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Three Things 2012 Taught Us About Unions

Jan. 17, 2013 10:30am

Casey Given is a policy analyst covering education and labor issues at the Americans For Prosperity Foundation.

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Given: Three Things 2012 Taught Us About Unions

Debbie Nault from the Michigan Nurses Association stands with other members of the association on the state Capitol steps in Lansing, Mich., Monday, Dec. 10, 2012, protesting right-to-work legislation. (AP)

2012 was a historic year for labor relations. From the halls of Washington, DC to the Great Lake states’ capitals, Americans watched numerous union dramas unfold for better or worse. Here are three lessons we can draw from this important year, marching forward in the fight for workers’ rights and fiscal responsibility:

1. Public sector unions are the biggest threat to state and city governments’ fiscal health.

It’s no secret that the American states are in fiscal crisis. Taxpayers are constantly reminded of the $1.1 trillion of debt our states owe, but an even larger number often escapes the conversation: $2.9 trillion. That’s how much the states owe in unfunded pension promises to their civil service retirees. For decades, state and local governments have offered their employees fiscally unrealistic retirement benefits, often up to 90% salary pay for life, and they are beginning to experience serious economic repercussions. The city governments of Stockton, California and Harrisburg, Pennsylvania, for example, filed for bankruptcy in 2012 largely because of their impractical pension promises.

Most of the blame rightfully lies with state and local elected officials, who ultimately consented to make these bankrupting contracts. Since governments have no market competition and a massive revenue base, they are often tricked into thinking they can afford unrealistic compensation and pension promises. However, public sector unions also share part of the blame; they hasten our ship of state’s sinking by bankrolling supporters of the status quo with multimillions in campaign contributions and ferociously opposing fiscal reform.

Plenty of the latter was seen in 2012, with union interests challenging Gov. Scott Walker’s collective bargaining reform in Wisconsin and striking against Mayor Rahm Emanuel’s teacher compensation reform in Chicago. When the dust settled, Gov. Walker’s efforts succeeded through defeating a close recall effort, while Mayor Emanuel’s efforts failed with Chicago Teachers Union defeating almost all of proposals for reform. This contrast is awfully telling about each party’s future fiscal and economic health. In the Windy City, Mayor Emanuel’s concessions is estimated to increase the city’s public school deficit to more than $1 billion every year beginning in 2014 at a time when Chicago and Illinois are already some of the highest-taxed localities in the country and Gov. Pat Quinn is seriously considering a federal government pension bailout.

Just north of the state line, by contrast, Gov. Walker’s reforms have spurred economic growth. In fact, the Federal Reserve Bank of Philadelphia projected last January that Wisconsin would experience growth of 1.95% in 2012 – the highest rate since 2003. These contrasting developments speak volumes about the benefits of standing up to public sector unions.

With taxes and debt piled up, the fate of state and local governments lie at stake. Now is the time for responsible citizens to demand that their elected officials not fall for the public sector unions’ swindle again but instead stand up for fiscal reform to ensure prosperity for ourselves and our future generations.

2. Private sector unions can drive companies out of business if they don’t get their way.

In the wonderful world of labor relations, private sector unions have much less red ink on their hands than their public sector brethren since they actually have to face market forces. After all, companies consent to collective bargaining deals with private sector unions voluntarily and pay for the negotiations out of their own pockets, not the taxpayer’s. Thus, a company that bankrupts itself because of impossible promises it makes to its employees is fundamentally mismanaged. Nevertheless, companies should beware that conceding to every single anticompetitive demand a union makes will come back to bite them.

2012’s case in point is Hostess. After a massive strike by its bakers’ union, the beloved American artery clogger went out of business in November, leaving 18,500 workers losing their jobs. Hostess had been bogged down for years by giving into its union’s nonsensical demands. Most destructively, the company agreed to major restrictions on how its product is shipped, agreeing to a Teamster demand that bread and pastries be shipped separately. Furthermore, the company agreed to a $100 billion increase in health benefits for its retirees in 2011, almost half of which didn’t even go to Hostess employees because of the Teamster’s multi-employer pension plan.

Employers should be careful in making such anticompetitive agreements in the future because many unions will stop at nothing to get their way – even if it ultimately means putting their company out of business. Additionally, citizens should stand up against private sector labor laws that inherently favor Big Labor like union shop laws where workers are forced to pay dues to unions even if they choose not to join one. Such legal favoritism doubtlessly led to the downfall of Hostess and countless other bankrupt companies. Now is the time to demand a neutral legal environment for employers and employees to fairly negotiate.

