It doesn’t take a Sherlock Holmes or an Hercule Poirot to deduce that state policies promoting “exclusive” union bargaining and forced union dues and fees in the public sector have played a major role in driving multiple states to the verge of insolvency this year.  All it takes is the willingness to look at, and respect, the facts.

In 2009, according to respected labor economists Barry Hirsch and David Macpherson, 41% of public employees nationwide were subject to a contract negotiated by their employer with a union monopoly-bargaining agent.

However, in 22 states, none of which authorize forced union dues for government employees and most of which don’t authorize public-sector union monopoly bargaining, either, fewer than 30% of public servants were unionized.  Not one of these 22 low public-sector-unionization states was to be found on Business Insider’s list, published just last month, of the nine states “most likely to default.” 

And Business Insider ranked Illinois, California, Michigan, New York, New Jersey, Nevada, Massachusetts and Wisconsin as the worst default risks for a totally objective reason:  Traders who wish to buy protection against the possibility of default by these nine states have to pay higher premiums (technically known as “CDS spreads”) than do traders seeking protection against default risk for any of the other 41.

The Hirsch-Macpherson data show that an average of 61% of public-sector employees in the nine worst default-risk states were under union monopoly bargaining in 2009.  That is, overall public-sector unionization was 20 percentage points higher than in the typical state.  All but one of these states, Nevada, had public-sector unionization at least 15% higher than the national average in 2009.  Nevada was also the only one of the nine not to authorize public-sector forced union dues and fees.

In the nine worst default-risk states, from 1999 to 2009, aggregate private-sector jobs fell by 4.2%, but heavily unionized state and local government jobs increased by 9.0%.  Since annual state and local government employee compensation costs nationwide come to $1.1 trillion, or half of all state and local government spending, it’s not hard to see that the Big Labor-driven, seemingly relentless growth in government payrolls is a fiscal catastrophe for states like California, Illinois, and New Jersey.

But to Gerald McEntee, president of the mammoth American Federation of State, County and Municipal Employees union (AFSCME/AFL-CIO), even calling attention to the fact that for years government payrolls have grown while private payrolls have shriveled is tantamount to an “assault on public employees.”

In a commentary bearing that heading, prepared last month for readers of the Huffington Post, among other audiences, Mr. McEntee thundered that the only acceptable solution to the intimidating fiscal problems faced by states like California, Illinois, and New Jersey is for elected officials to squeeze even more taxes out of beleaguered private-sector employees and businesses.

For Mr. McEntee, the idea that state budgets might be balanced largely by rolling back unwarranted increases in government payroll expenditures that occurred over the past decade isn’t even worthy of discussion.  But for all his bluster, he can’t keep New Yorkers, for example, from noticing that, while the number of Empire State pupils enrolled in K-12 public schools fell by more than 121,000 between the 2000-01 and 2008-09 school years, schools added 14,746 teachers and 8655 non-teaching professionals to their payrolls.

Gerald McEntee and his government union cohorts can’t prevent the facts from getting out.  Nor can they do much about the fact that public sentiment in state after state is turning strongly against public-sector union kingpins who fight elected officials’ attempts to get government employee compensations costs back under control.

But the government union hierarchy could have the last laugh if fed-up taxpayers and their allies limit themselves to going after bloated public-sector payrolls, unsustainable public pension plans, and other symptoms of monopolistic unionism, rather than the problem itself.

State laws empowering government union officials to negotiate the contract terms for all the front-line employees at a public agency, even those who haven’t joined the union and want nothing to do with it, are behind the messes in Sacramento, Springfield and Trenton.  Closely related state labor laws that authorize the firing of public servants for refusal to pay dues or fees to an unwanted union make matters even worse.

Long-term solutions to state budget crises will require addressing the core problems of union monopoly bargaining and forced union dues in the public sector.

July 8, 2010 Near midnight last Thursday, House Speaker Nancy Pelosi and her fellow forced unionism apologists in the U.S. House of Representatives disgracefully amended a “must-pass” war funding bill to include language that is designed to force police officers, firefighters, and Emergency Medical Technicians (EMTs) into “exclusive” union bargaining in every state in the country.

It doesn’t take a rocket scientist to figure out that policies expanding public sector monopoly unionism have played a major role in driving many states to the verge of insolvency.

