Wednesday, February 9, 2011

More on public employee unions

A few weeks back, DHT covered an article by proud leftist blogger Freddie de Boer, which suggested that the "true" political left in the US was largely excluded from the mainstream professional blogosphere.  Freddie proposed that a way of distinguishing true leftists from "neo-liberals" was their position on organized labor issues, and according to him, quite a few bloggers (such as Matt Yglesias) whose petitions were often adversarial to labor fail to qualify.  The article prompted much debate, including a defense from Yglesias.

Now, another prominent blogger--this time the libertarian-leaning Will Wilkinson of The Economist, has stuck a stick in this hornets nest.  The title of Will's opus is swift and to the point:  Government workers don't need unions.  Will drags an old FDR quote out of the attic to bolster his point ("The process of collective bargaining, as usually understood, cannot be transplanted into the public service"), and makes essentially the following arguments.
  • Private labor/employee relationships are different than public ones, as the former involve two parties fighting over the surplus from some economic activity, whereas public sector workers are bargaining against the public good.
  • Many public sector workers don't need collective bargaining to protect their interests, as they often have civil service protections; and are found in such large numbers as to hold significant political power.  (I might add that many public employees hold jobs which cannot be easily outsourced; and that public-sector administrators and their elected-official bosses are generally under more pressure to deliver services than make money).
  • Oh, and they have the Democrats under their thumb--making Republicans appear to be the economic champion of the underprivileged (who by definition are neither wealthy, nor holding high-paying government jobs).
I've commented before on the tenuous relationship between organized labor and advocates for robust public services; quite a few transit bloggers I know are quite hostile to the local transit union.  However, Wilkinson's article contains several points which need firm addressing.

Regarding his first (in the list above)--essentially what he is saying is that in public-employee bargaining, we the taxpayer are management.  (A better analogy might be that the public at large are shareholders, and public officials are management).   That certainly changes the motivations of many people involved; it's not unsurprising to find those who don't care about relations between some corporation and its unions (or who even hold a union card in the private sector), but get outraged at media reports of highly-paid public employees who allegedly loaf on the job.  However, it ought not change the moral calculus one bit.  If you believe that jobs ought to pay a "living wage", it should not matter if the employer is a private enterprise or a public agency; nor should the public/private distinction matter if you are a firm believer in the premise that jobs should pay no more or less than what the market will bear.

Who's got the power?

Will is correct when he observes that public employees often enjoy greater bargaining power than their private sector counterparts.  The best evidence of this is their mere existence.  Many private sector unions (and indeed, entire industries) have been thoroughly smashed over the past three decades since Reagan first took office.   A great and somewhat unfortunate irony of labor relations is that in the industries where unions would have the most benefit, where the workers suffer the greatest levels of mistreatment and exploitation, they are mostly likely to be ineffective or missing altogether--as these are the industries where capital and management hold the strongest hands.  Conversely, where labor is "needed" the least--those markets where workers enjoy good wages and working conditions, are the areas where labor is likely to be strongest.   Part of this is due to the presence of the unions--their job, after all, is to win a better deal for workers--but part of this is because, as Will notes, the effectiveness of labor depends on its economic strength, not on any moral concern.  In those industries where work can easily be migrated elsewhere, or where workers are interchangeable, or where production can easily be stopped without damaging the interests of capital, labor does poorly.  Where workers have specialized skills, cannot easily be outsourced, or where work stoppages pose a serious threat to the boss's bottom line, labor fares well.  Strong unions grow stronger, weak unions get busted.

While Will's suggestion that maybe public employees ought to go away would serve to address one side of this inequity--the alleged overcompensation of public employees at taxpayer expense--he doesn't have any suggestions at all for how we might address it the other side of this phenomenon, and lift low-wage workers out of poverty.  Nowhere is the suggestion that coupled with attacks on the public unions, we ought to encourage and protect and foster private-sector unions, to help farmworkers and WalMart greeters and waitresses get off the minimum-wage treadmill.  (Or as an alternative to strong unions, find other ways to help improve their lot).

