The Case Against Public Sector Unionism and Collective Bargaining
By: David Y. Denholm

Public sector collective bargaining is a creature of the late 1950s and 1960s. The academicians and politicians who theorized about it and legislated its beginnings can be forgiven for having erred because they were working in a void with no empirical evidence as to how it would work.

Public sector collective bargaining as we know it in the 1990s is a failure. There is a very strong case against it, but the laws which mandate it have given political power to public sector unions, and they will not lightly relinquish the power they have gained. Therefore, the case against public sector unionism must have both theoretical and political dimensions.

To understand the utter futility of using the collective bargaining process to establish equity and harmony in public employment, it is necessary to briefly review the basic premises of our system of government and the fundamental nature of unionism and collective bargaining.

Differences between the Public and Private Sectors

We live in a society with two distinct sectors – the public and the private.

Unionism and collective bargaining are products of the economic decision making process of the private sector of our society. Despite this, the National Labor Relations Act, which was designed for the private sector, has been used, with minor variation, as a model for all public sector bargaining laws. Those who wish to impose collective bargaining on the public sector fail to appreciate the differences between the public and private sectors.

Monopoly v. Competition

The public sector is monopolistic; there is a single source of supply for government services. There is only one fire department, one police department, one system of public education.

The private sector is competitive; there are alternative sources of supply for the goods and services produced. There are a multitude of choices in everything from automobile dealerships to grocery stores.

The public sector provides essential services. It is the very nature of government to provide on a monopoly basis the public services which everyone needs.

The private sector provides nonessential services. There are choices involved as to what sort and how much of private sector goods and services to buy and use, whether it be an automobile or a television, or what brand of gas to buy or channel to watch, or whether to own a car or watch television at all.

This is not to say that some private sector goods, such as food, are not essential. But, in many cases, the government provides essentials through programs such as food stamps. Also, it may be argued that many government services are far from essential, but that is an argument against government providing that sort of service rather than an argument against the premise.

Political v. Economic

Public sector decisions are political decisions no matter how great their economic impact. Government makes decisions every day that have profound economic consequences, but these decisions are based on political, not economic, considerations. Decisions that are politically popular but economically ruinous can get a public official re-elected, gut decisions that are economically sound but politically unpopular can ruin a political career.

Private sector decisions are economic decisions no matter how great their political impact. In the private sector, economic decisions that have bad political consequences can make you unpopular, but political decisions that have bad economic consequences can put you out of business.

Sovereign v. Free Contract

Government – the public sector – is sovereign, and no other institution or enterprise in our society is sovereign. Sovereignty is the power to use force – to compel. Under our democratic system, governmental sovereignty is derived from popular sovereignty which we as citizens give to government, within constitutional limits, in the interest of security, and the public good.

Government's sovereignty is obvious in compulsory school attendance laws, the power to collect taxes, and the power to violate personal and property rights in the public interest.

All economic and social activity in the private sector is governed by free contract. You only have a free contract when both parties want one. You cannot be compelled to buy the product of a particular company. Businesses cannot be compelled to join a business or trade organization. Support of churches is entirely voluntary. The list goes on and on.

Some say sovereignty is outdated because it is misunderstood. Some think of it in terms of the "divine right of kings." It is useless to argue that sovereignty is an outdated concept. Sovereignty is not something that government can choose to have. A government which is not sovereign is a contradiction of terms. No matter how pluralistic our society becomes, it is the sovereign nature of government which ensures the order necessary for participation in that pluralism by the individual citizens.

It may be argued that there are compulsory public sector bargaining laws in many states and public order has not broken down. This also misses the point. Whenever the representatives we elected to run the public's business are unable to carry public programs into effect because of opposition from public sector unions, our sovereignty has broken down which is a loss to us all.

That said, let's take a look at the nature and basic premises of unionism and American labor policy.

