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Why Government Employee Collective Bargaining Must Be Reformed Now

Op/Ed from Bob Williams article on State Budget Solutions on June 5, 2012.

Posted 12/30/2012

There are three important lessons from the Wisconsin collective bargaining battles over the past eighteen months:

1. The power of the government-sector unions and their impact on elections is greatly overestimated. With a victory for Gov. Walker, Wisconsin Government employee union will have suffered their fifth major defeat since March 2011.

2. When given a choice, government employees will quit their union in large numbers. 3. Government employees’ salaries and benefits, particularly pensions, are financially unsustainable in most states and collective bargaining reform is needed.

This paper outlines the problems with government-sector collective bargaining and lists a series of collective bargaining reform options; and has background information on the history of federal government-sector collective bargaining.

1. The power of the government-sector unions and their impact on elections is greatly overestimated. Wisconsin Government employee union suffered their fifth major defeat since March 2011 last night.
May 8, 2012 their candidate, Kathleen Falk, was defeated in Democrat primary for candidate to challenge Gov. Walker in June recall election. June 5, 2011-Their attempt to get control of the State Senate by recalling four Republican State Senators failed. April 5, 2011. Their candidate, JoAnne Kloppenburg, was defeated in a race against incumbent Justice David Prosser. March 2011. Defeated in their attempt to stop the Budget Repair Bill which included the collective bargaining reforms.

2. When given a choice, government employees will quit their union in large numbers.
The experience in five states clearly shows what happens when workers have a choice about union representation.

a. Washington State: Voters approved a “paycheck protection” law in 1992. The law stated that employees must give annual written consent before unions could collect money for political activity. Before passage, approximately 82 percent of the members of the Washington Education Association contributed to the union’s political action committee. After the law’s first year of implementation only 11 percent of teachers contributed to the union’s political fund.

b. Idaho: In 1997, Idaho lawmakers required political committees to get annual written consent from workers before obtaining contributions through automatic payroll deductions. According to news accounts, the number of union members contributing to union political committees dropped by 75 percent.

c. Utah: In 2001, the Utah Legislature adopted the Voluntary Contributions Act. The law banned public agencies from diverting employee wages to political entities, and it required public sector unions to collect funds through voluntary member contributions. Before the law was adopted, about 68 percent of Utah Education Association (UEA) members made annual contributions to its political action committee. After implementation, the number of contributors fell to 6.8 percent-a 90 percent drop-off in teacher contributions.

Another government union, the Utah Public Employees Association, was forced to shut down its PAC after deficit spending for several years. The funding decline was so serious union officials had to resort to absurd stunts to cajole members into contributing. At the UEA’s 2005 annual meeting, UEA president Pat Rusk rode into the auditorium on a motorcycle, dressed in leather pants and vest. Her t-shirt was emblazoned with a candid plea: “Girls Just Want to Have Funds.” This was particularly significant in Utah because it is also a right-to-work state. Public employees only pay union dues if they want to, but those same union members overwhelmingly refuse to contribute even one dollar to their union’s political spending.

d. Indiana: In 2005, Indiana Governor Daniels signed an Executive Order eliminating collective bargaining for state employees. At that time there were 16,408 dues paying union members. Today only 1,490 out of 28,700 are dues paying union members- 95 percent chose not to pay union dues when given the choice.

e. Wisconsin: The Wisconsin American Federation of State, County and Municipal Employees (AFSCME) say its membership fall from 62,818 in March 2011 to 28,745 in February 2012. 6,000 of the 17,000 members of the American Federation of Teachers (AFT) quit the union. Robert Chanin, the former general counsel for the National Education Association, once said in U.S. District Court: “It is well-recognized that if you take away the mechanism of payroll deduction, you won’t collect a penny from these people, and it has nothing to do with voluntary or involuntary. I think it has to do with the nature of the beast, and the beasts who are our teachers …. [They] simply don’t come up with the money regardless of the purpose.”

3. Government employees’ salaries and benefits, particularly pensions, are financially unsustainable in most states and collective bargaining reform is needed.
Government employee collective bargaining laws must be reformed. The free ride government unions receive must end. Government employees’ pay, health care and pension plans are bankrupting state and local governments across America. Collective bargaining gives unions unchecked power to influence politics and shape government policy. Let me be clear THERE IS NO RIGHT TO COLLECTIVE BARGAINING FOR GOVERNMENT EMPLOYEES. Government employees have the fundamental right to associate together, but there’s nothing in the U.S. Constitution that says their government employers MUST negotiate with them.

In fact, the U.S. Supreme said as much: “The public employee surely can associate and speak freely and petition openly, and he is protected by the First Amendment from retaliation for doing so. But the First Amendment does not impose any affirmative obligation on the government to listen, to respond or, in this context, to recognize the association and bargain with it.” Smith v. Arkansas State Hwy. Employees Local (1979) (emphasis added). More recently, the U. S. Supreme Court described government union bargaining as a privilege or entitlement. In Davenport v. Washington Education Association (2007), the Supreme Court said: “it is undeniably unusual for a government agency to give a private entity the power, in essence, to tax government employees.” Later the court described collective bargaining as “an extraordinary and totally repeatable authorization to coerce payment from government employees. . . .” Be definition “rights” cannot be taken away.