In 2009, according to respected labor economists Barry Hirsch and David Macpherson, 41 percent of government employees nationwide were subject to a contract negotiated by a union monopoly-bargaining agent.

However, in the 22 states which prohibit forced union dues for government employees and most of which don’t authorize public-sector union monopoly bargaining, fewer than 30 percent of public workers are unionized. Not one of these 22 states was to be found on last month’s Business Insider’s list of the states “most likely to default.”

Business Insider ranked heavily unionized California, Illinois, Massachusetts, Michigan, Nevada, New York, New Jersey, Ohio and Wisconsin as the worst default risks. And the Hirsch-Macpherson data shows that an average of 61 percent of public-sector employees in these nine states were under union monopoly bargaining — 20 percent higher than the typical state.

In these nine worst default-risk states from 1999 to 2009, aggregate private-sector jobs fell by 4.2 percent, but heavily unionized state and local government jobs increased by 9 percent. Since annual state and local government employee compensation costs nationwide come to $1.1 trillion, or half of all state and local government spending, it’s not hard to see that the Big Labor-driven growth in government payrolls is a fiscal catastrophe for states like California, Illinois, and New Jersey.

Yet to Gerald McEntee, president of the American Federation of State, County and Municipal Employees (AFSCME) union, even calling attention to the fact that government payrolls for years have grown while private payrolls have shriveled is tantamount to an “assault on public employees.”

In a Huffington Post commentary bearing that heading, McEntee thundered that the only acceptable solution to the daunting fiscal problems faced by states like California, Illinois, and New Jersey is for elected officials to squeeze even more taxes out of beleaguered private-sector employees and businesses.

But for all his bluster, he can’t keep New Yorkers, for example, from noticing that while the number of Empire State pupils enrolled in K-12 public schools fell by more than 121,000 over the last 10 years, schools added 14,746 teachers and 8,655 non-teaching professionals to their payrolls, all of whom are required to pay union dues or fees to keep their jobs.

But government union bosses are expecting to have the last laugh if fed-up taxpayers and their allies limit themselves to going after just bloated public-sector payrolls and unsustainable public pension plans, rather than root of the problem itself.

Laws empowering government union officials to negotiate the contract terms for all front-line employees at a public agency, even for those employees who want nothing to do with the union, are behind the messes in Sacramento, Springfield and Trenton. And laws that authorize the firing of public servants for refusing to pay union dues or fees to an unwanted union make matters even worse.

Long-term solutions to state budget crises will require addressing the core problems of union monopoly bargaining and forced union dues in the public sector.

Until then, hopefully the Senate will spare police officers, firefighters, and EMTs from forced union “representation” that will make budget matters worse for the numerous states that have already rejected it.

Mark Mix is president of the National Right to Work Committee.

Ohio Town Council Cuts Through Big Labor/White House Fog 

Marietta, which has only about 15,000 residents, but enjoys a place of honor as the oldest city of any size in Ohio, is located more than 230 miles outside the Washington, D.C., Beltway. 

And from the vantage point of Marietta’s community building at Lookout Park, where the town council considered adoption of a so-called “project labor agreement” (PLA) on May 13, it appears to be far easier to see and state the obvious than it is at the White House or on Capitol Hill. 

This spring, building trades union bosses lobbied furiously to convince the council’s seven members to impose a Big Labor PLA on employees and firms seeking to participate in the renovation of the town’s former Ohio Bureau of Employment Services building into a new municipal court facility. 

Parkersburg Marietta Construction and Building Trades Council union President Bill Hutchinson claimed, time and again, that the reason he and his cohorts were twisting arms to get a PLA was to ensure that “local” workers got the jobs. 

Finally, at the council’s May 13 meeting, Councilman Jon Grimm decided to test building trades union bosses’ sincerity. 

Mr. Grimm called attention to the provision in the PLA mandating that 50% of any contractor’s employees be registered with the union and pay union dues, even if they weren’t union members, and didn’t want to join. 

Would union officials accept a PLA retaining all the other provisions, but excluding “mandatory union membership”? Mr Grimm asked. 

