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13

THE SPREAD OF UNIONISM IN THE PUBLIC SECTOR

Collective bargaining spread rapidly in the public sector in the United States in the early 1960s. Today, more than one-third of all employees of federal, state, and local governments are represented by a union. In 2016, 40.3 percent of local government employees and 29.6 percent of state government employees were members of unions. 1 This alone makes unionism in the public sector worthy of a separate chapter in this book, especially at a time when each year a smaller fraction of private sector employees have union representation.

This chapter examines labor relations in the public sector. However, the public sector is a special case of bargaining and employment practice. Governments are not just employers and providers of services; they are also providers of public services. Because of this, the public sector bargaining system must be particularly responsive to the demands of the public.

There has been much debate about the appropriate legal regulation of public sector collective bargaining. Some analysts have argued that the unique nature of governments as employers makes collective bargaining as it traditionally practiced in the private sector inappropriate for the public sector. Other observers would allow the traditional type of collective bargaining, but in a form that has been adapted to meet the special circumstances of the public sector. Another consideration is that in some states, public sector union membership has dropped signifi cantly recently, for example, in Wisconsin. 2

The fi rst section of this chapter examines the historical phases of public sector bargaining. The sections after that review the practice and outcomes of public sector bargaining and consider how bargaining in the public sector compares with bargaining in the private sector. The text then considers whether the legal regulation of public sector unions should be different from that of private sector bargaining.

Collective Bargaining in the Public Sector

C o p y r i g h t 2 0 1 7 . I L R P r e s s .

A l l r i g h t s r e s e r v e d . M a y n o t b e r e p r o d u c e d i n a n y f o r m w i t h o u t p e r m i s s i o n f r o m t h e p u b l i s h e r , e x c e p t f a i r u s e s p e r m i t t e d u n d e r U . S . o r a p p l i c a b l e c o p y r i g h t l a w .

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 3/3/2022 3:58 PM via UNIVERSITY OF MARYLAND GLOBAL CAMPUS AN: 1589152 ; Harry C. Katz, Thomas A. Kochan, Alexander J. S. Colvin.; An Introduction to U.S. Collective Bargaining and Labor Relations Account: s4264928.main.eds

332 Part V. Special Topics

THE EVOLUTION OF PUBLIC SECTOR COLLECTIVE BARGAINING

Public sector labor relations have undergone several different eras in the United States, growing in some periods with much public support but being called into question in others.

The 1960s and Early 1970s: The Era of Growth

The percentage of all federal, state, and local government employees who were members of unions increased signifi cantly in the 1960s and early 1970s, rising from 12.8 in 1960 to 20.6 in 1974. By the 1970s, other public sector employees joined associations, such as the National Education Association, many of which also engaged in collective bargaining. By 1974, 37.7 percent of all public sector employees were members of a bargaining organization (whether it was a union or an association that engaged in collective bargaining). The extent of unionization in this sector has stayed at a high level since then.

Factors that contributed to the expansion of public sector unionism in the 1960s and 1970s included the growth in the size of government budgets throughout the 1960s and early 1970s, the example of civil disobedience that civil rights and other groups set in the 1960s, and the passage of laws favorable to public sector collective bargaining.

The Mid- and Late 1970s: The Taxpayers’ Revolt

The economic environment for public sector bargaining, however, tightened sharply in the mid-1970s because of slowdowns in the economy and in response to a wave of political conservatism. Many conservatives questioned the value of many government expenditures, and some state and local governments began to face major fi scal problems. In addition, taxpayer resistance to public expenditures created a backlash against public employees and reduced the political infl uence of public sector employee organizations.

New York City, the prime example of the fi scal crises of the cities in the 1970s, hovered on the brink of bankruptcy for several years. Eventually, the city accepted an emergency fi nancial control board composed of representatives of the state government, the private sector, unions, and the federal government. 3

Other cities faced similar fi scal crises. In the fall of 1975, voters in San Francisco altered municipal procedures in ways that reduced the income and benefi ts of city employees. 4 Wage and pension-setting procedures were modifi ed and city craft workers received large pay cuts. Those craft workers then went on strike but were resoundingly defeated; they returned to work a month later under management ’ s salary terms.

Although public sector employers grew more resistant to union demands in the mid- and late 1970s, they did not aggressively try to remove unions. This contrasts with the more recent actions taken in several states to eliminate the right of public employees to bargain for higher wages.

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Collective Bargaining in the Public Sector 333

The Early 1980s: The PATCO Strike

The one important exception to union stability in the public sector in this era was the experience of the Professional Air Traffi c Controllers Organization (PATCO). In August 1981, PATCO struck. The controllers wanted their employer, the federal government, to increase their wages and benefi ts. President Reagan fi red the strikers on the grounds that they had violated a no-strike clause in their employment contracts. The government called in military controllers who, along with supervisors and some controllers who crossed picket lines, kept the air traffi c system functioning (though limits were imposed on certain fl ights).