The Nature of Unionism

Adversarial

Unions view the employer-employee relationship as an adversarial one. Unions believe, or at least want their members to think, that employers are by their nature exploitative and that without the collective power of the union, the unorganized individual employee is helpless against the various forms of capital formation which employers represent.

While this may be true in the private sector, there is no reason to believe that it would be true in the public sector. The private sector is governed by an economic incentive – the profit motive. This system of economics has provided Americans with more goods and services, and a higher standard of living, than any other economic system in the world. But it is not applicable to many areas of the public sector of our economy.

Competition and the profit motive are at the heart of the union contention that employers are exploitative. That viewpoint leads the unions to an adversarial relationship. The absence of competition and profit motive from the public sector should cause us to then ask whether an adversarial relationship is necessary or desirable in public sector employer-employee relations.

Monopoly

Unions insist upon a monopoly in representation. If a majority of employees in a bargaining unit desire representation by a union, the union then imposes its representation on the minority.

In theory, collective bargaining brings the employer and the employees to the bargaining table as equals. This is a concept appropriate only to the private sector. Government, because of its sovereign nature, is in great peril when it views a small special interest group as its equal. Such an equal relationship causes broad public concern about the effectiveness of representative government, and can cause widespread voter/taxpayer dissatisfaction with government. Yet a less than equal role for the unions causes frustration for employees who have been led to expect too much from unionism.

Impasses

This brings us to the final element in the nature of collective bargaining – impasses. In collective bargaining it is the role of the unions to make demands and the role of management to respond to those demands. At some point management is bound to find itself unable to satisfy all the union demands. When an impasse occurs, the union must have some means of enforcing its demands. The traditional means of response to management recalcitrance is to threaten a strike.

In the private sector the strike is an economic weapon. The employer faces economic losses through a lack of business, and the employee faces economic losses through a loss of wages. If there is a strike at one provider of a good or service, consumers – the public – can shift to another provider or not purchase at all.

In the public sector the strike is a political weapon. The employer does not suffer an economic loss, and in many cases (e.g., particularly in education where most public sector strikes occur) neither does the employee.

Because of its political impact, the public sector strike is disruptive of the normal political process. Under normal circumstances, various interest groups within society, all of whom have a legitimate interest in public policy questions, exert pressure from various directions on elected representatives. Of these groups, a union of public workers is the only one that has the power, if not the legal right, to unilaterally deprive the rest of society of an essential service. Once this occurs, divergent political forces show a strong tendency to coalesce into a unified voice demanding a restoration of service.

The proponents of unionism and collective bargaining in the public sector, who based the public-sector model on the private-sector model, ignored the essential differences between the

decision-making processes in the two sectors and the conflicts inherent between the nature of unionism and the nature of government.

The Public Interest

In order to fully appreciate the case against public-sector unionism, it is important to understand why public-sector collective bargaining is contrary to the public interest. We must first determine what is the public interest in public employment. This may be many things to many people, but there should be universal agreement that it include the following:

In 1959 Wisconsin was the first state to enact compulsory public-sector bargaining legislation. Since then more than forty states have followed suit in one form or another.

The proponents of bargaining were astute. They knew that if they told the public that unionism and bargaining in the public sector were intended to give unions a disproportionate amount of influence in the decision-making process, no one would have bought the idea. So they talked in terms of equity and ensuring harmonious employer-employee relations.

On both scores the results of compulsory public-sector bargaining have not only failed to fulfill their promise but have had an effect completely contrary to their intended purpose. As a result, public employees are increasingly hostile to their employers, and there is increasing public hostility toward public workers.

Harmony

The imposition of collective bargaining on public sector employer-employee relations results in an increase in strike activity. In 1958, before the passage of the first public sector collective bargaining law, there were 15 strikes against government. By 1980, after thirty-seven states had enacted compulsory public-sector bargaining legislation covering one or more groups of public, there were 53 6 strikes.

