23 February 2011

Wisconsin 3: On Public Sector Trade Unionism

I said in my previous post that the end of public sector trade unions was not the bottom of a slippery slope from my perspective, but an intended, explicitly desired outcome.

That's a claim worth backing up with reasoning.

Before I begin though, I want to say that this is something I've changed my mind about in the last couple of years. I used to support public sector unions. My thinking is that since it is illegal for a private sector employer to refuse to bargain with a union it is unseemly that governments, in their capacity as rule-makers, would exempt themselves, in their capacity as employers, from the same requirements. As I look back now, my reasoning was less about allowing public employees to bargain collectively, and more about subjecting public employers to collective bargaining.

As I said though, I have changed my mind. I was not right to lightly equate public and private sector trade unionism. Here's why.

1. The theory of trade unions, as I understand it, is to secure a bigger slice of the profits for workers. That's unobjectionable.

But there are no profits to divvy up in the public sector. The only thing to divide up is tax revenue, and tax payers don't get a seat at this bargaining table. (Well, they do have some power, but only about as much as an individual worker bargaining alone might be said to have. They must act alone, hoping the desired outcome emerges, without the ability to represent the collective interest of the group.)

2. Unions are extremely influential in politics, more so than corporations even, especially at the local level where the big battles over unionism are being fought. I am not exaggerating when I say that not a single person can be elected to my county government without union backing, especially that of the teachers and school administrators. Unions are, because of this, negotiating against people who are beholden to them.

3. I am fond of this quote from Bastiat and have blogged it before.
Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all.

We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.
Public sector unions have an inbuilt advantage which I find destabilizing. A trade union, like all organizations, serves its own needs as an entity first, and only then the needs of its members. Coming in line far behind this is the ideals the union claims it serves, such as "Justice" or "Health".

Public sector unions get to hide behind their ideals to a huge degree, and much more so than their private sector counterparts. If you push back against the teachers' unions, you get accused of hating education and wanting children to remain ignorant. If you push back against cops, you must be on the side of criminals.

I had to be very careful in point #2 not to use the term "education unions." This is the framing they want, because it presupposes they serve the platonic ideal of Education, when in reality they serve their leadership and their members (in that order).

Trade unionism, I'm told, is all about balancing of power. The ability to hide behind lofty sounding ideals is destabilizing and unbalancing.

4a. (This applies to trade unions private and public.) We all understand why a monopoly provider of a good is bad. Why would a monopoly provider of a class of labor be any better?

4b. This is especially problematic when the monopoly supplier of labor is dealing with a monopsony consumer of that labor, which is what we get with governments.

If unions negotiate higher compensation then their private sector employers pass this on to their customers, who have the option of side-stepping the rising costs by doing business elsewhere if they choose. The public sector has no "customers" — we're all stuck with the deal the government strikes.

(Peter Suderman made this point better than I just did earlier today.)

If private trade unions press their employers too hard they will eventually get push back from the market when their employer loses revenue. Sooner or later other companies, foreign or domestic, whose employees haven't over-reached will make both management and workers suffer. There's an automatic dampening of unions which grasp too much. It's not often a smooth dampening, to be sure, but at least their is some corrective feedback.

There is no such feedback in the public sector. The union can demand more until the fiscal plane finally flies into the mountain, which is what we're getting now, and it's not good for anyone in the equation.

5. Managers of corporations are often accused of being harmfully short-sited: nothing past the next earnings report matters. I think this case is vastly over-egged, but there is a kernel of truth to it.

What is less often said is that government managers are just as guilty of this, if not more so. Nothing matters past the next election.

This is a problem generally, for instance in the building but not the maintenance of new physical plant, but it has proven to be especially a problem when it comes to public sector unions. Politicians have been able to buy electoral and monetary support now while making promises about payments in the future, typically in the form of unfunded medical and pension costs. And because governments have exempted themselves from having to carry these obligations on their books in the same way other employers do, this combo of short-sited management and unions is especially toxic.

6. The major motivation of a private business is to raise the most revenue possible from the least costs. Unions can push against that in the private sector.

A major motivation of government (actually the major motivation, according to some) is to transfer small amounts of resources from a great many people to a fewer number of favored people. Rather than damping that tendency, public sector unions amplify it.

7. We expect corporations to be amoral. Some would say avaricious, but I'll settle for amoral. Unions can push back against that tendency as well. (In theory, at least.)

But we expect better from government. If a union is necessary to keep the government from exploiting workers, why would we possibly trust that government with, say, crafting occupational safety legislation? Or eminent domain power? Why trust them with anything of consequence?

I'm generally someone who expects the government to screw people left and right, so this could conceivably be an argument in favor of public unions. I think in combination with #6 it no longer is. However, it seems like anyone who thinks a union is a vital check on the predations of government-as-employer would have very little faith in government-as-rule-maker's ability to treat anyone else in society with justice.

If teachers and cops and air traffic controllers are powerless to defend themselves from the State without the protection of vigorous trade unions, what's going to happen to me — an individual citizen? Why is it that the people who most vocally claim that the government can not be trusted to set compensation or working conditions for bus drivers, DMV workers, and letter carriers are also the most vocally supportive of empowering the government to set prices for health care, housing, electricity, fuel, vehicles, corn, raisins, sugar, cotton, mohair, organs, low-wage labor, and so on?

1 comment:

  1. Again, I'm withholding most comments until I get to the end of the Wisconsin Saga, so consider this more of a note to self in case it gets lost before I can actually respond. I like your positioning here, that pub unions are really negotiating for a larger slice of tax money, which is obvious but also not often mentioned. So pub unions are working against government and The People in some way. It rings of corporatism which you didn't say, but seems undeniable.

    However, in my view, libertarians and other free-marketeers overstate the power of human mobility. Labor is famous for being a market with a lot of friction and as long as school systems are run at the local level, non-union systems could take advantage of the Baumol effect to underpay what is supposedly a valuable resource. I don't see how, as long as school is funded by the government that we can avoid public sector unions (at least for teachers, janitors etc). I'm less sympathetic to the claims of police officers and firemen because a failure to keep quality people in those posts will be evident pretty quickly and would be an immediate political liability regardless of union activity.