Notes From Babel

Posts Tagged ‘unions

The Labor Movement, Redistributive Justice, and Procedural Fairness

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The left’s alignment with unions is more than merely political—it is ideological.  The major justification for continued existence of unions, particularly public sector unions, borrows heavily from a liberal conception of redistributive justice, as follows:

  • As a matter of first principles, all Americans are entitled to a minimum standard of living.
  • As a matter of observed fact, impersonal market forces sometimes do not result in compensation that comports with that preconceived standard of living.
  • Therefore, the market is an unsatisfactory mechanism for assigning economic values to labor.

I do not hide my antipathy for this line of reasoning, but I will not assail it here.  I want to instead press upon participants in the debate over organized labor, and particularly over public sector unions, of the impossibility of meaningful progress in that debate without acknowledging the standoff between conservative and liberal first principles.  More specifically, I contend that the labor movement will fail to win many converts because it either cannot or will not approach the issues as most Americans do:  by focusing on procedural fairness, rather than substantive outcomes.  While many people might believe they should earn more money, for example, they eschew procedurally unfair mechanisms to achieve it.  The abuse of procedural mechanisms, however, is precisely the criticism lodged against public sector unions.

As I discussed at length in a previous post, public sector unions present, at a minimum, the following forms of procedural unfairness:

  • Striking in the public sector exerts political rather than economic pressure on the government (who continues to collect taxes regardless), and is thus designed to harm the members of the public, particularly the poor, who depend on government services that unions are contracted to provide.
  • The employer with whom public employee unions negotiate—the government—is not just another industry, and thus normal market constraints are often supplanted by political restraints and more flexible accounting practices that enable unfair and unrealistic concessions in favor of unions.
  • Using their substantial political clout, public employee unions are able to influence elections and thus exert control over the representatives with whom they negotiate, resulting in less-than-arms’-length negotiations.
  • Accordingly, public employee unions are able to negotiate deals that often violate state constitutional proscriptions against retroactive compensation and incurring liabilities without voter approval.
  • Public employee unions represent one of the most powerful special interest groups by, in part, having successfully lobbied for laws requiring union dues be automatically collected from their members.
  • Public employee unions lobby against laws, such as Right to Work, that prohibit coercive and anti-competitive practices.
  • Public employee unions, unlike the general public, are permitted to press their interests upon elected officials in closed-door negotiations.
  • All this substantial political influence wielded by public sector unions constitutes an improper delegation of the police power properly held in trust by elected officials for the protection of the health, safety, welfare, and morals of the public.

The dispute over public sector unions, then, is between mainstream Americans in the private sector who believe fairness is achieved with the guarantee of fair and adequate procedures, and union supporters who believe fairness can only be determined by looking to substantive outcomes.  For the first group, public sector unions are unfair because they are given and make resort to special procedures not available to other groups.  For the second group, these various procedural objections are unpersuasive so long as public employees receive adequate compensation according to conceptions of liberal redistributive justice.

The two groups hopelessly talk past each other, then, as they are each lobbying for disparate forms of justice.  As a matter of practical reality, the two conceptions of justice are mutually exclusive:  The guarantee of procedural fairness is precisely the guarantee of fixed procedures in order to achieve particularized outcomes based on individual merit.  The guarantee of substantive fairness is precisely the guarantee of particularized procedures in order to achieve fixed outcomes based on conceptions of a “human right” to membership in the Middle Class.

It should be obvious, then, that for advocates of procedural fairness, whether public employees are overcompensated is merely a derivative claim—the principal claim is procedural unfairness.  The disparity in substantive outcomes that results between public and private employees—despite their being otherwise similarly situated—is evidence of the fundamental procedural problem.  (Incidentally, the same basic argument runs with respect to wealthy financiers.  Mainstream Americans are not overly bothered by the notion that someone, somewhere, might be very rich.  They are bothered instead by the idea that they might have become rich because of unfair tax policies, unfair regulatory schemes, or outright fraud—all of which are examples of procedural unfairness.)

