Politics & Policy

Upending Our Caste System

It is unions’ political power, not their economic power alone, that must be curtailed.

As Wisconsin flips its wig, there has been a great deal of dishonest, ill-informed, and indeed knavish commentary on the relationship between public-sector unions and the fiscal conditions of the states. The thrust of these unenlightening analyses has been that public-sector unions are not to blame for the dire fiscal situation facing Wisconsin and many other states. The general shape of the Left’s argument here has been that of a compound error with two distinct components: 1) the inability to distinguish between the short-term problems facing states as a result of the recent recession and their long-term fiscal problems; 2) the much more serious conflation of collective-bargaining rights with unions’ political power.

Public-sector unions are enormously important political players, including in those states where their collective-bargaining rights are limited or nonexistent. That fact makes nonsense out of arguments such as the one put forward by Joseph McCartin of The New Republic: “Contrary to [Gov. Scott] Walker’s assertion, there is no direct correlation between public-sector collective bargaining and yawning state budget deficits.” Collective bargaining is not the operative factor; Mr. McCartin is providing an answer to a meaningless question. Likewise, Dick Polman is entirely off track in making a related argument: “Yes, a lot of public unions have good wages and benefits. But blaming these unions for the states’ red ink is a serious overreach. North Carolina, Arizona, and Nevada currently have budget deficits far deeper than Wisconsin’s — and none of those states allow their public employees to bargain collectively.” These arguments ignore the fact that unions do a lot more than engage in collective bargaining, and that their most important and influential work is done not at the negotiating table, but on the campaign trail. Collective bargaining is not the only way, or even the main way, that public-sector unions shape public policy.

Nearly 90 percent of government employees in the United States are employed at the state and local level. A very large number of them, many millions, belong to public-sector unions. State and local bureaucrats are much more likely to be unionized than federal bureaucrats — more than twice as likely, in fact; 19 percent of federal workers are unionized, but 30 percent of state workers are, and 43 percent of local workers. These are very high levels of unionization across the board — only 8 percent of private-sector workers are union members — but much, much higher at the state and local level. That is significant because, contra Polman, McCartin, and the bulk of the Democratic commentariat, these unions do not influence public policy mainly through engaging in collective bargaining. They influence it by determining the outcome of elections.

And “determining the outcome” is no overstatement. Many union critics in the past few days have referenced Stanford professor Terry M. Moe’s fascinating paper “Political Control and the Power of the Agent,” published by the Journal of Law, Economics, and Organization in 2005, citing a single extraordinary fact: In the elections Professor Moe studied, union support was as valuable as incumbency in determining winners. That fact is, in and of itself, sobering: Incumbency is generally the most powerful factor in elections — short of a major scandal or similar political catastrophe, incumbents most often are relatively secure in their reelections. The fact that union support turns out to be not only as powerful a factor but, in fact, a slightly more powerful factor in the most significant contests demands a reevaluation of our fundamental thinking about who is really in charge of our state and local governments. Professor Moe found that in the school-board races he researched, incumbency boosted a candidate’s reelection chances by 47 percent. Union support boosted the odds by 56 percent. The combination of union support and incumbency boosted the odds by 76 percent — an important factor, since many of those incumbents became incumbents on the strength of earlier union support, meaning that the unions are compounding the effectiveness of their electoral efforts over time, stocking the incumbent pipeline with their favored candidates.

Money is certainly a factor in public-sector unions’ electoral influence. Despite the Left’s panicky talk about “corporate money” shaping our elections, unions are almost always either the top spenders or in the top few at the federal and state levels. The biggest-spending unions, and those who provide the most critical operational support to Democratic campaigns (staffing phone banks, doing door-to-door retail politics, volunteering for get-out-the-vote efforts, channeling the “walking around money” that delivers vote blocs in big-city elections, filing lawsuits to stop reform proposals), are public-sector unions. As Professor Moe reports, “Studies of the U.S. states have asked experts to rank interest groups according to their influence on public policy. Throughout the 1990s, the teachers unions came out number one on the list, outdistancing general business organizations, trial lawyers, doctors, utilities, bankers, environmentalists, and even state AFL-CIO affiliates.” (The most recent survey put the teachers’ unions at No. 2.) These unions spend a fair amount of money at the local level, too, but there they have an even more important advantage: the votes and the muscle to determine outcomes.