Vast Majority of ‘Local’ Construction Workers in Marietta Aren’t Unionized 

Marietta law director Roland Riggs, who had hammered out the PLA deal with union officials, bluntly responded: “I don’t believe the folks from the building trades council would be interested in signing an agreement if that were removed.” 

A crowd of union militants, including several union officials, was in the room. No one from the crowd contradicted Mr. Riggs. 

“The plain fact is, the vast majority of ‘local’ construction workers in Marietta, Ohio, are union-free, and show no signs of wanting to be unionized,” observed National Right to Work Committee President Mark Mix. 

“According to labor scholars Barry Hirsch and David Macpherson, just one in four construction workers across the state of Ohio is currently under union monopoly bargaining. And southern Ohio, where Marietta is located, is much less unionized than northern Ohio. 

“Forcing independent local hardhats to pay dues to an unwanted union in order to work on taxpayer-funded projects is no way to ‘help’ them — and a Marietta council majority had no trouble seeing the truth and voting down the PLA. 

“Unfortunately, all too many Inside-the-D.C. Beltway politicians from President Obama on down seem to have a much harder time deconstructing the phony claims of Big Labor bosses demanding union-only PLAs on taxpayer-funded public works. 

“For example, in issuing Executive Order 13502, promoting union-only PLAs for federal taxpayer-funded public works in February 2009, the President mechanically repeated Big Labor propagandists’ contention that PLAs promote ‘economy.’ 

“The truth is exactly the opposite. By discriminating against the union-free majority of construction employees, PLAs jack up taxpayer construction costs by a minimum of 10–20%, according to nonpartisan researchers. 

“Even a recent study commissioned by Obama appointees at the Department of Veterans Affairs predicted that PLAs would raise taxpayer costs in markets like Denver, New Orleans and Orlando. 

“But rather than cancel the PLA executive order after Veterans Affairs found it would fail to accomplish its purported objective, the Obama Administration proceeded to implement it this April!” 

Right to Work Movement Is Fighting Back 

“Fortunately, there’s still hope that the Obama Administration’s anti-taxpayer E.O.13502 can be stopped,” Mr. Mix continued. The legal system is one possible means. 

In April, attorneys for the Committee’s sister organization, the National Right to Work Legal Defense Foundation, filed a federal court brief charging that a California PLA illegally discriminates against independent construction workers. (Mr. Mix is president of the Foundation as well as of the Committee.)If the Foundation’s argument in this case (known as Rancho Santiago) prevails, that will raise serious questions about the legal viability of E.O.13502.

Right to Work Fights For Independent Transportation Employees

Over the past three-quarters of a century, federal labor policy has done enormous damage to employees and businesses by authorizing and promoting monopolistic unionism.

Federally-imposed “exclusive” union bargaining undermines efficiency and productivity by forcing employers to reward equally their most productive and least productive employees.

The damage is compounded when the employees already hurt by being forced to accept a union bargaining agent opposed to their interests are forced as well to pay dues or fees to the unwanted union.

Fortunately, Right to Work laws in 22 states, where nearly 40% of the private-sector work force is employed, prohibit the collection of forced dues from the vast majority of employees. (Both the U.S. Supreme Court and the U.S. Congress have recognized states’ freedom to protect employees’ Right to Work.)

However, in 1951, when Congress first foisted forced union dues and fees on employees covered by the Railway Labor Act (RLA), Big Labor senators and representatives opted to deny states the option to protect employees’ Right to Work.

Ever since, Big Labor has had the government-granted power to get airline and railroad employees fired for refusal to bankroll a union in all 50 states, including Right to Work states.

Partly in order to compensate for the unique privileges airline/railroad union bosses enjoy, even relative to other union bosses, federal labor policy has long set a somewhat higher bar for RLA-covered union officials to acquire monopoly-bargaining and forced-dues powers.

New Rule Intensifies Federal Policy’s Pro-Big Labor Monopoly Bias

Until this spring, unlike most private-sector union officials, airline and railroad union bosses have needed the backing of the majority of all of a firm’s employees in a “craft or class,” not merely the majority of those who vote, to be installed as employees’ monopoly-bargaining agent.

This somewhat higher bar hasn’t been a huge problem for airline and railroad union organizers. According to labor economists Barry Hirsch and David Macpherson, in 2009, 42% of “air transportation” employees and 69% of “rail transportation” employees were under union monopoly bargaining, compared to just 8% of all private-sector employees.