This is why liberals will not answer the questions about the basic unfairness of public sector unions—they have no interest in fixing the unions.  It’s the unions who’ve got the right idea, according to liberals:  fix the value of labor in the first event to meet a basic standard of living, and then work backwards to somehow make all the math work. Instead, liberals are interested in making the rest of the workplace look more like the public sector.

The strategy seems like it would be a slam-dunk:  who wouldn’t favor an approach that would increase their compensation?  Thus, the fact that as many Americans disfavor as favor public employee unions strikes liberals as evidence of a stupid or brainwashed population captured by powerful corporate interests.  I submit instead that liberals have to this point ignored Americans’ strong predisposition toward procedural fairness, and that, provided procedural fairness is reasonably assured, Americans are willing to accept disparate outcomes—the bugbear of liberal ideology.  This is the bitter pill that liberals are reluctant to swallow, and it is why they have not made meaningful progress in advancing the dialog on public sector unions or addressing their many systemic abuses.

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Cross-Posted at The League of Ordinary Gentlemen

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What’s the Difference Between Public and Private Sector Unions?

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Many supporters of public sector unions suggest there are no meaningful differences between public and private sector unions when it comes to collective bargaining.  As I explain below, however, there are in fact several fundamental differences, many of which have been pointed out since the inception of public sector collective bargaining.  Prior to the rise of public sector unions in the 1960s and ‘70s, a number of courts across the nation routinely observed the dissimilarities between public- and private-sector collective bargaining.  For example, Florida’s Supreme Court observed in United Teachers of Dade v. Dade County School Board, 500 So.2d 508 (1986) that “[i]t would be impractical to require that collective bargaining procedures … be identical in the public and the private sectors. [Citation.] Myriad distinctions, not just those of procedures, exist between public and private collective bargaining, and have been noted by the highest courts of several sister states.” The conclusion, solemnly held until social and political factors led to the rise of public sector unions, was that to grant those unions the powerful tool of the strike and collective bargaining was profoundly anti-democratic.

A Brief History of Collective Bargaining Rights in the Public Sector

First, a brief history of the inception of public sector unions is in order.  Daniel DiSalvo has provided a nice treatment of the subject, which I will draw from here.  DiSalvo describes three general conditions that led to the advent and growth of public sector unionization and collective bargaining.  The first was the weakening of party machines.  By the 1960s, after reformers weakened those machines, most large US cities had civil service protections providing nearly lifetime job security.  The second condition paving the way to public sector unionization and collective bargaining was economic and demographic change, particularly with respect to the increased demand for teachers in the wake of the Baby Boom.

The third and most profound factor, following this empowerment and growth of the public employee class, “was the solidification of the alliance between organized labor and the Democratic Party”:

Franklin Roosevelt’s signing of the Wagner Act (which protected the rights of private-sector workers to organize and bargain collectively) in 1935 fully bonded labor to the Democrats; their partnership was reinforced during the fight over the Taft-Hartley Act of 1947, which was a Republican initiative to rein in union power. By mid-century, Democrats began to rely on labor unions for both funding and on-the-ground campaign organizing. In the 1950s and ’60s, according to political scientist J. David Greenstone, "labor functioned as the most important nation-wide electoral organization for the Democratic Party." As a political tag team, both Democrats and labor had an incentive to broaden the base of the labor movement — and they came to see public-sector workers as the most promising new hunting ground, especially as private-sector union membership began to decline.  [¶] . . . . [¶]

From the mid-1960s through the early ’70s, states and cities followed with a plethora of laws providing public-employee unions with collective-bargaining rights. In many cases, the consequences were almost immediate. In New York state, one year after the passage of the so-called Taylor Law in 1967, 360,000 state- and local-government employees became unionized; the New York Times described the law as having an "almost revolutionary effect." Other states and cities experienced similar expansions in the number of public-sector union members. For example, in 1968, California passed the Meyers-Milias-Brown Act — a law granting local-government workers bargaining rights — and then extended those rights to teachers a few years later; in the 1970s and ’80s, both membership in public-sector unions and the number of strikes in California skyrocketed. Nationwide, by 1970, the AFSCME had negotiated more than 1,000 collective-bargaining agreements, nearly twice the number in place in 1964. And by 1972, nearly half of the states had public-employee collective-bargaining laws in place at either the state or local level.

