The War Against the Unions

Public-sector unions are too powerful in many states, I argue in a column for the Financial Times. But the Republicans' war against them is being fought, as they say, on a false prospectus.

Total pay is not the anomaly. There is a labour market, after all. Pay and benefits cannot move too far out of line without shortages of workers or surpluses of applicants getting embarrassingly out of hand. The anomaly is not the fiscal cost of the settlement unions have won, but its form, seen in the broadest terms.

Pensions are only part of it, but they point to the real problem, which is one of management and accountability. Unions have traded lower wages for better benefits - including, in some cases, retirement on full pension in early middle age and tacit acceptance of abuses such as pension spiking (pay increases in the last year of employment, to pump up final salary benefits) and liberal recourse to pre-retirement "disability". Employers have gone along, disguising the true cost of state services and shifting some of it through underfunding to future taxpayers.

This is not the only bargain unions and politicians have struck. Unions also traded wages for control. In many US school systems, bargaining rights have expanded to the point where unions are in charge. They have their say not just on basic pay and benefits, but on seniority rules, hirings and firings, school hours, you name it. In many states, schools are run like the British printing industry before Rupert Murdoch, with similarly unimpressive results.