Ever so quietly, America passed a milestone in 2009. For the first time in our history the number of employees in the public sector belonging to a labor union exceeded the number in the private sector. Proposed legislation in Congress would push this trend along further. The benignly-named Public Safety Employer-Employee Cooperation Act (H.R.413, S.1611) would mandate union monopoly bargaining for state and local public-safety employees. Its brand of “cooperation,” strongly backed by the American Federation of State, County and Municipal Employees (AFSCME) and other unions, would force police, fire, ambulance, and corrections departments across the country to create collective bargaining units to cover employees. If evidence is any guide, however, this expansion of public-sector unionism is likely to produce higher taxes, strained budgets and more strikes.
The driving forces behind this bill are Rep. Dale Kildee, D-Mich., and Sen. Judd Gregg, R-N.H. Kildee introduced the House bill back in January 2009, with Gregg following with an almost identical Senate version in August. That no committee action has occurred to date is misleading. The House in July 2007 passed a similar bill. As of late April, the new House bill had attracted 212 co-sponsors – 166 Democrats and 46 Republicans – or almost half of all members. Pressure from the Obama White House, labor leaders and union-sponsored PACs may well put the proposal over the top. If that doesn’t work, then Senate Majority Leader Harry Reid, D-Nev., has a back-up plan. On April 12, he re-introduced the Gregg measure as an identical bill, S.3194, with the intent of bypassing standard parliamentary procedure. The late Sen. Edward Kennedy, D-Mass., had this tactic in mind when he unveiled similar legislation on September 13, 2001, just two days after the 9/11 terrorist attacks; he tried to slip the bill through the Senate by “unanimous consent” without a hearing or a floor vote. Given that the recent health insurance overhaul came to be law in pretty much the same manner, the possibility for quick, under-the-radar passage here is very real.
At the heart of the measure is the concept of “exclusive representation.” For 75 years the National Labor Relations Act (NLRA) has mandated private-sector employer recognition of any union as the sole bargaining agent if that union obtains support from more than 50 percent of affected workers. Designed to mimic political democracy, this “winner takes all” arrangement ensures a majority of workers will prevail. Since there can be only one union per bargaining unit, a common alternate term for exclusive representation is “monopoly bargaining.” The Public Safety Employer-Employee Cooperation Act would extend monopoly bargaining to a huge part of the public sector.
There actually was a time in this country when even staunch allies of organized labor cautioned against public employee unionization. President Franklin Roosevelt wrote in a 1937 letter, “All government employees should recognize that collective bargaining, as usually understood, cannot be transplanted into public service…Actions looking toward the paralysis of government by those who have sworn to support it are unthinkable and intolerable.” Likewise, AFL-CIO President George Meany in 1959 declared: “It is impossible to bargain collectively with government.” Conditions reflected this prevailing view. The Bureau of Labor Statistics noted that in 1958 only 12 percent of state and local government employees were union members, slightly less than a third of today’s figure. Moreover, their unions typically lacked the authority to forcibly impose collective bargaining agreements upon or collect dues from members. In other words, public-sector workers did not enjoy the privileges of private-sector workers. Starting in the Sixties the situation changed, suddenly and irrevocably. There were several reasons.
First, the share of the American private-sector work force belonging to a union began to fall noticeably. To maintain clout at the bargaining table, labor leaders saw public-sector organizing as a way of making up for lost ground. They successfully pressured states to pass laws requiring, or at least encouraging, collective bargaining for public employees. President Kennedy took the lead, allowing the federal work force for the first time to collectively bargain. Public employee unions such as AFSCME, the American Federation of Government Employees (AFGE), the American Federation of Teachers (AFT) and the National Education Association (NEA) eventually became among the nation’s largest and fastest-growing unions. The Service Employees International Union (SEIU), a mix of private- and public-sector employees, has owed much of its rapid growth to organizing government employees or getting them classified as such.