The Federal Labor Relations Authority eventually decertifi ed the union. (In 1987, the new controllers voted in a new union.) Some analysts argue that the fi ring of the controllers had enormous ramifi cations by legitimizing a hard line in bargaining among other public and private sector employers. During the Clinton administration, the strikers were offered their jobs back and a few of them returned to work.

The Mid- and Late 1980s: Institutional Stability and Some Gains

The fi ring of PATCO strikers may have contributed to the wave of concessionary bargaining that occurred in the private sector in the 1980s. However, it is important to note that public sector collective bargaining underwent a relatively calm period in the 1980s. In part, this stability was the result of the absence of extreme economic pressures.

By the mid-1980s, the political tide had begun to turn again in favor of the public sector. Some politicians and observers claimed that cutbacks in government spending had gone too far. At the same time, public attention was turning to the problems in primary and secondary education in the United States. Many newspaper editorials argued that weaknesses in the nation ’ s schools, particularly compared with Japanese schools, were contributing to the country ’ s problems with trade and competition. The Carnegie Commission issued reports charging that public education was inadequate and that part of the solution would be to upgrade the salary and status of public school teachers. 5 The fact that school districts were having diffi culty recruiting science and math teachers because of competition from the computer industry seemed to support the Carnegie Commission ’ s analysis.

The 1990s: Reinventing Government

In the 1990s, the public sector came under intense pressure to improve its per- formance and shrink its size. In that decade, many of the calls for government reform came from formal reviews or commissions, which often called for a reinvention of the public employment system to address alleged excessive bureau- cratization and ineffi ciencies. Interestingly, some these performance reviews concluded that reform programs should empower the public sector work force through partnerships with unions. A report of a task force of the U.S. secretary of labor noted that “from school house to fi re house, a growing number of state and local governments are forming cooperative workplace partnerships in an

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334 Part V. Special Topics

effort to transform their public agencies into fl exible, customer-responsive organiza- tions better equipped to serve citizens.” 6 The task force also observed that work restructuring in the public sector had “major parallels” to efforts under way in the private sector.

Calls to reinvent government often were accompanied by efforts to downsize the public sector payroll through privatizing public services (a public sector version of the increased outsourcing that was occurring in this period in the private sector).

2000–2016: Intensifi ed Attacks on Public Sector Unions and Collective Bargaining

Over the last several years, some state and local government political leaders and commentators have called for sharp limits on the collective bargaining rights of public employees and the unions that represent those employees. These calls have been bolstered by claims that public employees are overpaid and that their allegedly overly generous pension benefi ts are unsustainable. In several states, new laws to eliminate or limit public sector collective bargaining and union rights have been enacted or proposed. 7 Politics is the critical driver of developments in Wisconsin and other jurisdictions that call into question the future strength of public employees and their unions. The rights of public employees and their unions have been challenged by the political actions of fi gures such as Governor Chris Christie in New Jersey and Governor Scott Walker in Wisconsin. These legislative actions have followed have raised concerns about the future of public sector labor relations.

THE LEGAL REGULATION OF PUBLIC SECTOR UNIONISM

Federal, state, and local government employees are all excluded from coverage under the NLRA. Separate legal regulations govern collective bargaining in each of these sectors. Collective bargaining coverage exceeds union membership in jurisdictions where employees who are covered by a collective bargaining agreement are not members of a union, a situation that is much less common in the private sector.

FEDERAL EMPLOYEES

Federal employees received the right to unionize and to negotiate over employment conditions other than wages or fringe benefi ts through Executive Order 10988, which President Kennedy signed in 1962. This order was subsequently extended and expanded by President Nixon in Executive Order 11491.

In 1970, as part of its effort to reform the postal service, Congress gave postal service employees the right to engage in collective bargaining over wages, hours, and working conditions. In 1978, Congress replaced the executive orders of

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Collective Bargaining in the Public Sector 335

Presidents Kennedy and Nixon with the fi rst comprehensive federal law to give collective bargaining rights to federal employees. This law, however, excluded pay and fringe benefi ts from the scope of bargaining.

Collective bargaining in the federal sector is now regulated by the Federal Labor Relations Authority. The Federal Services Impasse Panel is responsible for resolving impasses. It may use mediation, fact fi nding, or arbitration to resolve disputes. Federal employees are prohibited from striking by the NLRA.

STATE AND LOCAL GOVERNMENT EMPLOYEES

As of 2016, all but nine states had legislation that gives at least some state or local government employees the right to organize and to bargain collectively. Of these 41 states, 24 have passed comprehensive laws that cover certain occupational groups. The states that have not yet enacted public sector bargaining laws are primarily located in the South.

