Public Sector Unions – Part 2

The source of the power of public sector unions.

This essay, part of a series on the influence and effects of public sector unions, focuses on the sources of public sector union power in our democracy.

As Philip Howard writes in his book Not Accountable: Rethinking the Constitutionality of Public Employee Unions:

What gives public unions this power? Americans supposedly live in a republic in which voters elect leaders to run the operating machinery of government. How is it that public unions hold the keys? The answer is that, over the past fifty years, public unions have harnessed the power of the state to put themselves in a dominating political position. They have three sources of power, each unique to them: Public union political advocacy is in a league of its own, with billions of dollars per year to spend on political influence, plus a pool of millions of members who can be recruited for political activity. State laws authorizing collective bargaining, and allowing automatic deductions of dues, are the catalyst for this mass mobilization of public funds and public workers. Public unions have used this political clout over the decades to construct a formidable legal fortress against reform. New leaders come to office with hands tied by collective bargaining agreements and a web of statutory restrictions. Public unions hold daily government decisions in their hands and have shown no hesitation to wield every club in their arsenal, including job actions and strikes, to bring political leaders to heel.  The result is a political force unlike any in American history—amassed and entrenched using state power. Like a kind of political jujitsu, unions have weaponized the mass of modern government against democratic reform of modern government. The bigger government gets, the more public employees can be organized against reforming it. Reformers can’t get out of the starting gate. Collective bargaining agreements typically run for three to five years and are not coterminous with election cycles. “A new mayor or governor—no matter how hard-charging a reformer,” Daniel DiSalvo [professor at the City University of New York] concludes, “will often find his or her hands tied by the agreements unions managed to extract from his or her predecessors.” … Nor can elected leaders achieve meaningful change when collective bargaining agreements come up for renegotiation. The statutes authorizing collective bargaining usually impose upon elected executives a legal duty to negotiate over any matter involving wages, working hours, or other “terms and conditions of employment.” If there is an impasse—because, say, an elected executive wants to reduce the union controls—that too is generally beyond the executive’s power. In many states, and in the federal government, an impasse over a new agreement is not resolved by elected officials but by arbitrators or other unelected bodies.

For example, in New York, a “law called the Triborough Amendment provides that the existing collective bargaining agreement stays in place until a new agreement is reached—continuing to accrue any automatic ‘step increases.’ The union can sit on its hands and lose nothing to a would-be reformer.” 

As Howard summarizes:

unions have steadily used political influence to permanently encase management controls in statutes. Some of the most significant restrictions therefore are not even subject to collective bargaining—including procedures that effectively bar accountability, mandate seniority preferences, impose requirements for a minimum number of sick days, and bar merit pay. Governors, mayors, and other elected executives have no legal authority to override these statutory protections … What happened is in plain sight: Public unions have created a modern spoils system. Just as the spoils system ran government for the benefit of campaign supporters of the winning party, public unions control government operations for the benefit of public employees. Like the old Tammany machine in New York, public unions have consolidated their political might to advance policies aimed at keeping public employment as a sinecure, unmanageable and unreformable … Public employee unions in America are engines of selfishness—partisan machines dedicated to their own self-interest. They demand entitlements, rigidities, compensation gimmicks, public policies with no public benefit, and veto rights on public management, and do so holding elected leaders at political gunpoint.

And “Just as unions can largely ignore elected executives, so too are unions largely immune from their own members. Most states do not require unions to be recertified in periodic elections.”

This vast power of public sector unions to embed policies that promote the interests of their own members at the expense of others is a large drag on the U.S. economy.  As Howard writes, “It is perhaps no coincidence that the United States ranks twenty-seventh in World Bank ratings on government effectiveness. Public trust is also low—near the bottom of OECD developed countries.”

The power of public sector unions is derived from the decisions made by its leaders, who, as we saw in the previous essay in this series, have legal fiduciary duties to exclusively promote union members interests to the exclusion of the interests of all others in society.  It’s the fiduciary duty-driven decisions of these union leaders, of course, and not those of most rank-and-file members, that cause governmental dysfunctions.  In his book Inside Job: How Government Insiders Subvert the Public Interest, Mark Zupan writes, “Nothing that follows is intended to cast aspersions on public employees. To do so would be like castigating business people for behaving self-interestedly when analyzing the supply side of private markets. My goal, rather, is to better understand the workings of political markets in terms of the two sides of any market – supply and demand. This model involves an economics point of view, so I will ask why political markets may not promote the public interest.”  For example, Zupan continues:

Public workers’ superior compensation packages reflect their monopoly power in the political arena and the extent to which that power has grown in recent decades through unionization. The monopoly power stems from civil-service–type protections and public positions being more insulated from market forces. After all, the state often is the sole or dominant supplier of the good or service in question. In addition, public employees get “two bites at the apple” versus the one “bite” available to their private-sector counterparts. That is, not only can they organize themselves to collectively bargain with their managers, as can private-sector employees, they also have the ability to elect and otherwise manage the public officials who are supposed to be managing them on behalf of ordinary voters.

As Howard writes:

The shopping spree by unions reflects the unprecedented political war chest that public employee unions amassed with the exclusive rights afforded by collective bargaining. Annual union revenues from dues are on the order of $5 billion. Much of this is spent on direct and indirect political activity. Public employee unions are a powerful force in national politics and by far the dominant force in state and local politics where collective bargaining is authorized. In addition to campaign contributions, public unions mobilize thousands of members as campaign workers, including staffing candidates’ campaign offices. They also run members as candidates, for example, to local school boards. The unions are structured as national federations with local branches, so that resources from one state can be used to snuff out reforms in other states … Public unions receive membership dues of about $5 billion each year—seven million active members pay dues of roughly $700 per year. Direct contributions to candidates and PACs, and payments to outside lobbyists, Daniel DiSalvo estimates, comprise at least 20 percent—about $1 billion per year …

And, as Howard writes, the reported union political financial contributions are just

the tip of a massive political iceberg. Most union political support is indirect, through campaign staff support, such as … meeting with politicians and their staffs, public relations and advertising, campaign call banks, door-to-door canvassing, organized demonstrations with members and their families, providing senior staff for candidate campaigns, and recruiting and training union members to run for office … There is not much, in other words, that unions do with their revenues that is not political. It’s hard to imagine that unions devote more than a third of their revenues to nonpolitical member services.   By these estimates, public unions spend somewhere between $1 billion and $3 billion each year to influence political decisions, or $4 to $12 billion in each four-year political cycle. No other interest group, no industry, comes close to mobilizing that amount of political money, particularly in state and local elections.

As Howard writes, “About 10 percent of delegates to the Democratic National Convention are members of the teachers unions, making them the single largest organizational bloc of Democratic Party activists.”  And as Zupan elaborates, “relative to their Republican counterparts, Democratic politicians have been more willing to support public employees on account of both their ideology which favors government playing a greater role in society and private-sector unions, which have been a core part of the support base for Democratic politicians, being on the wane over the last half century.”

In advocating for the adoption of the federal Constitution in 1788, James Madison, in Federalist Paper No. 51 famously wrote “In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself.”  Public sector unions fail that test, in that they can’t be controlled when they elect their would-be controllers.

In the next essay in this series, we’ll examine how the rules imposed by public sector unions in the context of policing, and not racism, is the prime cause of police misconduct.