(Michael Chamberlain/Nevada Business Coalition) – Wisconsin Governor Scott Walker’s attempt to rein in the power of public sector unions has sparked protests and counterprotests. Unionized teachers, who claim their interest is the students, have shut down the schools in some cities by calling in sick so they can protest their possible loss of pay, benefits and power. Some have screeched that the governor is trying to bust unions.
There is no comparison between public sector and private sector unions. Public employee unions constitute a tremendous potential threat to taxpayers that their private sector counterparts generally do not.
Both private companies and governments negotiate with unions to determine the wages, benefits and work rules that will apply in that particular workplace. The company’s costs and expenses, including its personnel costs, must be less than what its customers are willing to pay for its products because no private company can force people to pay more than they want to spend or force them to buy things they don’t want.
If a company and union agree on a package that is too costly, eventually the company will go out of business. Its very survival depends on not paying too much.
In this bargaining situation, on one side of the table is management, with an interest in controlling costs. On the other is the union, with an interest in maximizing its share of the company’s revenues.
This does not happen with the government. Governments are the only entities that can force people to not only pay more for things than they think they are worth; they can force people to pay for things they neither need nor want nor use. People who never use public parks, for instance, are nevertheless responsible for paying to build and operate public parks through their tax dollars. (Private companies that are granted monopoly power by the government are not really an exception because it is the power of the State that forces people to purchase from them.)
So when governments and unions negotiate, it is with the understanding that the government is not limited by what people will voluntarily pay. They can simply force taxpayers to pay more to cover overly-generous compensation packages. And they do, as long as they can.
This dynamic is distorted even further when public sector unions become politically active, as they invariably do. These unions give support to politicians to aid in their elections, the same politicians who are supposed to be representing the interests of the taxpayers against these unions in negotiations. It is not surprising to find them reluctant to drive a hard bargain.
In this bargaining situation, on one side is the union, with an interest in maximizing its share of the government’s revenues. On the other are politicians and other public employees, who often also have an interest in maximizing the union’s share.
This creates a cycle of public employee unions and politicians feeding each other that is an invitation for abuse and corruption. It accounts for the concern taxpayers should have for the power of public sector unions.
There is little to rein in public sector unions who have collective bargaining rights and much to facilitate them in obtaining unsupportable and unsustainable pay and benefits. It is why collective bargaining by public employees inevitably leads to unsustainable compensation packages and should not be allowed.
(Michael Chamberlain is Executive Director of Nevada Business Coalition.)