Nevertheless, Big Labor’s motto is, “The more monopoly bargaining, the better.” And union strategists know President Barack Obama, who reaffirmed in April that he is a “pro-[forced] union guy” and makes “no apologies for it,” shares that sentiment.

That’s why, last fall, it wasn’t hard at all for union bosses to persuade the two Barack Obama appointees who now constitute a majority of the three-member National Mediation Board (NMB) to rewrite the RLA rules.

As a consequence of the change, starting this month, airline and railroad union officials will need the backing only of a majority of employees who vote to get monopoly-bargaining power.

Because, in practice, only a minority of all potential voters participate in many elections over unionization, this rule will often allow a pro-union minority of workers to foist a union on the majority of their fellow employees who prefer not to have a union.

Right to Work Supporters Already Fighting Back

National Right to Work Committee Vice President Doug Stafford vowed to do everything possible to reverse Obama bureaucrats’ RLA rule change.

On one front, Committee legislative leaders are working with pro-Right to Work Sen. Johnny Isakson (R-Ga.) on a resolution that could overturn the unwarranted change legislatively.

On a second front, attorneys for the Committee’s sister organization, the National Right to Work Legal Defense Foundation, are representing five independent Delta employees in a bid to get the rule overturned in court.

The Foundation motion charges, in part, that Obama NMB appointees Harry Hoglander and Linda Puchala should not have voted on the rule change, because, as former airline union officials, they both had a conflict of interest.

Government Union Monopolists Have Brought State to Brink of Ruin

(Source: May 2010 NRTWC Newsletter)

From 1999 to 2009, according to the U.S. Labor Department, New Jersey’s private-sector employment fell by 2.4%, a percentage decline seven times worse than the national average.

Over the same period, New Jersey’s state and local public employment jumped by a whopping 15.2%, substantially more than the hefty-enough nationwide increase of 12.5%.

For most hard-working Garden State workers and employers, these statistics sum up why New Jersey is in even worse shape, economically, than the nation as a whole.

For years, the state’s heavily unionized public sector has been sucking resources and vitality out of beleaguered private-sector employees and businesses.

But for government union officials, the relentless expansion of the Garden State’s public-sector employment from 1999 to 2009, even as the state’s private-sector employment alternately stagnated or shriveled, is a magnificent achievement that must be preserved and built upon, whatever the cost.

During his successful campaign for the state’s highest executive office and since he was inaugurated in January, GOP Gov. Chris Christie has sided with the vast majority of New Jerseyans who appreciate that state and local government must now be rolled back to give the private sector room to grow.

However, significantly rolling back government payrolls in New Jersey will be an extraordinarily difficult task because of the special monopoly-bargaining and forced-dues privileges government union bosses enjoy under state law.

New Jersey’s State and Local Tax Burden Ranks Highest in the Nation

According to labor economists Barry Hirsch and David Macpherson, last year New Jersey had roughly 606,000 public employees, of whom 404,000, or two-thirds, were forced to accept a single union as their “exclusive” (monopoly) bargaining agent in their dealings with their employer.

That’s a higher share of public employees under union monopoly-bargaining control than in all but two other states. And the vast majority of unionized public employees are forced to fork over union dues or fees as a condition of employment, even if they choose not to join the union or quit it.

New Jersey government union bosses enjoy enormous power primarily because state law actively promotes the corralling of public employees into unions.

“All by itself, one Garden State public-sector union, the New Jersey Education Association [NJEA/NEA], rakes in roughly $80,000,000 a year in union dues and fees, overwhelmingly compulsory,” noted Mark Mix, president of the National Right to Work Committee.

“And government union bosses divert a huge share of the conscripted revenue they rake in into efforts to elect and reelect politicians who will help them keep increasing the number of forced dues-paying public employees and retirees.

“No wonder New Jersey government has expanded and expanded, and, as the nonpartisan, D.C.-based Tax Foundation reports, New Jerseyans have to fork over a higher share of their incomes in state and local taxes than the residents of any other state.”