3. Standing up against unions for worker’s choice and fiscal responsibility is possible and popular.

Despite 2012’s major losses for fiscal sanity, the seeds of hope have doubtlessly been planted in labor relations. In Wisconsin, Scott Walker’s daring collective bargaining reforms were upheld in the court of public opinion, with the governor escaping a recall attempt unscathed. In fact, more Wisconsinites voted for Walker in the recall election than in the gubernatorial election in 2010. Considering the economic growth the Badger State has experienced since his reforms went into effect, Wisconsin has sent a clear message to the rest of the nation that standing up to public sector unions is both politically popular and advantageous to prosperity.

However, 2012’s greatest glimmer of hope came not from Wisconsin but its Great Lake neighbor Michigan. After resoundingly rejecting union interests’ attempts to make collective bargaining a state constitutional protection and nullify hundreds of existing labor laws along the way, Michigan shocked its special interests by passing right-to-work legislation in December. As the birthplace of United Auto Workers and the cradle of American unionism, this is a momentous victory for advocates of workers choice to join a union free from force.

These two critical wins are waking up reform-minded politicians into taking a stand for economic liberty. Since Michigan’s success last month, talks are underway in states like Pennsylvania and Ohio to follow suit. Americans are finally sending the message that pro-freedom labor reform is not idealistic but politically preferable. Indeed, a bipartisan coalition is emerging in favor of fiscally responsible labor relations, as evidenced by recent statements from prominent liberal mayors Michael Bloomberg and Rahm Emanuel in favor of reform. With support from free market proponents, this positive trend towards workers choice and fiscal responsibility can continue in 2013.

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Comments (33)

Salamander
Posted on January 20, 2013 at 8:53am
Labor is a lost cause for unions. They have overpriced our labor on the World markets, and so things requiring skilled labor have gone overseas. “Workers of the World Unite” is a distraction, a feint–not a reality! If it were, Trumka would be in China, in India, in the United Nations and NOT in The White House! Rather, the unions have moved toward their LAST VIABLE TARGET–the professions, specifically through white collar government workers! Obamacare is a POT OF HONEY for the unions! Once they corner the market for 35% of our GDP, particularly with the sick, the infirm and the elderly, they’ll go after the doctors and nurses–the medical ‘professionals’! Anyone wanting to practice medicine will HAVE to be a government employee–and join THE union! The Circle will be complete–until it collapses!

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jimbo_from_suwanee
Posted on January 18, 2013 at 3:24pm
4. Union members tend to be violent.

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Arshloch
Posted on January 18, 2013 at 3:05pm
A union is an operation of the thug, by the thug, for the thug to generate funding to buy politicians to feather the ‘bosses’ nest.

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VanceUppercut
Posted on January 18, 2013 at 10:38am
Workers in right-to-work states make an average of 10 percent less a year in wages. Fact. They have little t no job security. Fact. Cons talk a big game about God, when the only God they worship is the Almighty Dollar. fact.
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- jarhead7052
  Posted on January 18, 2013 at 11:33am
  The cost of living in most right to work states is generally 10-20% less because most right to work states aren’t run by fiscally irresponsible democrat controlled governments. As for job security, I know 15000 steel workers in the Ohio Valley, union members all, who are no longer steel workers because their steel jobs are gone. And I really miss Twinkies. What happened to those 18000 Hostess workers? Job security? Everyone is at risk, union or not, right to work or not. It’s called “life in a free market economy.”
  
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calmandcents
Posted on January 18, 2013 at 12:54am
Dang. I wish someone would publish a map (names and addresses) of all of the union bosses in my area . . . . . of course, just to be sure who we can trust and count on in tough times.

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calmandcents
Posted on January 18, 2013 at 12:46am
Hmmm ~ I think the union bosses have devolved mostly into being about killing the goose that laid the golden egg. Someday they are going to have to explain it all to the idiots who continue to support them, which will be as exciting as Pelosi explaining Obamacare.

For a cure to this cancer, donate — even a little — to the Right to Work Legal Defense Foundation at http://nrtw.org/

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Restore the Republic
Posted on January 18, 2013 at 12:19am
We also learned that Union members are the most foul mouthed, violent, selfish and greedy people on the earth.

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Robert999
Posted on January 17, 2013 at 9:48pm
America will not be truly free until all unions are outlawed.

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- 1FreeVoice
  Posted on January 19, 2013 at 8:33pm
  You are forgetting the bill of rights, I think. They have freedom of association etc. … They just don’t have the freedom to force other people to associate with them.
  
  Unions can continue to exist, but under some restrictions. They should make all of their finances fully open to their members, and no one can be forced to join, or prevented from leaving. Unions cannot be exempt from the law. If they use thuggish tactics, they can expect to be treated like thugs and charged with any crimes they have committed.
  
