Green Room

Confusion on Public vs. Private Unions

posted at 9:06 am on February 23, 2011 by

Allah already touched on the results of a new poll on American attitudes towards unions and, in particular, collective bargaining. It should serve as a cautionary tale to those who may be looking to go a bridge too far a bit too quickly in their anti-union zeal. But the current debate also seems to indicate a bit of confusion in some quarters when it comes to the players involved on the field.

Most of the debates we have here are readily broken down into two camps: left vs. right, red vs. blue, pro vs. con. But in this discussion there are three unique sets of players.

  • Government – This covers federal, state and local, and it grows even more complicated because it is polluted by the process of politics.

  • Industry – The private sector and the engine of American economics. Creators of jobs, gatherers of wealth, innovators of technology.
  • Labor – In this case composed of the myriad union entities who represent the workers.

And further, it is important, as will be shown below, to recognize that Labor needs to be broken down into two sub-groups. One deals with Industry and the other with Government, and the differences between those two forms of relationships are critical.

I should start by stipulating that I am not flatly in favor of “union busting” as a way of life. There is still a very valid role for unions to play in this dance, though the conditions on the ground have changed drastically since the birth of the union era and the unions themselves have failed to adapt appropriately to the times. But too much of anything is still bad. Though it chafes on my fiscal conservative friends to hear it, too much Industry – in the form of unbridled, unregulated capitalism – causes long term societal problems. Too much government is, well… too much government. Similarly, too much power in the hands of unions has led to a tumor in the body of American capitalism. As such, it is not in any way “unamerican” or “crushing the working man” to be engaging in a conversation about if, where and how to limit – not eliminate – collective bargaining agreements today.

To understand this, it’s first important to recognize one key difference between Government and Industry. Both serve as “employers” for this question, but their base motivations are quite different. Industry is in the business of making and keeping money. Government is in the business of spending – or flat out giving away – money.

But perhaps more important is the difference in the relationship between the two aspects of Labor and those two types of employers. Labor and industry are in a completely adversarial – and at least somewhat balanced – relationship as opponents. Industry wants to keep its money. Labor wants to get as much of that money, in the form of pay, benefits and such, as it can get. Labor has no back door crowbar to apply in an effort to influence Industry’s decisions. They don’t dump extra cash into Industry’s profits. They can’t influence others to suddenly boot out the management of Industry. All they can do is fight as a bargaining unit to get the best deal possible. It’s an uneasy marriage which has worked in fits and starts for a long time.

But the relationship between Labor and Government is far more complicated, if not poisoned to the point of being toxic. Labor has a large collection of guns pointed directly at the head of its Government employer. It collects vast amounts of money which is applied to the political process, threatening the livelihood of individual Government “managers.” It can round up vast numbers of votes each fall, presenting another threat to the elected officials responsible for doing the bargaining. It can, with those tools, make and receive demands which would be laughed out of the room in any reasonable discussion with an Industry employer.

And since the toxic combination of money and politics permeates the process, Labor has run amok in these discussions, demanding increasingly plush deals stretching out over the full lifetimes of generations of workers, bringing us to the situation we face today where states are going bankrupt in an effort to honor these pacts and keep paying the ransom. This is a situation which simply has to change or the goose is going to stop laying eggs – golden or otherwise – and the workers will find themselves out on the streets even as the financial structure of the Government entities collapses.

But by the same token, government employees still deserve some level of protection to ensure parity with their private sector counterparts and to prevent the pendulum from swinging too far in the other direction. So absent the complete elimination of collective bargaining,what’s to be done? I have a few suggestions for the class to consider and discuss.

First, any negotiations between Government and public union Labor should have the official, mediating assistance of some sort of private sector board which would be charged with monitoring current labor conditions and statistics from the non-government workforce. After all, aside from the actual elected positions of those making legislation or serving as governors, etc. most government jobs are the same as you find in the private market. There are jobs ranging from engineers and scientists to data entry clerks and maintenance staff. And every voter should feel a vested interest in doing this because they are, after all, the ones paying for all of this compensation.

