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A Tale of Two Labor Laws

Posted By Conn Carroll On June 2, 2010 @ 1:00 pm In Economics | Comments Disabled

[1]

The Washington Post [2] editorialized yesterday:

Montgomery County has just completed a nightmarish budget year. Stressed, squabbling and besieged elected officials savaged services and programs and jacked up taxes to eliminate an eye-popping deficit of almost $1 billion in a $4.3 billion spending plan. Meanwhile, across the Potomac River in Fairfax County, all was sweetness and light by comparison. With a budget roughly equal to Montgomery’s, Fairfax officials erased a deficit a quarter as large with relative ease and far less drama.

The Post even goes on to correctly identify the power of public sector unions as the culprit for Montgomery’s budget woes, but then they write: “The primary culprits here, as this account should make clear, are not the unions, which are supposed to represent their workers energetically, but county leaders.” This is silly. Politicians don’t magically become more fiscally responsible by crossing the Potomac. But what does change at water’s edge is the law. Specifically, Maryland unions operate under a collective bargaining regime while Virginia law allows each public employee to negotiate their own compensation free from union coercion. The results are startling. The Washington Post [2] reports:

Take a snapshot of one year, 2006, when times were flush. … In Montgomery, County Executive Douglas M. Duncan, a career politician then running in the Democratic primary for governor, pitched a gold-plated, pork-laden grab bag of political largess that drove county spending up by 11 percent.

Mr. Duncan’s budget that year capped a three-year spree in which county spending rose by almost 30 percent. It reflected major multiyear increases in pay and benefits that he had negotiated for police, firefighters and other county workers. At the same time, Jerry D. Weast, Montgomery’s schools superintendent, negotiated a contract that promised pay increases for most teachers of 26 to 29 percent over three years — about twice the raise Fairfax teachers got — plus health benefits virtually unmatched in the region. Montgomery County Council members, most of whom were hoping for union endorsements in the fall elections, rubber-stamped Mr. Duncan’s contracts. The Board of Education, equally beholden to the teachers union, did the same for Mr. Weast.

Last year government unions, like the ones that are bankrupting Montgomery County, became the norm of the labor movement in this country. According to the Bureau of Labor Statistics (BLS) a majority of American union members now work for federal, state, or local governments [3], not the private sector. The days when “union member” meant an American working in a steel plant, or coal mine, or auto factory are gone. Today, unions are dependent on government, not the private sector, for their livelihood. So when government unions gain control of government, as they have in one-party Montgomery County, policies that encourage more union dues, like higher taxes and more governemnt spending, are favored over ones that encourage private sector job growth. Or as the Post puts it:

Montgomery’s higher taxes already put it at a competitive disadvantage with Fairfax, which has a wide lead in attracting business and creating high-wage jobs; now Montgomery risks a downward spiral.

Which sounds a lot like the fates of Michigan, California, New York and most other states that give public sector unions collective bargaining power.


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

URL to article: http://blog.heritage.org/2010/06/02/a-tale-of-two-labor-laws/

URLs in this post:

[1] Image: http://www.foundry.org/wp-content/uploads/SEIU-10-4-131.jpg

[2] The Washington Post: http://www.washingtonpost.com/wp-dyn/content/article/2010/05/29/AR2010052903132.html

[3] a majority of American union members now work for federal, state, or local governments: http://www.heritage.org/Research/Reports/2010/01/Majority-of-Union-Members-Now-Work-for-the-Government

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