Skip to comments.The Political Economy of Government Employee Unions (they are the servants, not the masters)
Posted on 02/24/2011 6:26:40 PM PST by sickoflibs
The main reason why so many state and local governments are bankrupt, or on the verge of bankruptcy, is the combination of government-run monopolies and government-employee unions. Government-employee unions have vastly more power than do private-sector unions because the entities they work for are typically monopolies.
When the employees of a grocery store, for example, go on strike and shut down the store, consumers can simply shop elsewhere, and the grocery-store management is perfectly free to hire replacement workers. In contrast, when a city teachers' or garbage-truck drivers' union goes on strike, there is no school and no garbage collection as long as the strike goes on. In addition, teachers' tenure (typically after two or three years in government schools) and civil-service regulations make it extremely costly if not virtually impossible to hire replacement workers.
Thus, when government bureaucrats go on strike they have the ability to completely shut down the entire "industry" they "work" in indefinitely. The taxpayers will complain bitterly about the absence of schools and garbage collection, forcing the mayor, governor, or city councillors to quickly cave in to the union's demands to avoid risking the loss of their own jobs due to voter dissatisfaction. This process is the primary reason why, in general, the expenses of state and local governments have skyrocketed year in and year out, while the "production" of government employees declines.
For decades, researchers have noted that the more money that is spent per pupil in the government schools, the worse is the performance of the students. Similar outcomes are prevalent in all other areas of government "service." As Milton Friedman once wrote, government bureaucracies especially unionized ones are like economic black holes where increased "inputs" lead to declining "outputs." The more that is spent on government schools, the less educated are the students. The more that is spent on welfare, the more poverty there is, and so on. This of course is the exact opposite of normal economic life in the private sector, where increased inputs lead to more products and services, not fewer.
Thirty years ago, the economist Sharon Smith was publishing research showing that government employees were paid as much as 40 percent more than comparable private-sector employees. If anything, that wage premium has likely increased.
The enormous power of government-employee unions effectively transfers the power to tax from voters to the unions. Because government-employee unions can so easily force elected officials to raise taxes to meet their "demands," it is they, not the voters, who control the rate of taxation within a political jurisdiction. They are the beneficiaries of a particular form of taxation without representation (not that taxation with representation is much better). This is why some states have laws prohibiting strikes by government-employee unions. (The unions often strike anyway.)
Politicians are caught in a political bind by government-employee unions: if they cave in to their wage demands and raise taxes to finance them, then they increase the chances of being kicked out of office themselves in the next election. The "solution" to this dilemma has been to offer government-employee unions moderate wage increases but spectacular pension promises. This allows politicians to pander to the unions but defer the costs to the future, long after the panderers are retired from politics.
As taxpayers in California, Wisconsin, Indiana, and many other states are realizing, the future has arrived. The Wall Street Journal reports that state and local governments in the United States currently have $3.5 trillion in unfunded pension liabilities. They must either raise taxes dramatically to fund these liabilities, as some have already done, or drastically cut back or eliminate government-employee pensions.
Government-employee unions are primarily interested in maximizing the profits of the union. Consequently, they use civil-service regulations as a tool to protect the job of every last government bureaucrat, no matter how incompetent or irresponsible he or she is. Fewer employed bureaucrats means fewer union dues are being paid. Thus, it is almost guaranteed that government-employee unions will challenge in court the attempted dismissal of all bureaucrats save the occasional ones who are accused of actual criminal behavior. This means that firing an incompetent government school teacher, for example, can take months, or years, of legal wrangling.
Politicians discovered long ago that the most convenient response to this dilemma is to actually reward the incompetent bureaucrat with an administrative job that he or she will gladly accept, along with its higher pay and perks. That solves the problem of parents who complain that their children's math teacher cannot do math, while eliminating the possibility of a lawsuit by the union. This is why government-school administrative offices are bloated bureaucratic monstrosities filled with teachers who can't teach and are given the responsibilities of "administering" the entire school system instead. No private-sector school could survive with such a perverse policy.
Government-employee unions are also champions of "featherbedding" the union practice of forcing employers to hire more than the number of people necessary to do the job. If this occurs in the private sector, the higher wage costs will make the firm less competitive and less profitable. It may even go bankrupt, as the heavily unionized American steel, automobile, and textile industries learned decades ago.
No such thing happens in government, where there are no profit-and-loss statements, in an accounting sense, and most agencies are monopolies anyway. Featherbedding in the government sector is viewed as a benefit to both politicians and unions but certainly not to taxpayers. The unions collect more union dues with more government employees, while the politicians get to hand out more patronage jobs. Each patronage job is usually worth two or more votes, since the government employee can always be counted on to get at least one family member or close friend to vote for the politician who gave him the job. This is why, in the vast literature showing the superior efficiency of private versus government enterprises, government almost always has higher labor costs for the same functions.
Every government-employee union is a political machine that lobbies relentlessly for higher taxes, increased government spending, more featherbedding, and more pension promises while demonizing hesitant taxpayers as uncaring enemies of children, the elderly, and the poor (who are purportedly "served" by the government bureaucrats the unions represent).
It is the old socialist trick that Frédéric Bastiat wrote about in his famous essay, The Law: The unions view advocates of school privatization, not as legitimate critics of a failed system, but as haters of children. And the unions treat critics of the welfare state, not as persons concerned with the destruction of the work ethic and of the family that has been caused by the welfare state, but as enemies of the poor.
