Last Tuesday’s referendum in Ohio was just the latest clash between governors and unions representing state workers. Voters brusquely overturned Gov. John Kasich’s signature reform of government labor relations in a referendum. It was a big win for organized labor and its allies in the Democratic Party. They claim Republicans overreached and hope the results portend a 2012 Obama victory in the Buckeye State. Fair enough. But the deeper lessons are rather different.
First, note that labor secured its triumph in a goal-line stand: After a $30 million campaign effort, the labor movement managed to return the ball to midfield — restoring the old status quo of mandatory collective bargaining in the public sector.
Second: Reform would’ve given elected Ohio officials and agency managers more discretion to determine priorities; its defeat will require the state to adopt one of the other two dominant approaches to dealing with their unionized workforces — budget austerity, or a combination of labor concessions and new revenues. Put differently, Ohioans are in for some combination of service cutbacks or tax hikes.
Third and most important: Battles between politicians and public-employee unions are far from over. A prolonged period of slow economic growth, which the nation now seems likely to experience, will depress states’ tax revenues. Simultaneously, the cost of government employees’ pension and health-care benefits will continue to rise. Great fiscal strain will result.
But public-sector unions have powerful incentives to resist making any concessions — and since they’ve already made some, it’ll be even harder for them to accede to more.
These competing pressures are a recipe for conflict, not just in Ohio but also in New York, California, Illinois and Michigan.
The fundamental differences between unions in the public and private sectors help explain why confrontation will persist. Unions representing teachers, police and firefighters and those representing steelworkers, carpenters and coal miners are really distinct “species.” The differences extend across historical, economic, political and moral dimensions.
Historically, private- and public-sector unions emerged at different times and from different legal sources, and they’ve followed different trajectories. Private unionism was facilitated and is still governed by federal law — mainly, the Wagner Act of 1935 and the Taft-Hartely Act of 1947. Public-sector unionism, on the other hand, is the creation of state laws that emerged in the 1960s and 1970s.
After reaching a high-water mark in the 1950s, when roughly a third of the US workforce was unionized, private-sector union membership has steadily declined. Battered by global competition, technological innovation and legislative setbacks, unions now only represent about 6 percent of private-sector workers. In contrast, public-employee unionism has been an island of stability, as about 36 percent of workers in state and local government have belonged to unions since the early 1980s. Despite Wisconsin, government unions are now fixtures in the the states and aren’t going anywhere fast.
The economic difference between the two types of unionism is that private-sector unions operate in the marketplace and public-sector unions in government, which changes the nature of collective bargaining. Private-sector unions must be attentive to their employers’ competitive position vis-à-vis other firms and moderate their demands in light of it. Public-sector unions encounter no such check.
The political difference is that public-sector unions have two ways to influence their employers — that is, government. The collective bargaining process is the chief means for private-sector unions to win things for their members. But public-sector unions can also use politicking on behalf of elected officials who act as “management” in contract talks. Ultimately, public-sector unions are fundamentally political organizations, because most decisions affecting them are political decisions.
The moral difference between private- and public-sector unions is that the former are pretty upfront about the fact that they are pursuing their self-interest. But having government as their employer encourages the latter to conflate their self-interest with the public interest. Hence the slogan of the National Education Association and the American Federation of Teachers: “What’s good for teachers is good for kids.”
Today, public employees have become majority of union members, their unions are now the principal financiers of organized labor’s political efforts, and government decides most issues of importance to them. Don’t expect them to give up the fight.
Dan DiSalvo is an Assistant Professor of Political Science at City College and a Manhattan Institute senior fellow.