public-employee unions

Massachusetts’ Collective Bargaining Law: A Worry for the Obama Administration?

by Ivan Osorio on July 13, 2011

in Economy, Employment, Labor, Politics as Usual

It’s not easy being a governor or state legislator these days. With states facing deep budget deficits, state lawmakers around the nation are working to close their budget gaps by tackling one of the biggest costs they face: government employee compensation. As we saw in Wisconsin (and to a lesser extent in Ohio), Republican lawmakers who take on the government employee union lobby can expect an all-out backlash from it.

But it’s not just Republicans. Some Democratic state elected officials are also trying to close their own states’ budget gaps. While public employee unions have not been as vocal in their opposition to Blue Team-proposed cuts, Democrats depend on campaign support from unions in a way Republicans do not, so alienating those unions could prove costly politically — at least in theory.

That’s difficult enough, but now it appears that Massachusetts Governor Deval Patrick, a Democrat, recently had to deal with the Obama administration on this issue. The Boston Globe reported this week:

The White House took the unusual step this spring of calling Governor Deval Patrick to discuss his plan to curb the collective bargaining rights of public employees, an indication that the Obama administration may have been concerned about the potential for national political fallout.

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Wisconsin Judge’s Strange Ruling Blocking Limits on Collective Bargaining Surprises Legal Observers

by Hans Bader on March 25, 2011 · 2 comments

in Labor, Legal

Wisconsin legal observers were “surprised last week when Madison-based judge Maryann Sumi issued a temporary restraining order blocking implementation of Gov. Scott Walker’s bill to limit public-sector collective bargaining.” A law professor was “astonished” by the legally-baseless ruling, which didn’t even bother to “address the relevant laws and rules that demonstrate that what the legislature did was proper.”

The judge’s decision made no legal or logical sense, but did make political sense: the judge has to run for reelection in a liberal area, and her own son was a union organizer. Her son is a liberal political operative who also happens to be a former lead field manager with the AFL-CIO and data manager for the SEIU State Council. Moreover, the judge’s husband is a campaign donor to three of the Democratic lawmakers who fled the state to block the passage of the collective bargaining law, as well as a donor to Gov. Walker’s opponent.

Judges in Wisconsin have to run for reelection, and this judge is elected in liberal Dane County, where the new collective bargaining law was resoundingly unpopular, and the new governor lost by a wide margin even while winning easily statewide.

There was little legal basis for the judge’s ruling. The Senate Chief Clerk and non-partisan legislative attorneys signed off on the legislation being consistent with the open-meetings law.

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Did Wisconsin Police Violate the First Amendment through Selective Enforcement of Limits on Protests?

by Hans Bader on March 3, 2011 · 1 comment

in Features, Labor, Legal, Personal Liberty, Politics as Usual, Sanctimony

Post image for Did Wisconsin Police Violate the First Amendment through Selective Enforcement of Limits on Protests?

Ordinarily, protesters who tried to occupy the Wisconsin Capitol Building would be swiftly arrested and removed. But this weekend, police in Madison, Wisconsin, not only allowed pro-union protesters to stay and sleep in the state Capitol Building, they joined them.

Wisconsin union supporters applauded this lawlessness. One exulted, “Police have just announced to the crowds inside the occupied State Capitol of Wisconsin: ‘We have been ordered by the legislature to kick you all out at 4:00 today. But we know what’s right from wrong. We will not be kicking anyone out, in fact, we will be sleeping here with you!’ Unreal.”  (Days later, the police finally told the protesters to leave the Capitol Building, but “didn’t evict“ them at that time, and protesters were still camped out in the Capitol Building on the morning of March 1, with their garbage and trash littering the building and the surrounding areas. By the time the police finally took grudging action to limit the protesters’ access to the building, it was during business hours — when the building has traditionally been open to the public. So a union lawyer then promptly got a temporary restraining order that, with little explanation, forced Wisconsin officials to reopen the building to the public during business hours, thus making it harder for them to clean up the building and prevent future occupations.)

