules for Radicals

Over the years there have been repeated suggestions that public sector union organizers, especially those associated with the National Education Association, were being trained by Saul Alinsky or by his Training Institute.

Alinsky passed away in 1972. His methods and his ideals succeed him. In his book, "Rules for Radicals," he laid out the guidelines for radical organizers. Very frequently, the tactics used by unions mirror those advocated by Alinsky. It is quite likely that the training of many public sector union organizers includes a crash course based on Alinsky's teachings. Some confirmation of this is contained in an interview with a person who was once an NEA UniServ and the executive director of an NEA state affiliate. He warned:
"To understand the NEA - to understand the union - read Saul Alinsky. If you read 'Rules for Radicals,' you will understand NEA more profoundly than reading anything else. Because the whole organization was modeled on that kind of behavior which was really begun when NEA used Saul Alinsky as a consultant to train their own staff."
Time and again public officials have described to me their shock and disbelief at what a union had done to them personally during organizing campaigns or labor disputes. I have told them that such activity was entirely predictable because it was almost textbook Alinsky. Their response has generally been that, if they had only known what to expect, they could have prepared for it and taken steps to neutralize its worst effects

Here, therefore, is a thumb nail sketch of some of Saul Alinsky's 'Rules for Radicals,' taken from his book by the same name published in 1971 by Vintage Books.

Alinsky emphatically states that the end justifies the means but cautions that extreme means are only justified in certain situations. Here are Alinsky's rules to test whether the means are ethical.
  1. One's concern with the ethics of means and ends varies inversely with one's personal interest in the issue.
  2. The judgment of the ethics of means is dependent upon the political position of those sitting in judgment.
  3. In war the end justifies almost any means.
  4. Judgment must be made in the context of the times in which the action occurred and not from any other chronological vantage point.
  5. Concern with ethics increases with the number of means available and vice versa.
  6. The less important the end to be desired, the more one can afford to engage in ethical evaluations of means.
  7. Generally, success or failure is a mighty determinant of ethics.
  8. The morality of means depends upon whether the means is being employed at a time of imminent defeat or imminent victory.
  9. Any effective means is automatically judged by the opposition to be unethical.
  10. You do what you can with what you have and clothe it in moral garments.
  11. Goals must be phrased in general terms like "Liberty, Equality, Fraternity," "Of theCommon Welfare," "Pursuit of Happiness," or "Bread and Peace."
He also had a set of rules for what he called power tactics" or the means used to "take." He described it as "how the Have Nots can take power away from the Haves." Here are his rules of power tactics.
  1. Power is not only what you have but what the enemy thinks you have.
  2. Never go outside the experience of your people.
  3. Whenever possible, go outside of the experience of the enemy.
  4. Make the enemy live up to their own book of rules.
  5. Ridicule is man's most potent weapon.
  6. A good tactic is one that your people enjoy.
  7. A tactic that drags on too long becomes a drag.
  8. Keep the pressure on with different tactics and actions, and utilize all events of the period for your purpose.
  9. The threat is usually more terrifying than the thing itself.
  10. The major premise for tactics is the development of operations that will maintain a constant pressure upon the opposition.
  11. If you push a negative hard and deep enough, it will break through into its counterside.
  12. The price of a successful attack is a constructive alternative.
  13. Pick the target, freeze it, personalize it, and polarize it.
Even a cursory review of these rules for radicals reveals that a union activist schooled in them will have no compunction about using almost any tactic in a conflict with a public agency. In fact, radicals must often create issues to stir up problems in order to radicalize their potential followers.

With careful forethought any of these tactics can be defeated but in order to do so one must sometimes play be the same rules as the radicals.

For example, the tactic that seems to shock public officials most is the personalization of the attack. For the radical, it is not sufficient to attack the "administration" or the "board" they must attack a particular administrator or a member or members of the board. This is "outside their experience." They are simply not accustomed to having questions raised about their personal character because of differences of opinion on policy questions.

Public officials may seem trapped by this tactic because personally attacking an individual is "against their rule." If they react by attacking the "union," the organizer can then turn this around by telling his follwers, or potential follwers, that they have been attacked or insulted by the individual.  Using the "pick it, freeze it, personalize it and polarize it" tactic, the reaction must be against a particular union activist, no matter how distasteful this might be.

Alinsky says that, even if the decision is 48% to 52%, once it is made the opposition becomes "100 percent devil." He refers to any effort to be objective or fair about your opponent as "political idiocy."

