Public Sector Unions

Readers of the site know that I do not generally join in with the Conservative bashing of unions, except to the extent that they feed at the public trough (e.g. at GM) where I will bash them equally with all other similar hogs.  Unions are perfectly acceptable associations of individuals in a free society for a generally rational purpose.  What upsets this equation is when the government attempts to intervene to tilt the playing field either towards employers or unions in their negotiations -- but this is a government intervention issue, not a union issue per se.

Far more problematic is the growing influence of public employee unions.  Union advocates talk about the need to help private unions in a power imbalance with large corporations, but talk about a power imbalance!  In the public sector, we have hugely powerful unions with absolutely no one willing to take them on.  Government leaders who supposedly should be advocates of taxpayers and pushing back against union demands are typically in bed with unions.  One might say it is a similar case to unions owning the private company in which they work, but in that case there are market dynamics that mitigate against overly high pay or indifferent customer service.  No such balancing mechanisms exist in government monopoly institutions.

There have been a lot of articles on this topic of late that I have been keeping in my reader but have not linked, so to do a bit of tab-clearing, here are some good recent articles on public sector unions.

Carpe Diem shows the direct relationship between increasing public sector unionization and public sector debt.  Chris Edwards appears to be the original source.

Chris Edwards followed up to show an inverse relationship between state management quality and unionization.

Bruce McQuain discusses the $500 billion California unfunded pension liability.  And this does not include the unfunded liabilities of all the state's cities and towns and counties, which typically don't book any liability at all for their future pension and medical commitments.

Steven Malanga on how public sector unions broke California.

The camera focuses on an official of the Service Employees International Union (SEIU), California's largest public-employee union, sitting in a legislative chamber and speaking into a microphone. "We helped to get you into office, and we got a good memory," she says matter-of-factly to the elected officials outside the shot. "Come November, if you don't back our program, we'll get you out of office.'

Traditionally, public sector unions have exercised a lot of power in elections, as evidenced by this example of the success of unions in fielding winning candidates in California school board elections.   Bruce McQuain reports that the SEIU has even formed its own 3rd party in North Carolina.  Its amazing that candidates whose main platform is to shift more taxpayer resources to the pockets of government workers has success.

Finally, according to the GAO, union contracts have a lot to do with why the USPS is failing  (as labor accounts for 80% of USPS costs).  They seem to have all the labor problems GM had, except there is even less pressure to correct the problems, since after all we can't get our mail delivered by Honda or Toyota.  Here is an example:

  • USPS workers participate in the federal workers' compensation program, which generally provides larger benefits than the private sector. And instead of retiring when eligible, USPS workers can stay on the "more generous" workers' compensation rolls.
  • Collective bargaining agreements limit the amount of part-time and contract workers the USPS can use to fit its workload needs, and they limit managers from assigning work to employees outside of their crafts. The latter explains why you get stuck waiting in line at the post office while other postal employees seemingly oblivious to customers' needs go about doing less important tasks.
  • Most postal employees are protected by "no-layoff" provisions, and the USPS must let go lower-cost part-time and temporary employees before it can lay off a full-time worker not covered by a no-layoff provision.
  • The USPS covers a higher proportion of employee premiums for health care and life insurance than most other federal agencies, which is impressive because it's hard to be more generous than federal agencies.
  • If the collective bargaining process reaches binding arbitration, there is no statutory requirement for the USPS's financial condition to be considered. This is like making the decision whether or not to go fishing, but not taking into consideration the fact that the boat has holes in its bottom.
  • Dr. T

    "... Unions are perfectly acceptable associations of individuals in a free society for a generally rational purpose...."

    True, but only if you're living in fantasyland. It's like saying the ideals of a communist economic system are perfectly acceptable. Of course, the reality has been far from ideal.

    The reality of private section unions is as bad or worse than public sector unions. I've seen their corruption and thuggery firsthand when AFL/CIO union workers wrecked my mother's car for not voting for absurd demands that the company would never have granted.

    Most unions exist to line the pockets of the union bosses first, to exercise political power second, and to improve worker conditions third. Many unions use coercive actions on employees to get them to vote the way they want. They blindly support the worst employees even when those employees are making things difficult for union coworkers and for customers. (I had a local union president brag to me that she stopped the firing of a union worker. That male union worker had verbally abused and then struck a female coworker in front of witnesses. The union president also bragged about fighting to keep in place a hospital medical technician whose errors jeopardized the lives of two patients.) They make productivity-killing workplace rules and demand pay and benefits that jeopardize the survival of the company, and then whine a few months later when entire divisions are closed or the company goes bankrupt.