In many school-board races, the raw number of union members’ votes was significantly greater than the margin of electoral victory, meaning that a union-disciplined bureaucrats’ bloc could have, by itself, determined the outcome (and in many elections probably did). These facts suggest that in a great many cases — a great many of the most significant political cases — elected officials answer to public-sector unions more than public-sector unions answer to elected officials. That is not democracy; it is a caste system given democratic form.

A reminder: All of the above is true both for states in which unions have collective-bargaining authority and for those which they do not. In Texas, for instance, the teachers’ unions are an extraordinarily powerful political force, with the Texas State Teachers’ Association running an influential PAC that reliably doles out great heaps of money, largely to Democrats, in multi-thousand-dollar increments. How powerful is the TSTA? Powerful enough that it was able to persuade school districts to use their payroll departments to collect PAC donations out of teachers’ paychecks, in violation of state law. Meditate on that for a second: These weren’t union dues being deducted out of government employees’ paychecks, but PAC donations. This is the equivalent of the Environmental Protection Agency deducting contributions to the coal lobby’s PAC out of its employees’ paychecks — and this is in Texas, where the government unions are allegedly as defenseless as newborn babes in the woods. Texas’s teachers’ unions, like their counterparts across the country, have been extraordinarily effective in fighting most meaningful school-reform efforts, from vouchers to school choice to greater accountability measures — and all of this without collective-bargaining power.

With these facts properly understood, Paul Krugman invites mockery when he writes: “What Mr. Walker and his backers are trying to do is to make Wisconsin — and eventually, America — less of a functioning democracy and more of a third-world-style oligarchy. And that’s why anyone who believes that we need some counterweight to the political power of big money should be on the demonstrators’ side.” Never mind the intellectually indefensible overstatement with which Professor Krugman habitually cheapens his own academic reputation and the once good name of Princeton, he is simply wrong about the facts. The big money and the unions already are on the same side: The unions are the big money; they are the oligarchy. Being familiar with the financial role that such organizations as the SEIU, AFSCME, and the NEA played in the election of President Obama and scores of Democratic senators and representatives, Professor Krugman probably knows that he (or his wife) is writing things that are not strictly speaking true, but that is what the New York Times apparently pays him (or his wife) to do. Equally ridiculous, in this light, is Jonathan Chait’s parroting of Krugman, with the claim that “in the real world, politics is dominated by the influence of the rich and the business lobby, with unions providing a small countervailing force.”

The facts suggest that the force is neither small nor countervailing, but large and prevailing. At the state and local levels, unions run the show. They run it financially, and run it by turning out at the polls. One of Professor Moe’s more interesting findings is that teachers who live in their districts turn out to vote at much higher numbers than teachers who live outside their districts. One might expect teachers in general to vote in greater numbers than the general population: Being more affluent, more educated, and more connected to government, they fit the profile of likely voters. But teachers residing in the district in which they work were more than twice as likely to vote as those living in one district but working in a different one. Likewise, unionized school-district workers outside of the teaching profession, in low-wage, low-education jobs (janitors, maintenance workers, etc.) also were extraordinarily more likely than average to vote if they lived and worked in the same district, even though their general demographic profile is one that suggests low voter turnout.

The variable, of course, is narrow self-interest. Teachers and school employees voting and working in the same district have a very strong interest in seeing particular candidates elected and policies enacted — and in seeing reformers and reform initiatives stopped. Significantly, these turnout figures held true not only for school-board elections, but also for bond elections.

