Opinion

The battle for Wisconsin’s soul

Taking down public unions is worthy of praise, not protest

Paul R. Krugman PhD ’77’s recent article “Wisconsin Power Play” in the New York Times is a revealing look into the liberal derangement over the ongoing public sector union battle in the Badger State. In his article, our esteemed alumnus claims that unions must be defended because they are a bastion against undemocratic forces. And against what undemocratic forces are they arrayed? The Republicans, of course. And how do we know that Republicans are, as Krugman says, trying to turn America into a “third-world-style oligarchy?” Because they oppose unions.

Krugman’s thesis that unions are valiant knights defending us against an onslaught of corrupting plutocrats could use some shoring up because, at a glance, it looks more like unions are the corrupting influence. Over the past 20 years, unions have made up five of the top ten contributors to congressional and presidential campaigns. In the last election, they were ten of the top twenty political action committees. And what oligarchy does Krugman think unions are balancing against? In 2010, all ten of the ten largest contributing industries gave more to Democrats than Republicans. Unions did not even the score by giving to Republicans. They were, as always, creatures of the party that promises them more wages for less work.

More troubling than Krugman’s selection of such an obviously flawed thesis is what he must have passed up as an even more flawed defense of his partisan interests. Why didn’t Krugman, an economist, try to make an economic case for unions? Something to the effect of: “Unions are a vital feature of our economic system and promote an efficient market for labor supplies” would seem appropriate, given his background.

Perhaps Krugman demurred on the economic argument because there is not much of one to be had; unions are effectively the labor market’s equivalent of a cartel, with suppliers colluding to restrict availability and raise prices above their market equilibrium. But whereas we recognize cartels as rent-seeking, value-destroying organizations, and exterminate them with extreme prejudice, the left wing of our political spectrum likes to pretend that unions are different, that their use of monopolistic power to force all prospective employees of a company to pay dues to their organization, their sacrifice of jobs in order to raise labor prices, and the harm they cause to consumers are all somehow justified because union members vote Democrat.

The problem of public sector unions is even more pernicious than that of private sector unions. Private sector unions face limits on how much they can leech from their host; a company, after all, can go out of business. There is no such backstop for public sector unions. The government is exempt from the fiscal sanity that constrains private enterprise — if unions demand more, politicians can sate them with other people’s money, either borrowed, taxed, or printed.

Imagine if a car company, over the course of fifty years, more than tripled the inflation-adjusted price of its cars even as it lowered their quality. We would be more than outraged — we would speculate endlessly as to what forces had conspired to prop the company up for such a long period of time.

What, then, should we make of our heavily unionized public school system, which has seen its real per-pupil costs increase by a factor of 3.5, even as student performance has fallen? How are we to interpret Krugman’s preaching on the matter? Is there a conspiracy of fat cats, bent on keeping our children from learning math? Or are unions, the defenders of democracy that they are, protecting us from the evils of a more literate nation?

The current state of affairs is so perverse that it verges on the criminal. What a deal we’re offering for the next generation — they’re the ones who will end up paying the bill for an education they never got.

The core reason why government workers are so inefficient in their duties is simple: they are not held accountable in the same way private companies are held accountable. Public unions are not the champions of the working man. Public unions are special interests with only one item on their lobbying agenda: a less accountable, more profligate government.

It takes great courage to stand athwart history, yelling “Stop!” The public has a tendency to kill the messengers that bring it bad news. And yet, someone needed to remind public workers that their jobs exist not for their own personal benefit, but for the benefit of the public they serve. Governor Scott Walker had the bravery to challenge the madness and fight for a more responsible government. If there is any mercy left in our political system, he will be emulated, not demonized.

14 Comments
1
Parent almost 7 years ago

Excellent and well thought out article. I would never expect this from a college paper. Krugman's ego has blinded his objectivity. Or he was never qualified!!!

2
rtaycher almost 7 years ago

Wrong.

Unions are a good thing! They raise wages not just for union members but overall. Unions are a balancing force in an economy with such high inequality. They also fight for minimum wage and workplace safety laws which help protect all workers (not to mention healthcare,sick leave,ect).

Unions can be corrupt and their number one priority is the self interest of their members but unions are overall a force for good. But that is not their only priority, unions are also interested in raising general wages and better laws that help many non unionised people.

There are a bunch of union transparency laws on the books and while union corruption is not dead much of it has been removed. Business frequently have a more corrupting and pernicious effect on our politics and unions help counterbalance that.