This foot-dragging by police and their selective enforcement of the law was a violation of federal court rulings, like Dwares v. City of New York (1992), that require police to enforce the law in a viewpoint neutral manner. In Dwares, police were sued for refusing to arrest people who attacked flag-burners because they disagreed with the flag-burners’ message — even though police ordinarily enforce laws against assault.

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Bogus Statistic from Wisconsin Union Backers Spreads Despite Repeated Debunking

by Hans Bader on February 28, 2011 · 6 comments

in Economy, Employment, Labor, Regulation

Post image for Bogus Statistic from Wisconsin Union Backers Spreads Despite Repeated Debunking

“A lie can make it half way around the world before the truth has time to put its boots on” — like a false statistic recently spread by supporters of Wisconsin’s government-employee unions, such as MSNBC’s Rachel Maddow. Despite being debunked by PolitiFact, it has since been widely repeated in multiple letters to the editor, and it remains uncorrected on the web sites of publications like The Economist.

On Wednesday, PolitiFact debunked the claim by Wisconsin union supporters that Virginia, which bans collective bargaining in state agencies, ranks 44th in the nation in ACT/SAT scores, compared to Wisconsin ranking 2nd. For example, it noted that in 2009, Virginia ranked 22nd in ACT scores, while Wisconsin ranked 13th. As PolitiFact notes, this claim was originally disseminated by the Wisconsin Democratic Party, which has now retracted it.

(Although PolitiFact didn’t note this, in 2010, Virginia actually beat Wisconsin in ACT scores, with Virginia ranked 12th and Wisconsin ranked 17th. Unlike Wisconsin, Virginia is a right-to-work state that bars forcing employees to pay union dues. Collective bargaining with government employee unions is currently mandated in Wisconsin, but banned in Virginia.)

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Wisconsin Union Backers Defame Virginia and Spread Bogus Statistics

by Hans Bader on February 26, 2011 · 1 comment

in Features, Labor, Politics as Usual, Regulation, Zeitgeist

Post image for Wisconsin Union Backers Defame Virginia and Spread Bogus Statistics

Virginia schools have better-than-average test scores. Virginia obviously doesn’t rank an abysmal 44th in the nation on SATs and ACTs, as supporters of Wisconsin government-employee unions keep falsely claiming. They’re making that claim up because Virginia bans collective bargaining by government employees, and Wisconsin, which currently mandates collective bargaining in government agencies, is considering proposals by its newly-elected conservative governor to bar such bargaining in areas like pensions, which frequently result in government costs being passed on to future generations.

In 2009, Virginia ranked in the middle of states on the ACT and SAT, and in 2010, it actually outranked Wisconsin on the ACT (12th vs. 17th in “average composite score“). The reason it doesn’t rank higher on the SAT is because so many of its students take the test – including marginal students who wouldn’t even take them in another state. (Wisconsin boasts a higher average SAT score than Virginia partly because only “four percent” of Wisconsin students took the SAT, compared to “67 percent” in Virginia. Virginia’s lower average SAT score is a function of a larger pool, not dumb students or bad schools, as PolitiFact pointed out in debunking the false claim that Virginia ranks 44th.)

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No, Wisconsin’s Budget Deficit Wasn’t “Manufactured” by Walker and the GOP

by Hans Bader on February 23, 2011 · 2 comments

in Economy, Employment, Labor, Regulation

Post image for No, Wisconsin’s Budget Deficit Wasn’t “Manufactured” by Walker and the GOP

Wisconsin is one of the most heavily taxed states in the country, and its government employees are paid much better than the state’s taxpayers. Like many states, it’s facing a substantial budget deficit. But when the state’s newly elected Republican governor, Scott Walker, attempted to place reasonable limits on government-employee pay and collective bargaining, liberal commentators such as Rachel Maddow falsely claimed that the state’s budget crisis was manufactured, and that Wisconsin actually had a projected budget surplus.

