Public sector union hurting municipal governments


Across the nation right now, most local elected officials, especially mayors, are jumping with joy over the Janus v. AFSCME ruling, which made the public sector one big “right-to-work” zone.

Of course, the GOP mayors will say so publicly, but make no mistake about it most Democrat mayors are privately celebrating the weakening of public sector unions. Here’s why.

Union membership in the United States has been collapsing for six decades. The unions will claim that this is primarily due to the activism of conservatives. That seems odd given that the union movement thrived when Pinkerton’s men beat them with clubs. No, there is more to the demise of unions than K-street lawyering.

Private sector unions thrived when there were large classes of workers for whom it was difficult to determine individual productivity. Industrial unions flourished when workers were interchangeable but collapsed as the economy changed in ways that made it easier to identify and reward individual skills and effort.

Public sector unions mimicked these private sector union tactics and exploded onto the national scene between 1960 and 1980. Today, most union members work for the government in schools, fire departments, city hall and elsewhere. Their presence has done two things that are highly damaging to state and local governments.

First, public sector unions have done everything they can to prevent individual evaluation of government workers. Whether it is the addition of police cameras, use of student performance for teacher pay or physical fitness requirements for firefighters, public sector unions lead the charge to prevent employees from assessment.

Second, public sector unions have done everything they can to boost membership, even if it bankrupts the local government. Some of the results are chilling, and I’ll offer just two examples.

Illinois teeters on the edge of a recession because union pension obligations are far too high to repay at any tax rate. Chicago owes in excess of $50,000 per resident in pensions for teachers, firefighters and police officers. They cannot undo this because unions helped rewrite the state constitution, so they languish until the inevitable crisis motivates action. It cannot turn out well.

The second example involves state takeover of two Indiana school districts. In both Muncie and Gary, two decades of school boards consisting of handpicked candidates from the teachers unions stalled much-needed downsizing until both school systems were bankrupt. This surely helped the union bosses and the politicians they elected.

But today, in these places, teachers and other public sector workers are far worse off, students are worse off and taxpayers are worse off. It is a monumental failure.

Now, the Janus ruling won’t solve all these problems. It will be important for Illinois and other states, but it won’t matter immediately in Indiana, where right-to-work legislation already prevents compulsory payment of union dues. Therefore, this is not the end of public sector unions, nor the debate about any of these issues.

It does, however, weaken unions who do things that members recognize as harmful to their long-term interests.

Since right-to-work legislation passed, Indiana public sector unions have lost one out of every 20 members. Much of this is due to the negative value unions have imposed not only on communities, but on their own membership. Muncie and Gary are obvious examples but there are others.

With the union pushing hard to prevent evaluation of employees, I find it ironic that even progressive think tanks report studies that find better skilled teachers to choose districts with ‘pay for performance’ formulas. Good workers wish to go where they can be rewarded for their efforts. Unions that stand in the way of this to boost membership will increasingly face a hard time recruiting. We should all be glad for that.

Finally, it is worth noting that this ruling pushes us towards a freer republic. It allows men and women to more freely associate, and it relieves them of the burden of supporting coerced speech by those with whom they disagree. I like the ruling for its potential benefits to municipal budgets and services as well. Nevertheless, if a Supreme Court ruling made us freer at the cost of government that is more expensive and less nimble, I will be nearly as happy.

Michael J. Hicks is the director of the Center for Business and Economic Research and an associate professor of economics in the Miller College of Business at Ball State University. Send comments to [email protected].

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