Second, union leaders came to recognize that mandatory monopoly bargaining works especially to the advantage of state and local employees. Their employers, after all, are monopoly service providers. And government agencies have little incentive for prolonging contract negotiations. It is taxpayer money at stake, not their own. Likewise, elected officials have every reason to fear a protracted strike. They, even more than the unions, are a convenient target for frustrated voters. That’s why politicians, eagerly or reluctantly, are likely to support programs generating public-sector employment in return for campaign endorsements and contributions. Democrats in particular are in hock. “Public-sector unions are a rising force in the Democratic Party,” observes Fred Siegel, a senior fellow at the Manhattan Institute. “They depend on extra money for the public sector, and that puts the Democrats in a difficult position. In four big states – New York, New Jersey, Illinois and California – the public-sector unions have largely been untouched by the economic downturn. In those states, you have an impending clash between the public-sector unions and the public at large.” Recent data from the Center for Responsive Politics shows that public-sector unions are among the largest political donors, and that almost all of their money goes to Democrats. And their officials aren’t bashful about getting in the faces of elected officials. In California, where state employees now routinely retire at age 55 with annual pension distributions approaching or even exceeding base pay, an SEIU official recently addressed the legislature: “We helped to get you into office, and we got a good memory. Come November, if you don’t back our program, we’ll get you out of office.” That’s none too subtle.
Third, public-sector unions grew adroit at exploiting the specter of a breakdown in public order as a collective bargaining tool. Linda Chavez and Daniel Gray in their 2004 book, “Betrayal: How Union Bosses Shake Down Their Members and Corrupt American Politics” (Crown Forum), explain:
The prime weapon of government unions is the threat to eliminate public safety. Police labor bosses have run television ads in local markets implying that violent crime will run rampant if they don’t get their way. The union ads flash images of murder victims, with the announcer declaring murder, rape, and robbery on the rise. In the commercials, police telephones are ringing, but no one answers. The voiceover says, ‘Suppose you called and they didn’t come. Think about it.’
The authors liken this to extortion. Union officials know that voters instinctively fear a breakdown in public safety and therefore will vote for public officials willing to maintain it at any cost.
All of this is essential to understanding why union growth over the last several decades has been concentrated in the public sector. In 2009, 12.3 percent of the total U.S. work force was unionized, a drop from nearly a third during the mid and late Fifties. Among private-sector employees, only 7.2 percent belonged to a union last year; in the public sector, the figure was 37.4 percent. In absolute numbers, public-sector employees now have more members than their private-sector counterparts – 7.9 million vs. 7.4 million. Indeed, even though the unemployment rate in 2009 rose to around 10 percent, total government employment grew by 16,000 to reach a record-high 22.5 million.
The Kildee-Gregg-Reid legislation would accelerate this trend. It goes beyond simply giving state and local governments the option to enter into monopoly bargaining agreements. They already have this option – and exercise it. About half of all states have instituted mandatory bargaining for all (or nearly all) state and local workers, and another dozen have done so on a partial basis. The purpose of the bill is to federalize state and local labor law. The measure would: require all state and local governments to recognize a union as a sole collective bargaining agent; force these governments to collectively bargain over hours, wages and benefits other than pensions; require state creation of a dispute resolution process; grant state courts enforcement powers; and direct every state to conform to federal collective bargaining laws within two years of the effective date. In short, it would apply NLRA to state and local public safety employees. Violators would be subject to fines and firings.
The prime motive shouldn’t be too hard to figure out. Aided by periodic “stimulus” legislation, public-sector employment gradually is supplanting private-sector employment. And public-sector unions stand to gain from this transformation. As Rutgers University labor economist/political scientist Leo Troy argues, public-sector unionism seeks “to redistribute more of the national income from the private to the public economies.” This is why public employee labor officials, even more than their private-sector counterparts, have egalitarian tendencies. Because the Kildee-Gregg-Reid measure reinforces those tendencies, it likely will produce three major outcomes.
First, the law will trigger an explosion of state and local collective bargaining units. Creating these entities would require hundreds of millions, if not billions, of taxpayer dollars to negotiate contracts. A study by the Maryland Department of Fiscal Services concluded that forced monopoly bargaining throughout that state would cost taxpayers between $1.3 million and $1.4 million in annual processing costs for every dozen state employee bargaining units.
