In the aftermath of the June 5th elections, a dramatic round that included the unsuccessful Governor Scott Walker recall in Wisconsin, and the landslide victories for pension reform in San Jose and San Diego, California, countless pundits have weighed in with their own versions of what it all means. Earlier this week, a heavier than usual lineup of UnionWatch Highlights hopefully captured some of the best of these. Here are a few excerpts from the best of the best, chosen because they epitomize a change in sentiment regarding public sector unions that is national in scope, and animates Democrats as much as Republicans. In the battle to reform public sector unions, Americans may rediscover a political center, both because the polarizing politics of unions will be diminished, and because by recognizing the intrinsic conflict between the union agenda and the public interest, the larger issue of what size government is financially sustainable attracts serious bipartisan attention.
One crucial realization that is spreading across the American electorate like a wind driven wildfire burning on tinder dry tall grass is this: There are crucial differences between public sector unions and private sector unions. Writing for NewJersey.com in a June 10th guest opinion column entitled “Greedy labor unions deserved outcome of Black Tuesday election,” here is how a self-described “recovering socialist,” Matthew Bastian, describes this:
“It is intellectually dishonest to implicitly lump private and public-sector unions together, or to not acknowledge the differences between the two. In the public sector, there is no natural counterweight to labor demands. With union war chests, endorsements and get-out-the-vote efforts serving as one big carrot, the people on the management side of the table — politicians — are incentivized to give the unions what they want.
And unlike private-sector unions, where the continued health of the company is in the best interest of both labor and management, everyone in the public sector is playing with house money. When “profit” isn’t a concern, and instead replaced with higher debt, taxes and fees, the natural inclination is to keep the game going. It’s a game that taxpayers may finally be on to.”
And here is what Jeff Jacoby, in a June 10th opinion column appearing in the Boston Globe entitled “The end is near for public-sector unions,” had to say about the unique problems with unions in the public sector:
“There was a time when even pro-labor Democrats like Franklin D. Roosevelt would have regarded it as obvious that collective bargaining was incompatible with public employment. Even the legendary AFL-CIO leader George Meany once took it for granted that there could be no ‘right’ to bargain collectively with the government.
When unions bargain with management in the private sector, both sides are contending for a share of the private profits that labor helps produce — and both sides are constrained by the pressures of market discipline. Managers can’t ignore the company’s bottom line.
But when labor and management bargain in the public sector, they are divvying up public funds, not private profits. Government bureaucrats don’t have to worry about losing business to their competitors. There is little incentive to hold down wages and benefits, since the taxpayers who will be picking up the tab have no seat at the table.
In 1959, when Wisconsin became the first state to enact a public-sector collective-bargaining law, it wasn’t widely understood what the distorted incentives of government unionism would lead to. Five decades later, the wreckage is all around us. The privileges that come with government work — hefty automatic pay raises, Cadillac pension plans, iron-clad job security, ultra-deluxe health insurance policies — have in many cases grown outlandish and staggeringly unaffordable.”
Joel Kotkin, a writer who reinforces his observations on political and economic issues with astute insights into the underlying demographic and geographic realities, writing on June 11th in Forbes in an article entitled “Is Perestroika Coming to California?,” offered his big-picture take on the seismic shift in voter sentiment towards public sector unions. He writes:
“California’s ‘progressive’ approach has been enshrined in what is essentially a one-party state that is almost Soviet in its rigidity and inability to adapt to changing conditions. With conservatives, most businesses and taxpayer advocates marginalized, California politics has become the plaything of three powerful interest groups: public-sector unions, the Bay Area/Silicon Valley elite and the greens. Their agendas, largely unrestrained by serious opposition, have brought this great state to its knees.
California’s ruling troika has been melded by a combination of self-interest and a common ideology. Their ruling tenets center on support for an ever more intrusive, and expensive, state apparatus; the need to turn California into an Ecotopian green state; and a shared belief that the ‘genius’ of Silicon Valley can pay for all of this.”
Kotkin alludes to a key realization, one that inevitably follows the realization that public sector unions are not acting in the public interest, namely: Crony capitalists, i.e., monopolistic corporations – especially the large government contractors and public utilities – have an identity of interests with government unions – both seek rents from taxpayers, both avoid competition, both manipulate our laws to favor their agenda. These are special interests that are not in opposition, they are in detente, if not outright cahoots. They work together. Kotkin goes on, however, to challenge voters and policymakers who have realized a new political paradigm is called for, to come up with one:
“Clearly, the conditions for a California perestroika are coming into place. Still missing is a coherent vision — from either Independents, centrist Democrats or Republicans — that can unite business, private-sector workers and taxpayers around a fiscally prudent, pro-economic growth agenda.”
This is the crucial next step. This is the valid criticism that anyone defending the status-quo may legitimately level at those who want to reform government unions and big government in general. To some extent, Kotkin answers his own question when he identifies the culprits as not just government worker unions, but “the Silicon Valley elite and the greens.” How many Silicon Valley entrepreneurs, to the extent they aren’t developing games and social networking applications, are building products that they intend to sell on the competitive free market to voluntary buyers? And how many of them are building products that nobody would ever buy if they weren’t subsidized both during manufacture and through the purchase, and indeed mandated by legislation, all in the name of being “Green”?
The debate over how to shrink government, save the middle class, and stimulate economic growth starts with reining in public sector unions. But it ends with a discussion over “externalities,” and whether or not we should intentionally raise the price of basic commodities – energy, water, land, transportation – in an attempt to save the environment. To what extent are these externalities contrivances of crony green capitalists, and to what extent are they genuine imperatives? The answer is not clear, but the debate has been one-sided in favor of the greens, their allies in the Silicon Valley – people who have forgotten their roots – and their political enablers and symbiotic partners, the public sector unions.
One writer who offered a constructive, centrist proposal for regulating public sector unions was Conor Friedersdorf, a staff writer for the Atlantic. In his in-depth article on June 7th entitled “The Problem With Public Sector Unions—and How to Fix It,” he describes his own realization that public sector unions have acquired too much power and are acting in their own interests instead of the public interest. He goes on to propose reforms that preserve many prerogatives of government labor interests, but attenuate those powers that he suggests have been the most harmful. He writes:
“I am not ready, however, to outlaw all public employee unions. Instead, I’d preserve the right to bargain collectively while limiting the scope of that right. Public employees unions should be able to negotiate compensation packages, but only the total amount of compensation owed each employee for a period no longer than an election cycle, which would make the costs a lot more predictable and transparent, and build political accountability into the process. As a nudge, the package would be structured, by default, with prudent percentages going to health care and retirement savings, but if the union or the individual employees wanted to override that mix, it would be their business. The municipality would only be in the business of negotiating the total amount it allocates up front to compensate an employee for a given year.
Public employee unions could also negotiate for improved job safety, a core good unions facilitate. But not for job security or seniority requirements (though government employees would enjoy all of the protections against wrongful termination from which folks in the private sector benefit). Especially when it comes to public safety employees and teachers, it’s vital that the worst can be fired easily. The public’s welfare must be a more urgent priority than job protections so robust that they jeopardize it. (Wrongful termination in the private sector is hardly a huge problem.)
These several reforms address the most problematic effects of public employee unions that we’ve observed in the real world, while preserving the ability of government workers to negotiate collectively for better compensation, and when necessary, to address safety issues pertaining to their jobs. They are neutral on the question of how much public employees ought to be paid. And they give elected officials greater flexibility to grapple with the changing finances of their jurisdictions. Surely that’s at least an improvement over a status quo that is bankrupting many.”