If you don’t read our weekly Union Watch Highlights, where we compile links and excerpts from the most relevant stories across the U.S. concerning union activity and union reform, this week would be a good time to start. Because across the country, an increasing percentage of state legislatures are beginning to seriously confront the challenges of union power, public sector union power in particular. And the union counterattacks are everywhere; they are swift, comprehensive, resourceful, fearsomely well funded, and relentless.

At the national level, the recent appellate court decision that overturned Obama’s “recess” appointments of labor-friendly activists to the NLRB, has been ignored by the Obama Administration (ref. “The NLRB tells the D.C. Circuit Court to take a hike,” WSJ). Also at the national level, Senator Rand Paul has introduced right-to-work legislation (ref. “Senator Rand Paul Introduces national right-to-work bill“), which doesn’t have much of a chance getting through the Democratic Senate, but is offered as a counter to “card check” legislation, which is certain to be tried again, and presumably will not make it through the Republican House.

In the state legislatures, a right-to-work bill is back for reconsideration in New Hampshire, and was just narrowly defeated in Virginia. The Kansas state legislature is considering two bills, one that would ban collective bargaining by public sector employees, and another that would ban public sector unions from using payroll deductions for political activity.

In Michigan, where the state legislature imposed right-to-work rules on unions (except for public safety unions), the unions are now working to undermine the spirit of the law by renewing collective bargaining agreements for up to ten year terms. By using deliberately lengthened terms, and signing them before the new legislation takes effect, they defer right-to-work from applying for a decade (ref. Michigan Union Tell-All, WSJ).

As Nolan Finley writes in his column for the Detroit News, “Unions busy subverting right to work,” when it comes to public sector employees, “It’s a warning flag that right to work alone will not be enough to break labor’s stranglehold on local politics and policy making. One of the reasons public employee unions are such a target of government reformers is that Michigan’s collective bargaining laws basically create the opportunity for them to negotiate contracts with themselves. All the unions need to do is put their money behind candidates who support their agenda and get them elected in school board elections that attract little interest from voters. Once those union-friendly politicians take office, the adversarial relationship of the bargaining table goes out the window. The Michigan Education Association actually holds regular seminars informally titled ‘How to Elect Your Own Boss.’”

As we’ve pointed out in “The Preexisting Political Advantage of Public Employees,” and as Finley grasps, the lion’s share of taxpayer’s money is being managed at the local level by relatively obscure elected officials – obscure, that is, to everyone except the people who work in those organizations, who almost invariably constitute the pool for candidate recruitment, and the source of funds for candidates. This sort of dynamic informs elections for school boards, police and fire commissions, airport boards, utility boards, special assessment districts, and, of course, city councils and county boards of supervisors. And as noted in a February 2, 2013 editorial in the Sacramento Bee, “Appointment of private labor union official to CalPERS board is worrisome,” the reality of workers with obvious conflicts of interest managing money that is ultimately sourced from taxpayers extends all the way up to the board of the biggest public employee pension fund in the United States. As we reported in Unions & Pension Funds, CalPERS is typical – union alumni tend to dominate public sector pension fund boards.

As the political struggle escalates between union reformers and union advocates, it is refreshing to observe more and more journalists and commentators – from diverse political perspectives – recognize the crucial differences between private sector unions and public sector unions. But the connection between public sector unions and Wall Street financial interests is still insufficiently explored.

There is a conflict of interests between unionized public employees and the members of the public they are supposed to serve. And the consequences of that conflict of interests are an avalanche of laws, regulations, government programs, and taxes, that are designed ostensibly to serve the public, but have the direct benefit of increasing the numbers of union members, as well as increasing their pay beyond sustainable or equitable levels. That much is becoming clear. But still not sufficiently appreciated is the symbiosis between these public sector unions, whose political agenda creates budget deficits, and the financial sector who swoops in to extend debt instruments, often on dubious terms, always at great profit to themselves. Similarly, the financial services sector profits when public employee pension funds take on increasingly generous obligations to pay retiree benefits. And yes, we’re talking here about trillions of dollars.

A greater understanding by the general public of the unhealthy symbiosis between public sector unions and Wall Street bankers, how they both win when the taxpayers lose, would go a long way towards moving the debate over public sector union reform into an entirely nonpartisan context.

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