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Morning Bell: Government Unions Win, You Lose

Posted By Conn Carroll On January 25, 2010 @ 9:39 am In Ongoing Priorities | Comments Disabled

Since President Barack Obama was sworn into office, the U.S. economy has shed 3.4 million jobs [1] and the unemployment rate has risen to 10% [2]. But not all sectors of the economy have been suffering equally. In fact, the sector of the economy most supportive of President Obama has not only avoided contraction, but has actually managed to grow instead.

According to a report [3] released by the Bureau of Labor Statistics (BLS) last Friday, in 2009 the number of federal, state and local government employees represented by unions actually rose by 64,000 [4]. Coupled with union losses in the private sector economy, 2009 became the first year in American history that a majority of American union members work for the government. Specifically, 52% of all union members now work for the federal, state or local government, up from 49% in 2008. Or, to better illustrate these statistics: three times more union members work in the Post Office than in the auto industry [5].

So what? Why should Americans care if unions are now dominated by workers who get their paychecks from governments, instead of workers who get their paychecks from private firms? There’s one simple reason: private firms face competition; governments don’t.

Collective bargaining, the anti-trust exemption at the heart of a union’s power, was created to help workers seize their “fair share” of business profits [6]. But if a union ends up extracting a contract from a private firm that eats up too much of the profits, then that firm will be unable to reinvest those profits and will lose out to competitors. But when a union extracts a generous contract from a government, the answer is always higher taxes or borrowing to pay for the bloated spending. And make no mistake: unionized government worker compensation is bloated.

As Heritage fellow James Sherk notes “[t]he average worker for a state or local government earns $39.83 an hour in wages and benefits compared to $27.49 an hour in the private sector. [7] While over 80 percent of state and local workers have pensions, just 50 percent of private-sector workers do. [8] These differences remain after controlling for education, skills and demographics. [9]

Unionized government employees not only want to keep their bloated compensation packages, but their leaders are desperate for more members and more union dues. That is why public-sector unions have become a fierce lobbying force for higher taxes and more spending across the country [4]. Organized labor once fought against taxes and regulations that impeded the economic interests of their employers, but now they are in alliance [10] with environmentalists pushing private sector and economy-crippling cap-and-trade legislation.

It’s worth noting that the BLS did not count the United Auto Workers working for General Motors and Chrysler as unionized government employees. But perhaps they should have. Our country will share their fate unless something is done about unionized government power.

Quick Hits:

  • Three different White House advisers (Senior Adviser Valerie Jarrett, Press Secretary Robert Gibbs and Senior Adviser David Axelrod) gave three different estimates for the number of jobs President Obama’s economic stimulus program “created or saved” this Sunday [11].
  • According to the latest CNN poll [12], 56% of Americans now oppose President Barack Obama’s economic stimulus program.
  • Rep. Barney Frank (D-MA) said his committee was preparing to recommend “abolishing” [13] Fannie Mae and Freddie Mac.
  • The Obama administration Guantanamo Bay task force has concluded that at least 47 prisoners [14] must be held indefinitely without civilian or military trial.
  • Venezuela President Hugo Chavez has ordered popular television station RCTV off the air [15] for not televising Chavez’s speeches in their entirety.

Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/01/25/morning-bell-government-unions-win-you-lose/

URLs in this post:

[1] the U.S. economy has shed 3.4 million jobs: http://www.foundry.org/2010/01/08/jobs-decline-in-december-as-obama-jobs-deficit-continues-to-climb/

[2] the unemployment rate has risen to 10%: http://www.heritage.org/Research/Economy/wm2748.cfm

[3] report: http://www.bls.gov/news.release/union2.nr0.htm

[4] the number of federal, state and local government employees represented by unions actually rose by 64,000: http://www.heritage.org/Research/Labor/wm2773.cfm

[5] three times more union members work in the Post Office than in the auto industry: http://www.heritage.org/Research/Labor/wm2773.cfm#_ftn6

[6] to help workers seize their “fair share” of business profits: http://www.heritage.org/Research/Labor/wm2773.cfm#_ftn10

[7] [t]he average worker for a state or local government earns $39.83 an hour in wages and benefits compared to $27.49 an hour in the private sector.: http://www.heritage.org/Research/Labor/wm2773.cfm#_ftn13

[8] While over 80 percent of state and local workers have pensions, just 50 percent of private-sector workers do.: http://www.heritage.org/Research/Labor/wm2773.cfm#_ftn14

[9] These differences remain after controlling for education, skills and demographics.: http://www.heritage.org/Research/Labor/wm2773.cfm#_ftn15

[10] in alliance: http://apolloalliance.org/

[11] this Sunday: http://www.politico.com/news/stories/0110/31914.html

[12] CNN poll: http://politicalticker.blogs.cnn.com/2010/01/24/cnn-poll-56-percent-oppose-stimulus-program/

[13] “abolishing”: http://www.washingtonpost.com/wp-dyn/content/article/2010/01/22/AR2010012204629.html

[14] at least 47 prisoners: http://content.usatoday.com/communities/ondeadline/post/2010/01/reports-35-at-gitmo-face-legal-action-47-must-be-held/1

[15] ordered popular television station RCTV off the air: http://blog.heritage.org http://www.washingtonpost.com/wp-dyn/content/article/2010/01/24/AR2010012402887.html

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