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Roros
Posted on January 17, 2013 at 9:36pm
Help make Washington State a right to work state. Help Boeing make better planes before Airbus non union Airbus, takes the air from Washington. Ow do not like that do ya, Boeing could move to a right to work state. Make Washington State a right to work state

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Patriot Z
Posted on January 17, 2013 at 9:08pm
if unions were worth what they claim they would WELCOME RTW laws.

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bankerpapaw
Posted on January 17, 2013 at 7:07pm
I know three things about unions: 1. They are a bunch of worthless thugs.
2 & 3. See number 1

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ranepowel
Posted on January 17, 2013 at 6:43pm
I love my union. I get a guaranteed wage at every film production I join. I get four weeks of vacation a year — six if I want two unpaid weeks added on to it. I have a nice pension and will be able to retire after 20 years of work, aka when I’m 42 (just a few years away!) with a 100% paycheck coming to me for the rest of my life.

Seriously, anyone that says unions suck obviously isn’t working for the right ones. And it’s not like my union is going anywhere. My industry (film production) continues to make big profits year after year. 2012 was better than 2011, and 2011 was better than 2010. Even during recession and economic hardships, people go and watch movies and watch TV.

So yeah, I’m sure people on here hate the unions, and I’m sure they will totally overlook the fact that the Hostess CEO and board gave themselves multi-million dollar bonuses using the Hostess teams’ pension fund, but whatever. I love my union, and my union loves me. And since we just got another big tax break from Obama as part of the “pork” deal that just recently passed as part of the fiscal cliff deal, my industry is protected by the government :)

I’ll let all you guys know how much it sucks being a union member when I buy my first vacation condo later this year :) :)

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- John 1776
  Posted on January 17, 2013 at 7:34pm
  Film, Lighting, and Theater unions aren’t too bad. Good profitable industries. Not so much with the auto industry, and public sector unions will be the death of us all. (No one to negotiate with as the politicians are using OUR money not theirs.)
  
  As with everything else, blanket statements are usually wrong. In this case, however, the lion’s share of cases make industry unprofitable and encourage outsourcing.
  
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- Patriot Z
  Posted on January 17, 2013 at 9:07pm
  good for you, we still say unions suck because they take by force that money and give it to you and other union members who do lousy jobs. we still say unions suck, because there is NO accountablitiy and NO choice. we say they suck because they drive prices up to pay for gangter union bosses and liberal bribes. we still say they suck because if union workers and the unions themselves were has good as you clain, the youunions would welcome the opportunity to allow choices for workers. instead as we are seeing, when RTW laws are put in place people leave your blessed unions like rats off a sinking ship. so forgive me if i dont applaud another useless union worker being overpaid to take too much time do a lousy job . oh and i come from a union family
  
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- banjarmon
  Posted on January 17, 2013 at 11:13pm
  Going to the movies cost too much to see such junk!
  
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- The_Cabrito_Goat
  Posted on January 18, 2013 at 2:03pm
  DON’T CALL THE HOBBIT JUNk!
  
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@leftfighter
Posted on January 17, 2013 at 5:37pm
1. Public sector unions are the biggest threat to state and city governments’ fiscal health.
-This is old news. All of Progressivism is a major threat to the US’s fiscal health.

2. Private sector unions can drive companies out of business if they don’t get their way.
-Again, very, very old news. See also Pan Am & Eastern Airlines. Yeah, sure. Union thugs will claim the lack of regulation had the companies on their death beds, but the fact is, strikes killed them.

3. Standing up against unions for worker’s choice and fiscal responsibility is possible and popular.
-Listen and take note, America. The Left and the Unions will kill the U.S. You know it. I know it. Some of the politicians own it. The Left will crush us all if we don’t stand up now.

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spfoam1
Posted on January 17, 2013 at 5:07pm
Trumpka dreams of the power to have absolute control over an entire nation, like his idol, Stalin. So does Obama.

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MrKnowItAll
Posted on January 17, 2013 at 5:03pm
The Union can GO where the Sun Don’t Shine.
Union Stewards son. No EXPERIENCE in our Trade. (0). One day more Seniority then a Great Tradesman. Union Stewards Son finds out about Bumping. Bumps Great Tradesman to Dirt Job. Rest of us get stuck with Idiot, know nothing Union Stewards Son. Everyone involved Furious except Union Stewards Son. Great Tradesman leaves company in Anger. I followed right behind him.

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- M13
  Posted on January 17, 2013 at 7:44pm
  So how did that work out for you?
  
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American_Made
Posted on January 17, 2013 at 4:49pm
4) They should be abolished as they only vote and spend money on worthless liberals even if the union member does not agree.

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SocialistSlayer
Posted on January 17, 2013 at 4:45pm
We also learned they are a bunch of Communist Thugs !

