The Hidden Costs of Chicago's Teacher Strike

The strike by the Chicago public teachers union imposes very visible costs. School age children wander the streets rather than sitting in the classroom—and this in a school district performing well below the national average. A parent spontaneously complained to me in the park that the strike has completely upended her work, making it hard to meet a deadline—and this is doubtless even more true of lower income families who work hourly shifts rather than by project or on salary.

But the less visible costs are far greater. The union is using the leverage provided by its legal perquisites, including the right to strike, to set educational policy for the benefit of its members rather than the public interest. It is also using these privileges to impose substantial burdens on the long-term Chicago budget that it has already distorted through previous collective bargaining agreements. But the effect of the Chicago Teachers Union (CTU) on its locality, even if extreme in degree, is by no means unique in kind. By their nature and design, public sector unions have baleful consequences for public services and government budgets.

It is important to understand that while the name “union” is applied to associations of both private and public sector workers who are given coercive privileges by the operation of law, such as the authority to organize, bargain on behalf of their members, and withhold their services from employers without being fired, public sector unions differ essentially from their private sector counterparts. First, private sector unions exist within the framework of a competitive economy that limits their power. If a private sector union demands too much of a company, it ends up harming its workers, as the company will become non-competitive, particularly in a globalized world where foreign companies can move. Government, in contrast, enjoys a monopoly in many services that it provides, de jure in such areas as the police, and de facto in K-12 education, where the majority of people in urban school districts cannot afford private schools.

But the even greater difference appears in the relation of private and public unions to those with whom they bargain. Private sector unions face company executives who represent shareholders. They are not in any way beholden to the union and can bargain at arms-length. But politicians sit on the other side of the bargaining table from public sector unions. Public officials are in theory agents of the entire citizenry. But as public choice economics shows, on any given issue they are more likely to be responsive to the concentrated interests focused on that issue.

Public sector unions represent a particularly powerful concentrated interest, having both money and numbers. They can both mobilize voters and provide campaign support to press for the election of those sympathetic to their views. In contrast, the average citizen is rationally ignorant, because his or her vote is very unlikely to make a difference in an election. As a result, politicians, even ones like the current Mayor of Chicago who may not agree to the teachers unions’ positions as an ideological or intellectual matter, must nevertheless give the unions’ self-interested perspective greater weight than the more disinterested general public. To be sure, the general problem is not new. The Framers were themselves worried about factions and their ability to undermine the public good. The difference here is that the laws concerning public sector unions have armed a particular faction essential to government services with coercive powers.

Finally, public sector unions members tend to hold views on public policy that—even apart from their interests dictated by their membership—are not representative of the general public. The head of the CTU, Jesse Sharkey, is a socialist who participated in something called the Midwestern Marxism Conference. A member of the CTU’s executive committee went to Venezuela to show solidarity with the totalitarian Maduro regime. Chicago is, to be sure, a town that leans Democratic but these views are far to the left of the median voter here.

Thus, it should be no surprise that the Chicago teachers union wants a mixture of policies that will help its members and promote a more generally left-leaning ideological agenda. It is pressing for a moratorium on charter schools, smaller size for school classrooms, and the placement of various social services within the schools. The advantages to the union of such policies are clear: First, reduce the threat of publicly funded competition and performance that may display traditional public schools in a bad light. Second, expand the number of teachers and thus political power. Finally, start bringing in other kinds of state workers under their aegis to expand the union’s reach.

While these policies are good for the union, they do not generate cost-effective benefits for children. Many charter schools have better records than public schools. And they inject competition and innovation into the public sector. The evidence of smaller classes for educational improvement is mixed. Moreover, we must weigh any benefits against using the money for reforms that would render greater improvements.

For instance, there is no doubt that great teachers have a very positive effect. The union has already prevented pay differentials to reward outstanding performance. And it has rules that make it very hard to fire underperformers. Thus, the costs of this present strike are only a small part of the reduction of quality that the power of collective bargaining and threat of strikes have already achieved.

And public sector unions not only reduce quality but raise costs. The teachers union here, for instance, has excessively generous pensions for its members and these pensions are vastly underfunded. This time bomb for the Chicago city budget is also a natural consequence of the structure of public sector unions and the incentives of politicians.

Politicians want to slough off the cost of an agreement to future politicians and future voters rather than pay off the full costs now. The difficulty for Chicago is that bill is now becoming due. But despite the risk that Chicago might go bankrupt, kicking the can further down the road even under dire circumstances remains in the mutual interest of union leaders and politicians.

The problems that the teachers union creates for Chicago are extreme for two reasons. First, the law gives public sector unions in Illinois the right to strike. Even deep blue states like New York and New Jersey withhold that privilege. Second, public sector unions are the mainstay of Democratic urban machine politics in a city like Chicago. They have supplemented, if not replaced, the patronage system.

Thus, the only hope of reform lies in the possibility of a split in the urban progressive coalition. Certain progressives have become disenchanted with some public sector unions. For instance, the costs of collective bargaining agreements that interfere with disciplining union members have become increasingly clear in police shootings. My colleague Max Schanzebach has shown that unjustified shootings tend to originate from officers against whom there are many complaints but who cannot be fired—in large part because of collective bargaining restrictions. And the enthusiasm for school charters among some liberals shows disquiet with the state of urban public education.

Nevertheless, I am not optimistic that progressives will rein in the public sector unions any time soon. Many of the Democratic presidential candidates rushed to endorse the strike. Paradoxically, the worse the policies that the unions foist on our cities, the more progressives need their muscle to get reelected.