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Gutting Public Unions

Daniel DiSalvo's self proclaimed 'non-partisan' attack on public unions as greedy, inefficient and undemocratic, 'Government Against Itself,' has been welcomed by the right and granted recognition for its 'scholarship' even by some on the left. Not so fast, argues William P. Jone, in a deeper look into the economic realities and history of public unions, and the place of public unions in our democracy, DiSalvo has confused the symptom with the disease.

Wisconsin public employees protest right-to-work legislation, 2011,Matt Baran via Flickr

Government Against Itself: Public Union Power and Its Consequences
by Daniel DiSalvo
Oxford University Press, 2015, 304 pp.

Since the enactment of Act 10, the law that sparked massive protests four years ago in Wisconsin and that now forms the centerpiece of Governor Scott Walker’s bid for the GOP presidential nomination in 2016, average weekly wages for employees of that state have barely kept pace with inflation. And, with increased responsibilities for health insurance and pension costs, many state employees saw their take-home pay decline by 10 percent or more between 2011 and 2014. Leah Lipska, president of Local 1 of the American Federation of State, County, Municipal Employees (AFSCME), which was founded in Madison in 1932, told the New York Times that, by 2014, she had been forced to apply for food stamps to support her family.

Walker’s law limits collective bargaining contracts to one year and requires unions to win a majority of all eligible voters—rather than the more common standard of all votes cast—in annual certification elections. Even if unions cross that hurdle, public officials are prohibited from deducting union dues from paychecks, negotiating over benefits or working conditions, or raising wages faster than the rate of inflation. Lest workers grow impatient with that administrative quagmire, Act 10 allows the governor to declare a state of emergency during which state employees can be fired for participating “in a strike, work stoppage, sit-down, stay-in, slowdown, or other concerted activities to interrupt the operations or services of state government, including specifically purported mass resignations or sick calls.” Stripped of any real power, unions watched helplessly as their members turned to other sources of support. “I don’t see the point of being in a union anymore,” one teacher told the Washington Post, explaining that he sought a part-time job to make up for the losses. “The money I’d spend on dues is way more valuable to buy groceries for my family.”

Unions greeted Act 10 as a potentially fatal blow, not just in Wisconsin but also across the country. The year 2010 was the first in history that public employees accounted for more than half of all union members in the United States. This was not just due to the expansion of government and the decline of manufacturing but also to the steady erosion of legal protections for unionization and collective bargaining in the private sector. Unions won early victories in 2011, when voters sided overwhelmingly with a referendum that overturned an Ohio law similar to Act 10 and forced Walker into a recall election in Wisconsin. Hopes faded, however, as Walker won the recall by a larger margin than his original election, survived a series of legal challenges to Act 10, and used those victories to deepen his party’s majority in the state legislature. In 2012, Indiana became the first Midwestern state to pass a right-to-work law, which bars unions from charging workers to represent them, followed shortly by Michigan and Wisconsin.  Meanwhile, a series of legal cases imposed similar restrictions on public sector unions nationally. In the fall of 2015, the Supreme Court will rule in Friedrichs v. California Teachers Association, a case that challenges a unions’ ability to charge any fee for representing or negotiating on behalf of a public employee.

Given the central role that public-sector unions have played in mobilizing voters and lobbying elected officials to defend public investment in education, health care, and other social services, these were setbacks not just for organized labor but for anyone who believes the state should ensure access to such goods.

However, according to Daniel DiSalvo, a political scientist at the City University of New York and a senior fellow at the Manhattan Institute (a libertarian think-tank), Walker’s law stands as a model for addressing “one of the diseases most incident to contemporary American democracy.” Before 2011, he contends, Wisconsin’s collective bargaining law allowed unions to increase wages, benefits, and job protections for public employees, block reforms aimed at making government more efficient, and expand the size of government beyond what taxpayers needed or could afford. Yet according to DiSalvo, the biggest problem was not financial, but that collective bargaining allowed unions to “distort democracy” by giving public employees more influence over elected officials than other citizens.

Government Against Itself carries the scholarly credentials of Oxford University Press, but it hones closely to DiSalvo’s 2011 polemic, Government Unions and the Bankrupting of America. Published in the midst of clashes over public-sector unions in Wisconsin, Ohio, and other states, that pamphlet appeared in a series of broadsides claiming to “make the case for liberty and the institutions of democratic capitalism at a time when they are under siege from the resurgence of collectivist sentiment.” I point this out not to discredit DiSalvo; as a state employee in Wisconsin, I am clearly more invested in this debate than he is. Rather, I offer this as an explanation for his tendency to ignore obvious contradictions in his thesis, rely on scholars who share his ideological background while ignoring those who contradict him, and support his argument through theory and speculation more often than empirical data.