You probably disagree but many people believe the right to collectively bargain a fundamental right akin to the right of speech.

As for the repetition of unions ruin school line, I nominate this article for best rebutal(http:www.slate.comid2285650).

3
Anonymous almost 7 years ago

This article is so predictable coming from Yost as to be not even worth writing. Let's quickly take it apart:

Mr. Yost has failed reading comprehension. Krugman's article that unions are important because "theyre among the few influential players in our political system representing the interests of middle- and working-class Americans, as opposed to the wealthy."

If that makes them a corrupting influence, well, I guess corruption is in the eye of the beholder. If, like Mr. Yost, you believe that growing inequality isn't a problem, or maybe that it doesn't even exist, then certainly it makes sense that unions are corrupting and unnecessary. But, if you live in the real world, instead of the economist's ivory tower, then the function of unions becomes apparent. As Krugman says, "You dont have to love unions, you dont have to believe that their policy positions are always right.."

Furthermore, just because the unions donate a lot of money to Democrats doesn't mean the Democrats actually listen to them. The growing income inequality is evidence of this - at best, the remaining union influence may be slowing down that rate of growth. The following article talks about how there really are no interest groups representing the average worker: http:motherjones.compolitics201102income-inequality-labor-union-decline

Finally, if Walker were being honest, he would say that his goal is to destroy unions. But he won't say that, because, fortunately, that's still a politically untenable position. Only 57 of union members vote Democratic, and the Republicans don't want that number to go higher. Tea Partiers like Walker may be "principled", but they're not principled enough to say what they really mean if it'll cost them votes.

4
goodmanl almost 7 years ago

If you take 14.64, you'll learn that the decreasing unionization has very little to do with increased inequality. See Dinardo, Fortin, and Lemieux (1996), for instance.

Unions definitely had a role to play in the days of the robber barons, before safety and work standards, and the minimum wage. They probably still play a role in private industry today, where most employers have a decent amount of market power over employees.

But in government? Government employees are paid much better than their private counterparts, with much less accountability. A marginal reduction in union power (or at least in wages) would be efficiency enhancing.

5
London Derriere almost 7 years ago

"Mr. Yost has failed reading comprehension. Krugman's article that unions are important because 'theyre among the few influential players in our political system representing the interests of middle- and working-class Americans, as opposed to the wealthy.'"

Most middle- and working-class Americans are not members of unions. However, most middle- and working-class Americans are taxpayers. Taxpayers who make less money and have less job security than public employees, but are expected to pay the bloated salaries, benefits and pension of public employees.

Even if you believe that unions serve some purpose in the modern, information-centric, 21st century economy, surely you can see the danger in unionizing public employees. Government authority is exercised through these employees. Collective bargaining allows them to hold government authority hostage to their own desires. There's also a conflict of interest in the political activity of unions - they use union dues to pay off the legislators who determine their pay. Another consequence of this is that union members are stuck paying dues to support politicians they oppose.

All this being said, I will note that Mr. Yost is throwing some populist anti-union red meat to moderates and conservatives after defending Obamacare. Maybe he's just a pot stirrer and after some experimentation has finally realized that he can get a larger rise out of people and generate more controversy this way.

6
Anonymous almost 7 years ago

Except for '3.5', provided without citation, absent from this discussion are some actual numbers. Wisconsin economist Menzie Chinn provides some information on Wisconsin public sector wages:

http:www.econbrowser.comarchives201102analogy_watch_c.html

If others here could link to similar sources of quantitative information, that would be very welcome.

Missing from the article is real consideration of the historical, moral, institutional, or political context of the struggle in Wisconsin. Mr. Yost could use a dose of Tony Judt: http:www.nybooks.comarticlesarchives2010apr29ill-fares-the-land?page2

The idea that public sector workers can have no legitimate claims that are contrary to the interests of 'society' is, of course, nonsense. It would be cheap and efficient for the rest of us to have slaves collect the garbage. Poland's Solidarnosc was in the 'public sector.'

7
Anonymous almost 7 years ago

"It would be cheap and efficient for the rest of us to have slaves collect the garbage."

This is hyperbolic. If public employee unions don't like the offer extended by taxpayers, they can always find jobs elsewhere. If they can't, it says more about them than about us. States just don't have the money to pay them. Ultimately there will be some employees who have no other choice than to accept terms offered by the taxpayers, and that's how we will bring savings to American taxpayers. There's no reason these public employees should be paid so highly. Most of their work does not require a high level of skill.

