Monday, February 21, 2011

Why Government Worker Unions are Dangerous

Money and politics. Politics and money. Government worker unions are the complete marriage of money and politics. Unfortunately it is the people's money that is being spent.

Let's take the example of a private sector business first, then expand that in to the public. The differences are what will make my argument for me.

I start a business building airplanes. If I wish to keep my business running I have to turn a profit. I can not just break even, because I must have some money on hand to buy new equipment and other capital expenditures and to increase salaries, etc. If I do not turn a profit, I have to close my doors, and sell all of my assets to pay all of my creditors. The management and staff of my company know that the money for the company is made by a quality product. If the business is run correctly, they work hard to produce just such a product. They have "skin" in the game. This is the way of the privateer.
If a government agency decides that they want to build airplanes, they do not need to turn a profit. They simply start making airplanes, asking for their budget from the congress, via their parent agency. Even if the airplane building division is run horribly, with many problems, it can still operate at a massive loss. They don't get their money from a good product, they get their money from the congress. The money will still be there even if the product is substandard.

Now we enter in unions. First I will qualify this by saying, I believe that unions have a place in the workforce. When business takes advantage of its workers, and puts them in unsafe conditions, unions are needed so that the individual labors can stand together to stop the unsafe practice. However, it is also the mandate of the State to ensure that the rights of the individual are not infringed upon by the company. Thus, the State, by force of law, should and and ought enact legislation to protect worker's rights. Such as a safe workplace. When the State steps in and does this, what is the role of the union? Collective bargaining.

So, the workers in my airplane factory unionize and come to the bargaining table. As the union represents all workers in my factory, I only need to negotiate once. If a deal is struck, everyone in the plant has the same deal. I know how well my company is doing and how much I can spend on each employee. I am only beholden to the company bottom line, thus there is a finite amount of money I can deal with. The union and I come to a deal with this bottom line in mind.

When the government worker union comes to the bargaining table, they deal with someone who is not beholden to the company, but to elected officials. The elected official, post 17th Amendment, is beholden to the people in his district. The elected official knows that if he gets the endorsement from the union, lots and lots of people in his district will vote for him. As he also has no skin it the game, and there is no mandate to turn a profit, the bottom line that the privateer has does not exist in the public sector. Unions are given nearly everything they ask for, as they essentially hold the elected official hostage with their endorsement.

This is why government unions are so powerful, and so dangerous. Government, post US vs Darby Lumber, essentially has a blank check to write. The unions know this and go after that brass ring. Ironically, the man who made this a reality, FDR, was staunchly anti union because of this very reason. His later successor, JFK, was the one who let the fox in the hen house.

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