At the beginning of the 1950’s, unions represented almost one third of U.S. workers in the public and private sectors. Representation of the private sector was 35.6% in 1954 with 11.4% of the public sector or 32.3% of the total work force.
The union membership rate has declined over the years to only 11.9% of the U.S. work force in 2010, down 12.3% for a year earlier (source U.S. Bureau of Labor Statistics). The ratio of union membership in the public sector tripled to 36.2% of mostly state and city employees while the private sector rate plummeted to 6.9%.
It’ s easy to see why organized labor has pushed for the Employee Free Choice Act (EFCA) legislation that would make it far easier for unions to organize new members because it eliminates the secret ballot. The passage of this Act was almost certain when Democrats won control of the White House and Congress in 2008 but recessions have a way of changing the future.
Now, unions are faced in a life-and-death struggle with state governors around the U.S. for basic survival. The governor of the state of Wisconsin started a ‘war’ with public employees’ unions by announcing he would seek to eliminate almost all collective bargaining rights in order to reduce state budget deficits. Unions would still have the right to bargain for wages, but not for the more expensive items such as retirement benefits and health insurance for current and retired employees. More importantly, unions could not force all public employees to join unions and they’d have to bargain for permission each year to collect union dues.
The survival of unions in the U.S. relies heavily on the public sector. If state and local governments push back and reduce or eliminate union collective bargaining rights, union membership rates will decline as they did in the private sector. Employees will see less value in union membership and member dues so they’ll leave their unions.
How did this happen?
Many people feel union leadership got greedy. They knew that politicians would agree to generous contract terms, particularly with pensions and health care, because unions could deliver 2 important things -
1) votes
2) political contributions.
Unfortunately for taxpayers, most of these generous contract concessions didn’t occur right away but will cost a fortune in the years ahead as baby boomers retire. One columnist made the observation that collective bargaining requires parties at both sides of the bargaining table. For public employees, taxpayers chose politicians to serve in ‘management’s’ role but the politicians had nothing to gain from being tough with unions. Unions would merely threaten to withhold votes or political contributions and politicians would give in to their demands. Rather than collective bargaining,
‘collusive’ bargaining took place where the unions and politicians colluded or conspired together to get what they wanted while requiring taxpayers to pay the costs.
These generous contract concessions have created enormous unfunded liabilities for states and cities. Unlike the federal government, states and cities need to balance their budgets each year so the time has come to ask for unions to give up some of their Gains or see members lose their jobs.
It’s interesting to note that union leaders seem unwilling to admit the good times are over. When the New Jersey governor approached the teachers’ union leadership in that state and asked members to contribute only 1 ?% of their salaries towards their pensions, the leadership immediately rejected the proposal. They felt confident that public opinion would be on their side.
They were wrong. Taxpayers see that it’s impossible to balance the budget without union compromises. If unions don’t cooperate, taxes will go up or public employees will lose jobs. Since many taxpayers have lost jobs in the private sector, they’re becoming less sympathetic to unions who refuse to compromise.
The conflict between state governors and public unions will be a huge campaign issue in the 2012 elections. If governors are successful in spreading the message they love union members (teachers, police, firefighters, etc.) but unions leaders are too powerful and greedy, they’ll prevail in the election. If union leaders can convince a public with 9% unemployment and unsteady job security that unions deserve their generous retirement and health insurance benefits (even with higher taxes), they’ll win the elections.
Frankly I believe union leadership will refuse to cooperate, hoping taxpayers will ignore the realities of rising costs. If so, they’ll face the same fate as the private sector ? extinction.
