Public unions: How strong is their influence?
Recently I participated in a podcast for the non-profit Freedom Works. One of the topics was how much influence public unions have on federal, state and local politicians. I said that I had not seen academic studies, but my own belief is that their over-sized political influence has allowed them to increase wages, benefits and advantages for public workers. It doesn’t look all that different from how corporations and Wall Street buy political influence through elections and legislation.
This is from a University of Pennsylvania study that maps union support to favorable fiscal decisions:
Our empirical analysis focuses on municipal elections in the 150 largest cities in the U.S. between 1990 and 2012. We find that challengers strongly benefit from [union] endorsements in competitive elections. Challengers that receive union endorsements and successfully defeat an incumbent also tend to adopt more union friendly fiscal policies.
In 2010, the Wall Street Journal commented on public union political spending at the national level:
The 1.6 million-member AFSCME is spending a total of $87.5 million on the elections after tapping into a $16 million emergency account to help fortify the Democrats’ hold on Congress. Last week, AFSCME dug deeper, taking out a $2 million loan to fund its push. The group is spending money on television advertisements, phone calls, campaign mailings and other political efforts, helped by a Supreme Court decision that loosened restrictions on campaign spending.
“We’re the big dog,” said Larry Scanlon, the head of AFSCME’s political operations. “But we don’t like to brag.”
Was there a quid pro quo for the spending? From the WSJ again:
The 2010 election could be pivotal for public-sector unions, whose clout helped shield members from the worst of the economic downturn. In the 2009 stimulus and other legislation, Democratic lawmakers sent more than $160 billion in federal cash to states, aimed in large part at preventing public-sector layoffs. If Republicans running under the banner of limited government win in November, they aren’t likely to support extending such aid to states.
The payoff multiple that public unions get for political spending appears to be as potent as Wall Street’s corporate giving.
There is another outcome that shows the influence that public unions can exert. By manipulating the political process, they can in effect elect the members on both sides of the negotiating table. From National Affairs:
Through their extensive political activity, these government-workers’ unions help elect the very politicians who will act as “management” in their contract negotiations — in effect handpicking those who will sit across the bargaining table from them, in a way that workers in a private corporation (like, say, American Airlines or the Washington Post Company) cannot. Such power led Victor Gotbaum, the leader of District Council 37 of the AFSCME in New York City, to brag in 1975: “We have the ability, in a sense, to elect our own boss.”
The vast majority of public workers do a very good job, but their political influence has clearly created imbalances in the economy, particularly in areas like retirement benefits. It’s clear from data from the Bureau of Labor Statistics that the distribution of these public benefits far exceeds anything the private sector has. Compare the bottom row to the top row:
The scale of retirement benefits for public workers is unsustainable. As I wrote in January, municipalities have three choices to deal with underfunded retirement liabilities: negotiate, litigate or go bankrupt. There are actually two more choices: either raise taxes or cut other spending such as education. At the end of every year, state and local budgets must balance. The political arguments over how to do it are sure to heat up.
Sun Foundation: A Roadmap for Releasing Municipal Lobbying Data