Public_Sector_Unions

There are few issues hotter in the public sector right now than unions. The economic crisis and unemployment rates are creating a public eager to find a scapegoat and states are passing monumental legislation to limit the rights of public unions. This combination has put public unions in the spotlight and in the news. This paper explores the history of unions in the United States and their evolution in the public sector. Arguments for and against the public sector will be presented and a look at the future of public unions in the U.S. Finally, a look at the human resource issues involved with unions. Unions, in the United States, became a major force after the passage of the National Labor Relations Act in 1935 (Freyss, 2009). Industrial workers began to organize and protest poor working conditions and low wages. Unions remained a private industry phenomenon until the 1960s and 1970s when the public sector gained the right to unionize. The right to unionize for public workers fell under constitutional protection and became precedent after a string of court cases (Freyss, 2009). However, collective bargaining (a matter under serious contention in many states right now) was not protected under the constitution. Collective bargaining has to be granted by the employing jurisdiction. Federal employees were given the right under the Civil Service Reform Act (CSRA) of 1978, but state and local employee rights are varied (Freyss, 2009). Collective bargaining rights can even vary within jurisdictions. For example, a city may allow police to bargain collectively, but other city employees cannot (Freyss, 2009). Many states and local jurisdictions followed the federal example and the number of states allowing collective bargaining went from 1 in 1955 to 10 in 1965. By 1970, about half of the states allowed collective bargaining (Edwards, 2010). The CSRA gave unions legitimacy in the public sector. Suddenly, they were a force to be reckoned with. Even large federal agencies (e.g., OSHA) had to consult with the unions before they were able to implement any large scale changes (Reeves, 2006). After this landmark legislation, public unions were a well protected institution. Republican and democratic administrations supported the right of public employees to unionize (Reeves, 2006). Many administrations made attempts to make the relationship between labor and management more of an equal partnership and less of an adversarial fight. In particular, Gore’s National Performance Review attempted to equalize the relationship (Reeves, 2006). After the public union boom of the ‘60s and the legislation protections of the 1970s, the ‘80s saw a slowdown in advancement and the laws regarding unions have remained relatively stable since this. In more recent years, unions have become a public sector issue. There are now more public sector employees in unions than there are private sector union members. This is particularly impressive because there are more private sector workers overall. Union density is higher now in the public sector than it ever was in the private sector, even during the 1950s when private sector unionization was at its height (“Government”, 2011). Why exactly unions flourished in the public sector remains a mystery. The public sector was already a decent employer and provided decent wages, above average benefits, and job security that could not be found in the private sector (Reeves, 2006). In addition, public employees were professionals and technicians, not miners toiling away in toxic working conditions. It is especially curious because the movement began in the 1960s when government was living large and had strong supporters in JFK and LBJ (Reeves, 2006). It seems a union would be superfluous to this group of workers. However, public employees did join unions, in unprecedented numbers. Reeves (2006) argues that, even though public employees cannot be fired without just cause, the protection of a union was still very appealing in the public sector. In fact, the union representatives are the people who typically represent public sector workers during grievance hearings. Public employees definitely saw the value of having someone in their corner that could help them fight if needed (Reeves, 2006). The fact that public employees are already a fairly protected group of workers is certainly a common argument against the unionization of the public sector. This and other reasons against public sector unionization are explored in the following section. There are many arguments against public sector unionization, some are based on actual facts and some are just propaganda used to help politicians advance their agendas. One of the primary arguments, which is extremely powerful in an economy where so many people are unemployed or working poor, is that public workers earn a much higher salary than their private sector counterparts. Edwards (2010) points out that the private and public sector wages used to be very similar. However, by 1980 (following the unionization of the public sector in the ‘60s and ‘70s) public sector wages began to leave private sector wages behind and by the mid-‘90s the public sector had a substantial pay advantage. This discrepancy is usually found primarily with regards to benefits. One study found a six thousand dollar average difference between private and public benefits compensation (Edwards, 2010). Edwards (2010) also cites a study claiming public sector employees work fewer hours than private sector workers. However, another recent study found that when education and experience are accounted for, state and local employees actually earn about ten percent less than their private sector counterparts, even when including benefits (Traub, 2010). There are many variables in analyzing and comparing compensation; it might be hard to ever determine if the public or private sector pays better. However, when it comes to benefits, public employees certainly have it much better than private employees. Edwards (2010) found that while 71 percent of private employees receive health care benefits, 88 percent of public sector employees receive them. Even more disparate are retirement plans, which 90 percent of public employees receive compared to only 67 percent of private employees. Differences similar to these are found with life insurance and paid sick