In my previous column I gave two examples of the decline of unionism in the private sector and pointed out that the picture is very different in the government sector. Whereas the unions' market share in 2001 in the private sector was 9 percent, in the government sector it was 37.4 percent (down slightly from 37.5 percent in 2000). What accounts for the relative success of unionism in the government sector, and what unique constitutional issues emerge therein?
Union Success in the Government Sector
First, unions are organizations that try to quash competition among workers in the job market. In short they are, or try to become, labor monopolies. A monopolist in the production and sale of a product tries to restrict the supply of the product and increase its price above competitive levels. A union tries to restrict the supply of labor and increase its wage above competitive levels. Private sector employers usually try to avoid paying supra-competitive wages because they cannot easily pass the resulting cost increases on to their customers. Their customers typically have many alternative vendors with which to do business. Government sector employers, on the other hand, are often monopoly providers of their (alleged) goods and services. Their customers (taxpayers) do not have alternative vendors to which to turn. Moreover, their customers cannot refuse to pay the prices (taxes) the government agencies charge them. Thus government sector employers can, much more easily than private sector employers, pass forward any cost increases that result from paying supra-competitive wages, and therefore they do not resist union demands at the collective bargaining table as much as private sector employers do.
Second, government sector workers realize that the determination of taxes and spending is a political process, and they know that organized interests are more successful in the political marketplace than unorganized individuals. Claims by government employee unions (GEUs) to be able to improve terms and conditions of employment for their members have more credibility than similar claims in the private sector, so government sector workers are more receptive to union organizing than private sector workers.
Finally, the two sides of the government sector collective bargaining table have a common interest--to pick the pockets of taxpayers. Government agency heads are empire builders. They want more visibility, authority, responsibility, and larger budgets than they have. They are perfectly happy to cooperate with GEUs in pursuing those ends. For example, administrators and faculty unions at government universities often join forces in lobbying legislatures for bigger university budgets. They may fight over their respective shares of those budgets, but they agree that bigger budgets are better than smaller budgets.
Unique Constitutional Issues
The individual state statutes that control unionism among state and local government employees are all patterned after the National Labor Relations Act (NLRA) which controls all private sector unionism. Three features of the NLRA are particularly odious when applied to government employment--exclusive representation, union security, and mandatory good faith bargaining.
Exclusive representation means that a union selected by a majority of an employer's employees voting in a representation election is the monopoly representative of all employees who were eligible to vote. Individuals are even forbidden to represent themselves on issues of wages and other terms and conditions of employment. I have often argued that even in the private sector exclusive representation violates individual workers' freedom of association. The Supreme Court disagreed by saying that the government is not a party in private sector collective bargaining so the Bill of Rights, which limits government encroachments on individual freedoms, does not apply. I think the Court is wrong on this point because Congress created the NLRA and is therefore a party in all of its processes. Be that as it may, when it comes to government sector collective bargaining governments are indisputably parties to all collective bargaining agreements. Government agencies are the very parties with which GEUs bargain. Therefore, granting the privilege of exclusive representation to GEUs is unconstitutional on its face. The government is forbidden by the Bill of Rights to discriminate against any citizen on the basis of his association or lack of association with any legal private group. A union of government employees is just that--a legal private group. It is not another branch of government. When a government says it will employ only workers who are represented by a particular union it violates the Constitution.
Union security means that all workers who are represented by a certified union must pay fees to support the union. Unions say they need union security to prevent individual workers from free riding--getting the benefits of union representation without paying for them. Whether in the private or government sector, the unions' free rider problem is an artifact of the law. Without exclusive representation there could be no free riders. However, in the government sector governments are parties to the collective bargaining agreements that include union security clauses. A government that imposes union security on its employees says to them if you do not pay a tax to the GEU that represents you, your employment will be terminated. This, too, is clearly discrimination by government against individual workers on the basis of their association or lack of association with a private group. It is also a grant of taxing power to private groups. It cannot withstand objective constitutional scrutiny. The Court has recognized this problem with GEUs but has said the denial of freedom of association must be balanced against the government's interest in maintaining labor peace. The Court ignores the fact that the granting of monopoly privileges almost always results in less labor peace. Politics dictates that GEUs must have union security privileges, and the Court simply fabricated a particularly silly argument to excuse it.
Mandatory bargaining says that if either the employer or a certified union wants to bargain about some labor-related issue (except issues that involve illegalities), the other side must agree to bargain about it. Moreover the bargaining must be in good faith, which, in practice, means that each side must make concessions to the other. The only sure defense against an accusation of failure to bargain in good faith is a record of compromise with the other side. In the government sector, matters of wages and other terms and conditions of employment are matters of public policy. Mandatory good faith bargaining with GEUs means that governments share the making of public policy with private groups. The Constitution speaks of only three branches of government--legislative, executive, and judicial. It says nothing about a fourth branch--GEUs. Now, all sorts of private groups attempt to influence public policy by lobbying and campaign contributions, but GEUs are special. Any politician or agency head can legally ignore any ordinary special interest lobby such as the Sierra Club, but it is illegal for politicians and agency heads who are in collective bargaining with GEUs to ignore them. GEUs must consent to government wages and other terms and conditions of government employment before politicians and agency heads impose them. GEUs have the legal power to cast a private veto to block government policy. This is the clearest case of the unconstitutional delegation of governmental authority to private groups I can imagine. Yet, here again, the Court has been willing to permit violation of the constitution in the name of political expediency.
Government sector unionism is the only hope that union sympathizers have that unions will not eventually become irrelevant. It is also the form of unionism that is most clearly unconstitutional. If the Supreme Court ever summons the courage to once again defend the Constitution against political expediency, unionism will become a curious historical relic.
*This article was first published in Ideas on Liberty, a monthly magazine published by the Foundation for Economic Education (web: www.fee.org). Copyright is retained by Foundation for Economic Education.