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rtaylor174
Posted on January 17, 2013 at 4:31pm
Unions, like any other institution or organization, have their problems and drawbacks. Here is what unions meant to me over the years: When I was a kid raised by a Teamster dad, it meant having decent food and medical care, and a decent place to live. When I was a young man, it meant my first good job and car and not being treated like a burger flipper. Later, it meant being able to afford being able to support a child who’s mother didn’t have to work outside the home. It meant not being fired every time a company decided to move the bosses around. Now that I am old it means retirement without being on welfare. I chose public sector work about halfway through my working life because I knew they couldn’t ship that work to Mexico or China. I was right about that, but was only a few steps ahead of a pink slip for about the last ten years of my career. My life hasn’t been easy, but it has been tolerable, and the unions helped make it that way. When the unions are gone, most people who aren’t rich will be treated like burger flippers. My conservative brothers aren’t suggesting any realistic replacement for the unions. They want us all to throw ourselves on the mercy of the employers.

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- SocialistSlayer
  Posted on January 17, 2013 at 4:47pm
  You Communist !
  
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- lani59
  Posted on January 17, 2013 at 4:50pm
  And now we have those poor NY city school bus drivers who are fighting for their very lives. How does anybody expect for someone to surive on $14 – $29 per hour pay, which is TWICE the pay scale of the next highest paid drivers in L.A. Yes, we must help these drivers out and increase the spending of $7000 per year, per student to whatever these drivers need. Power to the people!
  
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- rolla020980
  Posted on January 17, 2013 at 4:50pm
  I believe that much of what you have said was true in the past, but the Unions got greedy. They were formed to give the average working man a fair days pay for a fair days work. It has evolved into overpayment for underworking. They have also gained too much political power. Ohio had a collective bargaining ban on public sector unions, but it was overturned by the electorate. Unions will fight for other unions regardless of the financial harm it causes society. When UAW strikes because 50 grand/year to put in a bolt is not enough, it has gone too far.
  
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- AtkRWC
  Posted on January 17, 2013 at 5:03pm
  WOW! Thats impressive! To think I did all that without the nanny help of a union. I’m 1/2 to retirement for the 2nd time (Retired 11 yrs ago). Great healthcare, wonderful home and never saw a union! I was raised by a father who taught me to be a man on my own. Oh well, to each his own.
  
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- jhrusky
  Posted on January 17, 2013 at 5:10pm
  @ rtaylor174
  
  Obviously there are bad employers out there just as there are bad employees. Today the entire union debate is much like all other debates … everyone is so extremely polarized on one side or the other it’s hard to get any honesty anywhere.
  
  There was a time that unions were needed when some employers wanted to run, essentially, sweatshops here. I believe those days have left us. Many employers, at least small ones, don’t have a problem with paying a fair days wage for a fair days work, and many of us don’t pay ourselves 1000X our employees salary, either. Unfortunately, the insatiable greed at some of the larger corps has painted the entire corporate America as greedy SOBs who would enslave its workers.
  
  Additionally, public sector unions have enjoyed quite a ‘free ride’ in many respects; the pay for their members is not even close to similar professions in the private sector. It never made any sense for a public sector union to ask for a raise all the while donating to the bank accounts of those that gave those rases; of course they’d get what they ask for and of course it would be abusive.
  
  American just needs to get back to some form of normality. I’m of the mindset today that a collapse and complete reset of the system may be what it takes.
  
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- Perspective
  Posted on January 17, 2013 at 5:26pm
  Aren’t you just arrogant and VERY CONDESCENDING? You really seem down on someone who as you put it is ,”a burger flipper”. Why do you hate young and elderly people as these are most of what works fast food. A Teamster huh? The most corrupt unin ever and you’re proud of that. In the end you’re just another left wing unionite who could care less about anyone else who works for a living. Shame you couldn’t make it on your own isn’t it? I have nothing more than a high school education and have always negotiated my own wages and benefits and live comfortably. Why? Because I busted my @55 and worked hard. Then you chose to suck of the taxpayers teat,how pathetic.
  
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- FutureOnePercent
  Posted on January 17, 2013 at 5:45pm
  It sounds like the benefits your union offered would be worth paying dues for. Many people believe we are against unions completely, which is not true. We are against FORCING workers to join a union against their will.
  
  If unions were as great as everyone says they are, they wouldn’t have to force people into their ranks.
  
  I support freedom of choice and a market based on voluntary association, not coercion.
  
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- Jim in Houston
  Posted on January 17, 2013 at 5:53pm
  You are a sick puppy! Unions do absolutely nothing for the worker and a hell of a lot for the head goons. Right to work without being forced to pay some goon is an absolute right that unions cannot usurp.
  
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