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Yes, Layoffs Are Bad
Obama makes the case against collective bargaining.


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Josh Barro

Many state and local workers can use the collective-bargaining process to block wage and benefit concessions. Layoffs, which fall on a junior subset of workers, are more appealing than wage concessions to longstanding employees who know their jobs are safe — meaning that unions are not as afraid of layoffs as you might expect.

You can compare the austerity at Marvin to the often smaller givebacks that unionized public employees around the country have balked at. In 2010, when Gov. Chris Christie’s fight with the New Jersey Education Association was at its peak, his request was that teachers should take a one-year freeze on base pay — annual increases had been running at 4 percent for the previous several years — and contribute 1.5 percent of salary to pay for health benefits, up from zero in most districts. Concessions of this magnitude would have eliminated the need for any teacher layoffs due to cuts to state education aid.

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Christie got agreement on those concessions almost nowhere — unlike the Marvin workers, New Jersey teachers were able to say no, and they did. Layoffs ensued. Christie did eventually get higher teacher contributions toward health insurance, but only because the legislature passed a law to remove that matter from collective bargaining.

Liberals often point out that public employment has been declining in 2010 and 2011, partly offsetting job growth in the private sector. They bemoan budget cuts that lead to shrinking headcounts. But then they — including President Obama — defend a public-sector collective-bargaining regime that takes non-layoff savings options off the table. If liberals really want state and local governments to be able to maintain their headcounts, they should push to end collective bargaining for public employees, not to strengthen it.

— Josh Barro is the Walter B. Wriston Fellow at the Manhattan Institute. His research is focused on state and local fiscal policy.

editors note: This article has been amended since its initial posting.



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