Thereafter, from the mid-1960s through the early ‘70s, state and local governments en masse began authorizing public employee unions to collectively bargain.  Incidentally, it was Wisconsin who, in 1959, became the first state to enact a public employee bargaining bill.  Today, 45 other states have passed similar measures.

Collective Bargaining in the Public Sector Is Anti-Democratic

Public sector union advocates suggest that collective bargaining in the public sector is essentially no different than in the private sector, and that far from being a problem, it is a positive good.  To evaluate this argument, first briefly consider the policy reasons for authorizing private sector unions.  Primarily due to unequal bargaining power, negotiations between employers and individual workers in many circumstances result in working conditions and compensation below desired public policy standards.  In order to improve these conditions and compensation levels to meet those standards, the government can do one of two things:  (1) it can pass legislation requiring by law that industries meet those minimum desired standards; or (2) it can pass legislation permitting workers in those industries to collectively bargain, and thus to more collaboratively and efficiently meet those standards within the confines of market realities.  It is easy to see why collective bargaining is the more attractive approach in the private sector context.

With that in mind, consider now the public sector.  Again, assuming working conditions or compensation fall below desired policy standards, consider again the government’s above choices:  (1) it can require the employer to meet those standards; or (2) it can authorize collective bargaining.  Obviously, this is an absurd choice when the employer is the government:  Conceptually, the working and compensation standards of the government-employer could never fall below the standards of the government in the first place.  And if it somehow did, what help could a collective bargaining agent provide in ameliorating it?

In this context, public sector unions are anti-democratic.  To permit a public entity to specially negotiate with a special interest group, behind closed doors, subverts the democratic process. Collective bargaining, striking, and mandatory collection of union dues by the employer, among other things, are all ways that public employee unions gain disproportionate political advantage at the expense of other groups.

It is one thing to decide that market forces produce an unsatisfactory result and to attempt to restructure the relative strength of economic participants.  It is quite another to decide that political forces produce an unsatisfactory result and to attempt to change the democratic process itself by giving preferred economic and political status to one of many interest groups.

In this respect, Harry H. Wellington and Ralph K. Winter emphatically argued in their 1971 book, The Unions and the Cities, that government was not just another industry; the assumption that the employer’s superior bargaining power should be equalized did not translate to the government workplace.  In his review of Wellington and Winter’s work, Ronald C. Brown summarizes:

Government employers too frequently yield to constituents by a grant of increased benefits to employees and then either bury the increases in the “bowels of an incomprehensible budget,” seek new funds, or reduce other services by reallocating the city’s treasury.  Thus, normal market restraints are often supplanted by political restraints regardless of economic or social impact.

Wellington and Winter presciently intuited the enormous harm that could occur by leveraging the strike weapon against the public:

if unions are able to withhold labor—to strike— … they may possess a disproportionate share of effective power in the process of decision. A large part of a mayor’s political constituency will in many cases, press for a quick end to the strike with little concern for the cost of settlement. Interest groups other than public employees … may be put at a significant competitive disadvantage in the political process. . . . [I]n the long run strikes may become too effective a means for redistributing income; so effective indeed that one might see them as an institutionalized means of obtaining and maintaining a subsidy for union members.

The government is not just another industry, and leveraging collective bargaining against it yields unpredictable and undesirable results to the disadvantage of the public.

