Cops, and Robbers
From the Aug. 30, 2010, issue of NR.


Daniel Foster

How did police and fire unions score such a sweet deal? Part of it is institutional. Since public-safety unions can, by law, virtually never strike, nearly all of them take advantage of their right to force “interest arbitration,” wherein an ostensibly neutral third party settles contract disputes between labor and government. As such arrangements became commonplace through the 20th century, police and fire unions began to see their compensation rise faster than that of non-uniformed public employees. The availability of legally binding arbitration meant that unions had less incentive to deal directly with their government employers, while elected officials facing angry voters could blame expensive settlements on the imposition of the arbitrators.

The effect of forced arbitration on the fiscal health of local government is starkly illustrated in a recent comparative study of Fairfax County, Va., and Montgomery County, Md., undertaken in a refreshing Washington Post staff editorial from May:

Virginia law denies public employees collective bargaining rights; that’s helped Fairfax resist budget-busting wage and benefit demands. As revenue dipped two years ago, Fairfax officials froze all salaries for county government and school employees with little ado. By contrast, Montgomery leaders were badly equipped to cope with recession. County Executive Isiah Leggett took office proposing fat budgets and negotiating openhanded union deals. . . . Then, as economic storm clouds gathered, he shifted gears and cut spending — while still trying to appease the unions.

Notoriously, one such deal guaranteed almost $300 million in pension benefits over 40 years to thousands of employees based on salary increases they never received. The giveaway became known as “Phantom COLAs,” for the cost-of-living raises that were never paid. And even when Montgomery’s teachers agreed to give up cost-of-living raises last year, about two-thirds of them continued to receive step increases of up to 4 percent.

As a result of their different collective-bargaining policies, the two demographically similar jurisdictions have “parted ways.” Montgomery County is “lurching under the weight of irresponsible governance, unsustainable commitments and political spinelessness,” while Fairfax, “though facing tough choices[,] . . . has a brighter future.”

But beyond institutions, political — and even cultural — norms play a role in the special status of police and fire compensation. For one thing, cops and firemen are swing voters.

“Their unions are more powerful in the sense that they are more politically heterodox,” says Barro. “Teachers’ unions are nearly unanimous in their political support for Democratic officeholders. Fire and police unions split their loyalties more, and are therefore in a better position to extract support from politicians.”

“Republicans don’t view it as a waste of time to try to make police unions happy,” he adds.