FDR Was Right About the Trouble With Public-Sector Unions
Public-sector unions are not passive participants in the democratic process; they are among its most sophisticated and ruthless players.
Over on the Left Coast, public school teachers in San Francisco and San Diego are poised to go on strike for the first time in decades. Members of the United Educators of San Francisco, the union representing 6,000 teachers, classroom aides, and school counselors, have voted all but unanimously to walk off the job. Barring an 11th-hour deal on pay raises and health insurance, the strike will begin Monday. The last time San Francisco teachers walked the picket line, it took seven weeks before they returned to work.
In San Diego — the state’s second-largest school district — the teachers union is preparing to launch its first strike in 30 years on Feb. 26 unless city officials meet their demands to create more special education positions and increase teacher stipends. Meanwhile, in Richmond, Calif., a strike last month ended with a tentative contract hiking teachers’ pay by 8 percent over two years and requiring the government to pay 100 percent of their health premiums. Other cities may follow suit: The California Teachers Association has kicked off a “We Can’t Wait” campaign demanding higher wages, richer benefits, and more staff positions — or else.
None of this is confined to California, of course. Here in Massachusetts, Boston firefighters recently ratified a new contract delivering an 8.5 percent pay raise along with enhanced increases at certain career milestones and boosts in line-of-duty death benefits. And only a few years have passed since a wave of teachers’ strikes — all of them illegal — shut down classrooms across the Commonwealth, forcing cities and towns into costly settlements under intense political pressure.
Beyond the understandable passions on all sides of these fights, there’s a structural question at their heart that rarely gets discussed: In negotiations with the unions that represent public school teachers or other government employees, who represents the interests of the people paying the bills? The taxpayers who are required to fund public education and municipal services through their dollars don’t get a seat at the bargaining table. Instead, government officials negotiate with powerful and organized unions over how to allocate public funds. That institutional arrangement — one that blurs the line between those claiming public resources and those who are supposed to be their custodian — deserves a lot more scrutiny than it gets.
In the private sector, collective bargaining brings together parties with genuinely opposing interests. Workers seek higher pay and better benefits; management seeks to control costs and keep the enterprise viable. Each side knows it has something to lose by overreaching. If labor demands too much, jobs can vanish. If management refuses to compromise, strikes disrupt operations, customers are lost, and profits suffer. The discipline of the market imposes limits on both sides — and harshly enforces them.
None of that discipline exists when government bargains with public employees. There are no profits to share, no competitors to steal market share, no risk of bankruptcy if costs spiral out of control. There are only taxpayers’ dollars — dollars provided by people who have no voice at the bargaining table and no direct say in how those dollars are allocated. When government managers negotiate wages, benefits, and work rules with unions representing government workers, the state is effectively negotiating with itself over how to spend other people’s money.
That imbalance is compounded by politics. Public-sector unions are not passive participants in the democratic process; they are among its most sophisticated and ruthless players. They mobilize votes, fund campaigns, and make clear which officeholders are friends and which are adversaries. Officials on the government side of the bargaining table know that generosity today can be rewarded at the next election — while resistance can carry steep political costs. The incentives all run in one direction.
That political leverage isn’t incidental to public-sector collective bargaining — it goes to its very core. “It is vital that AFSCME members be politically active,” emphasizes the nation’s largest labor union for government workers on its website and in its officers’ handbook. “Political action allows us to directly elect our bosses.” Because public employees bargain not with owners risking their own capital but with officials dependent on votes and campaign support, negotiations unfold in a political environment from start to finish.
Moreover, government managers benefit personally from what economists call the “spillover effect” — when public-sector unions negotiate higher pay for their members, nonunion employees commonly get a commensurate hike in their pay and benefits. All of which reinforces the same fundamental flaw: The people charged with guarding the public purse are often beneficiaries of the very agreements they are supposed to police.
And it helps explain why, for most of American history, public-sector collective bargaining was regarded as incompatible with democratic government. “The process of collective bargaining, as usually understood, cannot be transplanted into the public service,” President Franklin D. Roosevelt affirmed in 1937. He recognized that government is not just another employer and that empowering a private organization to negotiate public policy with officials who neither pay the bills nor bear the long-term costs was an invitation to abuse.
In theory, voters can always elect candidates who will drive harder bargains. In practice, public-sector unions spend heavily on trying to ensure that those aren’t the candidates who win.
Roosevelt’s warning has not grown obsolete. Rather, it has grown easier to ignore — precisely because the arrangement has become so familiar that few think to question it. But familiarity doesn’t resolve the contradiction at its core: A system in which the people who fund public services have no seat at the table and only the most remote and indirect power to shape the terms. The unions organize, the politicians calculate, the contracts get signed — and the taxpayers, whose money made it all possible, learn what it will cost them when it’s too late to say no.
