Attacking Teachers Reveals Cost Less Than in ’81: Albert R. Hunt

The political battles raging in states across America are cast as about whether big labor retains its considerable clout.

Republican Governors Scott Walker of Wisconsin and Chris Christie of New Jersey say public employees are fleecing taxpayers, causing fiscal chaos. It’s an inherent conflict, critics contend, for public-employees’ unions to bargain with government officials they helped elect with campaign support.

In a column in Newsweek last week, a former adviser to President George W. Bush charged that the primary purpose of public unions is to “work against” the interests of taxpayers. “Public unions are big money,” the article boldly proclaims. Most of the specifics are directed at unions representing teachers, firefighters and nurses, yet the broadsides attack labor generally.

The reality is the U.S. labor movement has steadily lost influence, politically, socially and economically. Labor believes President Barack Obama is taking it too much for granted; he is.

Most of the workforce isn’t unionized, and labor negotiations are less important than in the past. “There’s no sector, other than professional sports, where unions actually have a big impact on cost structure and productivity,” says Andy Stern, the former head of the Service Employees International Union.

Declining Membership

Over the last 30 years, the number of private-sector unionized employees has dropped from more than 20 percent of the workforce to 7 percent today. The number of unionized public employees has remained at about 35 percent.

Yet the impact of teachers and police unions are exaggerated. Labor costs, including wages and benefits, are actually a smaller share of state and local spending -- about 52 percent today, down from 63 percent 30 years ago, according to the Commerce Department’s Bureau of Economic Analysis.

The power of collective bargaining, critics charge, is a cause of the states’ fiscal situation. Yet some states such as Texas, which prohibits collective bargaining for public employees, have a far greater budget shortfall than Wisconsin. Most experts agree the real cause of the budgetary crisis on the state and local as well as the national level is the 2008 financial crisis.

Regardless, some Republican governors insist public- employee wages and benefits have to be brought in line with the private sector. A Bureau of Labor Statistics report in December found the average state-local government worker earns more than $40.10 an hour in salary and benefits, or almost 50 percent more than the $27.88 an hour earned by the average private worker.

Pay Differences

Upon closer examination, that’s misleading, as government workers tend to be better educated; 60 percent of Wisconsin public employees have college degrees, and a report last year by the bipartisan Center for State and Local Government Excellence found that when factoring in education levels, state and local workers earned 11 percent to 12 percent less than comparable private workers. That was true in Wisconsin, too.

Still, with huge budget shortfalls primarily caused by the economic crisis, there’s no dispute that teachers, nurses and cops have to make sacrifices. They complain, however, that governors in Wisconsin, New Jersey and Ohio, by taking any higher taxes off the table, aren’t spreading the sacrifice. New Jersey’s Christie vetoed a small tax increase for millionaires; the average teacher in his state makes $65,000 a year.

‘Rubber Rooms’

Teachers’ unions are the focus of the debate. Often they’re their own worst enemies, not because of high salaries -- usually teachers aren’t paid enough -- or lavish pensions, but because of rigid work rules that protect inept teachers and stifle innovation. New York City is still trying to phase out its “rubber rooms,” where teachers accused of incompetence or misconduct receive full pay for months as they sit in a room awaiting adjudication.

Yet if America’s school problem was simply attributable to unions, the education expert Diane Ravitch wrote recently in The New York Review of Books, why is it that Finland, with a widely praised education system, has heavily unionized teachers?

Without question, states such as California, New Jersey and Illinois have unsustainably high, unfunded pensions for public employees and will have to significantly change those plans. Also there are more than a few states where public employees can retire at 55 with a full pension; by contrast, most Americans have to be 66 today before qualifying for Social Security benefits.

Koch Brothers

Public-employee unions do negotiate with politicians they supported or helped elect with campaign contributions. This, however, is only a variation on the many special interests that contribute massive amounts to candidates and then seek legislative favors. A prime example is the Koch brothers, billionaires who run a far-flung energy empire and contribute millions, much of it undisclosed, to politicians with whom they curry political favor.

“Why are public employee unions any different from the Koch brothers seeking tax breaks?” argues Stern. “We have situational ethics here.”

It’s also a canard that big labor is tantamount to big money in U.S. politics. Unions are far outmatched by business and corporate interests in every cycle, on the federal level, and on most state levels, too.

“Whether in federal campaign donations, lobbying or contributions to outside groups, unions are vastly outspent by business in every category,” says Sheila Krumholz, executive director of the nonpartisan Center for Responsive Politics in Washington, which tracks political spending.

Democratic Supporters

U.S. labor mistakenly has put all its political eggs into the Democratic basket, making it easier and more natural for Republicans to attack them.

Not long ago, some unions, including the Teamsters and building trades, principally supported Republicans; even the largest teachers’ union, the National Education Association, backed about as many Republicans as Democrats. Republicans such as Senator Clifford Case of New Jersey and even President Richard Nixon received important labor backing.

Yet last year, more than 90 percent of union political contributions and support went to Democrats. Of course, today’s Republicans, the Christies, the Walkers, probably prefer making a weakened union movement a target.

Albert R. Hunt is the executive editor for Washington at Bloomberg News. The opinions expressed are his own.)

To contact the writer of this column: Albert R. Hunt in Washington at ahunt1@bloomberg.net.

To contact the editor responsible for this column: Max Berley in Washington at mberley@bloomberg.net.

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