Freeman

THE PURSUIT OF HAPPINESS

Government-Sector Unionism

An unconstitutional delegation of authority.

MAY 01, 2002 by CHARLES W. BAIRD

Filed Under : Labor Unions, U.S. Constitution

In my February 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’ private-sector market share in 2001 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?

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 its supply 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 government-sector collective bargaining have a common interest—to pick the taxpayers’ pockets. Government agency heads are empire builders. They want more visibility, authority, and 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.

The state statutes that control unionism for 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 a company’s employees in an election is the monopoly representative of all 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 because Congress created the NLRA and is therefore a party to all of its processes. Be that as it may, with government-sector collective bargaining, governments are indisputable parties. Therefore, granting exclusive representation to GEUs is unconstitutional on its face because governments discriminate against workers on the basis of association (or lack thereof).

Preventing Free Riding

Union security means that all workers represented by a certified union must pay fees for the “service.” Unions say they need union security to prevent individuals from free riding. 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 thereby threatens to fire employees who do not pay a tax to the GEU. This, too, is clearly government discrimination against workers on the basis of their association (or lack thereof) 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 requires that if either the employer or a certified union wants to bargain about some labor-related issue, the other side must agree to bargain about it. Moreover, the bargaining must be in good faith, which in practice means 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.

In the government sector, wages and other employment conditions are matters of public policy. Mandatory good-faith bargaining with GEUs means that governments share the making of public policy with private groups. This, in effect, creates a fourth branch of government contrary to the Constitution. Of course, all sorts of private groups attempt to influence public policy by lobbying and making campaign contributions, but GEUs are special: it is illegal for politicians and agency heads who are in collective bargaining with GEUs to ignore them. Thus GEUs have the legal power to veto government policy. This is the clearest case of the unconstitutional delegation of government 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, unionism will become a curious historical relic.

Charles Baird is a professor of economics and the director of the Smith Center for Private Enterprise Studies at California State University at Hayward.


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May 2002

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CHARLES W. BAIRD

Charles Baird is a professor of economics emeritus at California State University at East Bay.

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