The most obvious weakness of DiSalvo’s thesis is a fact that he concedes: “existing research does not point to a broad generalization that ‘government workers are overpaid (or underpaid).’” He begins the book with the horror stories of “lavish” pension and health care policies that are the stock-in-trade of conservative attacks, but clarifies later that such benefits are neither typical nor generous enough to offset the low wages earned by most public employees. The few studies that show otherwise assign a “market value” to pension plans, which accounts for the greater security offered by defined benefit plans that are more common in the public sector but overstates the actual cost of those plans to employers. Since DiSalvo is concerned about the impact of benefits on public budgets, a more relevant measure is used by national studies, which show that total compensation for public employees averages 4 percent less than that of comparable workers in the private sector. In Wisconsin, before Scott Walker slashed public-sector compensation even further, that disparity approached 5 percent. If unions are the pillaging tyrants DiSalvo claims they are, why would they settle for such meager spoils?

DiSalvo’s shoddy approach to history is exemplified by the epigraphs to his book: President Franklin D. Roosevelt’s warning that “collective bargaining, as usually understood, cannot be transplanted into the public service,” and AFL-CIO President George Meany’s complaint that it is “impossible to bargain collectively with the government.” Like many conservatives, DiSalvo interprets those statements as evidence that “through the 1950s, most politicians, labor leaders, economists, and judges did not believe that collective bargaining was proper in the government arena.” What broke the consensus, he contends, was the empowerment of public employees through civil service laws and increased demand for public services following the Second World War, which “gave politicians the incentive to link arms with the public sector unions and make them bigger and more powerful to increase their own electoral fortunes.” Depicting that alliance in Faustian terms, DiSalvo writes: “It was a revolution with major consequences for American politics, as governments across the country effectively created a powerful new interest group.”

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While Roosevelt justified the exclusion of public employees from the federal law promoting unionization and collective bargaining in the private sector, he authorized alternative forms of collective bargaining in the Government Printing Office, the Tennessee Valley Authority, and other agencies. State and local governments followed suit, and by 1946 the Bureau of Labor Statistics identified hundreds of written agreements between public officials and their employees. In 1948, the American Federation of Labor urged state legislatures to provide public employees with “the same legal rights and privileges” that federal law granted to workers in the private sector. The AFL-CIO reiterated that position after the labor federations merged in 1955, indicating that George Meany’s famous statement, issued the same year, expressed frustration with the continued resistance from public officials rather than opposition to public-sector unions. By 1959, when Wisconsin passed the first statewide law governing collective bargaining in the public sector, the American Bar Association, the International City Managers Association, and the American Civil Liberties Union had all endorsed the position that collective bargaining could and should be “modified to meet the unique needs of the public service.” Even Business Week, noting that unions were growing more rapidly in government than in any other sector, dubbed AFSCME the “Union of the Future.”

The acceptance of public-sector unions stemmed not from the empowerment of government workers but quite the opposite, from the chaotic and contradictory character of the public labor market. Demand for public services expanded rapidly in the 1940s and 1950s, due in large part to the ability of industrial unions to increase wages and benefits for their members. But the exclusion of public employees from federal labor laws meant that their own wages, benefits, and working conditions lagged far behind the rising standards of the private sector. One example is that maids and janitors in New York City’s public hospitals, centerpieces of the postwar welfare state, worked forty-eight-hour weeks and still qualified for public assistance. Such contradictions created an unwieldy rate of labor turnover in public employment, and an over-concentration of women and non-white workers, whose alternatives were constrained by discrimination in the private sector. It also inspired a wave of labor unrest by public employees. AFSCME recorded nearly 200 strikes between 1950 and 1961, most of them by nurses aides, sanitation workers, custodians, and others who enjoyed none of the “job security and prestige” that DiSalvo credits with turning liberal opinion in favor of public-sector unions. Challenging the same misconception in 1959, Business Week noted that while “AFSCME is frequently thought of as a white-collar union,” 70 percent of its members were “blue-collar workers.”