leave. The argument is not so much that public employees should not receive benefits, but these packages were often developed when the economy was booming in the ‘90s and city, state, and federal governments are now struggling to continue to pay them. In fact, at the end of 2008, state and local pensions were lacking for 3.2 trillion dollars (Edwards, 2010)! Governments at all levels are not prepared for the high cost of deals made with unions in the ‘90s when there was money to spare. . Retirement can be especially costly with public employees retiring with the majority of their salaries (sometimes as early as 55) and the government has to pay the salary and benefits for 30 plus years (Edwards, 2010). These generous retirement benefits seem even more unfair when a retiree takes on another job and now has two incomes. There are also frequent cases of retirement fraud, including pension spiking which occurs when, during the last year of employment, the employee is given a generous raise or works a lot of overtime. The pension is then based on this last year of income, even though it was abnormally high (Edwards, 2010). It is unconscionable that public servants would cheat for personal gain, especially at the public’s expense, but these cases do exist and justifiably anger the public. In 2008, wages and benefits for state and local workers was $1.1 trillion, half of the total spending, with these rates expected to rise, primarily due to the cost of healthcare (Edwards, 2010). It is obviously a huge expense for all levels of governments and becoming more and more of an issue as governments struggle to find funds. The unions play a substantial role in the procurement and sustainability of these perks of public employment. The complaint is not only that they help get benefits for the public sector, but they are inflexible even when the financial viability of a city or state seems to rely on a change in the compensation level. Politicians frequently complain that despite their attempts to meet unions half way or attempt to get concessions, they are met with strong resistance and unfair requests (Klein, 2011). Private sector unions know when the business is struggling their inflexibility could lead to closure, but public sector unions lack this perspective (Klein, 2011). Bob Ziegelbauer a Wisconsin state representative complains he is unable to get any concessions from the unions during negotiations. “The leaders would rather take layoffs than make concessions. The reaction is ‘You can’t make me” (as cited in Klein, 2011, para. 3). Many people who are against unions in the public sector also argue the unions are not acting in the public’s best interest. Unions are there to protect workers from abuses and frequently an adversarial relationship between labor and management forms. In private industry the unions may attempt to make the corporate bosses sacrifice for the sake of the workers. However, this is the public sector and if the union is acting only in the interest of the employees then the public could end up suffering as a result. Edwards (2010) contends most services provided by the government are technically monopolies. The public does not have the ability to look for a better deal or use the market to keep prices low (or keep the quality high). This means they really have to pay whatever the police, firemen, or teachers are demanding. In addition, the unions do not have the same downsides found in the private sector. They can demand higher wages and better benefits without feeling repercussions, because it is the taxpayer who has to pay for it (Edwards, 2010). Public sector unions are not constrained by the fear of a plant closing or outsourcing jobs the way private sector union members are. This disregard caused Vallejo to file for bankruptcy because they were unable to cover the compensation costs of the city employees (Edwards, 2010). There are plenty of examples of shortsighted unions, concerned only with the interests of their members, forcing governments to make expensive decisions. Ziegelbauer, the state representative from Wisconsin, describes an incident where the county was forced to keep a juvenile detention center open for just a few detainees, because the union considered any other solutions outside contracting. This cost the county $650,000 a year, when they could have easily just sent the few juveniles to a nearby county (as cited in Klein, 2011). Teachers unions are notoriously large and powerful. However, when the union is only concerned with the welfare of the union members, alternatives like charter schools and merit pay are fought against and frequently stopped, even when it might be beneficial to communities and to students (Klein, 2011). Moe (2009) did an in-depth study on the effects of teachers’ unions on the students involved. He argues the problem with collective bargaining rights for teachers is the bargaining is “rooted in their own survival and well-being as organizations- not in student achievement” (p. 157). The union might fight for some rules that serve both teachers and students, for example a small class size might be a requirement by union and will also benefit the students. In addition, better benefits, wages, and conditions might attract a more educated, professional teacher. Moe (2009) sees these as only coincidental overlaps, but the unions are just as likely to demand benefits that are detrimental to the students as long as they benefit the teachers. This may be seen as the crux of the problem with unions in the public sector: “that ordinary public employees…can wield power in pursuit of their own special interests- and in so doing, can have important impacts on the policies, organization, and performance of government” (Moe, 2009, p. 172). Moe (2009) did find collective bargaining had a negative impact on students, especially in larger districts and in high-minority schools. When public servants have enough power and self-interest becomes the priority, it is the public that suffers not corporate fat cats. This can be true not just for teachers, but any other powerful public union. They are fighting for the interests of one group of employees and their rules can become part of the very structure of a government. Another common argument against unions is they hold too much political power. Unlike their private sector counterparts, they