Even if public officials are not willing to respond in kind to this sort of tactic, a great deal can be accomplished before a conflict by warning audiences what will happen. For example, if, at the outset of, a union campaign public official were to warn the employees of the agency that the union was going to attempt to make it seem that they were incompetent, immoral and corrupt, when it happened they might be able to ward off the worst effects of such attacks by reminding the employees that they had predicted them.

It is particularly important that appointed officials get this warning across to the elected officials who appoint them and that the elected officials then inform other opinion leaders in the community.

Any effort to go beyond public sector unionism may elicit the type of tactics described above. If you anticipate such problems, you may wish to make copies of these pages and provide them to local newspaper editors and civic leaders.

Note: There may be change in the wind. Recently, at a legislative hearing on a public sector collective bargaining bill, representatives of both local and national unions testified. The local union officials were nowhere near as smooth as the pooh-bahs from Washington. After the hearing one of them was overheard in conversation with the representative of another national union as disdainfully saying,
"They're still using Alinsky."

End the Privileged Class

With the Wisconsin showdown at a fever pitch, Mark McKinnon says America doesn’t need public unions anymore—they silence voters’ choice, redistribute wealth, and clog the political system.

Mark McKinnon, The Daily Beast
February 26, 2011

The manufactured Madison, Wis., mob is not the movement the White House was hoping for. Both may find themselves at the wrong end of the populist pitchfork. While I generally defend collective bargaining and private-sector unions (lots of airline pilots in my family), it is the abuse by public unions and their bosses that pushes centrists like me to the GOP.

It is the right and duty of citizens to petition their government. The Tea Party and Republicans seek to limit government growth to protect their pocketbooks. Public-union bosses want to increase the cost of government to protect their racket.

1. Public unions are big money.

Public unions are big money. Paul Krugman is correct: we do need “some counterweight to the political power of big money.” But in the Alice in Wonderland world where what’s up is down and what’s down is up, Krugman believes public unions do not represent big money. Of the top 20 biggest givers in federal-level politics over the past 20 years, 10 are unions; just four are corporations. The three biggest public unions gave $171.5 million for the 2010 elections alone, according to The Wall Street Journal. That’s big money.

2. Public unions redistribute wealth.

Public employees contribute real value for the benefit of all citizens. Public-union bosses collect real money from all taxpayers for the benefit of a few. Unlike private-sector jobs, which are more than fully funded through revenues created in a voluntary exchange of money for goods or services, public-sector jobs are funded by taxpayer dollars, forcibly collected by the government (union dues are often deducted from public employees’ paychecks). In 28 states, state and local employees must pay full union dues or be fired. A sizable portion of those dues is then donated by the public unions almost exclusively to Democratic candidates. Michael Barone sums it up:
“Public-employee unions are a mechanism by which every taxpayer is forced to fund the Democratic Party.”
3. Public unions silence the voters’ voice.

Big money from public unions, collected through mandatory dues, and funded entirely by the taxpayer, is then redistributed as campaign cash to help elect the politicians who are then supposed to represent taxpayers in negotiations with those same unions. In effect, the unions sit on both sides of the table and collectively bargain to raise taxes while the voters’ voice is silenced.

But the noisy mob in Madison is amplified beyond its numbers. Wisconsin faces a $137 million deficit this year, and a $3.6 billion shortfall in the next two-year budget. The proposals offered by Gov. Scott Walker would avert 5,500 layoffs of public employees and save $300 million.

The public unions, representing just 300,000 government employees in the Badger State, are trying to trump the will of the voters. Though voters don’t get to sit at the bargaining table, they do speak collectively at the ballot box.

4. Public unions are unnecessary.

The primary purpose of private-sector unions today is to get workers a larger share of the profits they helped create. But with a power greater than their numbers, these unions have destroyed the manufacturing sector, forcing jobs overseas by driving labor costs above the price consumers here will pay.

The government is a monopoly and it earns no profits to be shared. Public employees are already protected by statutes that preclude arbitrary hiring and firing decisions.

The primary purpose of public unions today, as ugly as it sounds, is to work against the financial interests of taxpayers: the more public employees are paid in wages and uncapped benefits, the less taxpayers keep of the money they earn. It’s time to call an end to the privileged class. And the White House makes a mistake if it thinks it can grow a manufactured and uncivil unrest into a popular movement. Voters will not follow those who flee.

As vice chairman of Public Strategies and president of Maverick Media, Mark McKinnon has helped meet strategic challenges for candidates, corporations and causes, including George W. Bush, John McCain, Governor Ann Richards, Charlie Wilson, Lance Armstrong, and Bono.

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