Public Servants and the Future of Reform: Michael Toth Responds

The state of Illinois, according to a recent article in the Chicago Tribune, is headed for a “pension doomsday.” So are other states. Across the country, unionized governments are a halfway house to nosebleed long-term pension and healthcare costs, giving politicians a Hobson’s choice. They can renege on existing collective bargaining agreements, hike taxes, or pare back social services.

Interestingly, neither my Liberty Forum essay nor the responses to me focused on the fiscal train wreck aspect. This was most likely a subconscious choice on the part of the contributors, myself included, to leave aside the nuts and bolts of public finance and concentrate instead on the bigger picture, or, more accurately, the bigger pictures of unionized government. At least three big things about public sector unionism can be gleaned from this month’s forum.

The first has to do with work in a governmental setting as compared and contrasted with work in a private setting.

John Eastman’s personal narrative is a good starting point for a macro discussion. Before getting to the legal and political ramifications of unionized government, it is necessary to reckon with the moral consequences. Collective bargaining agreements privilege employees who “play by the rules” no matter how little sense those rules make. In Eastman’s case, he got a pink slip for working too hard.

Eastman-type scenarios in the public sector demoralize dedicated public servants and make it impossible for them to turn their work into an opportunity for creative self-actualization. Consequently, the value of government work has fallen. Many now believe, with good reason, that innovative and responsive solutions cannot come from the government. In Silicon Valley, the consensus view is not that government is good or bad, but that it is irrelevant. Workers in the government sector are simply saddled with too many rules. The end state for critics of public sector unionism must be better working conditions for public servants, not simply the unblocking of union coercion in the governmental sphere.

Employees are treated better, moreover, when they can grow in their jobs, when they are rewarded for finding innovative ways to produce valuable goods and services. In general, this is not happening in the public sector. The U.S. Post Office at Stanford University, for example, is open for the same hours during the school year as it is in the summer, despite the fact that a fraction of the customers are around in summer. (And for that matter, is it wise for a campus U.S. Post Office, even during the school year, to use the standard schedule of 9 to 5, Mondays through Fridays, given that this is class time and hence the least convenient time for students and faculty?) This kind of mismatch with customer needs would run a private firm out of business, yet it is par for the course in the public sector. No wonder those who can are increasingly opting for private sector employment, as Daniel DiSalvo writes elsewhere.

The unionized job that hardworking John Eastman lost was in the private sector. We might ask if reform there might need to come first—how has it come about that at least some private sector employers make their employees contribute to a union as a condition of employment?

There is, however, an important technical difference between collective bargaining in the private and public sectors. In the private sector, the case for “state action” is in fact harder to make. Federal law requires that private sector employers and unions negotiate in good faith. Government is not directly responsible, therefore, for a contract entered into by a business and a union that compels all of that enterprise’s workers to contribute to a union. It’s what two private parties agreed to.

State action in the public sector context, by contrast, is obvious. The state is a party to the agreement. This technical difference, or difference of formality, is all but dispositive. Without state action, no constitutional claim is available. And it is highly unlikely that a majority of the current Supreme Court would adopt a broader view of state action given Chief Justice Roberts’ views on constitutional avoidance.

Setting the formality distinction aside, accountability is an even bigger difference between collective bargaining agreements in the public and private sectors. In the private sector, companies that routinely shed hard-chargers like Eastman will fall behind their competitors. There are no earnings calls, everyone knows, in the business of government.

Political representation, to be sure, provides something of an equivalent to market discipline. In republican (small “r”) governments, the electorate chooses the officials who are responsible for the public fisc. The problem there, as Adam White nicely illustrates, is that unionists in government work around the traditional political channels. Public sector unions negotiate collective bargaining agreements with government officials, who need the union’s support to remain popular. The process is more collusive than adverse, and the result is public labor agreements that put future lawmakers in a fiscal straightjacket. The shift away from republican self-governance is the second macro issue with public sector unionism.

And the third—the constitutionally questionable arrangements common in government-labor agreements—is now before the Court in the case of Friedrichs v. California Teachers Association, pending next term. Government employee unions would not have so much cash or clout without two particular features of public sector labor law, which DiSalvo notes in his response (and in far greater detail in his definitive treatment of this subject, Government Against Itself).

The law currently permits public unions to require public employees to cover the cost of collective bargaining. Public employees can avoid paying for the union’s electioneering efforts, moreover, only if they “opt out.” Both arrangements are irreconcilable with the Court’s insistence, in other First Amendment cases, that individual speakers not be made to affirm political or ideological speech that they do not support.

In the event that the curtains are drawn on unionized government, the real challenge will be restoring the image of public sector work and structuring government employment in such a way that an employee’s responsiveness is noticed and rewarded. Obviously this is no small task. The interests of the public and those of public employees do not align automatically. The more distance and layers of interference there are between the government and the people, moreover, the harder it is to maintain that alignment once achieved. Absent meaningful decentralization, the public sector may continue to underwhelm. At a minimum, however, curtailing the influence of government employee unions would treat one of the major causes of the sclerosis in the provision of public services. That alone would be something worth celebrating.