In the matter of pay, such a board should be able to look at what is being paid in the private sector and establish some sort of ceiling or range for government work. If Lockheed Martin can find somebody to empty the trash cans and vacuum the carpet for nine dollars per hour, why should the taxpayers have to lay out twenty dollars per hour for someone to do the same job at the DMV?

Next, there should be no – read ZERO – “bullet proof” jobs for life once an employee attains a certain level of seniority. Private sector workers are in constant competition to keep their jobs and hopefully advance. Public employees should not feel entitled to any less of a competitive environment if we are to get the most for our money.

Benefits – and in particular, how much the employee contributes out of their check for them – are incentives which private sector employees offer to attract and keep the best workers. They are not some sort of God Given Right enshrined in the constitution. If the average civil engineer at a contracting firm needs to kick in 18% of his pay for his health care and other benefits, is it so unreasonable for the taxpayer to expect the government employee to at least kick in 10%?

None of these ideas are revolutionary or draconian. The private market world works on a system based on competitive pricing. It remains functional and serves the needs of both sides, albeit with some bumps in the road over time. We don’t have to entirely eliminate collective bargaining for these unions – nor does it appear that Governor Walker of Wisconsin is looking to do so – but the special, and dysfunctional environment of Government vs. Labor negotiations cry out for some heavy handed restraint if they are to at least attempt to mimic the efficiencies of the private sector. Governor Walker’s solution may not be perfect, but it has at least spurred a long overdue discussion how to monitor the relationship between our government and the labor unions.

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Unions have bankrupted every industry they have been able to dominate. Every one. Government is no different.

This was recognized by the men who wrote the founding documents for the United States; democracy works only until ‘the people’ learn they can vote themselves free stuff.

It’s why they chose the republican form of government where elected officials were expected to use good judgment, to choose what was best for the country, for all the people, rather than just vote for what the loudest faction, or the largest faction wanted.

Skandia Recluse on February 23, 2011 at 9:48 AM

We don’t have to entirely eliminate collective bargaining for these unions – nor does it appear that Governor Walker of Wisconsin is looking to do so – but the special, and dysfunctional environment of Government vs. Labor negotiations cry out for some heavy handed restraint if they are to at least attempt to mimic the efficiencies of the private sector. Governor Walker’s solution may not be perfect, but it has at least spurred a long overdue discussion how to monitor the relationship between our government and the labor unions.

The premise of this last paragraph is staggeringly wrong, Jazz. The relationship between public-sector unions and government smacks of conflict-of-interest inherently. This isn’t a matter of things “having gotten out of hand” or needing to be “reined in.” This is a matter of union leadership spending large amounts of taxpayer money in a direct and poorly-concealed effort to elect people who will in turn pay them more.

Should there be protections in place for government employees? Absolutely. Those protections are enshrined in law, and whatever protections aren’t already in law should be signed into law. I want someone to start talking about the conspicuous absence of taxpayer advocacy in these “negotiations” for contracts that get more and more burdensome every year.

gryphon202 on February 23, 2011 at 10:50 AM

Many government workers HAVE protections. It’s called Civil Service.

njcommuter on February 23, 2011 at 11:02 AM

Seems to me that Labor should have had two other sub-groups–those, private and public employees who don’t belong to unions. Insignificant? No, not when you consider that many of the plants in the southern right-to-work states are model employment environments.

I also don’t care for this paragraph:

To understand this, it’s first important to recognize one key difference between Government and Industry. Both serve as “employers” for this question, but their base motivations are quite different. Industry is in the business of making and keeping money. Government is in the business of spending – or flat out giving away – money.

First, Industry, I would argue, does a great deal more than “keep” money. The suggestion is that Industry stuffs the money in the magical secret stash that liberals are convinced exist. Industry pays dividends to investors. Industry reinvests in improvements or expansion. Industry builds up reserves for self-insurance and rainy-day contingency. The suggestion is one of hoarding for personal benefit of a few, and I don’t agree. If you want to compose another post on executive compensation levels, have at it. I do suspect that there is an incestuous relationship in publicly traded companies between executives and the board members who set their pay. Of course, that would have no effect on privately held firms, who, in those cases, have a great deal of skin in their venture.