After President Ronald Reagan's firm handling of the PATCO strike in 1981, the number of strikes against government declined by about 50 percent, and the Bureau of Labor Statistics ceased reporting on strikes in the public sector, making further analysis of this issue impossible. Even so, it is worth noting that between 1958 and 1980 in no case did passage of a public sector bargaining law result in a decrease in strike activity.

Nevertheless, the proponents of compulsory public-sector collective bargaining have argued that such laws would serve to reduce public-sector strike activity. They claim that forcing government to recognize and bargain with unions would remove the cause of strikes by providing formal channels for the resolution of differences.

Some have claimed that collective bargaining legislation, by reducing the number of recognition strikes, would result in a net reduction in public-sector strike activity. Jack Stieber, author of a Brookings Institution study entitled, Public Employee Unionism, is often cited out of context to support this contention.

A study of this data covering all strikes against government from 1958 to 1980 shows that in states which have adopted compulsory public-sector bargaining laws, there is a tremendous increase in the number of strikes – whether legal or illegal.

A comparison of strikes before and after the enactment of a public-sector bargaining law shows a correlation between passage of such laws and a fourfold increase in strike activity on a national average. These figures are dramatized by examples such as Michigan where there was one strike against government between 1958 and 1964. In 1965, a public sector collective bargaining law was enacted which made strikes illegal. Between 1965 and 1980, there were 759 strikes against government in Michigan. In Pennsylvania, there were 72 strikes in the twelve years prior to the passage of a compulsory public-sector collective bargaining law which legalized strikes in 1970, and 767 strikes in the eleven years following enactment.

On a national average, there have been 1.34 public-sector strikes per year in states prior to passage of compulsory public-sector bargaining laws, and an average of 5.0 strikes per year after passage of such laws.

Equity

Unions in the private sector speak of equity in terms of the workers' "fair share" of the value of production.' No such measure is available to the public sector worker.

If we define equity for public sector workers as compensation comparable to their counterparts in the private sector, it can be easily demonstrated that unionism and collective bargaining have, as a natural consequence, inequity rather than equity.

In the private sector there is little argument that a unionized worker earns more than a nonunion worker doing the same work. Despite the obvious fact that our national labor law gives considerable advantages to unions in organizing campaigns, only about 10 percent of the workers employed in the private sector have elected to be represented by unions.

Unionism has the same impact in the public sector. This can be shown by postal wage activity since passage of the Reorganization Act in 1971. In 1970 the average postal worker earned $7,777 per year, while the average manufacturing worker in the private sector earned $7,440 per year. The Reorganization Act imposed the NLRA on employer-employee relations in the postal service, ignoring the monopolistic, essential and political nature of the service. (The postal service workforce is very heavily unionized.) According to a report by the General Accounting Office, by 1976 the average pay of a postal worker had risen 69 percent to $l3,127, while the average manufacturing worker’s wage had increased only 57 percent to $11,703.

In 1996, the Fiscal Services Department of the Maryland Legislature did a study on the impact of proposed public-sector collective bargaining legislation. That analysis concluded that public-sector unionism results in an annualized increase in compensation costs of 1 to 1.5 percent. Comparing the compensation of state employees in Maryland to other similar employees covered by collective bargaining statutes over a period of 16 years, the report concluded that if state employment in Maryland had been subject to collective bargaining over that period of time, state employee compensation would have been 29 percent higher.

According to the Bureau of Labor Statistics, average hourly earnings in the public sector in 1996 were $15.06 compared to a private-sector average of $12.72 – a 13 percent difference. Average hourly earnings for unionized public-sector workers that year were $16.85.

Rising public discontent has focused on the public employee, while public employees have taken an increasingly hostile attitude toward the public. Because public-sector collective bargaining is a sacrosanct institution and is very poorly understood by both groups, it is not recognized as the source of the problem.