This claim has now been debunked by the Milwaukee Journal-Sentinel, which endorsed Obama in 2008 and John Kerry in 2004: “Our conclusion: Maddow and the others are wrong. There is, indeed, a projected deficit that required attention, and Walker and GOP lawmakers did not create it.” Maddow blamed the state’s current deficit on business tax breaks supported by the governor, but those cuts are a tiny drop in the bucket compared to the state’s overall budget; and as the Journal-Sentinel noted, “the cuts are not even in effect yet, so they cannot be part of the current problem.”

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Obama Instigating Disruptive Wisconsin Protests to Protect Union Privileges

by Hans Bader on February 18, 2011 · 5 comments

in Economy, Employment, Labor

In the Washington Examiner today, I discuss how Obama and his allies are helping orchestrate the disruptive Wisconsin protests that have shut down many of its schools. The Democrats in the Wisconsin State Senate have fled the state to deprive the legislature of a quorum needed to pass fiscal reforms backed by Wisconsin’s conservative governor that would reduce the privileges of the state’s public-employee unions.

As The Wall Street Journal notes, those reforms would not only reduce gold-plated employee benefits, but also curb the entrenched power of liberal lawmakers by ending the practice of automatically withdrawing money from public-employee paychecks to finance the government-employee unions, which make almost all of their political donations to liberals:

Unions are treating these reforms as Armageddon because they’ve owned the Wisconsin legislature for years and the changes would reduce their dominance. Under Governor Walker’s proposal, the government also would no longer collect union dues from paychecks and then send that money to the unions. Instead, unions would be responsible for their own collection regimes. The bill would also require unions to be recertified annually by a majority of all members. Imagine that: More accountability inside unions.

As David Freddoso notes at the Washington Examiner, Wisconsin government employees are better paid than the state’s taxpayers. At the Daily Caller, CEI’s Ryan Young notes that there are political risks to well-paid public-employees effectively shutting down the government to preserve their perks. On the other hand, liberal bloggers and most liberal journalists seem to be backing the protesters, despite their inflammatory rhetoric (like depicting the governor as Hitler or invoking the words of Lincoln’s assassin) and defiance of a democratically-elected governor and legislature. One exception is The Washington Post‘s Charles Lane, who worries about steadily-rising government-employee pay crowding out other needs, and says that “it’s not progressive when employee compensation takes finite resources away from Medicaid, parks, roads and libraries.”

Obama Wants Taxpayers to Cough Up $50 Billion To Bail Out Public-Employee Unions

by Hans Bader on June 14, 2010 · 2 comments

in Bailout Watch, Deregulate to Stimulate, Economy, Employment, Energy, Environment, International, Labor, Politics as Usual, Precaution & Risk, Regulation, Sanctimony, Stimulus to Nowhere, Trade, Zeitgeist

President Obama now wants Congress to spend $50 billion to keep state governments from laying off government employees.  In essence, this is a bailout for the public-employee unions that bankroll liberal politicians.  Earlier, Obama’s allies in Congress proposed spending billions to bail out mismanaged and underfunded union pension funds.

The state governments will never have to pay back any of this bailout money, which rewards them for irresponsibly increasing government-employee pay much faster than inflation, to levels much higher than in the private sector.

By contrast, the private banks that were bailed out have repaid most of the money they received, while their shareholders lost most of their money–92.6 percent at Citibank.

While millions of private sector employees have been laid off in the current recession, few government employees have been.  The few government layoffs that have occurred would not even have been necessary if government employees were willing to accept pay cuts.  For example, in Montgomery County, Maryland, where a handful of teachers may end up being laid off due to a huge budget deficit, the average teacher makes $76,483 in base pay, not counting $30,000 in benefits, and other county employees are paid much better than teachers.  (Even if teacher layoffs occurred across the country–which they won’t–class sizes would still be smaller than they were a decade ago, since there are more teachers with higher pay teaching fewer students in the typical American classroom.)