This charade is over. American taxpayers finally seem to be aware that they are the servants, not the masters, of government at all levels. Government-employee unions have played a key role in causing bankruptcy in most American states, and their pleas for more bailouts financed by endless tax increases are finally ringing hollow.
If you realize both parties in Washington think that our money is theirs and you trust them to do the wrong thing, this list is for you.
If you think there is a Santa Claus who is going to get elected in Washington and cut your taxes, spend a few trillion and that will jump-start the economy, this list is not for you.
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The Austrian Schools Commandments plus :From : link
1) You cannot spend your way out of a recession
2) You cannot regulate the economy into oblivion and expect it to function
3) You cannot tax people and businesses to the point of near slavery and expect them to keep producing
4) You cannot create an abundance of money out of thin air without making all that paper worthless
5) The government cannot make up for rising unemployment by just hiring all the out of work people to be bureaucrats or send them unemployment checks forever
6) You cannot live beyond your means indefinitely
7) The economy must actually produce something others are willing to buy
8) Every government bureaucrat should keep the following motto in mind when attempting to influence the economy: First, do no harm!
9) Central bank-supported fractional reserve banking is an economically distorting, ethically questionable activity. In particular, no government should ever do anything to save any bank from the full consequences of a bank run, no matter what the short-term consequences.
10) Gold is Gods money.
1) Businesses don't hire workers just because of demand for products or services, they hire because it makes them money. Sorry to have to state the obvious.
2) Government spending without taxing is still redistribution
3) Taking one man's money and giving it to another is not a job.
4) Paul Krugman and Bernake have been wrong about everything, as well as the other best and brightest Keynesian's who have been fixing our economy for over a decade.
5) Republicans in the minority (esp out of the White House) act like Republicans, in the majority they act like Democrats .
This is the article to show anyone sitting on the fence on this issue, explains it perfectly.
If DiLorenzo said that the sun rises in the east I wouldn’t believe him.
Perfect explanation. I left state govt due to rampant ignorance among the co workers and higher ups. Currently the state of Florida has a female employee making 80K/yr before benefits. Watching soaps doing hair nails and makeup plus many breaks was promoted from file clerk and today is an Ass’t.Warden. had plenty of affairs to insure her movement thru the ranks. Lots of govt employees are very stupid. Unimaginably stupid like marco poll discovered america. Or better yet some thought an electric pencil sharpener was actually a camera. Lol
I hope this didn't convince you to join the Teacher union protesters in WI.
Yes, it does look like the taxpayer finally realizes they’ve been played like a violin.
With Obama putting the power of the Office behind the unions it’ll be rough going for some time to come.
But it’s been said that nothing’s more powerful than an idea whose time has come. The time has come.
I live in Maryland so I know lots of government workers. One fellow works directly for an agency here and gets paid ~ 80 K for replacing circuit boards in computers that are off. Someone else diagnoses the problems and gets it working. He just uses the screwdriver, He cant be laid off or fired really and gets cost of living increases.
One fellow in a different agency I know is an alcoholic, used to get drunk everyday at lunch, they bribed him to retire, He made close to 100K. Now we pay his health care too as he doesnt have to work.
Find the flaws in this article. That is part of what comments are for,
Many good points here. All these slugs want to be on the Gov’t payroll because millions of good jobs were offshored. Now the remaining good jobs in America involve paper shuffling. Not making anything useful (exaggerating a bit but true)
The “trainer”at our place used to go bet on jaiali while on duty on the states dime. Another fav of mine was reimbursement for attending ‘conferences’ on the states dime. Time worked plus usually located at a posh beach resort. Never required to attend classes and received $42/day in meals plus reimbursement for $200 to 400/night room. Even when they shared room both tried to claim full expense for reimbursement. Apparently before I got there this was an accepted accounting practice. It was a paid vacation paid for by the taxpayers.
>>>If DiLorenzo said that the sun rises in the east I wouldnt believe him.<<<
You prompted me to go ahead and read a number of reviews about DiLorenzo’s book about Lincoln. You’re right that many reviewers skewered the man about his facts and presentation.
That doesn’t make his facts and presentation here incorrect, however. A man can be wrong about some things and right about other things.
I’ve been working as a public school teacher for twelve years. The descriptions of government schools in this article match my own observations. Previous to my employment as a teacher, my other career allowed me to work closely with local, state, and federal officials and bureaucrats. Again, the descriptions in the article match my observations.
I haven’t studied Lincoln beyond the basic facts you learn in school (or are supposed to learn, anyway), and I can’t speak to the book you question with any authority. I can speak with authority about working in the government and with government unions, and what he says matches what I know personally and professionally.
I’m going with DiLorenzo on this one.
This is a good one that logically lays out our side on this issue. I been pinging (not the list above) many articles a day on this subject, but this one is the most thought out.
I am working on an xtranormal cartoon on this subject. Been watching MSNBC nightly for material on idiotic arguments.
makes it so simple, 8 gubmint union cavepersons can do it...8^}
So some pinhead made some wordy claim about an author that “many” other pinheads believe.
Not familiar with the author and won’t spend time combing through his prior works because I’m in agreement with the article posted.
I’ve seen how government (federal) unions “work” and it ain’t pretty. It’s truly bad for those employees who put in an honest days work since they must take up the slack for the union members. I can honestly say that anywhere I worked I could easily see who was a union member (especially stewards!); they stuck out like a sore thumb.
Unions days are through. They don’t and never did have a place in the public sector.