March 9, 2013

JOEL GEHRKE: Public Sector Unions Are Very Different From Private Sector Unions.

Under the National Labor Relations Act, private-sector unions are allowed to extract dues and fees from workers if the employer is a unionized workplace. The NLRA, passed in 1935 during Franklin D. 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. . . .

Typically, government unions are given the exclusive right to bargain for members in a workforce. If an employee takes a job, they are forced to belong to the union or pay an “agency fee.” This gives local and state unions a lot of power.

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

In economics, this problem is described in “public choice theory” – the idea that those receiving concentrated benefits (the union) have more of an incentive to spend time and money lobbying than those paying the diffused costs (taxpayers). Eventually, this leads to bloated government as the incentives for public-sector unions and their employees to perform well is eroded.

See, e.g., Detroit.

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