Do Public-sector Unions contribute to state budget problems?

Last week, I had lunch with a friend and we were talking about the pressures felt by public-sector unions as states attempt to balance their budgets. "If we get a union protest coming here from Wisconsin," my friend said, "we're in trouble." Ah, yes. Wisconsin Gov. Scott Walker's successful attempt to break the back of public-sector unions is the current front in the battle over public-sector pay and compensation. Some tend to cast this as a battle of good vs. evil (although which side is which role depends on who you're talking to). Having been in public education for over 30 years I can say without reservation that I never believed in teacher unions and never belonged to one. I have always believed that teachers were about children and not money. In fact I passed a rather lucrative opportunity when I selected education as my profession.

So I thought it was refreshing to read a column in the usually liberal New York Times that offered a thoughtful and nuanced look at the issues at stake. There are several important points involved and one has to do with an inherent problem with public-sector unions, but the other point is that states' budget problems are far bigger than just employee annual compensation. The elephant in the room so to speak is the states' unfunded liabilities with the public retirement funds and Healthcare. These two monsters are going to put those states, that did not set aside funds to cover such massive programs, into bankruptcy.

Here's an excerpt from the Times article:
"Even if you acknowledge the importance of unions in representing middle-class interests, there are strong arguments on Governor Walker's side. In Wisconsin and elsewhere, state-union relations are structurally out of whack. That's because public 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.

The debt problems before the tax payers are huge. Even in Wisconsin they cannot be addressed simply by taking on the public sector unions. Studies done in North Carolina and elsewhere suggest that collective bargaining only increases state worker salaries by about 5 percent or 6 percent. That's not nearly enough to explain current deficits, therefore, we have to consider the retirement and healthcare packages. There are many states without collective bargaining that still face gigantic debt crises".

So if the New York Times prints an article that is not in total agreement with the labor unions them you know that unions are in difficulty. However, it is apparent that one factor still remains and is very important and that is tax payers don't have a place at the bargaining table and they are expected to pay the bill. Seems like a situation of taxation without representation!

Recently congress was requesting files from Obama and he refused. Stating that this speedy release of documents is not required by the current Presidential Records Act and might have been impossible under an executive order issued by former President George W. Bush. That order allowed former presidents, vice presidents, and their heirs to withhold the release of documents indefinitely by claiming executive privilege.

On his first day in office, President Obama repealed the Bush executive order, but a future President could just as easily change it back or add new impediments to the timely release of an Administration's records. Therefore; it is possible that our new president could do the same and repeal or change President Kennedys Executive Order 10988, which gave federal workers the right to organize in unions. This would in effect "kill the bill" and do away with or change public unions as we know them today.

There are a large number of people who think that pay and benefit increases for public unions must be decided by a vote of the electorate. This would take congress out of the equation and make it impossible to show favor to gain votes! Another item to change is, not allowing public unions to donate to political parties with the membership dues. Either idea would help reduce the current problems that exist within public sector unions.