May 20, 2006

The Difference Between Private Sector and Public Sector Unions

Jon Coupal and Richard Rider have written Private and Public Sector Unions are not Equal, in which they say:

...When government watchdogs ask reasonable questions about the wisdom of promising high pay and lavish pensions that are far above what is available to most private sector workers, union leaders accuse critics of being "anti-union." In this manner, they hope to protect their efforts under the umbrella of America's labor union movement. After all, the implication of calling someone "anti-union" is that the person favors sweatshops and employer tactics that use coercion to deny workers a fair wage in return for their labor.

However, government worker unions have little in common with the private sector unions that have spearheaded the American labor movement -- aside from the "union label."

Taxpayer advocates have no fundamental problem with private worker labor unions. There we see the proper balance between labor and management, between employees and owners. While some may disagree with an individual union's policies and tactics -- just as they may disagree with a company's conduct -- most understand that these unions are a part of a productive private sector...

But public employee labor unions are another matter. In essence, particularly on the local level, they select the "owners," or at least the management. They expend manpower and money to see that "their" candidates are elected to office. This way, when it is time to sit down at the bargaining table to discuss wages and benefits, the union has representatives on both sides of the table. There is no balance -- quite the opposite. The fox is guarding the henhouse. And the taxpaying citizens are on the menu.

A major difference between private and public entities is that the private firms have to earn their money through voluntary transactions. For all their rhetoric, private employee union leaders usually understand that it's best that the companies they negotiate with be competitive enough to stay in business and thrive -- and businesses can do that only if they provide a desirable good or service at a price the customers are willing to voluntarily pay.

On the other hand, public employee unions rely on the coercive power of government to tax anyone and anything within their jurisdiction...

Does this make the government union members "bad guys?" No, they are simply acting in their own, and their members', self-interest. But they are playing a zero sum game, thanks to the involuntary nature of taxation. Every dollar that goes to a government worker has to be taken from someone else by the threat of force.

And remember, public employees have something that private employees do not -- a civil service system. Indeed, there is good argument that collective bargaining for public employees is unnecessary because of all the employment protections they already receive. (Ever tried to fire a public employee?)

We need balance to protect the real owners of the public sector -- the vast majority of citizens and taxpayers who do not work for a city, county or state government. It is time to break the government worker union hammerlock by giving the private sector a chance to provide government services at a substantial cost savings...

The authors' description of the political dynamics surrounding public sector unions is explained further in The Radically Different Visions of Tax-Eaters Versus Taxpayers.