America has had a federal civil service system in place since 1871. Fair hiring practices were first codified by the Pendleton Civil Service Reform Act in 1883, and the standardized General Service (GS) Pay Scales were first introduced in 1923. Civil servants rarely made claims of unsafe working conditions or egregiously unfair pay.
Why then do we have public employee unions? In the private sector, one could (perhaps) make the argument that labor unions balance the inherently lesser negotiating power of workers with those of their bosses to set pay and working conditions. Trade unions first arose during the Industrial Revolution not only to negotiate wages, but to improve safety and unsafe working conditions in a world where regulation was virtually nonexistent. Today of course, we have a panoply of worker protections; among them are the Occupational Safety Health Administration, the Employment Retirement Insurance Safety Act, the Americans with Disabilities Act, the Civil Rights Act, the Age Discrimination in Employment Act and the Fair Labor Standards Act.
The founders of the labor movement viewed unions as a vehicle to get workers more of the profits they help create. Government workers, however, don’t generate profits. They merely negotiate for more tax money and more jobs. It would be ironic if unionization didn’t increase public sector pay. After all, isn’t that what a union is for, to get workers better compensation than they could get on their own?
In the private sector, companies rightfully fight to get pay right. Those that do stay in business. Those that don’t either lose their workers to other employers or go out of business. But there is no incentive for public workers to limit their wage and benefit demands.
” the only private sector workers who get the same package of pay, benefits, and job security as government employees are workers at large, unionized companies. Should the public sector be governed by the same salary, benefits, and job rules that caused so many problems at General Motors?“
Do we want government jobs to be more desirable than those in the private sector? Many Americans think that public sector employees are on average paid less than private sector employees with the implicit bargain being that government workers would have job security that private company workers lack. This is an erroneous assumption.
“Full-time federal employees earned an average of $81,258 in pay last year and $41,791 in benefits, the Bureau of Economic Analysis (BEA) reports. By comparison, the private worker earned $50,462 in pay and $10,589 in benefits, meaning that federal workers earn about half more in pay but four times as much in benefits, the BEA says.“
The big advantage for federal workers over private-sector workers comes in time off, pensions and lesser-known benefits. After three years, federal workers get 20 days of vacation, 10 paid holidays and 13 sick days. For older workers, a federal pension is a sweet reward. Lifetime benefits are based on the highest three years of salary, rather than the five years typical of defined pension plans in the private sector. Retirement can start as early as 56 years old with medical benefits.
President Obama instituted a federal pay freeze in 2010, and has called for a 0.5% increase for 2013. But when government workers get a pay freeze, they still get a bump in pay for an additional years of service. Does this make sense?
Liberals argue that civil servants have a right to join labor unions, citing the 14th Amendment’s Equal Protection Clause. But even a champion of labor rights such as FDR recognized that government employees have a “special relationship” to the people that should preclude their ability to strike. Other government employees such as the military have never been allowed to organize. As recently as 1958, George Meany, President of the AFL-CIO thought it was “impossible to collectively bargain with the government” (though later he was happy enough to accept their union dues). So how did government workers unions become entrenched in federal, state and local politics?
In 1962, President Kennedy was facing poor prospects in midterm elections. JFK saw how in Wisconsin and New York, which had recently allowed public unions to take hold, local liberal politicians benefited politically and financially. So Mr. Kennedy lifted the ban on federal government workers unions by executive order. Today, there are about a million federal employees represented by unions, about 31% of the total workforce, whereas in the private sector, only 7% of the workforce is unionized. At the state and local level, 36% of workers are unionized.
Union membership in the private sector has been declining steadily for years, and is now at levels last seen in the 1930s at the beginning of the organized labor movement. Clearly, private sector unions are a spent force, remaining mostly in service industries and local construction work for government jobs (see my post “On the Davis Bacon Act and Public Works”). In manufacturing, most union jobs have been exported, moved to “right to work” states, or been automated out of existence.
So at the end of the day, what has some 50 years of government employees unions brought us? Decades of over promising and fiscal malpractice by state and local officials have created unfunded public employee benefit liabilities of more than $3 trillion. Years of overly optimistic growth projections, underfunding and over promising by politicians have rendered many of these public pension systems toxic assets on states’ books. Some jurisdictions around the U.S. already spend more money on retired workers than on current employees, and more on retired teachers than on existing students and schools.
Even more troublesome than the current or future economic costs of public employee unions is that unions interpose themselves in the administration of government. For a prime example look no further than our schools. Education is easily the most important social equalizer in our society, yet there is clear evidence that despite spending more than 3 times the inflation adjusted cost on K-12 since 1970, student performance levels have not increased. Many factors harm student performance—including that we don’t fire our worst teachers and don’t reward our best, thanks to union contracts that forbid merit-based compensation and block the dismissal of teachers except in rare circumstances. Last week Newark Mayor Cory Booker said that he was considering using some of the $100 million donated by Facebook founder Mark Zuckerberg to a foundation for Newark schools to fund buyouts of the worst teachers in the city’s system. “If we could fire the 300 to 400 lowest-performing teachers…(we) wouldn’t have a financial crisis.”
It is difficult today for defenders of public sector unions to make any sort of convincing case that such unions benefit the public at large. These “public servants” are better paid than their private sector brethren, and they interfere with the proper administration of government by our elected officials. It is time to end government unions.