    Unions had their place decades ago when they fought against horrid or dangerous workplace environments. OSHA deals with those problems now; the unions are no longer needed.

  • http://herdgadfly.blogspot.com/ gadfly

    "Unions are perfectly acceptable associations of individuals in a free society for a generally rational purpose."

    I am surprised at your stand on unions for several reasons. First of all it blows my mind that a libertarian would approve of the socialistic group-think unions that shun individualism for a purely Marxist philosophy. When the "needs" of the worker are put ahead of the employer's best interests, only an unworkable adversarial relationship can result (see UAW). As the risk-taker, the employer necessarily must have the prominent status in the relationship. All employees not happy with such a relationship can go elsewhere for employment. Oh, and someone needs to explain to me what generally rational purpose is served by a union.

    As for public service unions, there is no reasonable reason for them to exist. They are paid by the taxpayer, not the government, and as such they negotiate with non-principals who are locked between day-to-day relations with employees and bi-annual elections involving voter/taxpayers. Further, public unions cannot strike, nor can they refuse to carry out duties assigned nor change government functions. What they can do is lobby for their own pay and benefits by providing illegal help to elected officials during elections.

    Federal employees and postal workers have been allowed to build their own bureaucracy that makes it impossible for administrators to fire or discipline them. It is truly absurd that the US Postmaster cannot make the decisions necessary to downsize a white elephant that will go the way of the buggy whip in a very short time; but apparently Congress believes that postal workers also vote and that "government efficiency" is an oxymoron.

    Postal workers need to go the way of the air traffic controllers. To hell with statutory provisions of the law, just repeal the law and fire those workers that are not needed. If USPS was shutdown tomorrow, electronic mail and our national private courier networks would be moving all necessary mail within three months or less ... and junk mail at your doorstep would forever cease. Gone will be daily home delivery of letters and packages. Can we survive? As SP would say, "You betcha."

  • epobirs

    Unions became a serious problem when they started enlisting the government to strong-arm private employers.

    The problem with unions is that they're allowed to exist for more than 3-5 years. The potential for corruption is pretty much 100% in any union that is allowed to outlive its purpose for forming in the first place. Long term existence brings in the sorts who spend most or all of their careers as union officials and are far removed from the work the union members perform. The SEIU driven supermarket strike here in Southern California a few years ago was a disaster for the affected members. The union instructed the members to vote down the initial offer, without any of the members being given a chance to examine the offer for themselves. It turned out to be more generous than what was eventually accepted.

    At one time the unions took pains to drive out the Communists from their midst but what often goes unsaid is that much of this is due to the dislike of Communists by gangsters. The success of anti-racketeering investigations and prosecutions since the 70s has driven out a lot of the mobsters in favor of bringing back the commies.

    I can see the USPS collapsing in my lifetime. It has gone downhill immensely in the last fifteen years. There hasn't been a uniformed delivery to my house in several years and the car used frequently appears to be the driver's personal vehicle. The lack of any official status in evidence is such that I expect to see a raggedy Kevin Costner sticking letters in the box soon.

  • sethstorm


    * Collective bargaining agreements limit the amount of part-time and contract workers the USPS can use to fit its workload needs

    The problem is that the private sector outside of USPS bends that to allow for permatemping/permalancing. That is defined as stringing along people on successive contracts with the hope of a permanent position, but with no intention to follow through. Usually said individuals are not told of such with full honesty. Consider it an abuse that accompanies extended unemployment.

    While you might have people that are largely satisfied w/ a temporary/contract role, it is a problem of disclosure and a problem incentivized by the lopsided negotiation ability disfavoring applicants. It is one thing that should not be carried over from Europe.


    Unions had their place decades ago when they fought against horrid or dangerous workplace environments. OSHA deals with those problems now; the unions are no longer needed.

    The problem is that it isn't so much safety anymore, but the abuses of immigration law to disfavor any US citizen - union or not. See

    Also a problem is the permanent-temporary (and disposable) employee that isn't unique to Europe anymore. The main difference is that it isn't a division by age or sector. It's just used to lord over people here in the US.

    That said, the mining industries still have a place for unions as long as there are folks like Mr. Blankenship of Massey who buy entire regulatory bodies.

  • sethstorm


    Unions became a serious problem when they started enlisting the government to strong-arm private employers.

    The problem is that private employers have used the government for the same deeds against anyone who doesn't disfavor them. The only thing that has changed is the exchange of hired guns for specialized law firms and lobbyists.