Which leads us to a second issue. Ezra Klein et al. have a point when they argue that the current short-term deficits are more a product of the recession than of union rapacity. The level of ambient union rapacity in the political atmosphere can be assumed to be held at a constant (~ 100 percent saturation) across several decades; what has changed radically for most states lately is revenue. That’s true for collective-bargaining states such as Wisconsin and for non-collective-bargaining states such as Texas. But that ignores (willfully, in most cases) the bigger picture: Many of our states are facing serious fiscal crises now and in the future for reasons not related to the recent recession. Beyond the looming crisis in Medicaid, the most troublesome factors for many states are union pensions and retiree health-care benefits, which are carrying unfunded liabilities estimated to run as high as $3 trillion.

If we examine these more significant issues — the long-term issues — then Mr. Klein is on shaky ground when he writes: “Let’s be clear: Whatever fiscal problems Wisconsin is — or is not — facing at the moment, they’re not caused by labor unions. That’s also true for New Jersey, for Ohio and for the other states.” The most significant problems faced by these states are not short-term results of the recession; they are ruinously expensive wealth transfers to public-sector union members.

Even the Klein-Chait-Polman “collective bargaining” talking-point dissolves in the light of day. Of the ten states currently in the worst long-term fiscal shape, all but one invest collective-bargaining powers in their public-sector unions. (Those worst-off states are Rhode Island, Connecticut, Massachusetts, Illinois, Hawaii, New Jersey, New Hampshire, Indiana, Louisiana, and Oklahoma. Only Louisiana lacks a collective-bargaining statute.)  The question is how long the long term is.

Commentators including Matt Yglesias and Prof. Steve Greene of North Carolina State University have pointed to this graph from John Sides attempting to show that the issue of public-sector unionization is unrelated the issue of states’ fiscal health. But as the author himself advises, the data behind the chart do not reflect public-sector union strength. He writes: “I do not know of readily available data on public-sector collective bargaining or on public-sector union strength, so I used the percent of employed people who are members of unions (from this BLS report).” The overall level of unionization in the work force is a very different thing from the level of unionization in the public sector, to say nothing of the unions’ political influence. This is reminiscent of Mr. Klein’s earlier attempt to draw conclusions about the pay of Wisconsin’s public-sector workers using a study with data that did not refer to the pay of Wisconsin’s public-sector workers. (Rather, the study lumped Wisconsin’s data in with that of Illinois, Ohio, Michigan, and Indiana. Being much larger states, Ohio, Michigan, or Illinois alone would have overwhelmed the Wisconsin data; combined, they triply obscure it. Which is to say, Mr. Klein is making arguments about Wisconsin’s public-sector pay based on studies that tell us nothing useful about Wisconsin’s public-sector pay.)

If one takes the trouble to limit one’s attention to public-sector work forces and public-sector unions, as Cato’s Chris Edwards does here, then one discovers: “As the union share increases, a state tends to have a higher government debt load. . . . The correlation is likely caused by the fact that unionized government workers are powerful lobby groups that push for higher government-worker compensation and higher government spending in general.” If you distrust Cato, then, by all means, have a gander at the data yourself.

There are two things to be taken away from this: One is that the debate about unions and states’ fiscal health has been dishonest and probably will continue to be dishonest. This is a fight to the death for the Left, and the facts will suffer.

The second and more important thing is this: Curtailing collective-bargaining powers is not the end game. It is a necessary, but not a sufficient, condition for getting control of our public finances. The problem is not the public-sector unions, but the public sector, full stop. So long as we are a democratic society, a large public sector will have the power to impose its will on the political establishment, even if the unions are dissolved or their organized political activity is repressed. One of the great strengths of the United States is that many of our most important decisions are made at the state and local level, but government at that level is especially vulnerable to capture by rent-seeking public-sector unions. The public sector has relatively less clout at the national level (though it has a great deal) because its influence is diluted in a sea of other influences. But when it comes to state government or local bond issues — two titanic problems in our public finances — the public sector and its unions dominate, and will continue to dominate unless we either severely reduce its members’ numbers or enact very strong formal barriers to their voting themselves money out of the nation’s treasuries.

Scott Walker has not overshot, but undershot.

— Kevin D. Williamson is a deputy managing editor of National Review and author of The Politically Incorrect Guide to Socialism, just published by Regnery. You can buy an autographed copy through National Review Online here.


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