Public-Sector Unions: Too Costly for the Public

Cody Dunn, Editor-in-Chief Elect

The events in Wisconsin concerning collective bargaining rights for public-sector unions have sparked much debate over the very role of unions in modern society. Although some have publicly jeered at Governor Scott Walker’s requests for public union employees to contribute more to their own pensions and health care benefits as if it was a form of worker exploitation, many others now realize the immense burden that public-sector unions have placed upon those whom they should be working for: the public.

Unions were first introduced to the United States during the early part of the 20th Century, when tradespeople joined together to push for basic rights to protect themselves against excessive work, unfair wages, and, child labor, a major issue at the time. These basic workers’ rights were protected through collective bargaining, where unions negotiated with employers on wages, benefits, and labor protection on behalf of all employed workers. Since the signing of the National Labor Relations Act by FDR in 1935, the ability for workers to organize and collectively bargain has been protected by Federal law.

Since then, the protected civil rights that have come out of the Civil Rights Movement have made many unions obsolete, and it is no surprise that in 2009, unionized workers made up only around 7% of the private-sector labor market as compared to the all-time high of 36% membership in the mid-1950s. However, the opposite is true for public-sector unions, where union membership has increased dramatically to 37.4% last year as compared to nearly 0% in the 1950s. For the first time ever, the majority of union members are government employees.

Nevertheless, while private sector unions were created to protect the working-class from the greed and might of the industrialists, why were public-sector unions created? Were they established in order to protect the working-class from the greed and might of the public? This seems like a silly and confusing question, but it is a question that must be asked given the rampant budget deficits in many states which are due in part to unreformed public employee pensions. The 49 states that have balanced-budget amendments within their constitutions (Vermont being the exception) must either make solid cuts or raise taxes in order to continue to provide public services. Many fiscally-sound governors, instead of inviting the political blowback caused by raising taxes, have opted for budget cuts in order to bring their states back into the black, and a large chunk of many state budgets are tied up in the ever-increasing burdens of public employee pensions which are vigorously defended by public-sector unions.

With the federal law on their side, unions can force employers to accept their labor contract of fair working conditions in exchange for not striking. Like a large conglomerate holding a monopoly on the production of goods, unions are like a monopoly on labor. As per the contractual agreements, employers may only hire union members. In some contracts, such as the United Auto Worker’s local chapter for UCSD’s teaching assistants and other teaching staff, one must be a member of the local union in order to retain employment. This severely limits the choice of employees — who are forced to pay union dues in order to be hired. For private employers, the extra costs to employers are regarded as increased expenditures and are then passed on to the consumer as increased costs of production. These increased costs can be passed on in the form of an increase in the price of the product produced by the firm, or as lower-quality products sold to the consumer at the same price as competing products, in turn making these firms less competitive. The “Big Three” auto companies — Ford, General Motors, and Chrysler — who once dominated the market in the 1950s have now succumbed to bankruptcy, bailouts, and factory closures. The American car manufacturers, with their unionized factories, were unable to compete with their nonunionized European and Japanese competitors because of UAW contracted liabilities.

Just like private-sector unions, public-sector unions also pass the cost of contracted liabilities to their employers: us. Union management can negotiate their own contracts, which extract more money from taxpayers to fund these wage increases and additional benefits for their members. Unlike a private firm, where consumers have the choice to buy certain products or not and which may foot the bill of collective bargaining contracts, taxpayers do not have the option to opt out of paying taxes. Tax payers must foot the bill when union management and politicians collude to increase wages and benefits for unionized employees in the present; at the same time that they force future taxpayers’ to fund promised pension benefits, regardless of future economic realities.

In a time of recession and economic downturn, raising taxes is not the right answer to decrease expenditure burdens for local and state governments across the nation. Cutting benefits and asking union members to make financial sacrifices for their own labor benefits is the key to bringing down deficits without financially burdening the public.
Here at UCSD, the U.A.W. 2865 and A.F.S.C.M.E. 3299 are the local unions that claim to represent all teaching assistants, faculty, and staff members on campus. Nevertheless, these claims are inflated, as all faculty and staff members must become members of the local union in order to be hired by the UC system, thus driving up costs and forcing students to pay for benefits such as 100% health coverage for full-time TAs and subsidized child care services for all workers. In a time of great fiscal turmoil within the UC system, students and taxpayers are unable to support the benefits received by public workers and sacrifices must be made. No one has a “right” to a job, let alone benefits from that job.

The public-sector unions, especially the UC unions, are not the largest beneficiaries of taxpayer assets, but they are surely large enough to completely bankrupt the state and its productive citizens. Reform must be made now to ensure that public-sector unions do not continue to run rampant as parasites of a system that makes empty promises of ideal benefits now, but cannot follow through on its commitments in the future.

Cody is a freshman in Warren College majoring in Management Science.

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