Obama’s allies in Wisconsin are a throwback to Juan Peron’s public employee unions.
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Unions and collective bargaining in the private sector are perfectly valid, when the workers choose them. Workers’ rights to such collective bargaining are protected by federal law, and everybody supports that, except maybe the unions themselves, which don’t believe in working people having a choice of whether to join a union. The unions believe in government forcing workers to join unions whether they want to join or not.
But there is no place for collective bargaining in the public sector for government bureaucrats. Public servants working for government are subject to democracy and the will of the people like everyone else. Unions are not a fourth branch of government with the power of veto over democracy and the will of the people, which is effectively what they are demanding in Wisconsin, and across the country. Collective bargaining in the public sector means that after the people’s elected representatives vote in state Houses and Senates across the country on pay and benefits for their own state government workers, they then have to go get permission from the unions. But democracy and the will of the people do not properly sit down as equals with the unions. Government workers are subject to what the people decide through democracy, just like the rest of us.
This is why there is no collective bargaining with Congress for federal workers. Congress already represents the will of the people, and Congress does not properly sit down to collectively bargain with unions over what it decides.
Government workers, federal, state, and local, are already protected perfectly well by the political process. If government workers feel they are being exploited and treated unfairly, they can take their case to the people through the political process, and participate themselves in that process. But what they are demanding with collective bargaining is additional powers above democracy, forcing democracy to come to them a second time as equals in collective bargaining. This is anti-democratic.
Government workers are not the ones being exploited today. Nationwide, state and local government workers are paid on average 45% more than private sector workers, with an average hourly wage of $26.25, plus $13.56 in hourly costs for benefits, for total hourly costs of $39.81, or $80,000 per year on average. Before Governor Scott Walker came along, the annual cost of the lavish family health coverage for public school teachers in Milwaukee was $26,844, for which the teachers paid nothing. Ann Coulter reported at Townhall.com on March 9 that one Madison bus driver made $159,000 in 2009, leading 7 bus drivers overall who made over $100,000 that year. Local government officials explained that was what was required by the union contract.
Federal government workers without collective bargaining do even better. Average pay and benefits for federal civilian employees at $123,049 is more than double what private sector workers make on average. From 2005 to 2010, the number of federal workers making over $150,000 per year surged more than 10 fold. The ones being exploited today are not these government workers, but the taxpayers who have to pay the taxes to support them in the lifestyle to which they have become accustomed.
AFL-CIO President Richard Trumka wrote in the Wall Street Journal on March 4 that what is at stake in government union collective bargaining is “[t]he freedom of workers to come together to bargain for decent living standards, safe workplaces, and dignity on the job.” But as the above numbers show, what is at stake is whether government workers, so-called public servants, are working for us, or whether we are working for them.
Howard Dean goes on CNBC’s Kudlow Report on CNBC shouting everyone else down over what the people of Wisconsin think about all this. But no one appointed Howard Dean to speak for the people of Wisconsin. Howard Dean is not even from Wisconsin. The only person who can arguably speak for the people of Wisconsin is the man the people elected Governor of Wisconsin, Scott Walker.
The Prosperity of Working People
Trumka argues further in the Wall Street Journal that the wages of working people and the middle class have stagnated because of the decline of unions. But the traditional prosperity of the American worker has never been based on unions. It is based on economic growth, and when unions and their policies reduce that growth, they reduce the wages and standard of living of working people.
That is proven by one simple fact. Throughout the 20th century, with unions soaring by mid-century to represent close to 40% of workers, and then collapsing to represent less than 10% in the private sector today, the proportion of national income going to labor has remained steady at about 70%. Only 30% goes to capital. The soaring rise, and then collapse, of unions made no difference in the share of national income going to working people. What made working people rise and advance is increasing national income, due to economic growth.
Credulous union partisans argue that union wages are always higher, which allegedly proves the value of unions to working people. But those higher union wages come at the expense of lower wages for other workers. That is proved again by the stable long-term shares of national income going to labor and to capital. This is a straightforward result of economic principles. Unions raise the wages of their own members by creating an artificial reduction in the supply of labor for the employer, by denying other workers access to that employer. That is why unions are always most vociferous about scabs, or breaking union picket lines. With the supply of labor to the employer artificially reduced to the union labor pool, the union workers can get higher wages. But the non-union workers denied access to the unionized employers have fewer employment options as a result, and so get lower wages than they would without the unions.
Trumka also argues in the Journal that the question posed by the current debate is this: “Do we continue down a path that delivers virtually all income growth to the richest 1% of all Americans, or do we commit to building a thriving middle class?” But what experience shows is that numbers and unions don’t mix, whether economic statistics, or the accounting on union books.
Scholar Alan Reynolds demonstrated in his brilliant book Income and Wealth that this notion that virtually all income growth went to the richest 1% of all Americans during any period in our history is a dirty misrepresentation of the facts regarding the broad-based bounty produced by the American economy, which is obvious to anyone familiar with America. The true, correct data regarding American living standards shows that they increased for all workers at all income levels consistently throughout the 20th century, especially during the 25-year Reagan boom from 1982 to 2007.
From 1973 to 2004, about 30 years, real per capita consumption in America nearly doubled. Over 75 years, 1929 to 2004, real per capita consumption by American workers increased by 5 times, even faster since 1961 than before. The fastest growth periods were 1983 to 1990, and 1992 to 2004, during the 25-year Reagan boom.
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