Collective bargaining for government employees is a privilege granted by legislation. Thus, government employees who enjoy this privilege can have it restricted or repealed at any time. All it takes is a new statute. All citizens have the right to associate in groups to advocate their special interests to the government. But it is something entirely different to grant any one interest group special status and access to the government decision-making process. When government enables and strengthens unions, dues-paying members are coerced flourish, filling union coffers.This allows government sector unions to use big money and political clout to elect favorite political candidates, almost always Democrats. Union bosses then get to negotiate with the very public officials they usher into office.

Government sector unions are among the most powerful special interest groups in America. In the 2010 elections, the American Federation of State, County and Municipal Employees (AFSCME) was the biggest outside spender with total contributions of nearly $90 million. More than 98 percent of this money went to Democratic candidates and causes. NEA spent $40 million and AFT spent $16 million. Government unions in Wisconsin said they agreed to concessions so there was no need for the bill. Meanwhile they did everything they could to delay the final passage of the bill so they could get their contracts renewed for up to three years. What are the preliminary results from Wisconsin? School districts are now looking at millions of dollars in surpluses as opposed to projected deficits before the new collective bargaining law was passed.

The impact on the two major unions has been dramatic. The Wisconsin Education Association Council laid off 42 (or 40%) of its employees because of the decline in mandatory membership. In September the government unions representing about 50,000 workers opted not to file notice of an intention to hold the votes required by the new collective bargaining law. This means the state will no longer be obligated to bargain with its largest government employee unions. The problem with the Wisconsin bill wasn’t that it was damaging to public employees. No, Big Labor opposed the bill because it was bad for Big Labor. The bill gave workers the ability to annually opt in to union representation, rather than being forced to pay union dues as a condition of employment. It also got the state out of dues-collection by prohibiting government agencies from collecting union dues through the payroll system. Only unions and the Internal Revenue Service can take money from a worker’s paycheck without their permission.

However, in order for unions to exercise this “privilege” government must authorize it. A larger question is why should unions be allowed to use government to collect dues? Labor bosses know that government unions would disappear overnight if employees were given a choice about union services. Government unions enjoy their current, powerful state because of coercive policies that force employees to pay tribute to the union.

Following are the problems with government sector collective bargaining:

1. Monopoly Power.
Private-sector bargaining is constrained by competition. If labor costs go up in the private sector, prices rise accordingly, and consumers can take their business elsewhere. That dynamic (usually) provides a sobering check on new competitive demands. But the government has a monopoly on most public services, so there are no market pressures to keep costs down. If labor expenses go up in the public sector, tax increases are the usual “remedy.” And unless the “consumer” wants to move out of the state, he must pay the new prices.

2. Adversarial nature of collective bargaining.
Labor and management represent two independent, opposing sides. But in the public sector, “management” isn’t nearly as independent. It consists of elected officials for whom replacements can be found – and whose political opponents can be funded – if unions become displeased.

3. Globalization.
Private-sector negotiations are constrained by the cost of labor in Mexico, China, and India. Private-sector management has an irreducible interest in keeping labor costs on a par with competitors. Public-sector unions contribute millions to the campaigns of the very individuals who will be negotiating the contracts with the unions.

4. Stability of Management.
Top-level management in the public sector generally changes much more frequently than in the private sector. This affords public sector unions enormous strategic bargaining advantages not replicated in the private sector.

5. Difficulty in Discipline and Discharge.
Labor lawyers often joke that to sustain a discharge of a public-sector employee, he must be caught on tape shooting his supervisor in a public square.

6. Conflict between public records transparency and collective bargaining secrecy.
The result: Those who are required to pay the bill – taxpayers – have nearly zero input or insight into the process. Both sides’ initial proposals are developed in secret, they are exchanged in secret, they are modified and traded in secret and they are resolved in secret. And just when you’d think that at least the final deal would be put before taxpayers, that doesn’t even happen. Isn’t it interesting that the agreement is subject to a ratification vote by the union members, but the taxpayers get no such say?

7. Fact Finding, Mediation, and Arbitration.
Public sector collective bargaining agreements can be affected by third parties who have the authority to peg contract terms to the prevailing practices of other public sector contracts in the state. This can amplify and perpetuate the worst practices and the highest costs for employers throughout the state. Collective bargaining curbs reform spread across the country in the past two years – 820 bills were introduced this year on collective bargaining according to the National Conference of State Legislators. The left is concerned about the 11 states with Democrat Governors who pushed for labor concessions. Democrat Governors in California; Connecticut; Hawaii; Illinois; Maryland; Massachusetts; Minnesota; New Hampshire New York; Oregon; and Washington pushed for collective bargaining reform.

Following are our TOP 10 Reform Ideas for Government Unions

1. Voluntary association.
Public employees covered by a government union must pay dues as a condition of employment, even if they don’t want to join the union. No one should be forced to pay a union as a condition of employment. Give workers a choice in the matter. This respects the freedom of association of employees and ensures that unions can effectively represent the people who actually want their services.

2. No forced political speech.
Government unions can use mandatory dues collected from employees for political and lobbying activities. No one should be forced to pay for another’s political views. Require unions to get permission from employees before using their mandatory dues for political purposes. When employees are given a choice about supporting union politics they often choose to keep their money. After Washington adopted this policy, voluntary contributions from teachers to their union dropped from 80 percent of the membership to a low of 4 percent. In Utah, contributions to the teacher’s union political fund dropped from 68 percent of teachers to less than 7 percent.

3. End union monopolies.
Public employees should be permitted to choose from an array of unions or professional associations. If you open the phone book to find a doctor, mechanic or painter you’ll find dozens of options. But unions are shielded from market forces and get to wield a monopoly over workers. Also, employees should be free to associate together, but forcing the state to deal only with a government union shifts responsibility and authority away from elected officials and over to special interest groups that are interested only in gaining more power. growing government.

4. No state collection of union income.
Government unions can have political contributions deducted directly from a worker’s paycheck. The state shouldn’t be in the business of collecting political funds for special interest groups. In Ysursa v. Pocatello Education Association, the U.S. Supreme Court affirmed that states can prohibit the collection of union political funds through government payroll systems. Similarly, government unions collect general dues from employees through payroll deductions. No other business or association enjoys the privilege of having the state collect its income from customers. If employees desire a union’s services, they’ll be willing to pay for it. Get the state out of the business of automatically collecting dues for the unions.

5. Financial transparency.
Require government unions to disclose financial information to the public and their members, including union officer salaries and itemized income/expenditure reports. This is currently required of private unions, but doesn’t apply to unions that represent public employees. Public employees are forced to pay union dues; they have a right to know how the money is used.

6. Open union negotiations up to the public.
Government union contracts are negotiated behind closed doors. Lawmakers, employees, and taxpayers are left out of the process. Open collective bargaining sessions to the public under the state’s sunshine laws.

7. Require First Amendment notices.
Public employees have the right to get a refund of money the union spends on political activity or other non-bargaining activities. Government unions are happy to keep this information quiet. Require unions to notify employees of their opt-out rights.

8. No public funds for union’s collective bargaining costs.
When a union negotiates with the government, the union often convinces the state to pay for a portion of the it’s bargaining costs. But why? Public employees are already required to pay for the union’s negotiating costs as a condition of working for the state. Prohibit the use of public resources for the union’s expenses and let each side at the negotiating table cover its own costs.

9. Hold union re-elections.
Once a government union is made the representative of a group of public employees it enjoys near-eternal security. It is very difficult for employees to replace or remove the union if they are dissatisfied. Unions should face the same requirements lawmakers do and earn their position through frequent re-election campaigns.

10. Ban political donations to union’s “employer.
Government unions use mandatory dues paid by workers to elect labor-friendly politicians who will serve as their “employers” at the bargaining table. Eliminate this conflict of interest by prohibiting unions from contributing to campaigns where the elected official negotiates across the table – whether in gubernatorial races or campaigns for local school board. Excessive benefits occurred when politicians realized they could gain union support by providing wage and benefit increases and delaying the cost of the benefits to the future when they were not longer in office.

History of federal government collective bargaining.

1919 Boston Police Strike:
Gov. Calvin Coolidge, in the name of defending “the sovereignty of Massachusetts, fired all the strikers and brought in state troopers to patrol the city, and recruited a new police force from demobilized soldiers. Many liberals shared Coolidge’s belief that government employees should not be allowed to unionize, or at least not engage in private-sector style unionism.

President FDR:
In 1937 President Franklin D. Roosevelt, in a letter to the head of a federal employees group, proclaimed that: “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 bind the employer … The employer is the whole people, who speak by means of laws enacted by their representatives…” This is the essence of the sovereignty argument against government-sector unionism, that collective bargaining undercuts the inherent power of the state as a sovereign representative of the people, and therefore is anti-democratic.

President John F. Kennedy:
President Kennedy gave federal government employees collective bargaining powersrights.

President Carter:
An untold story is how the 1978 Civil Service Reform Act placed limits on collective bargaining and resulted in union membership becoming optional for most federal workers, and dues payments were no longer compulsory. President Carter and a Democrat Congress realized they needed to curb the influence and power of federal workers unions. Today government workers in Wisconsin have more collective bargaining power rights than federal employees. If federal workers had the same bargaining powerrights as Wisconsin state employees currently have, President Obama would have been unable to freeze salary increases to help hold the line on spending.

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