8
Anonymous almost 7 years ago

Regarding comments 4 and 5: You are missing the point. Both Krugman and my comments (3) are regarding the political power of unions as a force for the worker, not their economic power. Can you name any institution of significant political clout that actually fights for workers' rights?

9
goodmanl almost 7 years ago

8: Because of the nature of our democracy, workers already have a voice. The overwhelming majority of voters are workers. They don't need unions to provide political power, they can just use their numbers.

10
Anonymous almost 7 years ago

9: The nature of our democracy is set up so politicians listen to their donors, not voters. At best, they only address the concerns of the middle class occasionally. Some background reading from the Economist: http:www.economist.comblogsfreeexchange201102political_economy

The notion that "workers already have a voice" because "overwhelming majority of voters are workers" is simply naive. It matters little as politicians can only "hear" the rich.

11
goodmanl almost 7 years ago

I'm gonna backtrack a little bit. So it turns out the workers in Wisconsin are willing to accept most of the tangible paybenefit cuts that Walker wants, but that isn't enough for Walker. Walker just wants to bust the union, presumably for ideological reasons.

As I said before, I think unionization is important in private industry; therefore collective bargaining as a right should be preserved wherever it can be.

I originally thought that the (overpaid, under-accountable) government workers were protesting any cut in pay, but they're not, so I'm much more sympathetic.

And, 9, I will not claim to know much about political economy, so I'll run away from that question.

12
Pavan almost 7 years ago

6: For those who would like some numbers:

http:bit.lyg0ichd

5: Even if it appears that Yost is stirring the pot, so to speak, putting out illogical, poorly researched, poorly cited, Beck-type-rhetoric articles is just shoddy writing.

13
kevman almost 7 years ago

People are so polarized by this issue, but there must be a middle ground somewhere here.

Obviously, unions are an important counterbalance to greedy employer practices, but they can often skew the balance so far in their favor that only they may benefit while the non-union workers and even the general public make suffer. For instance:

1. Union wages: This sets a minimum wage irrespective of market forces. A low skilled worker is paid an inflated (union bargained) wage, by comparison a skilled worker will then demand higher pay . The consumer suffers since market forces were not at play and at the very least they are paying low skilled workers higher pay not determined by market forces.

2. Pensions: The union worker does not pay into, or pays very little toward their retirement benefits. The union worker works for a little while, then is guaranteed a certain pay for the rest of hisher life. The public finances this cozy lifestyle while some other union worker fills in the vacated spot and gains the same benefits. Who pays for this? You do, of course.

3. Unions give union dues to the Democratic Party hand-over-fist. I do not think Unions should be able to contribute funds to political organizations. Let the Unions lobby for employee rights and laws, but restrict donations to political organizations.

If I were a Republican and my Union were to take the dues I pay and contribute the money to the Dems (or vice versa) I would have a problem with that since my political views were not considered. If a union were to contribute worker's dues to a political group or figure then the dues-payer should have a series of choices as to where the funds dedicated to political funding goes - this is equitable, right?

4. The title of the article is "Wisconsin fights for its soul". Since when were Unions the "soul" of anything, let alone a state (or even a nation)?. If the Unions are the "soul" of a state then they have too much power already, your opinion or vote is inconsequential to their power.

14
kevman almost 7 years ago

Over the years there have been many benefits to society by the labor unions, and they have greatly lessened the gross inequities observed especially since the industrial age.

But in reading about the union-induced excesses in California and Wisconsin, especially in the public sector, one has to wonder how they have morphed into such bloated drains on the economy. If the system of union-induced public sector benefits is sucking the economy dry, and taxes need to be raised and other benefits to society need to be cut in order to sustain the union's ponzi scheme then there should be an action to neutralize its effect. I am not saying dismantle the union, I am just saying cut the fat and make the benefits more aligned with market forces.

So lets call a spade a spade - unions are political (Democratic Party) organizations disguised as a worker's rights organization specifically designed to funnel money (union dues) into the Democrat Party coffers. They buy the support of the union worker by inflating wages and getting them benefits in excess of market forces, at the expense of the common folk (private sector or non-union worker) who must pay for it in the form of higher cost of goods and services and higher taxes.

Kudos to the author Keith Yost for telling it like it is, it is refreshing to see such insight from a member of a public institution.

9 goodmani and 7 said it well, and I say that the public workers are here for us, not the other way around.

Public sector workers provide services but do not produce anything, private sector workers provide services, produce goods, and pay for the public sector's wages and benefits. Lets keep that in perspective before rioting in the streets in their favor.