Obama has not hidden his bias towards these unions.  As he noted in a 2006 book, “I owe those unions. . .When their leaders call, I do my best to call them back right away.  I don’t mind feeling obligated.”

Obama’s $800 billion stimulus package was deliberately crafted to focus on propping up pink-collar government employment at the expense of private-sector blue-collar jobs, where unemployment is concentrated.  The stimulus package is using taxpayer subsidies to replace U.S. jobs with foreign green jobs. It also destroyed jobs in America’s export sector.

The private sector bailouts have been bad enough.  An oversight panel found that the bailout of insurance giant AIG had “poisonous” consequences.

But bailouts of governmental and quasi-governmental entities will end up being far more costly.  The Obama administration lifted a $400 billion limit on bailouts for Fannie Mae and Freddie Mac, the corrupt, government-sponsored mortgage giants that even Obama administration officials admit were at the “core” of “what went wrong” in the financial crisis.

Senate Democrats recently blocked any reform of Fannie Mae and Freddie Mac.  (Obama received $125,000 in contributions from these mortgage giants as a senator.)

At the direction of the Obama administration, Freddie Mac ran up more than $30 billion in losses to bail out mortgage borrowers, some of whom have high incomes.  Federal regulators sought to make Freddie Mac hide the resulting losses from the SEC and the public.  The Obama administration showered the mortgage giants’ executives with $42 million in compensation.

Fannie and Freddie helped spawn the mortgage crisis by creating an artificial market for risky mortgages.  ”From the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime.”  They paid their CEOs millions, and engaged in massive accounting fraud–$6.3 billion at Fannie Mae alone–to increase the size of their managers’ bonuses.  As Government-Sponsored Enterprises, they were exempt from the capital requirements that apply to private banks, so they did not have enough reserves to cover their losses when their mortgages started defaulting.

Massive Fare Hike in Washington, D.C. Subway System; Public Sacrifices, Overpaid Union Doesn’t

by Hans Bader on May 28, 2010 · 7 comments

in Labor, Mobility, Politics as Usual, Precaution & Risk, Regulation, Sanctimony, Zeitgeist

The mismanaged Washington, D.C. Metro system is pushing through huge fare hikes,  not only increasing subway and bus fares, but adding a new 20 percent additional surcharge for rush hour.

But it’s refusing to engage in any sensible cost-cutting, such as service cuts that few passengers would ever notice, like ending subway service after 2 a.m. on weekends that results in virtually empty trains (but more high-paid work for unionized D.C. Metro employees).

Metro is almost unbelievably indulgent towards incompetent employees, who are allowed to drive buses despite a steady stream of accidents and traffic violations. Many Metro employees have $100,000-plus compensation and incredibly generous pensions.

Metro is padding its payroll while cutting funds for routine maintenance and safety (despite recent highly-publicized Metro crashes that killed passengers).

Metro’s Board includes Chris Zimmerman, an Arlington County Board member and tool of the public-employee unions who recently raised Arlington County taxes 10 percent to increase government spending in the middle of a recession, and take the Arlington County government on a billion-dollar spending spree.   Lazy board members like Zimmerman have long refused to conduct vigorous oversight over the Metro system or ask necessary and probing questions of incompetent D.C. Metro employees, which might offend their transit union.

The public interest takes a back seat to union special interests at the national level as well.  The Obama administration wants airline security and Amtrak to become more like Washington’s inefficient Metro, by increasing the power of unions and making it harder to get rid of problem employees.

A study found that the TSA is more than twice as likely to fail to detect a bomb as the private security firms it replaced. And TSA’s failure rate is three or four times as high as the few remaining private firms still allowed to handle airline security. In tests, TSA failed to detect fake bombs 60 percent of the time at Chicago’s O’Hare airport, and 75 percent of the time in Los Angeles. Yet the Obama administration backs collective bargaining for the TSA, even though collective bargaining makes it even harder to get rid of lazy employees and demand high performance.  The Obama administration is also undermining the security of railroad passengers by gutting an expert, highly-rated, anti-terror agency at Amtrak, which Amtrak’s unions hate, despite its efficiency, because it is not unionized.

