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Advisors to Management in HR

Behind the headlines on public sector unions.

The media coverage of the brouhaha about public employee unions is fast and furious these days.  We are seeing, and hearing on radio, many inaccurate statements about the loss of unionization rights for public employees in several states.  One headline I just read: “Wisconsin Lawmakers take up bill to cripple unions”. 


I believe this headline (and many others I have read) to be highly inaccurate.


The National Labor Relations Act governs labor relations of private employers.  There are approximately 22 states with “Right to Work” laws, basically allowing unions and labor negotiations, but baring Union Security Clauses (a clause in the labor agreement that forces all employees working for that company to join the union within a specified period of time).  From time to time, either the union side, or the management side will complain that this system is skewed toward one side or the other, but after three decades of working with this system, i believe that it is a fair system.


In the public sector, state laws govern unionization on the public sector.  There are 37 states that allow public employees to join unions.  Many states have restrictions on strikes with certain public employees. 


Remember, private employers can declare bankruptcy, and through the bankruptcy process, void some union contracts, or portions of union contracts when it is economically essential for change (ergo, the Auto Industry, the Steel Industry, etc.).  State and local governments cannot declare bankruptcy, and as recently as January 24th, House Majority Leader Eric Cantor said that he objects changing the laws to allow bankruptcy (which would allow an avenue to make changes to some contracts).


In other words, the public employee collective bargaining laws in most states have not evolved over time to be a system of checks and balances.  With the increasing economic power of political PACs, the candidates with the largest PAC contributions are elected.  Then the elected officials are in the position of negotiating with the people that had the most to do with their election.  In addition, there is a “mandatory binding arbitration” system that has emerged in many states.  In this system, neither side has the opportunity of bargaining hard at the table, because they will end up in “binding arbitration”, and an arbitrator (with absolutely no responsibility over the economic effects of the contract) actually deciding the final outcome of the contract.


I remember the days when a public employee received lower pay and benefits than the same job in the private sector.  Not anymore.  The average pay of most public sector jobs is competitive with the private sector.  The average benefit package (health, pension, holidays, and vacations) of public sector employees is superior to the private sector.  There needs to be a way to bring the cost benefits for the public sector to be more in line with the private sector.


Getting back to the Wisconsin headline I started with.  We hear that the Governor wants to take away all or most of the public employees’ union rights.  Not so, the proposals are:  public sector employees would still be allowed to bargain on wages, but not on health or pension plans; raises would be tied to the inflation rate, unless higher raises voted by the public; Public sector employees would have to pay more (e.g. 12.6% for health, when they are currently paying 6%) for their benefits than they are paying now, but the amount they would have to pay would still be lower than those of the average private sector employee; they would have to pay 5.8% of their salaries toward their pensions (in the past decade, they have paid less than ½ % of the total cost of the pension system;  Police, firefighters and other public safety workers would still be exempt from the new restrictions.


In exchange the Governor is willing to save about 10,000 state and local jobs. 


I believe public sector employees should receive pay and benefits commensurate with the private sector.  In many states this is no longer true, and needs to be remedied.  Without the checks and balances afforded the negotiation process through the NLRA and the National Labor Relations Board available to public sector bargaining, changing state regulations is the only method available. 


I believe the large predominance of unionized media companies, the news we receive on this topic may not always be accurate. 


I also believe that we as a nation do not pay the people that teach our children enough, a problem affecting our competitiveness internationally.  Seems like a topic for the future. 

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