  • epobirs

    Seth, I never claimed big businesses weren't capable of abuse, too. But I find it ridiculous that the government can tell a private enterprise that it cannot fire striking workers and hire a new workforce or that new hires must join the union. That is simply extortion.

    Big businesses have their share of abuses via government influence. The modern health insurance industry simply shouldn't exist and only does due to government meddling, which was then followed by the insurers colluding with large corporations to get tax breaks for large health policy purchases. This, along with Medicare, created a severe gap between consumer and seller, leading to increasing distortions in how these things were priced and leaving consumers with no ability to make competitive choices.

    This is the sort of thing Adam Smith warned against over 200 years ago. It is the job of government to say "No" when such things are attempted but corruption is ever present in government. The only change is who is being allowed to play fox in the hen house at any given moment. This is why a small government with limited powers is needed but ever resisted by those in love with power and the belief they know best how others should live.

  • IgotBupkis

    Those of you familiar with sethstorm from over on Carpe Diem will realize that there's usually a teensy, tiny shred of truth in what he says.

    That's all, and it's never enough even begin to actually justify the smallest iota of any single aspect of any one of his positions, but it's there....

    On the main topic:

    Another set of good articles on the problems with Public Sector Unions is to be found over on Wolf Howling. Grail Wolf is particularly disapproving of them, and cites a swath of abuse and problems with their very nature.

    .

  • IgotBupkis

    trivial correction: "...never enough TO even begin...". doh...

    The USPS is a primary example of everything wrong with any kind of government-run business.

    For literally DECADES, the USPS has been chasing the holy grail of handwriting recognition, the justification being that they want to set up a system for reading and sorting the mail.

    The goal seems obvious -- I would argue that, in fact, it should be that only two individuals should be touching the mail: The guy that takes it out of the mailbox the sender dumped it in, and the guy putting it into the recipient's mailbox. And you could probably eliminate the former, too. Short of stuff that gets jammed in the machines, probably 98% of all mail could and should be sorted mechanically.

    Now, it's rather clear that there's been a particularly reliable technology which could certainly sort mail -- private industry developed it, and it's been in steady use for literally forty-plus years now, at least thirty of which has been exceptionally reliable.

    Bar Codes. If the USPS established a code for bar coding addresses onto labels that EVERYONE could use (i.e., set it up so that it can be programmed into a home computer, too, for printing on printers) and which contained the entire address info -- sender and recipient -- and then gave a notable discount for anyone using them (suppose a 35-cent stamp would suffice), then it's quite self-evident that the whole system could be pretty thoroughly automated, requiring very little human handling -- almost all of it at the destination end.

    If the mail was handled by a private entity, it's clear such a system would long since have been thought of and implemented. But NO, the USPS is too busy being the ONLY organization for whom economies of scale don't apply. At least one "recent" postal increase was claimed to be needed due to "increased volume of mail". REALLY.

  • Ian Random

    Funny, how when it's the police oh everything is bad bad bad, but not the same for the public sector union that represents them. The blue union allows for bad or even dangerous police to stay on the force. PBS even made a documentary about a cop so violent that he was not allowed to patrol solo. Also aren't libertarians into competition, what better competition than amongst workers to get a promotion. A union is a labor monopoly backed by a nasty contract. I hope your workers unionize and demand better pay and benefits.

  • epobirs

    It is claimed by some that we can thank the postal workers union for the phrase 'going postal.' There was a period when it seemed that postal workers were an unusually volatile sort of people. But there was an unusual stress factor at work, too.

    Automation had reduced what had been a sorting line of twenty workers to just two. One to feed the machine at one end and another to change carts of sorted output at the other end. The mail left that defied automatic sorting could be handled by a single person. Seventeen people were now redundant, multiplied by many, many sorting across the country lines. Too bad, so sad. Automation had relieved a group of low skilled workers of their employment for the umpteenth time in history. (I'm currently reading a hefty volume entitled '1001 Inventions That Changed The World' which mentions numerous incidents leading up to and during the Industrial Revolution where rioting workers sought to destroy the feared new technology. The Luddites were only one of many such incidents.) The nation as a whole had receive a benefit.

    The USPS was faced with a problem. It couldn't just do a mass layoff because the powerful union simply wouldn't allow it. What they could do is ramp up the pressure on those workers to take early retirement or commit firable offenses. The result was mostly as intended but there was a notable incidence in workers going, as it came to be known, postal.

  • sethstorm

    What they could do is ramp up the pressure on those workers to take early retirement or commit firable offenses
    What the private sector does when there's a similar issue of hard-to-fire people that they need to have gone. It is done when someone has some certain qualities about them that would preclude direct firing (e.g. protected status). Simply just make the rules apply double to them as much as they do to everyone else. Rinse and repeat until they slip up.