The law that Wisconsin adopted in 1959, and which became a template for federal and state governments across the country, sought to address those contradictions within the framework set out by President Roosevelt two decades earlier. Most importantly, legislators granted public officials wide latitude in excluding certain issues from negotiations and in determining the means of enforcing any agreements. While unions pushed for legally binding collective bargaining contracts, sought arbitration when negotiations broke down, and won “a very limited right to strike” in some states, the system remained, according to legal historian Joseph Slater, “far removed from bargaining in the traditional private sector sense”

You wouldn’t know it from reading Government Against Itself, but a long line of court cases and scholarly studies have assessed the impact of collective bargaining in the public sector. DiSalvo cites legal theorists Harry Wellington, Ralph Winter, and Clyde Summers to claim that public-sector unionism “compromises the sovereignty of democratic government and distorts the democratic process,” but does not tell us that they favored collective bargaining laws that addressed those threats or that their recommendations have informed court cases and legislation since the 1970s. Their concern that unionization might lead to strikes that forced the hands of elected officials was alleviated by evidence that strike activity declined after collective bargaining became routinized and remained more common in states without collective bargaining laws. It is true that collective bargaining improved wages and benefits for public employees, but this tended to bring them in line with comparable workers in the private sector rather than producing inequalities.

Ironically, in conceding that “unionization has tended to reduce inequalities in the governmental workplace,” DiSalvo turns this around to contend that equality “comes at the price of making government work less attractive to the talented and ambitious, reducing productivity, and driving up the costs of government services.” Here too, DiSalvo relies on speculation more than evidence. After half a century of public-sector unionism, for example, Wisconsin ranked thirty-first among states in per capita spending for government employees and thirty-ninth in the relative size of its public workforce.  Nevertheless, while DiSalvo admits that no “scholarly consensus” demonstrates a correlation between unionization and productivity in the public sector, he insists “basic economic theory says that when there is little competition and vague performance metrics in the provision of a good or service, worker productivity will decline.”

Failing to demonstrate that collective bargaining “distorts democracy,” DiSalvo complains that public-sector unions get a “second bite at the apple” by mobilizing their members and contributing to electoral campaigns. At times, this amounts to blaming public employees for voting “at much higher rates than average citizens” and being “the foot soldiers for registration and get-out-the-vote drives in key races.” In contrast to other interest groups, however, DiSalvo charges that “unions are more focused in their drive to influence policy than most other groups” and that collective-bargaining laws “guarantee unions both members and revenue.” Public employees may not be overpaid, he contends, but Scott Walker and others still deserve credit for seeking to reduce their political power.

Ultimately, DiSalvo seems to fault unions for exerting any influence at all. He claims that agency fees, which unions charge to non-members who benefit from collective bargaining contracts, “in effect force a percentage of their members” to join the union. The deduction of union dues or agency fees from paychecks, a service also often offered to private charities and clubs, in his view, privileges unions unfairly. His critique of electoral spending by unions relies heavily on studies by political scientist Terry Moe, which show that teachers’ unions outspent “other interest groups” in twenty states and ranked first or second in thirty. Only in a footnote, however, do we learn that Moe, a senior fellow at the conservative Hoover Institution, “excluded political donations by party committees, candidate PACs, and wealthy individuals” from his study. DiSalvo is less concerned with spending by corporations and wealthy individuals, he explains, because they are more fragmented and less directly invested in the specifics of public policy, and because they tend to spread their donations more evenly between Democrats and Republicans. “Businesses, too, are undoubtedly self-interested, but the market helps ensure that their pursuit of their private interests yields public benefits in the form of innovative products, new jobs, and economic growth,” he concludes, adding that “[g]overnment workers’ unions offer few if any such generalized benefits.”

The solution, DiSalvo contends, is to reverse the Faustian bargain that led Wisconsin and other states to legalize collective bargaining in the public sector. This means excluding benefits and working conditions from collective bargaining, capping wages at the rate of inflation, and banning agency feeds and dues deduction—all measures pioneered by Scott Walker and being adopted by elected officials and judges across the land.

History suggests, however, that DiSalvo has confused the symptom with the disease.  Public-sector unions emerged to balance the interests of public employees with what President Roosevelt called “the special relationships and obligations of public servants to the public itself and to the Government.” Disempowering Leah Lipska and her co-workers will not resolve that tension, but instead force them to address it by seeking public assistance, neglecting their duties, or leaving public service. That may please small government ideologues like DiSalvo and Walker, but it is difficult to see how it serves the interests of society as a whole.

William P. Jones, Professor of History at the University of Wisconsin Madison, is author of The March on Washington: Jobs, Freedom and the Forgotten History of Civil Rights (W.W. Norton & Company, 2014)