can actually play a major role in whether or not their boss gets to keep his job (i.e., gets reelected). Public sector unions tend to be highly organized and highly political. They run phone banks, contribute money, campaign for union friendly candidates, and advertise (Klein, 2011). From 1989-2004 the American Federation of State, County and Municipal Employees contributed the most money to political campaigns and union leaders are frequent guests of politicians, even as high as the President (“Government”, 2011). This means they play a major role in electing people who will support unions and it also means politicians have reason to fear them. It is a lot of power for organizations that have done little to prove they are acting in the interest of the public, and not just in their own interests. The final argument against unions in the public sector (and maybe the private sector) is they protect incompetent employees and make it impossible to fire underperforming public workers. Protection from unjust termination was one of the biggest draws for people to join unions. However, what happens when an employee deserves to be fired' Are unions making it too difficult to fire them too' In the past ten years, the Los Angeles school district spent $3.5 million to try to fire seven teachers and still failed to get rid of two of them (“Government”, 2010). Union protection was not designed to leave the nation’s children in the hands of incompetent teachers. One economist argues that even improving the worst five to eight percent of the teachers with just average teachers would move the United States to near the top of the international rankings in subjects where we currently lag (“Government”, 2010). It certainly is not in the best interest of the public to protect incompetent public servants. It is a scary thought to imagine a few powerful groups having so much influence on so many aspects of government and this fear is used by politicians to start to whittle away the power of the public unions. There are, of course, also supporters of unions in the public sector. Klein (2011) is quick to point out the rise of unions and economic prosperity in America (the 1970s) occurred at the same time, and it was no coincidence. The unions helped create a middle class with the funds to consume and, therefore, support the capitalist country. Opponents of unions may use the fact that 90 percent of state and local public workers have a benefits package through work, compared with 20 percent in the private sector as proof the public worker is spoiled (“Government”, 2011). However, isn’t it preferable for people to have healthcare and retirement benefits' Certainly another person could read that statistic and think, “We need to get more private sector workers benefits!” Unions were designed to help workers gain benefits, decent working conditions, and fair wages. Unions in the private sector might be suffering because of globalization and other issues, but it doesn’t mean unions were a bad idea. Unionized public sector workers have an overall 42 percent compensation advantage (including pay and benefits) over their non-unionized counterparts (Edwards, 2010). This statistic can be used to show unionized workers as overpaid or it can be a reminder that non-unionized workers are underpaid. Floundering private sector unions does not necessarily mean public unions should also disappear, it might mean the private sector unions need to get stronger. This war on unions could amount to a war on the working and middle classes. In fact, the level of unionization in the United States has always been much lower than other industrialized countries, which means there has always been a large low wage employment sector (Katz, 2002). It is the lack of unions (not their existence) contributing to the growing divide between the rich and poor. In addition, McAlevey (2010) views the war on public unions not only as a war on the middle and working classes, but also a racist war. African-Americans represent a large percentage of government employees and are also disproportionately represented in all unions. Therefore, the dismantling of private and public sector unions is seriously hurting the blue collar workforce and minorities. Opponents want to portray public workers as overpaid, underworked leeches. However, recent studies showed police officers and school teachers were actually unable to buy homes in some metro areas on their public sector salaries (Traub, 2010). Although, it is not necessarily an argument in favor of unions, it is important to understand the public relations campaign that has been mounted to sway the public against unions. It has pitted private unions against public unions and it has made the public view the public sector as a non-essential component of this country (McAlevey, 2010). However, this is nothing new. Lichtenstein (2010) found the anti-union rhetoric has hardly changed since it began (after World War I). Union leaders were described as “tyrants” and “despots” in 1918 and again in the 1960s, when they began to move into the public sector. This implies the same smear tactics were used when corporations were attempting to stop unions from ever forming (and winning fair wages, benefits, and safe working conditions) and the public is once again being fed a one-sided, negative view of unions. The argument against unions began as part of the anti-communism movement and used the fear of communism to sway the public. Socialism is still a hot button issue and unions, once again, face the same negative press and incitement of public fear and anger, with little success mounting a counter attack (Lichtenstein, 2010). Public employees are quickly becoming the scapegoats for a nation’s economic problems. If the public sector unions decline, like the private sector unions did, it only serves to decrease the pressure to make decent pay and benefits the norm for working class people (Traub, 2010). It is easy to understand the private worker’s frustration when he hears about the public employee who still has health benefits. This anger is misdirected at the public sector unions, instead of the private sector bosses. The future of unions, in both the public and the private sectors, seems uncertain. The benefits and pensions public employees receive may need to be reevaluated and set at a more sustainable