Collective Bargaining in the Public Sector Constitutes an Improper Delegation of Power

Prior to the social and political forces giving rise to the growth of public union collective bargaining in the 1960s and ‘70s, courts routinely struck down collective bargaining laws on the grounds that they constituted an improper delegation of political power.  That is, setting legislative policy is the sovereign power of the legislature.  To provide an unelected body the tools—especially, the strike—to wrest this sovereign power is undemocratic and tyrannical.

For example, in 1945, Mugford v. Mayor and City Council of Baltimore held that a municipality could not bargain collectively or even agree to a dues check-off provision, because “city authorities cannot delegate … their continuing discretion” over labor relations.  In 1946, Nutter v. City of Santa Monica overturned a lower court ruling that permitted collective bargaining with city workers, explaining that the authority of public officials “may not be delegated or surrendered to others, since it is public property.”  Some courts strongly implied that they would not defer even if local governments voluntarily attempted to share power with unions, appealing to democracy itself.  In the 1947 opinion in City of Springfield v. Clouse, the Supreme Court of Missouri refused to permit city workers engaged in street cleaning and sewage disposal to collectively bargain. “Under our form of government, public office or employment … cannot become a matter of bargaining and contract,” because wages and working conditions involved “the exercise of legislative powers.”  Local officials, the Court observed, could not bargain such power away.

Collective Bargaining in the Public Sector Employs Political Rather than Economic Leverage

In the private sector, a strike is designed to put economic pressure on an employer.  It involves several factors for both the employer and the union:  the employer faces decreased supply due to the lack of workforce, and the possibility that customers will find alternate sources, putting pressure on the employer to settle.  At the same time, the striking private union must consider the possibility that the employer will go out of business, move, or downsize, and the public may or may not be supportive of the union.

A fundamentally different analysis occurs in the public context.  Here, a strike does not put any economic sanction on the employer, as taxes still flow in to the government.  Instead, the pressure a public union brings to bear is purely political, and is designed to hurt those who depend on the public services provided by the striking employees—i.e., the public.  The members of the public especially harmed by such strikes are typically the poor—who make more use of police and fire services—and parents and children who depend on the regular operation of public schools.  Thus, in the public sector, a strike is won or lost on the basis of political, not economic factors.  This is an unfair, disproportionately powerful, and anti-democratic weapon.

Because of Public Sector Unions’ Disproportionate Electoral Impact, Collective Bargaining Occurs at Less than Arms’ Length

Steve Bainbridge nicely summarizes this point:

A core problem with public sector unionism is that it creates a uniquely powerful interest group. In theory, bureaucrats are supposed to work for and be accountable to the elected representatives of the people. But suppose those bureaucrats organize into large, well-funded, powerful unions that can tip election results. With very few and very unique exceptions, no workplace in which the employees elect the supervisors functions well for long. Yet, research by Terry Moe (22 J.L. Econ. & Org. 1) into the electoral power of teachers’ unions finds just such an outcome:

The first study … provides evidence that teachers, acting through their unions, are quite successful at getting their favored candidates elected to local school boards. When a candidate is supported by the unions, her probability of winning increases dramatically, so much so that the impact of union support appears to be roughly the same as the impact of incumbency. In terms of total impact, union influence may be even greater than this suggests, because union victories literally produce incumbents—and the power of incumbency then works for union candidates to boost their probability of victory still further in future elections.

The second study … shows that public bureaucrats’ turnout advantage over other citizens is much greater than the existing literature would lead us to expect. It also offers persuasive new grounds for believing that their high turnout is indeed motivated by occupational self-interest—and more generally, that they are actively and purposely engaged in an electoral effort to control their own superiors.

Moe concludes:

The prevailing theories treat bureaucrats as mere subordinates, controlled from above by political authorities. But the control relationship can run both ways, and not just because bureaucrats have expertise and other sources of private information. In a democratic system the authorities are elected, and this gives bureaucrats an opportunity to exercise electoral power in determining who will occupy positions of authority and what choices they will make in office. It would be odd indeed if public bureaucrats and their unions did not invest in this kind of reverse control—and there is ample evidence that they do.

