Construction Law

Will The Public Employee Union Battle Presently Raging in the Mid-West Find its way to the Pacific Northwest?

By John P. Ahlers

The battle for organized labor has begun in Wisconsin and Idaho and will likely be a debate in most of the state legislatures over the next few months. President Franklin D. Roosevelt and several progressives had significant questions about the right of public employees to unionize. Unlike industrial unions, public employee unions are not organized against the power of capital; instead, they are organized against the power of the public and the public officials. Public employees in a union negotiation sit on both sides of the table. Unions are significant contributors to political campaigns and are known for their fierce activism in campaigning for government candidates. Thus, they exert undue power over the politicians-the very persons who the public employee unions are negotiating with. While industrial unions negotiate with the knowledge that a company will shut down if the union does not make concessions, public employee unions realize that if negotiations fail with the public entity, the public entity will not shutdown government (i.e., the schools, buses, or water system). Essentially, the public employees can negotiate to a standstill, confident in their position that the public entity will not fail if the union fails to concede in the negotiation.

The battle line in Wisconsin, drawn by Governor Scott Walker, is based on the simple issue that the public employee union only should have the power to negotiate wages and wage increases but no other collective bargaining rights. Over time, it has been easier for the politicians to negotiate big pension plans and work rule packages than wage increases. For example, politicians have found it easier to give the teachers' unions the right to determine the length of the school day and how to hire and fire teachers, rather than to raise wages which causes fallout for the politician. When wages are increased, the politicians must raise taxes in the short term which makes the politician accountable. On the other hand, when the politician gives in to long term pension benefit packages (unfunded) and work rule concessions, the short term impact is relatively slight while the long term impact is devastating to the taxpayers. Washington is one of the states that has an unfunded pension liability to state employees in the billions of dollars.

President Obama has often complained that the powerful teachers' union are an impediment to educational reform primarily because of the work rules in place after many years of collective bargaining. It is difficult to fire teachers, good teachers cannot be rewarded, and when layoffs become necessary, instead of having the flexibility to layoff the worst teachers first, the powerful teachers' union insist that the last hired be the first fired regardless of competence. These seniority work rules are not in the best interest of our children.

The northwest states rank high among the states with the strongest unions. Alaska is second with union membership of 22.9%, Washington ranks 4th with union membership of 19.4%, and the state of Oregon ranks 10th with union membership of 16.2%.

The conflict in Wisconsin is not a local issue; it will likely become precedence for a movement which will sweep many states as they struggle to stay above water. If Governor Walker's plans prove successful, they will likely become a blueprint for other troubled states to follow. Governors are pressing their legislatures to cut budgets sharply. Public unions have been able to set high pension plans and generous benefits in many of our states, and now those states have to keep the benefits in place and fund the unfunded pensions. Although there is some debate that states maybe able to declare bankruptcy, that issue is by no means settled. Drastic cost cuts combined with higher taxes are likely the only means to balance budgets. Thus, the only apparent solution to bring the bloated healthcare and pension plans in line is to at least change the rules for new and future workers by incorporating more conventional retirement programs such as 401k plans. Colorado's attempt to go back and change public worker's pension and health plans is presently being challenged in court.

http://247wallst.com/2011/03/10/the-states-with-the-strongest-and-weakest-unions/

http://247wallst.com/2011/02/21/wisconsin-and-the-future-of-public-worker-unions/?utm_source=nrelate&utm_medium=related&utm_campaign=related

Full post as published by Construction Law Blog on March 21, 2011 (boomark / email).