Next Year’s Momentous Supreme Court Decision: Reining in Public Sector Unions?

immediate image source  (ultimate source is the Wall Street Journal)

immediate image source (ultimate source is the Wall Street Journal)

After its momentous decisions this year legalizing gay marriage throughout the US, saving Obamacare one more time, and preserving the option of nonpartisan redistricting, the Supreme Court of the United States said it will decide next year on whether public sector unions can legally force those who work for the government to pay union dues even if they disagree with what the union is doing. If the Supreme Court addresses this question squarely, this will be a momentous decision because public sector unions are where the action is in unionization. In the last three decades, unionization fell dramatically in the private sector, but rose dramatically in the public sector (see above). The most likely reason is that public sector unions can offer political foot-soldiers to garner votes for those of their bosses who behave themselves as well as labor peace, while private sector unions can only provide labor peace. Without the combination of a political weapon and a strike weapon, I don’t see how public sector unions could have been so much more successful than private unions. Thus, I think the challengers’ contention the public sector unions are inherently political is quite reasonable.

I am cheering for the challengers because I think a reduction in the power of public sector unions would be a big boon to the US economy. It is often very valuable to for the government to provide additional public goods. But it is not so great to pay a higher price for the same level of government-provided goods and services, simply because public sector unions have effectively brandished their two weapons: the political weapon and the strike weapon. Our concern for income distribution should always be focused on the lot of the very poorest.

So whenever workers who are already typically paid more than comparable workers in the private sector have their wages go up further, it pushes the income distribution in the wrong way. And raising the cost of government employees who help the poor can easily lead to lower levels of service provided to the poor. This can often happen not only from price effects, but also from overall government budget pressures, as when overly generous delayed pension payments from a corrupt bargain between public sector unions and politicians that were never subjected to voter approval come due. And of course, government unions can often obstruct innovations (particularly in education) as well as draining limited government funds with wage demands that go beyond comparable private sector wages.

(Of course, I myself am officially a government employee, since the University of Michigan is a state university, but my salary owes nothing to a union. And part of my salary comes ultimately from the federal government, in the form of research support; I earnestly try to produce enough valuable research to make that a good bargain.)