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The Progressive Fix

Twilight of Collective Bargaining?

The Battle of Madison is in full cry, as labor and its progressive allies rally to block Wisconsin Governor Scott Walker’s plan to curb union bargaining power. The leftish Nation magazine calls it “Labor’s Last Stand.”

That’s a tad melodramatic; unions probably aren’t headed for extinction. But the traditional model of collective bargaining looks increasingly like an anachronism that may not survive this political donnybrook.

Like most states, Wisconsin is facing serious budget shortfalls. But Walker, a first-term Republican, isn’t just calling for givebacks from state employees. In addition to asking workers to chip in more for their health and pension benefits, he wants the legislature to pass a bill that would restrict their bargaining rights to the subject of wages. And he’s not alone: other GOP Governors, including John Kasich of Ohio, plan to follow suit.

Many Republicans blame states’ budget woes on generous labor contracts, which they see as creating a privileged class of public sector workers sheltered from the vicissitudes of the “real” economy. “Unionized public employees are making more money, receiving more generous benefits, and enjoying greater job security than the working families forced to pay for it with ever-higher taxes, deficits and debt,” Republican presidential aspirant Tim Pawlenty wrote recently in the Wall Street Journal.

This has incensed liberals, who note that it was Wall Street bankers and speculators, not bureaucrats, who plunged the nation into the fiscal crisis and the Great Recession. They say Walker is exploiting the fiscal crisis to aim a dagger at the heart of the only part of labor that has grown in recent decades: public sector unions. (More than 36 percent of public employees belong to unions, compared to just 7 percent of private sector workers.) Democrats view the GOP bid to strip public employees of collective bargaining rights as an attempt to topple a key pillar of the party’s progressive coalition.

In this view, what’s happening in Wisconsin and elsewhere is a political power play, pure and simple. Says Paul Krugman:

You don’t have to love unions, you don’t have to believe that their policy positions are always right, to recognize that they’re among the few influential players in our political system representing the interests of middle- and working-class Americans, as opposed to the wealthy. Indeed, if America has become more oligarchic and less democratic over the last 30 years — which it has — that’s to an important extent due to the decline of private-sector unions. Given this reality, it’s important to have institutions that can act as counterweights to the power of big money. And unions are among the most important of these institutions.

But things aren’t quite this simple, for three reasons.

First, Krugman conflates public and private unionism. Where public sector unions are concerned, the “boss” isn’t some private oligarch, it’s the government — ultimately the public. Unlike private unions, they get to pick the people on the other side of the bargaining table by funneling union dues into their political campaigns. Even if union leaders and lawmakers were saints, such an arrangement inevitably would put the public interest and the interests of government workers in tension. That is why no less a liberal paladin than Franklin D. Roosevelt opposed public sector unions, saying “The process of collective bargaining, as usually understood, cannot be transplanted in the public service.”

Second, progressives should acknowledge that many states have gone overboard in negotiating generous compensation packages for public employees. For example, the states are carrying about $1 trillion in unfunded pension liabilities on their books. Many pay a higher percentage of their workers’ health care premiums than private employers typically do. It rankles private sector workers to see states go into debt to provide public employees with pay and benefits (not to mention job stability) that are beyond their reach.

Third, progressives need to improve the quality of public services even as they reduce the cost of government. Collective bargaining agreements often impede the quest for flexibility, innovation, and higher productivity in the public sector. A classic example is teacher tenure, which makes it difficult for public school systems to get rid of ineffective teachers or to pay good ones on the basis of superior performance.

There’s no doubt that progressives must defend workers’ right to organize to protect their mutual interests. But organized labor also needs to evolve alternatives to the traditional collective bargaining model, which no longer fits the modes and organization of work in a post-industrial, globalized economy, and arguably has always been problematic in the public sector for the reasons that gave FDR pause.

Unlike private firms, high labor costs can’t drive government out of business or overseas. But running deficits to give workers what looks like special treatment can drive down public confidence in government. That’s why public employees need to develop new strategies that reconcile basic job protections with the need for a more effective, accessible, and fiscally responsible government.


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