Second, I’m put of by the absence of parallelism between Industry and Government. That is, whereas Industry makes and keeps money, Government, in this post, merely spends money. Although some (many?) would argue that at least on the federal level Government prints and spends money, I would have been satisfied if the post simply stated that Government takes and spends money. Let’s not lose sight of that taking part. To do otherwise, perpetuates the liberal belief that the income and net worth of private individuals and entities is merely that which the Government has allowed them to keep.

Beyond that, public-sector employees should never be paid the comparable level of compensation as private-sector employees until the medical care benefits are comparable–and that includes retiree healthcare, which private-sector employees almost never receive anymore. If that were comparable, I’d still say that they be paid less because despite the bone that JS throws to us about eliminating bullet proof jobs, the fact will always be that it’s infinitely harder to fire lousy government employees than it is to fire private-sector employees. The reduced compensation, then, would reflect the practical reality that government employees will generally enjoy a level of job security that those in the private sector will rarely, if ever, enjoy.

Of course, there are special compensation and benefits issues to address for those who put their lives on the line–police, firefighters, whatever–but not so for the most of the public-sector employees.

BuckeyeSam on February 23, 2011 at 12:51 PM

First, any negotiations between Government and public union Labor should have the official, mediating assistance of some sort of private sector board which would be charged with monitoring current labor conditions and statistics from the non-government workforce.

What on earth is a “private sector board”. If it governs, it’s government. If it’s an unaccountable committee, it can and will be corrupted by special interests. Jazz, your desired world state is fine but you seem to have little concept of how things actually happen when ideas rub up against reality. In practice, government unions are always a bad idea. No one has a right to government service. Pay and benefits in the government will keep parity with the private sector even if there are no unions… merely because private sector work is the competition.

joe_doufu on February 23, 2011 at 1:08 PM

Another thing I want to mention is that it’s also meaningful to draw a line between monopolistic and non-monopolistic unions. So there are really three types of unions:

1. Public sector. (eg: SEIU)
2. Private sector monopolistic. (eg: UAW, SAG)
3. Private, single firm.

The issue with monopolistic unions like the UAW is exactly the same problem with monopolistic companies: their monopoly power allows them to maximize their own profit at the expense of customers and the overall economic welfare.

Small unions that only organize the skilled workers of a single company are generally popular with their workers and have fruitful relationships with management. They want the company to grow and profit, and they help to make it happen.

By contrast, a monopolistic union like the UAW doesn’t care a whit if GM or Chrysler goes bankrupt — they’ll just pass the pension bill on to Ford, or the government, or some other car company. They squeeze their industries like the worst imaginable caricatures of robber barons, because they simply. don’t. care. about whether their employers succeed or fail.

joe_doufu on February 23, 2011 at 1:16 PM

Public sector unions need to go away. Period. The conflict of interest is inherent and creates not only growth in salaries but also positions. The sheer number of people in government jobs continues to grow very quickly, even if they try to claim their raises are not that substantial.

We don’t need a “private board” to review compensation and benefits, they should be set by Congress, by people we elect to set them.

Public sector employees will still have a voice without unions. They can take that money and contribute to campaigns as individuals or PACs, but the spending will be more diverse. But nobody should have this much power over their employers when their employers are spending the public’s money, not their own.

I’ve worked in the public sector. I’ve seen industrious employees released during probation based on scurilous and trumped up charges by sheltered lazy coworkers. I’ve seen departments with 5 people in them, two doing 90% of the work while the other 3 just pad the manager’s “kingdom”.

What PSU do is shield public workers from market, economic and performance impacts by holding financial guns to the politicians heads.

PastorJon on February 23, 2011 at 2:51 PM

FDR:

All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management. The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations. The employer is the whole people, who speak by means of laws enacted by their representatives in Congress. Accordingly, administrative officials and employees alike are governed and guided, and in many instances restricted, by laws which establish policies, procedures, or rules in personnel matters.

“But by the same token, government employees still deserve some level of protection to ensure parity with their private sector counterparts …”

Why? Why should government employees be ensured parity with their private sector counterparts?

LarryD on February 23, 2011 at 2:52 PM