Second, the incidence of strikes may increase. States enacting with laws mandating monopoly bargaining have experienced a 400 percent increase in strikes by public service workers, notes the Springfield, Va.-based National Right to Work Committee. During 1958-80, the period during which most states adopted compulsory public-sector bargaining, strikes increased by a factor of more than 35. True, the new federal bill contains a “no-strike” clause. Yet enforcing such a provision is easier said than done. In California, where public worker strikes are illegal, there have been dozens anyway. Public worker strikes long have been illegal in Massachusetts and New York State, too, yet mass transit workers in Boston (1982) and New York City (2005) staged brief but highly effective walkouts, bringing those respective cities to their knees. Former Missouri Congressman William Clay Sr., who had been ranking Democrat on the House Education and Labor Committee, put it this way: “I don’t think any employee is going to give up his right to strike…I don’t care how you legislate against strikes. Most states now have legislation prohibiting strikes but…in reality, they have not stopped strikes.”
Third, public sector union wage and benefit demands would further stretch state and local finances to the limit and beyond. Indeed, the future is already here. In May 2008, Vallejo, California, a city of more than 115,000 in the northern part of the San Francisco Bay area, filed for Chapter 9 bankruptcy. The city council, which voted unanimously for the action, saw no other way to close a $16.6 million budget shortfall, aggravated by a rash of mortgage foreclosures. Council members cited public-safety worker compensation, which by then accounted for at least 75 percent of the municipal operating budget. Orange, California, population 140,000, might follow suit. Of its $88 million budget in 2009, $13 million consisted of pension payouts, a figure set to rise to $23 million in three years. The State of California, facing a nearly $20 billion deficit for the coming fiscal year (it would be much higher were it not for a combination of spending cuts, tax hikes, borrowing, federal aid, and one-time accounting maneuvers), won’t be available to bail out such cities. Indeed, it barely can afford its own employees. Salaries and benefits of California prison guards, to name one spending area, have grown explosively, a major reason why prison spending has risen from 4.3 percent of the total state budget in 1986 to more than 11 percent today.
In California, political will to resist such trends has been insufficient. Republican Governor Arnold Schwarzenegger, who won office in 2003 through a voter recall of Democratic Governor Gray Davis (the latter, among other actions, having granted state corrections officers a large pay hike in return for $2.5 million in direct and indirect campaign contributions from their union), for a while tried to restrain the growth of public employee spending. He backed several ballot initiatives in 2005 designed to restrain union power and government growth. Labor officials responded with a furious campaign blitz in opposition; the California Teachers Association, the state affiliate of the National Education Association, alone spent $57 million. All the initiatives went down to defeat that November. Gov. Schwarzenegger never fully recovered from the experience, as the Democrat-dominated state legislature asserted its upper hand. Powerful public employee unions in New Jersey have vowed to exact the same political price upon that state’s new cost-conscious Republican governor, Chris Christie.
The irony of the proposed federal legislation is that nationwide public-sector employees already do comparatively well. According to the Bureau of Labor Statistics, federal workers in 2008 earned an average salary of $67,691, while the equivalent mix of jobs in the private sector was $60,046. Average federal salaries exceeded average private-sector salaries in 83 percent of comparable occupations. For health, pension and other benefits, the discrepancy in 2008 was far wider, noted the Bureau of Economic Analysis: $40,785 per federal employee vs. $9,882 per private-sector employee. And the gaps are likely to get wider still if recent history is any guide. According to the National Right to Work Committee, during 1998-2008 the aggregate real cost of state and local government employee compensation grew nearly 50 percent faster than the total real growth of private-sector employee compensation.
The conclusion is almost inevitable: Applying federal labor law to the delivery of police, fire and other emergency public services will boost salaries and benefits at rates well in excess of those in the private sector. And public employees, grateful to their benefactors, in turn may be inclined to provide political support. The Kildee-Gregg-Reid legislation implicitly assumes that public-safety employees can be partners in expanding the federal presence in state and local economies. If passed, it will create an expensive partnership.