level. However, it is important to remember the economic stability of the United States also hinges on having a middle class with spending power (Klein, 2011). Continuing to erode unions and allowing corporations and governments to pay less and less will not help keep the middle class alive. The make-up of unions has changed and now includes mostly middle class members. This is a huge change from the industrial workers and laborers who first started unions (“Government, 2011). This is mostly because of the inclusion of the public sector. Teachers, police officers, and firemen remain some of the most unionized groups (Edwards, 2010). Another major change unions’ face is the increasingly unfriendly country. More and more states have “right to work” laws which include provisions that no worker can be forced to join a union (Edwards, 2010). These laws also prohibit certain provisions in union contracts. The battles are continuing in states all over the country to attempt to limit the power of unions, especially through their use of collective bargaining. The future may sound grim, but there is also some hope for unions. The appointment of Hilda Solis to the post of Secretary of Labor by President Obama has many union leaders believing they have a friend in Washington (Schoeff, 2009). She previously co-authored a bill that would make it easier to unionize in organizations. However, to find success in a new global, competitive, and struggling economy the unions will need to change their approach. Unions have spent massive amounts of money on political campaigns and ended up with very little to show for it (e.g., Gore, Kerry). Reeves (2006) strongly recommends unions focus more on new member recruitment and less on battling out large political fights. With union rates declining, from 20.1% in 1983 to 12.5 in 2004, the unions need members and they need to become attractive to workers once again (Reeves, 2004). This seems to be a common critique of unions from people who want to see unions continue. McAlevey (2010) wants the unions to spend more time directly connecting with workers and helping them with the serious issues they are facing, including home foreclosure. If unions can begin to address the issues of serious concern to the working and middle class, then they might begin to find a new spark to use to rejuvenate the base. Unions are an issue for human resource departments, regardless of the sector, for obvious reasons. Unions affect the level of benefits and compensation of the employees, which are primary responsibilities of human resources. It is also frequently the human resource department who helps negotiate with the unions. It is crucial to remember as a member of human resources to prepare seriously for negotiations with unions. In order to properly represent the agency, one must know the laws involved, the history of negotiations, and have expectations about what the union may demand (Freyss, 2009). Negotiators on both sides must, by law, act in “good faith.” This means they must both attempt to reach an agreement, present counter-offers, and schedule meetings with appropriate preparation time (Berman, Bowman, West, & Van Wart, 2010). It is also important to focus on issues and interests, not individuals. Negotiators need to remember an end result where both parties are happy is the ideal, not an impossibility (Berman, et al., 2010). The relationship between management and unions has become adversarial and ugly in many situations. However, the nature of the public sector, which lacks the competitions and free market of the private sector, provides a unique opportunity to promote a harmonious relationship between the two parties. Negotiations between public sector unions and managers involve a third party as well: the public (Berman, et al., 2010). The public’s needs and interests must be kept in mind and protected. This additional concern makes the public sector unique and should always remain front and center during negotiations. Union negotiations certainly present difficult issues and paradoxes. For example, one side’s loss is another side’s gain, which destroys the trust and cooperation needed to run an effective organization (Berman et al., 2010). In the public sector, the nature of union versus management and negotiation leaves out the public’s interest which should be paramount. Unions have a long and powerful history in our country. They should be honored for the strides they made for workers rights and helping create the middle class. However, like the economy, business, and government, unions must evolve. Using the same tactics and demanding outrageous benefits will not help them survive. There is still a place for unions; in fact, the attempt to destroy them only seems to reinforce the argument for them to exist. They are essential to protect workers from abuse and to protect what is left of the middle class. It is not appropriate to compare public sector workers to their private counterparts or compare unionized workers to non-unionized workers and then vilify whoever makes more money. We must set the standard for fair pay and fair benefits and then demand it across the board. If we believe people have the right to healthcare, retirement, and enough money to buy a house, then unions can help us accomplish that for both private and public employees. The unions have mostly been destroyed in the private sector and retirement, healthcare, and wages have deteriorated along with them. The answer is not to now make the public sector as bad as the private sector. It is time for the unions to adapt and address the issues workers face today and work on recruiting new members. They can no longer rely on being huge, unbeatable entities, but should reconnect with their roots, which means organizing on the factory floor (or inside the office building). References Berman, E. M., Bowman, J. S., West, J. P., & Van Wart, M. R. (2010). Human resource management in public services: Paradoxes, processes, and problems (3rd ed.). California: SAGE Publications. Edwards, C. (2010). Public sector unions and the rising cost of employee compensation. CATO Journal, 30, 87-115. Retrieved from EBSCOhost. Freyss, S. F. (Ed.). (2009). Human resource management in local government: An essential guide. (3rd ed.). Washington, D.C.: ICMA Press. 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