I am joining my dear colleague, Charlotte Hays, this morning in discussing the Wisconsin public sector employee union protests. Charlotte’s excellent commentary on President Obama’s, expected, and yet unconstructive, position is quite refreshing and I echo her sentiments that thanks to unions, public employees receive “bloated benefits package[s] that [are] way out of line with the earnings of taxpayers who pick up the tab for [their] lavish benefits.”
As I wrote in December, public sector unions exploit taxpayers. Accounting for overly generous benefit packages, public sector employees’ wages are 45% higher than those of their private sector funders: the American taxpayers.
Public sector employee unions are the last remaining sector of effective union power in this country. The Wisconsin protests, organized to a large extent by President Obama’s Organizing for America group, show just how desperate unions are to stay in power. Private sector unions have been in decline since the 50s, with private-sector union membership dropping to 6.9 percent in 2010- its lowest point in over a century.
Dan Griswold at the Cato Institute explains why this is:
The seeds of organized labor’s decline lie within the movement itself. Private sector unions are literally pricing themselves out of America’s increasingly competitive and open markets.
As I pointed out in an article [PDF] for the Cato Journal last year, unions are effective at raising wages and benefits for their members, but not at raising productivity. The result is a “union tax” on certain U.S. companies and sectors, a tax that puts them at a competitive disadvantage against non-unionized firms, resulting in a long-term loss of market share and reduced employment for union members.
Unlike private sector unions whose demands are naturally curbed by the fact that if they bankrupt a business, their workers will have no jobs at all, public sector unions face no such constraints as long as state legislatures are willing to heed their demands by draining state budgets and coercing their constituency to pay for union benefits.
I applaud Governor Scott Walker for showing the courage and stamina to confront public sector unions who are placing an unbearable burden on states’ taxpayers. Shame on those Democratic state legislators who, according to Eileen Norcross:
To avoid a vote on a proposal to limit collective bargaining rights in the state of Wisconsin, 14 legislators have fled the state, to an undisclosed location. The reason they crossed state lines was to dodge the Wisconsin police. (H/T: Tyler Cowen)