As a former elected union official, I appreciate the role unions have played in improving the lot of the American worker.
Unions have been good for America. They saved the worker from exploitation in the early days of the industrial revolution. They expanded the middle class after World war II.
However, unions also have been involved in featherbedding; requiring firemen on diesel locomotives and three pilots in an airplane that was designed an certified to be flown by two. Unrealistic and restrictive work rules have raised the costs of producing goods and services in some businesses.
There are huge differences between public and private sector unions. One operates in the real world, the other does not. There was a time when a worker could make a decision to go into the private sector and have less job security but a higher salary, or he/she could opt for a government job with security and probably a lower wage. Now the government worker gets higher pay, generous vacation and slick leave, with health care and pensions rarely seen in the private sector.
Private sector unions are directly connected to the success of the employer. If the employer loses revenue due to market conditions or changes in its competitive position the union may be involved in concessionary negotiations. These negotiations may involve reductions in pay, reductions in vacation time and sick leave, changes in health care and contributions to pension programs. Employees may have nothing to do with the employer’s plight but they end up paying the price anyway.
The public sector doesn’t work that way. Historically, the unions get their demands met and the employer (governments) simply raise taxes and fees to pay for the largess. This has resulted in contracts that are excessive when compared with those in the private sector.
This is primarily due to their enormous political power. They can determine the outcome of elections. Thus, they are in a position of negotiating across the table with those they have put in office. Meaningful negotiation cannot take place in this artificial environment. Inefficiencies and high costs are the result.
Union power comes from the competitive environment of the employer. Monopolies, like the government and some utility and transportation companies, provide the most union power. As competition increases, union clout decreases. The airline industry is a good example.
Historically, there has been a strong argument that unions do not belong in the public sector. That debate is currently playing out.
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