Employee Rights v. Union Privileges

Another widely held misconception is that compulsory public-sector bargaining laws somehow guarantee "rights" to public employees. Nothing could be further from the truth. In fact, close examination reveals that, if anything, the opposite is true and that compulsory public-sector bargaining laws give powers and privileges to unions at the expense of the rights of individual public employees.

Public employees, like all American citizens, have the right to join a union. This is a right protected by the First Amendment to the Constitution of the United States. No law is needed to guarantee it and no law should violate it. Beyond this, all the so-called rights contained in compulsory bargaining laws are union rights, not employee rights.

This is contrary to the fundamental guarantee of liberty under the Constitution. The First Amendment to the Constitution of the United States guarantees citizens the right to petition the government. Granting unions the exclusive right to represent government employees in their employment relationships with the government denies public workers this right in one of the most basic areas of concern – their jobs.

Unions commonly exploit their monopoly bargaining power by insisting that because they are "forced" to represent all employees, that all employees, having lost the right of representation to the union, should be forced to join or support the union as a condition of employment. This violates each employee's right to freedom of association and gives the union greatly increased power in determining the employment destinies of the employees.

Forcing public employees who are not union members to pay for union representation is based on the idea that union representation is a benefit. It is becoming increasingly clear that union gains for one group of employees often come at the expense of another group of employees, frequently within the same bargaining unit. Forcing an employee to pay for representation that is ultimately harmful to their interest is an injustice.

In addition to contract negotiations, unions also spend a lot of time defending individual employees in "adverse actions" regarding their own employment. These issues often involve absenteeism, insubordination, poor evaluations, etc.

Granting unions monopoly bargaining privileges and the power to compel membership or support cannot be construed as guaranteeing any "rights" to public employees.

The proponents of compulsory public-sector collective bargaining laws play on the public's sense of fair play by saying that denying public employees the right to collective bargaining makes them "second class citizens." There is no constitutional "right" to collective bargaining in either the private or public sector. The U.S. Supreme Court has been quite clear about this in several decisions. All such "rights" are statutory.

Public Control

Nor can it be said that public-sector bargaining laws protect the right of the public to control government policies and costs through their elected representatives.

The most fundamental violation of this principle is inherent in the very nature of the laws and leads to their designation as "compulsory" bargaining laws.

Public sector bargaining laws "compel" elected public officials to recognize and bargain with unions. This immediately deprives from the representatives of the people the power to determine whether such recognition and bargaining are, in fact, in the public interest.

By making the union a full and equal partner at the bargaining table, compulsory public-sector bargaining laws deprive the public of its right to participate in policy making. This point was emphasized in a U.S. District Court opinion which upheld the constitutionality of a North Carolina law declaring public-sector union contracts to be void. The Court said:

The unions believe that no employer will seriously consider a union demand, if it knows that the union has no power to enforce it. To enforce their demands, unions must have the power to strike. As Sylvester Petro put it, "Collective bargaining unsupported by the strike is a sham institution; Government whose employees may strike is no less a sham." Another scholar from the opposite side of the ideological spectrum on the question of unionism, Theodore Kneel, expressed the same sentiment, "Collective bargaining and strikes are like Siamese twins."

Concern about strikes in the public sector has focused around the deprivation of public services. There is no doubt that this is a very real problem, but it distracts attention from an even more important consideration. Strikes against government are disruptive of the normal political process because they tend to coalesce divergent political views for a brief time into a single demand for the restoration of public service. This gives the union disproportionate power and results in government decisions which have short-term political benefits and disastrous long-term consequences.

Professors Harry H. Wellington and Ralph D. Winter, in their Brookings Institution Study entitled, "The Unions and the Cities," focus on this problem concerning the strike weapon:

There is no doubt that collective bargaining means strikes. There is also little question that strikes against government are intolerable. Therefore, collective bargaining as an institution is inappropriate to government.

Some states in an effort to avoid this problem have instituted compulsory, binding arbitration as a means of resolving labor disputes in the public sector. If anything, binding arbitration is worse than strikes.

