The National Labor Relations Act (or Wagner Act), passed under the watchful eye of FDR in 1935, specifically excluded public sector employees from unionizing. FDR is right: collective bargaining does not work with the government. A government has almost no leverage in such deals, and because of this they are at a significant disadvantage in dealing with a labor union. A government cannot relocate or significantly change their function. Also, a government is essentially a monopoly. You and I have no choice but to use the government for certain things. If the price of some government service gets too high, my only option is to not purchase the service. This would constitute not paying my taxes, which isn’t really an option at all, unless you really like living in a jail cell.
Once you add the typical mentality that a state or city can’t go broke you get elected officials that think taxes create an endless piggybank that they can use to curry favor with organized labor. Everyone wins… until you see your state is drowning in debt.
So now all the idiotic spending needs to come to a halt, one way or another, and unions are going to get the worst of it. 32.5% of public employees are unionized. In fact, as of 2009 there were more union employees working in the public sector than the private. As unions drove private enterprises out of the United States there was only one refuge left.
These “too big to fail” entities like states and cities are on the edge of actually failing now, and you can bet that they will throw everyone under the bus if given the opportunity. Raising taxes isn’t going to cut it. The states are all now trying to figure out ways to get out of their bloated union contacts. There’s even talk of a few states filing for bankruptcy, though there is no legal precedent for doing so. But really it isn’t a question of whether all these government entities are going to find a way to cut labor costs, just how.
At the end of the day the little guy is going to get screwed yet again. Lack of foresight on both sides has spelled ruin for not only governments, but all for those employees as well. Morons in the government cut ludicrous plans with unions which they could never honor, and the unions were glad to take them.
If the unions are smart they will renegotiate for more competitive wages, but I’m guessing they won’t. Aside from the fact that their bad deals will ultimately end up costing them more money in taxes (they do live under the governments they’re robbing), the Unions stopped being about helping individual workers a long time ago. Once upon a time they did great things, but those days are long gone. Unions are a business now and all they really care about is profit, no matter who it ends up costing. Tragically, this time, it is costing everyone, and dearly.
P.S.
Check out what’s going down in Europe regarding private pensions being used to keep governments afloat. Creepy.