In effect, public sector unionism thus means that representatives of the union will often be on both sides of the collective bargaining table. On the one side, the de jure union leaders. On the other side, the bought and paid for politicians. No wonder public sector union wages and benefits are breaking the back of state budgets. They are bargaining with themselves rather than with an arms’-length opponent.

Conclusion

Collective bargaining in the public sector is fundamentally different than in the private sector.  Put most simply, the government is not simply another market actor, because the government lacks the same economic incentives as private industry.  Perhaps more importantly, the government is uniquely entrusted with the political power of the people to act for the benefit of the entire public.  To provide to a special interest group unique tools and procedures to use as leverage to wrest that power for itself is anti-democratic and tyrannical.  Finally, the public sector collective bargaining, unlike in the private sector, permits a union political leverage over the employer, making negotiations less than arms’ length.

For all these reasons, it cannot plausibly be maintained that there is no meaningful distinction between the ways public sector unions wield collective bargaining rights and the ways private sector unions do.

Stop the Place-Hunters

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My interests in politics and political philosophy are largely organized around a theme of declension—the gradual decay and decline of a people.  This is what the title of this blog is meant to suggest, in fact.  My general view is that we are somewhat beyond the point in building our “tower” at which our project truly served the needs it was designed for.  Our Founders’ goal, at its core, was simple: to organize a political system that would protect our property and generally otherwise leave us alone to cultivate our own gardens. The energies of the modern progressives, however, who seek to command and conquer more and more of American economic life with government, are precariously accelerating the decline of the American political regime.

As Tocqueville can again demonstrate, while modern progressives will bemoan limited government attitudes by arguing that the exigencies of modern life render such standoffish economic views outdated, this is undermined by the fact that the progressives and their dangerous views were anticipated as early as the 1830s.

First, Tocqueville suggested that, following the initial phase of building the American political-economic system, the desire to amass great fortunes would eventually give way to a realization of the equality toward which democracies naturally tend.

The remembrance of the extraordinary events to which they have been witness is not effaced from the memory of men in a day.  The passions that the revolution had prompted do not disappear with it.  The sense of instability is perpetuated in the midst of order.  The idea of easy success survives the strange vicissitudes that had given rise to it.  Desires remain vast though the means of satisfying them diminish daily.  The taste for great fortunes subsists even though great fortunes become rare, and on all sides one sees disproportionate and unfortunate ambitions ignited that burn secretly and fruitlessly in the hearts that contain them.

Alexis de Tocqueville, Democracy in America, Univ. Chicago Press, 2002  (Mansfield and Winthrop, eds.) at 600 (emphasis added).  Tocqueville then explained how this momentum led eventually to democracy—and the state of equality of conditions that democracy brings—by “prevent[ing] any of them from having very extensive resources, which necessarily confines desires within fairly narrow limits.”  Id. at 601.  This “equality produces the same effects everywhere; wherever the law does not take charge of regulating and slowing the movement of men, competition suffices for it. Id. at 602 (emphasis added).  “All that he demands of the state is that it not come to trouble him in his labors, and that it assure him the fruits of them. Id. at 604 (emphasis added.)

This sentiment was still strongly felt when it was enshrined in—and, sadly, shortly thereafter deliberately read out of—the Privileges or Immunities Clause of the Fourteenth Amendment. As Tim Sandefur explains:

Ratified in 1869, the 14th Amendment prohibits states from abridging the “privileges or immunities” of citizens, or depriving them of the “equal protection of the laws,” or “due process of law.” The Amendment’s sponsors—particularly Representative John Bingham and Senator John Sherman—intended the “privileges or immunities” clause to protect the natural rights and common-law rights of all Americans. Among these, Bingham said, was “the liberty…to work in an honest calling and contribute by your toil in some sort to the support of yourself, to the support of your fellowmen, and to be secure in the enjoyment of the fruits of your toil.”

(Emphasis added.  See also Sandefur on Jeremiah Black and the Slaughterhouse Cases.)

