The Inconvenient Truth about Public Sector Unions

by Gordon Cooper

From Broader View Weekly, March 3, 2011

In order to fully understand the protests unfolding in Wisconsin, New Jersey, Indiana, Ohio and even in good old Albany, New York, we need to take a short trip into the history of the labor movement in our nation, and then to take a close look at the issue of unions in general and the public sector unions in particular.

As we all know, things were not always as they are now. There was a time when avaricious employers took heady profits by manipulating desperate workers into back-breaking labor for poverty level wages in unsafe environments. Children and the unskilled were especially taken advantage of and a tremendous disparity existed between the lifestyles of the affluent and the working class.

Unions were organized, and through a painful process of strikes and negotiations, conditions improved to such a state that the demands went from mere safety and fair wages to security issues like seniority, health care and pensions. As each contract season neared, the collective bargaining process would pit the union representatives against the management. Each side would bring conflicting demands – the union would seek a fair compensation for the labor of their constituents and the management would seek the most profitable and productive return for their labor dollar. The pendulum swung to both extremes at various times in our nation’s history, as first labor and then management would benefit from favorable legislation.

The conception and growth of public sector unions was understandably a different story as the task of working for the government was not the same as working for a “for profit” corporation. In fact, one former president was adamant in his refusal to allow collective bargaining for public employees. Consider the following quote:

Meticulous attention should be paid to the special relations and obligations of public servants to the public itself and to the Government....The process of collective bargaining, as usually understood, cannot be transplanted into the public service… [a] strike of public employees manifests nothing less than an intent on their part to obstruct the operations of government until their demands are satisfied. Such action looking toward the paralysis of government by those who have sworn to support it is unthinkable and intolerable.

Who made such a quote? Was it Reagan at the occasion of the Air Controllers strike? No, it was that labor-friendly liberal, FDR, in 1937, who recognized the incestuous relationship that would exist if government employees bargained with other government employees that they elected, with public funds extorted from taxpayers to extract more public funds from the taxpayers who would never have a seat at the bargaining table.

However, things changed in the late 50s, when through an executive order, which prevented that messy thing called the legislative process, Mayor Wagner of NYC declared city public unions could represent all city employees in collective bargaining, regardless of whether those employees were in the union. President Kennedy expanded the right to all federal unions in another executive order in 1962 and this led us to the point where we are today, with public sector unions growing in numbers and power while private sector unions decline in both categories.

In fact, a New York Times Online article (www.nytimes.com/2010/01/23/business/23/labor.html) reported that Labor Statistics now show public sector union members outnumber their private sector counterparts 7.9 million to 7.4 million. Other reports, such as a lengthy article by Daniel DiSalvo on National Affairs website, cites in detail the differences in wages and compensation between the public sector employee and the private sector employee.

Some of the decline in private sector unions’ members and power can be attributed to the loss of American manufacturing jobs due to over-reaching union demands and the need for corporations to produce a profit coupled with the realization that the security of union protection comes at a cost and sometimes that cost may lead to the bankruptcy or relocation of the corporation. However, in the case of the governmental agency, relocation and bankruptcy is not an option, therefore the costs just get pushed onto the overburdened taxpayer.

Governor Walker’s bill does not take away collective bargaining for police or firefighters nor does it stop the unions from negotiating for pay raises, it merely limits pay raises to the level of inflation. I could go on and on about the indefensible actions of the teachers who took fraudulent sick days to protest, and the doctors who sign their excuses illegally, and the truant Democratic Legislators who are neglecting their assigned (and paid for) duties to hide in Illinois. But I am already above my allotted column space.

However, if you would indulge me for a few more lines, I must correct Keith on a few items. First of all, according to figures from the Wisconsin Department of Public Instruction (dpi.state.wi.us/lbstat/newsar.html), the average compensation for public school teachers in Wisconsin was $75,587 and according to MacIver Institute’s report, Milwaukee, Wisconsin teachers earn a total of $100,005!

Another item that deserves correction is Keith’s claim that two-thirds of all corporations in Wisconsin pay “no corporate taxes and recapturing these lost revenues would bridge the budget gap”. Well, again the facts may be inconvenient, but according to www.taxfoundation.org/research/topic/67.html, the corporate tax rate in Wisconsin is 7.9% on all corporations which ranks the state 17th highest in the nation. The report goes on to say that Wisconsin was ranked 40th in The Tax Foundation’s Business Tax Climate Index, which compares all corporate, income and property taxes as well as individual taxes.

To balance the budget by increasing taxes has never worked because individuals and businesses can always relocate.