The privatization card

The bargaining power of public employees is not absolute, however; as anti-union public officials have several weapons in their arsenal, one of the most effective being privatization.   One of the key reasons that many conservatives favor privatization of public services (including arrangements where operations are contracted out to private operators while control remains in the hand of the public), is that  doing so turns public employees into private employeesAdding a private operator to the mix introduces another hand into the taxpayer wallet, but it is often effective in reducing wages, as private operators are insulated from the political pressures (and civil service regulations) which hamstring public administrators.  This is especially true for those services (including public transit in much of the country) which are viewed as "welfare", and have tenuous political support to begin with.

We see this a lot in the debate on public education.  While there are valid concerns that organized labor (which seeks to promote job security in addition to good pay and working conditions, and is thus frequently opposed to anything that might make it easier to fire teachers) opposes many sort of useful reforms, I suspect that a big part of the push for privatization isn't out of a desire to make education better, but to make it cheaper--and return the windfall to taxpayers.  (There are other factors as well that have little to do with economics; including a desire that many have for taxpayer-subsidized religious instruction).

Privatization has many defenders, including many parts of the media that consider it axiomatic that private agencies, motivated by profit, are inherently more efficient than public ones.  I'll agree that profit-focused agencies are better at making money; but they're not necessarily better at providing service.  There are countless examples of private companies (acting in countless industries--banking, telecommunications, and health insurance immediately come to mind) which seem to excel at nickeling and diming their customers to death.  Unsurprisingly, many of these industries are oligarchies, where the crucible of competition doesn't exist in any meaningful form.

Labor and political activism

Will also seems to consider it untoward that public employees attempt to better their lot via political activism (including the support of labor-friendly politicians), rather than solely seeking concessions at the bargaining table.  The prospect of elected officials owing patronage to unions is frequently denounced as corruption, under the theory that public officials have a fiduciary duty to the public to turn the screws on the government workforce as tightly as they can.  However, many conservatives seem far less bothered by the same sort of arrangements when rich people do it; and that it's perfectly legitimate for the Koch brothers or Richard Mellon Scaife to pour hundreds of millions of dollars into the political process to try and elect politicians who will be friendlier to their business empires.  It ought to tell you something that the Citizens United decision is largely praised by conservatives and loathed by liberals, despite the fact that its provisions also apply to labor--both sides know perfectly well who has the bigger bankroll at the poker table.

With regards to the impact on the fortunes of the various political parties, Will's observations may well be true--quite a few of the country's downtrodden seem to identify more with the GOP with the Democratcs--but it's worth asking why that ought to be.  Why should a poor person's livelihood be more threatened by a bus driver or school teacher making $50k a year, than by the multimillionaire Davos-hopping CEO who just got a bonus for sending good private sector jobs overseas?  While cultural and racial politics are likely a big part of it, the observation in the last paragraph (who has the most money to spend on political messaging) probably has something to do with it as well. 

Some final thoughts

As noted above, those of us involved in public-service activism frequently find ourself in adversarial situations with public employee unions.  Many of the government agencies we deal with lack plenary taxing power, and thus a direct conflict exists between the amount of service which can be provided, and the wages and benefits paid to the workers who provide the services.  It's tempting to pile onto the public employee unions and tell them it's their turn to take one for team progressive.  However, one question must be asked:

What would happen were major concessions to be won from public employees?  Would quality of service really improve?  Would class sizes shrink, bus frequencies increase, potholes get filled more quickly, and the folks at the DMV start to smile?

Or would the savings instead be "returned to the taxpayer", often in a form (such as broad-based rate reduction) that distributes the lion's share of the windfall to the wealthy, and the same class sizes and bus headways maintained--only now staffed with teachers and bus drivers who are more likely to come from the bottom half of the barrel? 

Four decades ago, when unions had broad market power and were producing inflationary spirals that threatened the economy, attempts to curb said power might have actually done some public good.  But in today's economic climate, such complaints are tantamount to fretting about mosquitoes while being chased by a hungry bear.  The growing economic disparity between rich and poor is the real problem facing the US today.  Taking shots at public employees will do nothing to narrow this gap, and might well widen it by eliminating a significant sector of what is left of America's middle class.


  1. I think people tolerate the rich because there is the potential for competition. For those upset with Richard Mellon Scaife's wealth, they can start a new Pittsburgh newspaper.

