Commentary: Why private sector unions are much different from government unions
Published: March 28th, 2011
Liberal icons New York Mayor Fiorella LaGuardia and President Franklin D. Roosevelt, who strongly supported industrial unions, both opposed collective bargaining by government employees because government employees enjoy market advantages too easily exploited. President Roosevelt once said, “The process of collective bargaining, as usually understood, cannot be transplanted in the public service.” Former AFL-CIO President George Meany also viewed government unions as unthinkable. They all recognized the fundamental differences between private-sector unions and government unions.
One key distinction between the two is that private sector unions must respect their employer’s bottom line, whereas government unions do not. Private sector union leaders bargain for more benefits while at the same time recognizing that excesses will force the company to lay off employees or go bankrupt. Those unions bargain face-to-face with those who pay the bills. In addition, private sector union members on strike lose their wages. Both private sector management and owners have an incentive to resist unreasonable union demands, particularly in regard to pension and retiree health care. If private sector managers make unwise concessions impairing the long-term profitability of their company, it is reflected immediately in the value of the company.
In contrast, government unions are not confined by an employer’s bottom line. For public employees, the bottom line is the bottom of the taxpayers’ pockets. Most government unions would not exist without forced union dues. One of the first things government union leaders bargain for is a “union security” clause, which forces all government employees in the unit to pay for union services as a condition of employment. If a government employee works in a state with a “union security” clause, the individual must pay tribute to the union.
Government unions don’t bargain with the taxpayers who pay the bills. When teachers go on strike, they pay no penalty when their absence forces schools to close. Adding insult to injury to taxpayers, their actions force parents to either take time off work or quickly find someone else to care for their children. Also, unlike private sector unions, a government union has a natural monopoly over government services. This monopoly gives government union leaders extraordinary power over elected officials.
The money the government unions collect in dues helps to elect politicians who support the unions’ objectives. Government unions play a major role in electing their management team! In essence, government unions have a seat on both sides of the bargaining table. The U.S. Supreme Court has made it clear that there is no “right” to collective bargaining. Collective bargaining for government employees makes them “super citizens” and the rest of the taxpayers are relegated to second-class status.
When the government entity bargaining with government employees cannot afford the cost of the union demands, the government increases the fringe benefits, i.e. pension, and pushes the costs off to the future. The heavily unionized government worker states, including California, Illinois, New Jersey and New York, have the largest unfunded pension and retiree health care liabilities.
Today, the number of unionized government workers surpasses the number of unionized private sector workers. As a result, national unions have become advocates for higher taxes and government expansion, despite the fact that many of their private sector members oppose these efforts.
In the last election at the national level, government unions spent more than $200 million to defeat Republican candidates. The American Federation of State, County, and Municipal Employees -the main union of state government employees- spent over $90 million during the campaign, and it was the top donor to the Democrats’ efforts to win gubernatorial and state legislative races.
As a result, the Democratic Party is now heavily reliant on unions and forced political contributions from their members. Unions help elect Democrats who repay the unions with more pay and benefits, many of which are unfunded. In effect, government unions elect their management (politicians), which in turn can forcibly extract more money from taxpayers to increase wages and benefits. Government officials can promise pensions and retiree health care benefits that future taxpayers will have to fund. This, in turn, sucks jobs from the private sector by forcing businesses to pay higher taxes.
Obama’s Democrats have used the financial crises to expand the public sector and the public sector unions. Today, government union leaders want it all – high pay, stability, and a growing work force. They lobby every level of government for increased spending and higher taxes. Incidentally, there are no studies that show government workers in unionized states provide better service than those in nonunionized states.
The dispute in Wisconsin is not a traditional private sector dispute between labor and management. It is in reality a question of important public policy and whether states can afford unsustainable agreements for government employees’ salaries and benefits.
Bob Williams is President of State Budget Solutions, a non-partisan organization advocating for fundamental reform and solutions to the state budget crises. To view the website of StateBudgetSolutions and learn more about the group’s analysis, visit here: