Look for the Union Label — 14 November 2011

The labor movement won a big victory in last Tuesday’s off-year election.  Union workers will be paying the cost for years to come.

Off-year elections are interesting – they offer a way of testing the national state of mind in a way that opinion polls don’t.  People can say anything to a pollster; when they are in the voting booth, it’s themselves and their conscience – and that little punch card.

And this survey of the general mood is not one that brings loads of comfort to Democrats at the national level.  In the first place, look at Virginia – where despite massive administration efforts, a state that Obama took by seven points has gone a deeper shade of red.  Every incumbent Republican won; meanwhile, the GOP picked up enough House seats to give them their biggest margin in history, and control of both houses and the governorship for only the second time since the Civil War.

Then there’s Ohio.  One measure on the ballot was a referendum against the individual mandate provision of Obamacare.  This was largely symbolic, since Federal law trumps any state provision.  Nevertheless, the measure passed by stunning margins – sweeping all 88 counties in the state, winning with a final tally of 66-34, nearly two-to-one.  Even if it doesn’t derail Obamacare, this vote can’t be encouraging to the White House that their signature legislative achievement remains so widely disliked.

But the measure the progressives are focusing on – and the media seemed to find the main story – was the referendum rejecting Governor John Kasich’s measures to curb the bargaining clout of public sector unions.  This also fell by a large margin – 61% voted with the unions – in what the labor movement is calling their biggest victory in decades.

There is probably less there than meets the eye.  For instance, according to a recent Quinnipiac poll, Ohioans favored curbing the benefits of public sector unionistas – 60% favor making them pay at least 15% of their health care benefits, and 57% they should contribute to their pensions, like everybody else.  The curbs on collective bargaining were where voters drew the line – even as many as 20% of Republicans opposed these, perhaps because, unlike in Wisconsin, these constraints covered police and firemen.

It was fascinating to see labor leaders like the AFL-CIO’s Richard Trumka leading the charge against this measure.  Here as well as in Wisconsin last February, union bosses made the contest seem to be one between Republicans and working people.  Actually, most workers’ interests are on the side of the Republicans.

Private sector unions are one thing.  There, there is a reasonably-balanced tension between bosses and workers.  Workers will say, give me more; bosses will say, if we do we’ll lose competitiveness and market share, and we’ll all suffer.  Management represents the shareholders, and they will lose their jobs if they don’t represent those interests well.

How different it is with public sector unions.  Here the workers say, give me more, and I will see to it that you are re-elected.  The politician-manager is inherently conflicted.  If he represents the interests of taxpayers like he is supposed to, the union workers will do their best to unseat him.  If he caves to the union, he gets a big assist in the next election, and the price is paid by taxpayers a generation down the road.  It’s a naturally corrupting situation, and plenty of corruption ensues.

Unions are tremendously powerful.  Of the all-time top donors to political parties between 1989 and 2012, nine of the top fifteen are unions.  Number three all-time is AFSCME, the public employees’ union.  Not only do they wield a big purse – they also produce foot soldiers by the thousand to knock on doors and bring voters to the polls.  What politician would not want these people on his side?

Except they are all on one side – only 1% of the donations from AFSCME over the last thirty years have gone to Republicans.  It’s one thing if company employees take part of their paychecks and promote union causes with it.  It’s quite another for money from taxpayers – of all persuasions –  to be circulated through the hands of public unions to support Democrats for office.

And the workers don’t even handle it.  To facilitate the money flow, government payroll clerks deduct union dues and send it to the union before the worker even sees it.  This is one of the features that has been successfully limited elsewhere, and was part of the Ohio bill.  Not only is it easy cash flow for the unions (and hence the Democratic Party), it is also money they wouldn’t otherwise get.  In Colorado, Utah, Indiana, and Washington, laws were passed that ended automatic deduction of dues, and dues payments fell between 80% and 90%.

So the scam is neat: governments skim taxpayer money to pay unions dues, which in turn is used to re-elect those politicians, who in turn agree to unreasonable and unsustainable compensation, mostly in the form of over-generous pensions the cost of which is borne by future taxpayers who are not currently voting.

At least in the private sector, if management gives away the store to buy labor peace, there is an ultimate comeuppance: look at the airlines, the steel companies, the auto companies.  In all cases, their foolish promises to unions back when times were flush undermined their ability to compete in a highly competitive world.  The result – bankruptcies, restructuring, layoffs.

There is no competition for many public sector-provided services.  The only sanction for a badly run state is migration.  We are seeing it in places like California, the erstwhile Golden State, which has lost population every year since 1990.  But shy of that, an overpaid, unmotivated, sullen public work force just looks like so many DMVs.  There is no penalty for the pol who says yes.

This symbiotic cycle often breeds a culture of casual corruption that is mind-boggling to the outsider.  Teachers often get a salary boost in the last year of employment to trigger a higher pension payment for the rest of their lives; 82% of California state troopers are “disabled” in the year before their retirement; 90% of Long Island Railroad employees retired with a disability.  Meanwhile, the Los Angeles school system succeeded in firing only five teachers out of 33,000 over ten years.

Work rules, job protection, pension abuse, cronyism, favoritism – all these pathologies fester in an environment where public unions take taxpayer money and use it to elect their bosses.  The result is a system of marvelous inefficiency and expense.

The battle over public unions’ privileges is not between workers and Republicans.  It is between those who are looking out for the taxpayers and those who want to continue to fleece them.  This effort may have suffered a setback in Ohio; but while it was a victory for Labor, and perhaps even for a few hundred thousand public workers, it was no victory for the millions of people – union members included – who will be footing the bill.

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