    Even if someone doesn't have the ambition or talent to start new enterprises, we want others to have the incentive. If two parties get filthy rich trying to out-innovate the other (for a newspaper, better websites, better distribution models, better columnists, etc.), then the general public still benefits. The public sector doesn't have nearly the same incentives for working smart and taking risks.

    In fields where competition doesn't make sense (waterworks, a nation's military, possibly public transit), then the public sector is the better choice. When public employee unions advocate for pay based more on improved productivity than seniority and head counting, then public sector unions are a great thing to have.

  2. Chad, how do unpaid furloughs and seniority rights improve productivity?

    Whether you describe it as lowering cost or improving output, productivity is the key issue. Technology has permitted manufacturing and knowledge based service sectors to tremendously improve productivity. It takes far fewer people to do a given piece of work then it did 20 years ago. People expect that to carry over into the public sector as well.

  3. Nobody, at least not me, is proposing denying anyone from "having the incentive" to start new enterprises. There seems to be a common argument that in order for entrepreneurs to be sufficiently "incentivized", as many impediments to profitability (whether it be taxes, regulations, or labor protections) should be swept away. This is, of course, silly when taken to extremes (as many conservatives are wont to do); entrepreneurship does not require that unions be busted, taxes be driven to the floor, etc. as preconditions. Entrepreneurs did fine in the 1950s, they did fine in the 1990s, and were the current tax/regulatory environment shifted a notch to the left, they will continue to do fine. Contrary to the assertions of some of the hysterical voices on the right, we're a LONG way from anything resembling Marxism or other anti-entrepreneurial ideologies, and nobody is proposing we go there.

    Of course, as noted, much of this has little to do with the public sector, where governments are charged with providing services first and foremost. Balanced budgets are important, but profit isn't the primary goal.

    In response to BJCefola: Technology improvements have improved much public work as well. Public offices have fewer clerical staff, public works department have better tools, so many of the same productivity improvements deriving from technology are found in the public sector as well. Public employee unions are not successfully resisting the deployment of technology which might make certain jobs redundant.

    As an anecdote, my father is a retired postal worker and a proud union man; he and his colleagues at the PO would often complain about automated mail sorting devices and other machinery designed to automate work done by hand. (He's full of horror stories about the machinery eating people's mail). But the APWU never was able to successfully prevent the deployment of this sort of technology. Of course, federal employees are prohibited from striking, which may have something to do with it...

    Will's suggestion, at any rate, doesn't seem designed to address any specific grievances, other than "public employees have too much power and make too much money; here's my proposal so that their piece of the pie will shrink". But proposals to knock public employees down a peg for the (alleged) benefit of the broader poor and middle class ring hollow, when the wealthy's share is growing by leaps and bounds.

  4. Scotty,

    "and return the windfall to taxpayers". Unh-unh, my friend, they want to "return" the windfall from education privatization to their sponsors in corporations, especially local S-Corps.

    It will cost MORE -- it ALWAYS does -- for private contractors to provide a professional service than it does for the government to provide it itself. Now things like refuse collection, road maintenance, and transit operations may indeed be cheaper using abundantly available indentured servants instead of civil service incumbents.

    But the truth is that most people who teach could probably get a more remunerative position in the private sector, but they LOVE to teach! After all, these days -- at least in the Blue states -- they all have Masters' degrees or they get booted.

  5. Anandakos wrote:

    "and return the windfall to taxpayers". Unh-unh, my friend, they want to "return" the windfall from education privatization to their sponsors in corporations, especially local S-Corps.

    Shhh.... you're not supposed to tell. :)

    More seriously, getting a piece of the action is often times a motivation for privatization, though it is seldom touted as one, for obvious reasons. But it's not the only reason. At any rate, division of the largess involved is often times the motivation for these sorts of arguments.

    Many people opposes public employee unions because they think public employees get too big of a slice of the pie. This includes many lower-income folk, often a few notches down the ladder, who seem to believe that Only If public employees were knocked down a peg, their lot may improve. This is usually not the case, however; the bulk of any "recovered" wealth usually ends up in the pockets of the well-to-do.


Keep it clean, please