Public Sector Unions Hurt The Public

Public sector unions are a blight on society:

Fear of a Long Island Railroad strike loomed larger Monday when contract talks imploded after just 45 minutes of negotiations and calls were made for Gov. Cuomo to save the day.

Both sides in the tense labor fight said they were miles apart on an agreement and a strike that would throw more than 300,000 daily riders into commuter chaos appeared imminent without Cuomo intervening.

But there was no immediate word from Albany on whether the governor would jump in and moderate a last-minute deal.

“I regret to report that negotiations have collapsed with the MTA and all eight unions are now proceeding with strike plans for July 20,” union spokesman Anthony Simon said.

MTA Chairman Tom Prendergast, who left contract negotiations with union leaders after just 45 minutes Monday, said both sides are far apart, with a possible strike just days away.

“There truly is a gulf,” Prendergast said.

A coalition of unions representing conductors, machinists, track workers and others has threatened to strike as early as 12:01 a.m. Sunday.

The Long Island Railroad employees are planning to strike because the MTA is only providing them with a 17% raise (phased in over seven years), along with requiring that employees contribute 2% – 4% towards their health insurance costs:

But the authority’s latest offer, extended late last month, would grant 17% in raises over seven years, not the six recommended by the boards. Current employees would pay 2% of base pay for health care under the MTA’s proposal. New hires, however, would have to contribute 4% of base pay toward health care and make pension contributions throughout their employment. LIRR workers now only make pension contributions for 10 years.

I have no problem with employees voluntarily organizing to represent their own interests against a private employer. I do, however, oppose (1) mandatory union membership; and (2) public sector unions.

Mandatory union membership is antithetical to America. Why? Because it is forced association. Nobody should be compelled to associate with individuals or groups if they do not want to. The right to peaceably assemble–guaranteed by the First Amendment–should not be compulsory. The right to not assemble should also be a protected right. This idea is gaining momentum in the so-called “right to work” states. If the union provides enough benefits to its individual prospective members, then most people should opt for union membership. That’s fine. That’s the free market working. Compulsory union membership is not free market.

Interestingly enough, job growth in “right to work” states is much faster than other states.

There are numerous reasons for this. Some of the reasons may not be related to the fact that the state is “right to work.” By this, I mean that tax policy could drive job growth in a state more than the fact that it became “right to work.” But certainly any state which relaxes rules and regulations on business will see an increase in business activity. Unionization costs employers and employees money. Eliminating that frees up capital for more jobs (and more take home pay).

I hate quoting FDR, but he was right on the money when it came to public sector unions. FDR was completely against public sector union’s and the right to strike and collectively bargain, according to Politifact:

“All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service,” he wrote. “It has its distinct and insurmountable limitations when applied to public personnel management.”

Roosevelt didn’t stop there.

“The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations,” he wrote.

When Walker claimed FDR said “the government is the people,” he had Roosevelt’s next line in mind.

“The employer,” Roosevelt’s letter added, “is the whole people, who speak by means of laws enacted by their representatives in Congress. Accordingly, administrative officials and employees alike are governed and guided, and in many instances restricted, by laws which establish policies, procedures, or rules in personnel matters.”

Public sector unions are designed to organize against the taxpayers–not the government. Why do I say this? Simply because the government does not have any money of its own. Government raises revenue by taxation, whether it’s income tax, property tax, sales tax, licensing fees, parking tickets, etc. The money comes from the population living within its jurisdiction. A public sector union, negotiating its raises or contract terms, is really negotiating with the taxpayer–except the taxpayer isn’t at the bargaining table. Government officials, many of whom are sympathetic to unions because they donate to their campaigns, negotiate in the place of the taxpayer. However, government officials don’t have any fiduciary duty towards taxpayer funds. If they did, nearly all government officials would be in jail.

When a union like the one representing the Long Island Rail Road threatens a strike, they are hurting the taxpayers three times. First of all, the strike will be disruptive to folks on Long Island who take the LIRR to work on a daily basis. Second, they will eventually get a large raise which will result in higher taxes or railroad ticket costs. Finally, the raise which the workers will eventually get will come from the “capital fund” which was set aside for rail improvements.

Moreover, some of the wage increases might come from funds which were supposed to go to pay for pension and health care costs. This is the quintessential “robbing Peter to pay Paul” maneuver, particularly in an election year. God forbid MTA fares go up when Govern Cuomo is running for re-election, right? Moves like these will continue to exacerbate the problem of chronically underfunded pension obligations.

Can you imagine striking after being offered a 17% raise and told that you now have to pay for your health insurance costs? Most people suffering from Obamacare’s double-digit insurance rate hikes would kick a puppy to get a deal like the one was offered by the MTA.

It should also be noted that the MTA wants a freeze in wage hikes because it requires it to remain solvent. The irony is that the Long Island Railroad was originally a privately-run railroad which ran into financial trouble, went into bankruptcy, and was purchased by New York State. Since then it has been a drain on taxpayers, to say the least. Fares and tolls collected cover less than 60% of the MTA’s operating costs.

To paraphrase Mitt Romney, let the LIRR go bankrupt.

As always, free markets are better markets.