D.C.’s Metro engages in massive racial discrimination in employment against non-black applicants.  Its workforce statistics go well beyond giving rise to a prima facie case of intentional, pattern-or-practice discrimination under the Supreme Court’s Teamsters decision.  (Note that I said “intentional.”  I am not talking about “disparate impact” or advocating racial proportionality or quotas relative to the general population.  Disclosure: I used to bring discrimination class-actions before working at CEI.)

Public Employee Unions’ Suffocating Grip on California

by Ivan Osorio on April 22, 2010

in Deregulate to Stimulate, Economy, Employment, Labor, Regulation

The current issue of the Manhattan Institute’s City Journal features a must-read account of how government employee unions have turned California into “The Beholden State,” by Steven Malanga. The piece covers a wide range of issues and trends relevant to public sector unionism, so I will focus here on one particularly interesting section, in which Malanga ties together organized labor’s support for greater government intervention in the (already heavily regulated) health care market with the growing crisis of underfunded union and public employee pension funds. As in so many stories of recent union power grabs, the Service Employees International Union (SEIU) is a major player.

The SEIU’s rise in California illustrates again how modern labor’s biggest victories take place in back rooms, not on picket lines. In the late 1980s, the SEIU began eyeing a big jackpot: tens of thousands of home health-care workers being paid by California’s county-run Medicaid programs. The SEIU initiated a long legal effort to have those workers, who were independent contractors, declared government employees. When the courts finally agreed, the union went about organizing them—an easy task because governments rarely contest organizing campaigns, not wanting to seem anti-worker. The SEIU’s biggest victory was winning representation for 74,000 home health-care workers in Los Angeles County, the largest single organizing drive since the United Auto Workers unionized General Motors in 1937. Taxpayers paid a steep price: home health-care costs became the fastest-growing part of the Los Angeles County budget after the SEIU bargained for higher wages and benefits for these new recruits. The SEIU also organized home health-care workers in several other counties, reaching a whopping statewide total of 130,000 new members.

The SEIU’s California numbers have given it extraordinary resources to pour into political campaigns. The union’s major locals contributed a hefty $20 million in 2005 to defeat a series of initiatives to cap government growth and rein in union power. The SEIU has also spent millions over the years on initiatives to increase taxes, sometimes failing but on other occasions succeeding, as with a 2004 measure to impose a millionaires’ tax to finance more mental-health spending. With an overflowing war chest and hundreds of thousands of foot soldiers, the SEIU has been instrumental in getting local governments to pass living-wage laws in several California cities, including Los Angeles and San Francisco. And the union has also used its muscle in campaigns largely out of the public eye, as in 2003, when it pressured the board of CalPERS, the giant California public-employee pension fund, to stop investing in companies that outsourced government jobs to private contractors.

In other words, SEIU pushed CalPERS to make an investment decision based not on what the returns from it would be, but on how it would advantage SEIU’s organizing — in this case, by maintaining a larger government workforce. This should constitute a clear violation of fiduciary duty under any sensible definition of the term. This kind of politicization of union pension investments has been going on for some time, so some pension funds have years of lost gains behind them today.

Further, to unionize “health-care workers paid by government medical programs like Medicaid,” unions are now trying to redefine the definition of “public” to any social service provider who receives state subsidies, even while not being directly employed by the state. By extending new subsidies to more people, the recently enacted health care “reform” bill has created even more opportunities for such a dubious expansion of the definition of “public.”

Now that Andy Stern has announced his retirement, is he is riding off into the sunset triumphantly after leading SEIU during its successful campaign to pass Obamacare, or is he jumping off a sinking ship as he leaves SEIU a financial mess? Maybe a bit of both.

For more on SEIU, see here, here, and here.

For more on public sector unions, see here and here.

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