This is a happy state of affairs, in which the genius of industry and self-reliance has led Americans to prosperity, and yet the political system of democracy has naturally led to a state of relative economic equality.  But it was also at this point that real trouble came to Americans, for their eyes were still fixed on the possibility of getting their hands on all the fruits of industry while competition with their neighbors rendered it difficult to make their fortunes.  This state of affairs puts at risk the general spirit of freedom in economic life, and causes individuals to look to other means to obtain some manner of economic advantage over their competitors.

But if the people grow restless or their commitment to freedom wanes or their resolve weakens, they will come to a dangerous realization: they can become government employees. And this will result in a government scrambling to make good on its promise of the distribution to all its subjects of the estimable product of a once virile, industrial people, which product has come to be replaced by that of the ever-diminishing productive energies of a now slow and entitled people whose ambition has been sucked out by the promise of a patrimony paid from the government largesse.  As Tocqueville warned, in a country “boundless and full of inexhaustible resources,” and where its people “are always surrounded with more goods than they can seize,” “[w]hat is to be feared in such a people is not the ruin of some individuals, soon repaired; it is the inactivity and softness of all.”  Id. at 594 (emphasis added).

In this regard, the following passage from Democracy in America is among the most prescient of its almost 700 pages:

But if, at the same time that ranks are being equalized, enlightenment remains incomplete or spirits timid, or if commerce and industry, hindered in their development, offer only difficult and slow means of making a fortune, citizens, despairing of improving their lot by themselves, rush tumultuously toward the head of state and demand his aid.  To be put more at ease at the expense of the public treasury appears to them to be, if not the sole way they have, at least the easiest and the best way open to all to leave a condition that no longer suffices for them: the search for places becomes the most practiced industry of all.

It will be so above all in great centralized monarchies, where the number of paid offices is immense and the life of officials assured enough so that no one despairs of obtaining a post and of enjoying it peacefully like a patrimony.

I shall not say that this universal and immoderate desire for public offices is a great social evil; that it destroys the spirit of independence in each citizen and spreads a venal and servile humor in the whole body of the nation; that it suffocates the virile virtues; nor shall I have it observed that an industry of this kind creates only an unproductive activity and agitates the country without making it fruitful: all that is easily understood.

But I want to remark that the government that favors a tendency like this risks its tranquillity [sic] and puts its very life in great peril.

. . . .

In democratic peoples as in all others, the number of public posts in the end has bounds; but in these same peoples the number of the ambitious has none; it increases constantly by a gradual and irresistible movement as conditions are equalized; it is bounded only when men are lacking.

Therefore, when ambition has no outlet but in administration alone, the government in the end necessarily encounters a permanent opposition; for its task is to satisfy with limited means desires that multiply without limitsOne must indeed be convinced that of all peoples of the world, the most difficult to contain and direct is a people of place-hunters.  Whatever efforts its chiefs make, they can never satisfy it, and one should always be apprehensive that it will finally overturn the constitution of the country and change the face of the state solely out of the need to make some places vacant.

Princes in our time who strive to attract to themselves alone all the new desires that equality sparks, and to satisfy them, will therefore end, if I am not mistaken, by repenting of having engaged in such an undertaking; one day they will discover that they have risked their power in rendering it so necessary, and that it would have been more honest and more sure to teach each of their subjects the art of being self-sufficient.

Id. at 605-06 (emphasis added).

Now consider all this when coming across reports such as the following:

Economist Gary Shilling has calculated that 58 percent of the population is dependent on the government for “major parts of their income,” including teachers, soldiers, bureaucrats, and other government employees; welfare and Social Security recipients; government pensioners; public housing beneficiaries; and people who work for government contractors. By 2018, Shilling estimates, an astounding 67 percent of Americans could be dependent on the government for their livelihood.

See also here.

If we cannot find a way to curb these “place-hunters,” we seem destined to reach a political and economic tipping point much sooner than we perhaps expected.