Facing Ferocious Big Labor Barrage, Governor Might as Well Be Bold

“Given that New Jersey’s projected deficit for just the upcoming fiscal year is a daunting $11 billion, the reforms Gov. Christie has so far sought, such as pressuring localities to freeze pay for some government employees for a year, are quite modest,” Mr. Mix continued.

“For this and other small steps such as promoting legislation that requires unionized public employees to contribute 1.5% of their salaries annually to help taxpayers cover government pension costs, Mr. Christie has incurred teacher union bigwigs’ wrath.

“One union official recently posted a prayer for Mr. Christie’s death on the NJEA’s Facebook page.  And an NJEA union militant in Camden County actually likened Mr. Christie to genocidal Cambodian Communist dictator Pol Pot!

“However, as Mr. Christie said in his state budget address in March, New Jersey’s ‘day of reckoning has arrived.’

“The state’s situation is very dire. And the governor has already come under a furious Big Labor barrage simply for trimming at the edges of the public-sector union empire’s special privileges.

“Given the circumstances, Mr. Christie’s best option is to be bold and strike at the heart of the problem by proposing elimination, or minimally a sharp reduction in the scope, of New Jersey government union bosses’ monopoly-bargaining privileges.

“If you’re already in the fight of your life, why not seek a policy objective that would be truly transformative?”

(Source: February 2010 NRTWC Newsletter)

As a group, taxpayers strongly believe they are worse off with the combination of taxes and public services they get in states in which more than half of public employees have a union exercising “exclusive” (monopoly) power to negotiate their wages, benefits, and working conditions.

And the compelling evidence that taxpayers prefer not to live in such government union-boss strongholds when they have a choice is furnished by the Statistical Information Service (SIS) of the IRS.

The SIS records the number of personal income tax filers who move (typically with their dependents) across state lines, based on year-to-year changes shown on individual tax returns. SIS data are arranged according to the year taxes are filed.

For example, data for the Tax Filing Year 2008 show that a total of 1.247 million personal income tax filers were residing in a high government-union-density state in 2007, but filed from somewhere else in the U.S. in 2008.

Public-Sector Union Fiefdoms Are Losing Massive Amounts Of Income as Well as People

Meanwhile, a total of 1.071 million tax filers were residing in a high government-union-density state in 2008 after residing somewhere else in the U.S. the year before.

That means, between 2007 and 2008 alone, a net total of 176,000 tax filers moved from a government union fiefdom to a state in which public-sector union bosses wield less power.

Over the last eight years for which data are available (Tax Filing Years 2001-2008), a net total of over 1.53 million tax filers moved from a state in which more than 50% of government workers were subject to union monopoly bargaining as of 2000 to a state in which government forced unionism is less pervasive.

(According to economists Barry Hirsch and David Macpherson, as of 2000 more than half of public-sector employees were unionized in 15 states: California, Connecticut, Hawaii, Maine, Massachusetts, Michigan, Minnesota, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Washington and Wisconsin.)

Also over the past eight years, a net total of roughly 950,000 tax filers fled to states that had public-sector unionization of less than 25% as of 2000. And a net total of roughly 580,000 fled to a state in which between 25.0% and 49.9% of public employees were under Big Labor control as of 2000.

The SIS also calculates and makes available to the public the aggregate adjusted gross incomes for households in the year immediately following their move.

While SIS data do not convey how much taxpayers who flee forced-unionism states earn any later than the first year after they depart, forced-unionism states’ losses due to domestic out-migration are clearly recurring and compounding, year after year.

Counting just the income lost by government union stronghold states in the first year after each tax filer moved out, these 15 states lost a net total of $107.9 billion (in constant 2008 dollars) due to domestic out-migration over the 2001-2008 period.

The actual total net loss, including income reported by tax filers in all years subsequent to their migration, is very likely at least four times higher, but cannot be calculated with available data.

Pending Federal Legislation Would Lead to Destruction of State Taxpayer Sanctuaries

State and local taxpayers’ ability to vote with their feet against public-sector union monopoly bargaining and other policies that promote overtaxation is gradually eroding the tax bases of government union boss-controlled states.

However, the Big Labor U.S. Congress is now poised to enact radical legislation (H.R.413/S.1611) that would lead to the imposition of union monopoly bargaining on state and local public employees nationwide — and thus leave beleaguered taxpayers with nowhere to flee.