Here Come the ‘Union’ Protests

February 22, 2011

The television news and talk shows have met their match. It is collective bargaining, an issue too complicated for the nine-second sound bite.

Unions are promising Statehouse protests this week against bills that would weaken their membership here. The televised reports on this important development, if the pattern holds, will be marked by misunderstanding and oversimplification.

Even the respected Journal Editorial Report on Fox News confused listeners over the weekend. A comment by the moderator, Paul Gigot, left the impression that Gov. Mitch Daniels had withdrawn collective-bargaining rights from all Indiana public-sector workers at the beginning of his first term.

But the question that escapes time-pinched television entirely is why there should be government unions at all.

Dr. Morgan Reynolds, an expert on the topic, has argued that a coherent rationale for public-sector collective bargaining, as opposed to a political argument to force such bargaining, does not exist. “There never was a ‘labor problem’ in government for unions to solve,” he wrote in The Indiana Policy Review almost two decades ago. “Government has always been a model — read generous — employer, lavishing good pay, the eight-hour day, fringe benefits and civil-service protections on its own.”

Agree or not, Hoosiers today need to know that there is an inherent difference between private- and public-sector unions.

Public-sector unions have spectacular bargaining advantages. Most obviously, their members are paid from tax revenue. That means no bottom line. And there are other, more subtle differences. Here is an inventory compiled by Chris Edwards writing in the Cato Journal:

• Public-sector unions tend to be static; once workers have been organized into a union group they tend to stay organized. In the private sector, businesses go bankrupt frequently and new businesses arise, requiring a constant organizing effort.
• Public education is in effect a legal monopoly. The great many consumers haven’t had the option of abandoning their schools if they became inefficient.
• When lobbying by public-sector unions leads to higher costs for the employer (the government), the burden is borne by someone else entirely (the taxpayer). “During labor negotiations,” Edwards observes, “public officials often have succumbed to pressure to make short-term concessions that end up damaging public finances in the long run.”

Dr. Eric Schansberg, an adjunct scholar of the Indiana Policy Review Foundation, notes a recent acceleration in public-sector employment. Civilian agency (non-military) jobs increased over the last decade from 1.1 million in 2001 to 1.2 million in 2008 and to 1.4 million in 2010, he reported in a special issue of its quarterly journal dedicated to public-sector unions (click on cover art above).

In 2009, for the first time, membership in public-sector unions exceeded that in the private sector with the public sector’s unionization rate at 37.4 percent compared with 7.2 percent for the private sector.

Dr. Schansberg doubts this union expansion can be sustained by state budgets. He predicts, however, that public-sector workers will continue to support politicians who continue to support them.

“It is an unfortunate arrangement that comes at the expense of taxpayers and consumers of government services,” he says.

Compared with private-sector unions, public-sector unions are collusive rather than adversarial, Dr. Schansberg explains: “They work with politicians to benefit themselves at the expense of taxpayers, who rarely have time to research such a complex economic relationship.”

Again, Indiana voters need more information than a television camera scanning the crowd can provide. Their interest and willingness to dig into the facts in newspaper editorials and on the Internet is likely to increase as the state budget is squeezed and as pensions for public-sector workers become a more obvious problem.

Even so, Dr. Schansberg offers little encouragement.

“In a season of economic and political worries, it’s sobering to note that some of our biggest public-policy problems are just starting to register on the radar,” he says.

Craig Ladwig is editor of The Indiana Policy Review. Contact him at editor@indianapolicy.org.

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