Public Employee Union Scam

Editor’s note: This article first appeared through the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.

Under the National Labor Relations Act, private-sector unions are allowed to extract dues and fees from workers if the employer agrees. The NLRA, passed in 1935 during Franklin Roosevelt’s first term, does not, however, apply to public-sector employees—including state and federal workers—because the thinking was that this would over-politicize government and cause a conflict of interest between unions and politicians. In a Weekly Standard piece by professors Fred Siegel and Dan DiSalvo titled, "The New Tammany Hall," this problem is described:

Unlike private sector unions, the sheer number of workers represented is not the linchpin of [the public sector unions] influence. Private sector unions have a natural adversary in the owners of the companies with whom they negotiate. But public sector unions have no such natural counterweight. They are a classic case of "client politics," where an interest group’s concentrated efforts to secure rewards impose diffused costs on the mass of unorganized taxpayers.

In the 1960s, many states began chipping away at the wall of separation between unions and public workers. In 1965, the Michigan Legislature revised the Public Employment Relations Act (PERA) to establish mandatory collective bargaining and exclusive representation for state and municipal government workers. This has caused the number of public-sector union employees to skyrocket.

A conflict of interest would be as follows: First, a government union elects politicians by funding their campaigns and organizing a massive get-out-the-vote drive; second, the politicians support employee pay increases, generous pensions, and condition of employment; third, the union takes dues (read: taxpayer money) and starts the cycle all over again for selected politicians.

At both the state and national level, public-sector union support for many Democrats has been well documented. One of the largest public-sector unions in the country, the American Federation of State, County, and Municipal Employees (AFSCME) has given over $40 million to politicians since 1990, with more than 98 percent of that going to Democrats. The SEIU, AFL-CIO, and United Steel Workers have all promised big help in the coming election. In return, the Democratic Party has voted nearly lockstep with these unions’ demands.
But political cronyism knows no party lines, and many Republicans likewise have been guilty here in Michigan.

In just the past year, the state has had several such instances. Last fall, nine Michigan Education Association-supported House Republicans nixed a 3 percent cost-saving plan for the school aid budget. In April, MEA-supported Senate Republicans watered down a modest bill that would "increase state and school employee payroll contributions to their pension system by 3 percent, cap pension ‘service credits’ at 30 years, and create a somewhat less generous defined benefit system for new school employees." At the same time, a union subsidiary of the SEIU pushed GOP Senators into coming up short on a vote that would have opened a prison to competitive bidding and privatized it, if privatization promised to save money.

Last August, one Republican state senator came under fire for introducing a bill that would have forced some 42,000 in-home health care workers into a union, sending approximately $6.6 million in taxpayers’ money to the SEIU in the form of "dues."

Unfortunately, what has happened in Michigan has taken place elsewhere in America.

The end game for these types of relationships is already happening in our country’s most public union-friendly states: in California, where budget gridlock has forced the government to issue IOUs and minimum-wage salaries to public officials, and in Illinois, where the governor has promised massive tax hikes combined with severe cuts to education. Both states have some of the highest tax rates in the county, and yet both face pension obligations that they cannot ever hope to pay.

These types of political dealings and financing may not be illegal, but they’re still an offense to the political process. Politicians can take money from government-employee unions and then vote on legislation that directly improves the financial well-being of these entities. A possible quid pro quo exists that would not if public-sector unions were restricted from giving money to politicians.

Politicians granting unsustainable government-employee salaries, benefits, and pensions is a problem everywhere, but the states with the strongest public-sector unions will have the hardest time correcting the problem. More broadly, as long as these incestuous relationships between government unions and the political class remain in place and unchallenged, the size and scope of government will continue to grow.

— Jarrett Skorup is a 2009 graduate of Grove City College and former student fellow at The Center for Vision & Values. He is the research associate for online engagement for Michigan Capitol Confidential at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Centers are properly cited. Mr. Skorup can be reached at [email protected].