Why unions are out of touch with reality
The public-sector union showdowns in Wisconsin and Ohio are proceeding as if it was the 1950s. Democrats and liberals call labor oppressed, and want the unions to win; Republicans and conservatives call labor a threat, and want unions broken. That’s the wrong way to think about the entire situation.
Labor unions and collective bargaining are important tools. There are good reasons to form unions. But unions must be reasonable. If the customer is not happy with a union’s performance, or if the cost of doing business becomes too high — whether the customer is the state of Wisconsin or otherwise — then unions must make reasonable compromises.
Collective bargaining is, after all, about negotiation.
Half a century ago, when most members of unions worked in dangerous conditions for low pay in factories or mines, it was fair for labor to demand justice. It is still fair for unions representing the mistreated, such as those who work as hotel maids or clean offices, to demand justice.
But today’s government employees are not mistreated. For today’s government employees to occupy the Wisconsin statehouse and turn red in the face angrily shouting demands shows public-sector unions have become spoiled and out of touch. That needs to change.
In the main, public-sector union members have good deals. They work in safe white-collar circumstances. Civil service rules afford protection against dismissal. Public-sector worker pay is about the same as pay for private-sector workers who have no protection against firing, while public workers’ benefits are better, sometimes much better.
California allows many unionized state employees to retire at 55 with a pension of half their final year’s salary. Ohio allows public-sector union members to “retire,” start drawing pensions, then be rehired for the same jobs. The Columbus Dispatch has reported that in 2009, Ohio paid $741 million in pension benefits to teachers and school administrators who were working full time. They “retired,” qualified for pensions, then went back to their previous jobs. In Wisconsin, public school teachers average nearly $100,000 annually in pay and benefits; private sector workers in Wisconsin average $60,000 in pay and benefits. In all these cases, private-sector workers are taxed so that public-sector workers can have better deals.
If public-sector workers in Wisconsin or any state were having money forcibly removed from their pockets and given to private-sector workers who already had better deals, the public employees would be furious.
Union members matter, but voters matter more. A situation in which customers (taxpayers) are penalized (taxed) so that public employees can have better deals than the public they serve is not reasonable. That’s where the negotiation aspect comes in. Government workers in Wisconsin, Ohio and other states must negotiate contracts that meet the needs of the customer, and that inevitably will mean lower benefits. States have at least $3.2 trillion in unfunded pension promises to union employees: this can’t go on.
Private-sector unions face market competition, which causes them to moderate their positions. Government unions work for a monopoly, so must moderate themselves. In recent decades, public-sector unions have adopted a mindset of demand, demand, demand — assuming politicians will always cave. This labor mindset is obsolete in a era of rapidly rising public debt. Public-sector unions must negotiate in good faith to provide taxpayers with improved terms.
Employers must negotiate in good faith too. In Wisconsin, new Republican Governor Scott Walker has handled the situation poorly. Rather than negotiate for reasonable reductions in public-employee benefits, he went directly to attempting to end collective bargaining, an extreme step that shows Walker is not a thoughtful man, merely a union-buster.
Walker’s anti-union bill also has Trojan horse provisions, including one that would allow the state to sell publicly owned power plants to corporate campaign donors on a no-bid basis. This isn’t reform — it’s corruption. If I were a Wisconsin voter, I’d be advocating public-sector union concessions on the one hand and on the other, signing a recall petition to get rid of Governor Walker.
Louis Brandeis, the leading progressive of the early 20th century, said it was a mistake for labor and management to be out to get each other. Their fortunes, Brandeis maintained, rise and fall together.
That’s the spirit missing from current labor-management disputes. Belonging to a union does not guarantee endless money increases regardless of business conditions; belonging to management does mean issuing ultimatums to workers. Both sides must negotiate toward reasonable outcomes.
Photo: A demonstrator holds a placard near the State Capitol building during protests against the proposed budget cuts from Wisconsin Governor Scott Walker, in Madison February 25, 2011. REUTERS/Darren Hauck