Big Labor vs. Taxpayers

by F. Vincent Vernuccio

Co-authored with Trey Kovacs

Until recently, union bosses—not elected representatives—have been in control of the government employee compensation process. Using taxpayer dollars they obtain through mandatory dues, they elect the management they later negotiate with. However, across the country in states such as Wisconsin, Ohio, and Michigan, taxpayers are fighting back and the tide of Big Labor control is starting to change.

Now there is a new online tool to give taxpayers and policy makers critical information on which states favor Big Labor. The Competitive Enterprise Institute and Crossroads GPS recently launched a “Big Labor versus Taxpayer Index” that analyzes 1,150 labor laws and regulations throughout the country and exposes states that make coddling Big Labor a top priority.

For the first time ever, government union members outnumbered those in the private sector in 2009. These unions are at the forefront of the movement for more expansive and expensive government. They use collected forced dues to lobby for greater pay, lavish benefits and more members. They also have a legal monopoly over public services and, if they strike, can deprive citizens of essential services such as education and safety.

The result is a vicious circle. Politicians cater to government unions, and these unions in turn support these politicians’ election campaigns. Once these pro-Big Labor candidates are elected, they can provide the increased pay and benefits to government employees that is demanded by their unions. The unions then collect dues from their members, which enables them to give more political support to friendly politicians, and the cycle goes on.

Politicians can put the interest of government unions ahead of taxpayers in a multitude of ways. Below are a few examples rated by the index on how Big Labor can be put head of citizens.

Collective Bargaining

Collective bargaining strengthens government unions’ labor monopoly in the public sector, manipulating the price and availability of public services. Big Labor uses the process of collective bargaining to exert control over budget and spending policy of state governments. Collective bargaining combined with political activity, enables unions to act as unelected government officials who lobby and negotiate for more government jobs and greater government employee pay and job security.

The gains that unions have made in the government sector are bankrupting states and municipalities. Government employees’ lavish compensation, unsustainable retirement benefits, and ironclad job security put enormous financial burdens on the taxpayer. Government workers, on average, earned 46 percent more in salary and benefits during the past decade than did similar workers in the private sector.

States that have long provided strong collective bargaining privileges to government employee unions today have high rates of union density and unsustainable pension liabilities. New Jersey, Massachusetts, Rhode Island, Connecticut, and New York all have union density rates of 55 percent or higher in the government sector. The high union density rates lead to some of the highest liabilities for government employee retirement funds.

Government employee unions’ are a relatively recent phenomenon. Until recently, even strong union advocates dismissed the notion of public sector unionism. President Franklin Delano Roosevelt once wrote, “All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service….The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations. The employer is the whole people, who speak by means of laws enacted by their representatives in Congress.”

Former AFL-CIO President George Meany put it more bluntly: “It is impossible to bargain collectively with the government.”

Paycheck Protection

Most of union bosses’ power comes from their ability to collect compulsory dues from employees in order for them to keep their jobs. The dues payments are used to lobby for union leaders’ preferred political agenda: bigger and more expansive government. For many union members, this means that their dues go to promote political agendas they do not support. Paycheck protection laws help to curb this undemocratic practice by requiring union bosses to obtain written consent from union members before they can use their dues for political activity.

Government employee unions’ spending is massive. The American Federation of State, County and Municipal Employees (AFSCME) was the largest outside spender in the 2010 election cycle. On its list of top all-time political donors, the Center for Responsive Politics lists AFSCME second. The National Education Association (NEA) fifth, the Service Employees International Union (SEIU) sixth, and the American Federation of Teachers (AFT) 10th. In short, government-sector unions constitute a permanent, well-funded, self-supporting lobby for bigger government, funded mostly from forced dues.

Secret Ballot Elections and Card Check

The secret ballot is a bedrock principle of democracy. The use of the secret ballot in union elections is paramount to maintaining employee rights. However, those rights are not protected like they are in elections for government officials. Big Labor’s preferred method of elections is card check. This circumvents the secret ballot by allowing a union to be certified for a group of workers by getting a majority of them to sign union cards. Card check occurs publically and usually in the presence of union organizers, which opens the door to coercion and intimidation.

Binding Arbitration

Binding arbitration is the process by which the unilateral decision of an unelected bureaucrat can determine the compensation and conditions of government employment. Some states mandate binding arbitration when collective bargaining negotiations reach an impasse. This policy usurps voters’ right to have the final say on how their state and local governments spend tax dollars.

Binding arbitration allows union negotiators to submit unreasonable offers in the hope that an arbitrator will make concessions to labor, as is often the case. In many cases elected officials have no power to overturn the arbitrator’s decisions, thus thwarting the electorate’s will.

Open Meetings Laws

Open meetings laws give the public accessibility to government sector collective bargaining negotiations, in order to hold both union officials and state negotiators accountable to the taxpayer. By enforcing transparency, open meetings laws limit the harmful aspects of collective bargaining and binding arbitration.

An informed citizenry versed in the workings of government is needed to ensure the proper use of tax dollars. Currently, however, only 11 states provide access to government sector collective bargaining sessions.

Public Employee Pension Underfunding

Pension underfunding is the amount each state government owes to fulfill its pension commitments to its employees. Collective bargaining, binding arbitration, and elected officials’ appeasement of union officials have led to an epidemic of unfunded state pension liabilities across the nation. According to a recent study by the Pew Center for the States, 31 states are below the 80-percent threshold needed for a pension system to be considered well funded. This debt directly affects taxpayer; as those states will require a tax increase of $1,000 or more per household to fully fund their pension systems if they make no other policy changes.

Project Labor Agreement Bans

Project labor agreements (PLAs) are government construction contracts steered to unionized construction firms. This practice eliminates fair and open competition. Under a PLA, a construction firm must agree to sign a union collective bargaining agreement, whether it is unionized or not, before it can bid on a government construction project. PLAs cost taxpayers. They can increase government construction costs by up to 18 percent.

Strike Policy

Government sector unions’ right to strike is detrimental to the free flow of commerce and maintenance of public services. Lack of strike prohabitions allow union officials to hold the taxpayer hostage by threatening the withdrawal of essential government services. When public safety employees are allowed to strike it endangers all citizens.  This allows the union to gain generous concessions from government officials that end up creating unsustainable contracts which often lead to state budget strains.

Taken together these criteria can illustrate which states favor taxpayers or continue to handout favors to Big Labor. The index is an excellent way for citizens across the country to learn where their political leaders stand. The index is already having an impact. Think tanks and policy makers across the country are using it to share ideas about how to improve their states’ labor policies.


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Posted Aug 31st 2011 at 4:38 am in Big Labor, Featured Story | 61 Comments