Strikes destroy democratic government by giving the public sector union – a very small special interest group – disproportionate influence and therefore effective control of the public decision-making process. Binding arbitration completely removes elected officials from the process.

In many states which have enacted binding arbitration laws there are active movements to repeal them. But repeal is difficult because the collective bargaining laws greatly increase the political power of the unions.

State legislators often approve binding arbitration because its effect is felt at the local government level. One striking example of this is in Michigan where State Senator Coleman Young was the sponsor of a binding arbitration law. Later, as the Mayor of Detroit, Young said,

Efficient Delivery of Public Services

Finally, do compulsory public-sector bargaining laws in any way promote more efficient or orderly delivery of public services?

As already noted, there is a strong and direct correlation between collective bargaining and strikes which disrupt public services.

Beyond this, union contracts tie the hands of elected officials and make it impossible for them to respond in a timely fashion to economic or natural disasters and emergencies. One only need look at New York City's financial default in the 1970s to see how completely destructive absolute power can be in the hands of public sector unions.

In addition, public sector bargaining tends to telescope the government decision-making process. Contracts frequently deal with subjects beyond wages, hours, terms and other conditions of employment, and directly impact a broad variety of government decisions.

It is the nature of negotiations to make concessions and compromises when faced with a deadline. As a result, many contract agreements are made at the last moment. Elected representatives of the people are then faced with the need to consider, in a very brief time, a document which will affect a wide range of other decisions. There is not time under these circumstances for public review and for informed comment from other interest groups.

Because they create more problems than they resolve, most public sector bargaining bills provide for the establishment of a public employment relations board to resolve problems which arise under the law. These boards are cumbersome new bureaucracies which greatly increase government costs. They are given broad regulatory powers from which locally elected public officials have little or no recourse.

It is clear, therefore, that no matter what the real intent of these laws, by any objective standard they are not in the public interest. They represent an expression of the selfish self-interest of public-sector union organizers and, indirectly, the interest of the politicians who enact them in order to curry favor with the union's political operatives.

Since public-sector collective bargaining is so contrary to the public interest, it is also essential to understand how it became so widespread. Public sector collective bargaining is a relatively new phenomenon.

In 1955 George Meany, the President of the AFL-CIO, said, "It is impossible to bargain collectively with the government." And as late as 1959, the AFL-CIO Executive Council was on record as believing that, "in terms of accepted collective bargaining procedures, government workers have no right beyond the authority to petition Congress – a right available to every citizen."

In the middle of the 1950s, some academicians began to toy with the idea that collective bargaining might lead to more harmonious and equitable employer-employee relationships in the public sector.

At about the same time, however, union membership as a percentage of the work force began to decline, and the number of people employed by government began to grow.

Union officials saw the emerging public sector as the new growth industry to replace the dues dollars and political clout they were losing from their decline in the private sector.

In 1958, public-sector union membership was only 1,035,000, or 12 percent of the public-sector work force of about 8.5 million. At that time the private-sector work force was about 43 million and union membership was 16,933,000 or 39 percent.

In the next two decades, the federal government and most states instituted compulsory public-sector bargaining schemes. In addition, the unions found that they could use their political power to prevent any resistance to union organization in the public sector at the local level, that is, once a compulsory public sector collective bargaining law had been enacted.

Between 1958 and 1978, the public-sector work force grew by 83 percent, while the private-sector work force grew by only 39 percent. Public-sector union membership grew to 6,019,000, which was 39 percent of a public-sector work force that by then numbered 15,630,000. By 1978, private-sector union membership had risen to 18,116,000, but was only 20 percent of the work force.

The decision to push for compulsory public-sector bargaining laws was indeed a profitable one for the unions. On the other hand, it was a failure for those who thought that it would lead to better government.

It is time for public officials and the people they serve to devise better policies and strategies for public employment matters. It is time to move beyond the failed nostrums of the past into a better future for public employees and the public they serve.