Collective Bargaining: A Case for Preserving It

Not even the most ardent supporters of public employees can deny the numbers. A fifth of states’ general spending goes for salaries and benefits. So as states face another round of huge budget deficits, you can’t blame policymakers of either party for targeting state employees for at least some savings.

But the argument by Republican Govs. Scott Walker of Wisconsin and John Kasich of Ohio and other state leaders and lawmakers that they must strip state employees of their collective bargaining rights in order to control long-term budget costs would seem more convincing if not for a few inconvenient truths:

First, state public employee compensation is hardly out of control. 

State workers are paid, on average, 11 percent less than their private sector counterparts with “comparable earnings determinants (e.g., education),” and their earnings have declined relative to comparable private sector workers over the last 20 years, according to an April 2010 report from the Center for State & Local Government Excellence and the National Institute on Retirement Security.

To be sure, benefits are better in the public sector than in the private sector. But even when you count benefits, total compensation for state employees is still 6.8 percent below that of comparable private workers, the report says.

Nor, by the way, have the rolls of state public employment grown much.  Over the past 30 years, total state and local employment as a share of the population has risen only from 59 employees for every 1,000 residents of the state to 62 per 1,000 – and those increases have all come in elementary and secondary education, including more teachers to reduce class sizes and meet some students’ special needs, according to a report by the Center on Budget and Policy Priorities. The increase in teachers reflected broad public support for more investment in education and a consensus that smaller classes and more specialized teaching would improve student performance.

If you take out elementary and secondary education, total other state and local employment (largely police and firefighters, college teachers, prison guards, nurses and other health care workers, and road crews and bus drivers) has fallen as a share of the population, says the Center, which cited data from the U.S. Census.

Second, some of the same policymakers who are criticizing public unions are exacerbating their states’ budget problems by cutting taxes. 

The first rule of crisis management is that if you’re in a hole, stopping digging. States are clearly in a fiscal hole, one driven overwhelmingly by the Great Recession and the steep drop in revenues that it caused.

Total state general fund revenues are an estimated 6.5 percent below pre-recession levels in fiscal 2011, according to the National Governors Association and National Association of State Budget Officers, and more than half the states already project that they will have less revenue in fiscal 2012 than they had in fiscal 2008.

Making matters worse, fiscal relief that the federal government provided to states as part of the 2009 stimulus law is drying up, while Republican-led efforts in Congress to cut domestic discretionary spending starting this year will reduce a variety of grants-in-aid that Washington provides to the states.

None of that has dissuaded Arizona’s Gov. Jan Brewer, Florida’s Rick Scott, Idaho’s Butch Otter, Michigan’s Rick Snyder, New Jersey’s Chris Christie, North Carolina’s Beverly Perdue, and Wisconsin’s Scott Walker from proposing or, in some cases, already pushing to enactment, lower corporate taxes. Nor has it dissuaded Otter, Christie, Walker, Maine’s Paul LePage, New York’s Andrew Cuomo, or North Dakota’s Jack Dalrymple from proposing to cut personal taxes.

Tax-cutting governors say lower taxes will improve the business climates of their states, inviting investment that creates jobs. But facing balanced-budget requirements, they must offset tax cuts with deeper cuts not only to safety net programs but public investments such as education. That could leave potential investors in their states with lower taxes but also with fewer skilled workers to fill the jobs they want to create.

Third, not every governor, nor even every conservative Republican governor who wants to cut taxes, has found the need to attack collective bargaining. 

Michigan’s Snyder may face the biggest long-term challenge of any governor. He presides over a blue-collar state whose signature industry – cars – needed a federal bail-out and whose signature city – Detroit – has been an economic and social basket case for years.

But while his budget would cut corporate taxes and seek $180 million in concessions from public employees, Snyder is not trying to curtail collective bargaining. Quite the contrary: He says that he hopes to work with the public employee unions to find agreeable ways to meet his $180 million figure.

“I believe in good faith we should be going through the collective-bargaining process,” the governor told the Washington Post, “and my belief is it should work in our state to achieve the goals we need to achieve in terms of balancing our budget” and addressing such problems as high unemployment.

Snyder’s belief that he can restore Michigan’s fiscal health without curtailing collective bargaining begs the obvious question of why Wisconsin’s Walker and Ohio’s Kasich insist they must curtail those rights to meet their own fiscal demands.

America’s labor movement has suffered a sharp decline in recent decades, with unions now representing just 11.9 percent of American workers, economics columnist Robert Samuelson wrote this week. When you take out government workers, the figure drops to 6.9 percent. Unions also seem increasingly ill-suited to helping workers in an economy that’s more global and competitive, with new industries replacing old ones at a faster pace and workers forced to change jobs more often.

Perhaps the time has come to reconsider the role of unions so that they can better serve their members and the economy. But let’s do so in an atmosphere of thoughtful deliberation, not one driven by questionable claims that state budget challenges demand an end to collective bargaining.

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