The Problem with Public Sector Unions
North sums up the differences between public and private sector unions quite nicely in the comments:
-Private sector unions negotiate with business managers who are selected indirectly by shareholders/business owners. Public sector unions negotiate with government officials who are either elected or appointed by elected officials. Union involvement in the electoral process often can create a situation where the unions can elect people who are more sympathetic to the union and in effect control both sides of the table in essence voting themselves a raise.
-Private sector unions costs land on only two entities: the owners of a business (through reduced profits) who can choose to divest themselves of ownership or customers (through increased prices/lowered quality) who can choose to take their business elsewhere. The costs of public sector unions land squarely on voters who do not have such similar freedom to rid themselves of those costs.
-Unions get better deals for their workers but this cuts into the profitability of a company. That’s all well and good; an excessively parasitic union will cause a company to become unprofitable/uncompetitive. The company may well then die and the union dies with it. Governments cannot (easily) go out of business. They have a captive tax base. Public sector unions thus lack the upper limit on their rapaciousness that private sector unions have.
-The drive in the private sector is cost control/profit making which can naturally incents them to squeeze workers. Unions are a valuable counterforce to that drive. The drive in the public sector is towards effectiveness and empire building. This is not necessarily bad for employees and in many ways is good for them. There is not the same need for collective bargaining in the public sector. Thus public sector unions provide much less benefit to society as a whole (possibly they provide a negative benefit) than their private sector counterparts.
I have wrestled with this issue quite a bit but find that A) the moral hazard created by public sector unions and the elected officials they help seat is simply too great; and that B) the budgetary problems that are caused by the outrageous pension and benefit programs are unsustainable and unfair to taxpayers and potential new government hires alike. There are also serious problems with transparency and, especially with teachers’ unions, with placing the needs of adult teachers over those of children and communities. The public safety unions – police, prison guards, fire – are often just as bad or worse.
I want to broadly respond to a few of the arguments in the comments below.
First off, I would not say abolish public sector unions – not at first, anyways. That strikes me as a last-ditch move – and if it really is a matter of the First Amendment then one we wouldn’t even necessarily be able to undertake anyways. Reform the public sector unions is more like it. For instance, there is no reason to have public pension systems when the rest of the country has a 401k system in place (or something like it). Other reforms such as requiring employee contributions into all benefits plans, making the bargaining process more transparent, and making it harder for politicians to make lavish promises that future generations can’t keep would all help as well.
Second, nobody is implying that public workers are dishonest, lazy, or incompetent. The problem with public sector unions is systemic and speaks not at all to the quality of the workers involved.
Third, teachers are not the only problem with American education, and teachers’ unions are not even a problem everywhere – some unions are not nearly as powerful as others, or as inflexible, etc. But where unions are a serious problem, it does little good to complain of parents. On a policy level there isn’t a lot that we can do about the parents. The teachers, on the other hand, we can try to influence, change, and so forth. Administrators should not be left out of the mix either, though where unions are very powerful there is little an administrator can do.
Fourth, no pensions are not the only reason state and municipal governments are in the red, but they are a big reason and a systemic and prolonged reason and simply picking the economy back up won’t fix the problem even if it will help it.
Last, I think it’s impossible for anyone to deny that the dynamic between the bosses and the workers in a public sector union is quite different than in the private sector, and we should craft the rules of the game accordingly.