    Works even better when there is a bad economy such as this one.

    IgotBupkis:
    Take your attempted character assassination somewhere else.

  • http://brazil84.wordpress.com brazil84

    Seems to me you can't ignore the fact that the postal service is getting killed by e-mail, electronic bill pay, paperless statements, fax, etc.

  • Fred from Canuckistan

    All goes well for those PS unions until their public teat drys up . . . I give you California.

    There will be much pain felt in the Golden State as the old adage "Socialism works until you run out of other people's money to spend" turns into reality.

    How high can a pension check bounce?

    We'll soon see.

  • Noah

    brazil84: the volume of private party to private party first class mail was in serious decline long before email was generally available.

  • anon

    Unions are simply cartels -- what OPEC is to oil producing nations, labor unions are to workers.

    Warren's right -- there's nothing intrinsically wrong with the free association of labor-producers (or oil-producers). They should be free to join together and set the price for their product/service.

    That unions have slowly dimished over time in the private sector indicates that having a cartel isn't all that it's cracked up to be, at least in the labor market.

    What is going on in the public sector is different -- the labor cartels have taken charge, and are now using force of law to take our money for themselves.

    That's the problem.

    Did anyone else notice the recent executive order mandating that all federal contracts over $25M go to union shops?

  • sethstorm


    That unions have slowly dimished over time in the private sector indicates that having a cartel isn’t all that it’s cracked up to be, at least in the labor market.

    Thank international trade for its ability to circumvent regulation.

    The problem is that when you use that as a weapon, it tends to be indiscriminate. That is, they ended up harming citizens when they really just wanted to harm unions.

  • Another guy named Dan

    Putting aside the specifics of the USPS, the larger issue is that the Civil Service itself has become a large and increasingly powerful special interest group at all levels of government. by the very nature of their role, they are extremely well connected to legislators and others responsible for creating their budgets - with the associated power that grants them over their own pay and benefits.

    See the brilliant and wickedly funny British series "Yes, Minister" and "Yes, Prime Minister" for this process in action.

    Mush of what we are seeing is the same disease that hit the automakers on a 25 year delay, probably since the public sector unions took off a similar period of time later. The problem is that there no more efficient alternative to sweep in and force change and restructuring. The rise of e-mail and more importantly cheap and convenient long distance phone service is performing this role within the USPS, but how do you create the same effect in such areas as the Bureau of Mine safety, for instance?

  • IgotBupkis

    > Take your attempted character assassination somewhere else.

    There was nothing "attempted" about it. And I really don't care about your character, which, offhand, seems a decent sort. I care about your rational skills, which you've amply demonstrated are sorely lacking. I'd think a lot more of you if you actually worked on that latter part a good bit. There does not appear to be a lefty cause you don't support almost to the hilt, and with mainly a mindless repetition of lefty parrot points. You're a little better than some on that, but not enough.

    ...Have a nice day. :D

    > That is, they ended up harming citizens when they really just wanted to harm unions.

    Case in point. Go ahead, seth -- name us an example of that which you speak.
    Assuming I can't dispute your example, I'll name a half dozen instances where more good was done for the citizenry by same.

    Lack of rational skills, mindless repetition of parrot points. It's your stock in trade.

  • sethstorm


    Case in point. Go ahead, seth — name us an example of that which you speak.

    PATCO? It was indeed a lawful firing of air traffic controllers that got out of hand. Where it got out of hand is that it proved that the moderating force that labor unions provided did not (and does not) exist. Instead of actually treating employees with respect, the cheaper answer was to just skip directly to legal/HR to outlitigate the source of the complaint.

    Between overzealous litigation and the precedent-setting PATCO firings, you have the reasons why labor unions are solely rent-seekers. Their (accelerated) decline only makes it more clear that they're a political interest.

    If you want to kill them, don't attack them directly - just prove that there is a way to fulfill the original mission of labor unions(protecting against bad labor practices, whatever they may be) without the labor union. Don't just simply say "that the market will handle it", show it and prove it by being the better(and more profitable) example. Outcompete them, don't merely outlitigate them.

    * If you don't want unions in the private sector, build up mutual respect between employees of all ranks in an organization.
    * In the public sector, do the same thing - and prove how it is cheaper than having a union around.

    In other words, make business friendliness a mutual feeling within / without and profit from it. But if you think it's cheaper to use vinegar than honey, I don't know what to say.