Wednesday, February 9, 2011

FDR on Public Sector Unions

Fred Siegel has an interesting article in the WSJ (January 25, 2011) on liberals and government unions:

Liberals were once skeptical of public-sector unionism. In the 1930s, New York Mayor Fiorello LaGuardia warned against it as an infringement on democratic freedoms that threatened the ability of government to represent the broad needs of the citizenry. And in a 1937 letter to the head of an organization of federal workers, FDR noted that "a strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied. Such action, looking toward the paralysis of Government by those who have sworn to support it, is unthinkable and intolerable."

More here and here. More complete quote from FDR below (FDR to National Federation of Federal Employees, 1937):

All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management. The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations. The employer is the whole people, who speak by means of laws enacted by their representatives in Congress. Accordingly, administrative officials and employees alike are governed and guided, and in many instances restricted, by laws which establish policies, procedures, or rules in personnel matters.

Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of Government employees. Upon employees in the Federal service rests the obligation to serve the whole people, whose interests and welfare require orderliness and continuity in the conduct of Government activities. This obligation is paramount. Since their own services have to do with the functioning of the Government, a strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied. Such action, looking toward the paralysis of Government by those who have sworn to support it, is unthinkable and intolerable.

Also, unionization typically leads to higher salaries and benefits for employees, which is generally laudable, but with an important caveat: the more expensive you make something, the less of it you can have. If cops and teachers cost $150K a year, you can't have as many of them--at least not absent massive tax increases that will cause businesses to expand outside the state, thereby harming immigrants and poor persons who rely mostly on the private sector for jobs.

Also, isn't it generally better to have more teachers and police officers than fewer of them? If so, the more benefits and money you give them, the fewer of them you can hire down the road, especially if you're spending hundreds of millions of dollars a year on retired/non-working officers and teachers (in the form of pensions). By switching government workers to 401(k) plans rather than pensions, the same money we're using to pay non-working government employees could be used to hire more teachers and police officers and to pay them higher starting salaries.

One last point: when government unions cause a significant portion of their members' compensation to be back-ended, i.e., in the form of pensions and lifetime medical benefits, you have two major problems: one, the politicians involved in negotiating the promises won't be around to suffer any consequences if they made unfair, overly generous, and unsustainable promises; and two, budget planning becomes very difficult because governments are not life insurers and cannot accurately or fully predict the costs of their employees' lifetime health care and pension benefits.

[This post was updated on June 8, 2012.  More here, from Bruce Bartlett.]  

3 comments:

Transplanted Lawyer said...

...isn't it better to have more teachers and police officers than fewer of them?

Yes, at least up to a point somewhere along the curve of diminishing marginal returns. When that point has been reached is obviously subject to a lot of debate, but consider that nationally and statewide, crime has been in a steady decline for quite a long time now. We should consider that such a situation means we have achieved, exceeded, or at least come close to maximum effective saturation of police in society and we risk an inefficient surplus. I'd much rather have 25 really good cops than 30 only-okay cops or 40 not-so-good cops.

Similarly, we may say that a teacher-student ratio of 1:40 is too high, that a teacher faced with 40 students cannot be effective. A 1:30 ratio is better, a 1:25 ratio better yet. But how much better does the teacher become when the ratio falls from 1:25 to 1:20? If there is a student body of 100 students to teach, does it matter that much if we hire 4 as opposed to 5 teachers to do the job?

K_Yew said...

@Transplanted Lawyer: excellent point. Thank you for commenting.

Brett said...

Why are you so obsessed with union "militancy?" When was the last time anyone was killed or harmed by "militant union" violence?

In contrast, corporations kill, oppress, repress and otherwise harm millions of people around the world, as well as many here in the United States.

Why do you never call out the killers? Why is your fury reserved for those trying to improve the quality of life for the American worker?