All for One? The Relationship of Public and Private Unions

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Welcome to Politics Bites, where every afternoon at It's A Free Country, we bring you the unmissable quotes from the morning's political conversations on WNYC. Today on The Brian Lehrer Show, E.J. McMahon senior fellow for Tax and Budgetary Studies at the Manhattan Institute and director of the Empire Center for New York State Policy, and Dean Baker, co-director of the Center for Economic and Policy Research, discussed the public perception of public unions and if they should be held in equal standing with private unions.

The Wisconsin bill to limit collective bargaining rights for public sector unions passed in a seconds-long vote in the Wisconsin State Assembly at one in the morning on Friday. E.J. McMahon of the Manhattan Institute and Dean Baker of the Center for Economic and Policy Research, discussed what the implications may be for workers in private unions.

Baker said public employee unions are not to blame for the problems faced by the country today.

We’ve had a remarkable piece of jujitsu here. We’re sitting here, in the worst down-trend since the Great Depression because of an incredible run of Wall Street greed. We have these Wall Street guys who are back up on their feet making incredible profits, paying themselves huge bonuses… and instead of being mad at Wall Street, we’ve got people angry at school teachers and firefighters. We have the data on this — the compensation of public sector employees is actually somewhat less than private sector workers. So what public sector unions are about is getting workers their share, about ensuring them some security in their jobs. I think they’ve done a good thing for their workers. But the idea that some how their wages and benefits are out of line with the private sector — that doesn’t correspond to reality.

Baker thinks that public and private sector unions are suffering from the same trend. Private sector unionization used to be twenty percent as recently as 1980, but policies and economic trends since then have reduced participation to seven percent, weakening the bargaining position in the private sector and causing a decrease in pensions, wages and benefits. Now, he says, the political effort is to target public sector workers, which will further weaken unions in general. 

McMahon disagrees that the fates of public and private sector unions are intertwined.

There never actually has been that much of a similarity other than the name…Government is a monopoly, and public sector unions essentially are a set of cartels negotiating with a monopoly under rules, in many states, which are favorable to their interest.

McMahon sees the legislative effort in Wisconsin not as a tearing down of union benefits, but merely a request for public workers to contribute more. He said that is the case in almost half the country now, and in the federal government, workers are able to advocate for their working conditions without a union or collective bargaining. He believes that if Walker’s bill prevails, Wisconsin public workers will still have slightly more bargaining powers than federal government workers did in 1962. He said federal workers now don’t bargain wages and benefits, yet in his opinion, they are doing well. He sees no reason state public workers wouldn’t fare the same.

Baker doesn’t think this is congruent with the data. He said while federal workers earn slightly less now than Wisconsin public employees, if Walker’s proposal is passed, their compensation will drop below their private sector counterparts. 

What’s more, over the long-term, you’re going to get fewer people, or people with fewer skills applying for those [teaching] jobs. As it is now, you don’t see the top students at Harvard rushing to become teachers in the private sector. They might rush to go to Wall Street, a lot of them do that, but they aren’t lining up for those jobs. If you cut the pay and benefits ten or twenty percent — yeah, you could do that, you’d still find bodies, but that’s not going to be good public sector.

A caller from Ramsey said that people in the private sector, who are angry that public workers get benefits when private sector employees do not, are angry about the wrong thing. 

They should be asking, why don’t we have these benefits? Why does my CEO make $220 million a year, and I don’t have any decent benefits? That’s the question that should be asked.

McMahon thinks the issue really is limited to public sector unions, rather than an attack on unionization as a whole. When management makes reasonable requests in the face of budget shortfalls, he said, public employee union's inflexibility translates into uncooperativeness.

The problem with the public sector labor set-up in many of the states… is that the business model of public sector unions is not flexible. They’re intensely political organizations in themselves... The norm tends to be a great deal of resistance to anything in the way of real concessions…When you go to unions and say, look we need concessions, because the bottom has dropped out of our revenue and we can’t afford the deal we made with you, and you say if we don’t do it we’re going to have to lay off a lot of people, unions generally say ‘go ahead and lay them off.’”

Baker said treating public and private sector unions as different and unrelated is an over simplification.

Public sector unions do not enjoy monopolies…Most public sector services compete with private sectors services, so the idea of a monopoly is absurd… Unions represent workers, and there are upsides and downsides to that.

While Baker agreed that public workers receiving higher benefits does mean more taxpayer dollars, he argued that the ensuing higher quality services also has a real value. He said both public and private sector workers value the security that unions provide.

While it is true that some workers have been able to get rights despite not having a union, Baker said that is no argument against institutionalizing those protections through unionization. The two disagreed over the meaning of 'right to work' laws as well. Baker explained that unions have an obligation to fight for all the members of a bargaining unit, not just the ones who support the union, and therefore it is right for the workers to pay equally for equal protection. McMahon argued that it is unfair to force workers who disagree with their unions to pay dues.

Why should I be compelled to pay money to a group I don’t agree with and who I don’t want to belong to?