Day By Day

Thursday, February 24, 2011

Public Sector Unions are Different

David Brooks explains why public sector unions are quite different from the old industrial unions.
[P]ublic sector unions and private sector unions are very different creatures. Private sector unions push against the interests of shareholders and management; public sector unions push against the interests of taxpayers. Private sector union members know that their employers could go out of business, so they have an incentive to mitigate their demands; public sector union members work for state monopolies and have no such interest.

Private sector unions confront managers who have an incentive to push back against their demands. Public sector unions face managers who have an incentive to give into them for the sake of their own survival. Most important, public sector unions help choose those they negotiate with. Through gigantic campaign contributions and overall clout, they have enormous influence over who gets elected to bargain with them, especially in state and local races.

As a result of these imbalanced incentive structures, states with public sector unions tend to run into fiscal crises. They tend to have workplaces where personnel decisions are made on the basis of seniority, not merit. There is little relationship between excellence and reward, which leads to resentment among taxpayers who don’t have that luxury. 
Divisiveness, resentment, fiscal crises, poor performance, unaccountability, corruption of the political process..., all these inevitably result over time from the establishment of public sector unions. Silent Cal knew this. So, too, did Reagan. We must learn from their example. 


Jonah Goldberg explains why public employee unions should  be broken here.

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