Sunday, June 13, 2010

Public Employee Unions at a Time of Fiscal Stress

In our chapters on interest groups and the bureaucracy, we discuss public-employee unions. They are much in the news lately, as salaries and benefits have come under scrutiny because of government's fiscal problems. See here and here.

Transparency advocate Peter Scheer writes that unions pay a price for abandoning public deliberation in favor of closed-door deals:

In California, government-sector unions, once among the most entrenched and powerful labor groups in the country, mainly have themselves to blame. For most of the postwar period, they were a force for progressive change, prospering by winning over public support for their agenda.

In the 1970s and '80s they backed laws like the Public Records Act and Brown Act to make state and local government more transparent. Because unions enjoyed broad-based political support, efforts to enhance government accountability and responsiveness to voters were seen - correctly - as benefiting the unions and their members. The public interest and public employees' interests were aligned.

But the unions switched strategies. Although the change was gradual, by the 1990s, California's government unions had decided that, rather than cultivate voter support for their objectives, they could exert more influence in the Legislature, and in the political process generally, by lavishing campaign contributions on lawmakers. Adopting the tactics of other special-interest groups, government unions paid lip service to democratic principles while excelling at the fundamentally anti-democratic strategy of writing checks to legislators, their election committees and political action committees.

While not illegal (in fact, such contributions are constitutionally protected), the unions' aggressive spending on candidates put them on the same moral low ground as casino-owning tribes, insurance companies and other special interests that have concluded that the best way to influence the legislative process is to, well, buy it.

Dale Kasler writes in the Sacramento Bee that public employee unions may not continue to meet with success:

In an effort to reduce the burden on their budgets, at least a dozen states have passed laws this year overhauling their retirement systems. Some have created less-generous pensions for newly hired workers. Others have increased the amount of money employees must pay into their pensions. Some have done both.
The trend is being driven by big budget deficits and the 2008 stock market crash, which left many pension plans underfunded. Meanwhile, sympathy for public employees' pensions has waned as anxious voters in the private sector struggle with turbulent 401(k) plan results and frozen pensions.
Arizona, Mississippi and Virginia are among those that instituted lower retirement benefits for newly hired workers. Even union-friendly states like Michigan and Illinois, their budgets depleted by the recession, reduced pensions for new hires.