The Public Employee Union Scam

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.

[This article first appeared through the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich.]

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  • Bingo. The fox is indeed in the hen house and as a union household, self-employed, I can tell you that if you call your local on any of this–good luck finding a job. Unions have brought in socialism from the back door. As a nation, we weren’t even watching. How can any industry survive when they have promised to pay astronomical pensions including benefits to a person for the rest of their lives? Based on what? Now, the problem has come home to ‘roost’, and most still refuse to recognize it. I’ll be checking back for the ‘pro-union’ comments that are sure to come to rebut your article.

    The biggest disappointment for us, personally? While all this has been as plain to see as the nose on your face for the past 30+ years, our Church consistently supported Unions as being a ‘savior’ (of sorts) to the ‘working man’. We reap what we have sown. I do think these union bosses could be useful, though. Let’s send them over to negotiate with China, Iran and other problem areas. They just might have what it takes to bring about equity where it is truly needed.

  • teapot

    I agree and I believe this is just one aspect of a very frightening situation that is developing in this country. First, as you stated, the public center unions are becoming dangerously powerful. Second, the public sector is growing rapidly as the private sector shrinks. Third, the percentage of the population receiving benefit payments from the government is also growing rapidly. All of this comes together in such a way that makes reducing the size of government all but impossible. This is a clear case of the lunatics running the asylum. I believe we are reaching (or have already reached) some kind of tipping point in this country. The portion of the electorate who have an immediate, personal, financial interest in keeping government spending as high as possible is at the point of overwhelming elections on a federal level. And it gets worse… Because of extremely heavy affirmative action hiring in the last 40 years minorities make up a disproportionately large percentage of public sector employees. This makes it possible to spin the problem from a racial perspective which is always a recipe for disaster. The Tea Party can call for smaller government until they’re blue in the face but I really don’t see how they can overcome these demographic facts. The government has its hooks buried too deep in our flesh. I don’t see how we can get free.

  • terrygeorge

    thank you for informative article. i really didn’t know the cycle so concisely, just that there was a connection. i don’t think most people out there know about it to be honest. always wondered how so many socialist were getting elected. it is shameful that so many in church foolishly support ‘pro-union’ politicians and dem party without sufficient consideration more important issues such as a strong pro life stance. to me, this is taking money for blood.