Comprehensive collective bargaining laws for state and local employees were fi rst passed in fi fteen states in the late 1960s and early 1970s. In the 1980s, in contrast, only two states, Illinois and Ohio, passed such laws and in the 1990s only New Mexico did so. In recent years, some state laws have been amended to expand the scope of collective bargaining to include new issues, to cover new employee groups, to strengthen the agencies charged with administering the laws, or to modify dispute resolution procedures.

Public sector unions can exert infl uence even in the absence of the right to bargain. For instance, public sector unions already operate effectively as associations that represent the interests of professional employees in some states that lack collective bargaining laws (e.g., the National Education Association in North Carolina), and they often work in alliance with major professional associations.

Legal Regulation of the Right to Strike

No state gives public employees a right to strike that is equivalent to the right the NLRA specifi ed for private sector workers. However, some states give such workers a limited right to strike. 8 Colorado, for example, permits strikes by all public sector employees, and in Pennsylvania nonuniformed employees have a more limited right to strike if they do not endanger the public health, safety, or welfare of its citizens.

Some states do not allow any public sector strikes and some impose harsh penalties on public sector strikers. In New York, for example, the Taylor Law mandates a “two for one” penalty under which a striking employee is penalized one day ’ s pay for each strike day in addition to the day ’ s pay the employee loses while striking. Under the Taylor Law, the struck employer is responsible for collecting the monetary penalty and keeps the money raised by the strike penalty. Yet even with these penalties, strikes do periodically occur in the New York public sector. 9 New York is not the only state where public sector strikes sometimes

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336 Part V. Special Topics

occur even though state laws make those strikes illegal. However, strike penalties appear to reduce the frequency of strikes.

The Bargaining Rights of Supervisors

The bargaining rights of supervisors differ substantially in the public and private sectors. Most state laws do not exclude public sector supervisors from collective bargaining. This policy confl icts with the restrictions in the Taft-Hartley Act on the involvement of supervisors in union activity in the private sector. Some state laws require supervisors to form separate bargaining units from rank-and-fi le employees, however.

Why are public sector supervisors treated differently? Unlike in the private sector, where supervisors are assumed to have the authority to make independent judgments about critical personnel functions, in the public sector many of those functions are handled by a civil service commission. In addition, there are many more levels of supervisors in public sector hierarchies, and many individuals with the title of supervisor do not serve as bona fi de supervisors. Although not everyone agrees that public sector supervisors should be treated differently, to date the law has evolved differently in that sector.

Calls for Federal Legislation for State and Local Employees

The failure of the remaining states to give collective bargaining rights to public employees has spurred calls for federal legislation to extend bargaining rights to all public employees. Movement on this issue has been blocked by two obstacles. The most formidable is the constitutional question of whether the federal govern- ment has the authority to mandate collective bargaining legislation that covers state and local employees. A second major obstacle has been the inability of various labor unions to agree on the form the legislation should take. Three different approaches for federal regulation of public sector collective bargaining have been advocated:

1. A simple extension of the National Labor Relations Act and the jurisdiction of the National Labor Relations Board to cover state and local employees.

2. Special comprehensive legislation that takes into account the unique char- acteristics of public employees.

3. A minimum-standards law of collective bargaining rights for state and local employees that would leave the specifi c form of the legislation to the states.

Like its private sector counterpart, public sector collective bargaining is infl uenced not only by collective bargaining legislation but also by other regulations in state and federal statutes. Chief among these are the laws that govern taxation. Also important are civil service laws and procedures. One of the more diffi cult issues that has arisen in the public sector, as collective bargaining has spread, is how to resolve confl ict between the rights that collective bargaining laws give public employees and the provisions of other laws.

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Collective Bargaining in the Public Sector 337

THE SOURCES OF BARGAINING POWER IN THE PUBLIC SECTOR

While the same three key types of bargaining power that exist in the private sector also exist in the public sector—total, relative, and political power—there are some key differences in the nature and role of these power sources between the two sectors. Total power in the public sector is determined by the revenue (i.e., tax revenue, revenue sharing, and fees for services) available to the parties to be distributed between labor and management in a manner analogous to the role of profi ts in a private sector negotiation. Also, both strike leverage and the elasticity of demand for labor are critical determinants of relative bargaining power in the public sector, even though the strength of their infl uence is altered by the particular circumstances that are common in public sector labor relations. For one thing, the fact that public sector employees do not commonly have the legal right to strike reduces, but does not eliminate, the leverage public employees gain from a strike action or strike threat. Some public employees do have the legal right to strike. Even more important is the fact that the absence of the legal right to strike does not prevent strikes from occurring or prevent strike threats from being meaningful.

Where binding interest arbitration (referred to in other countries as compulsory arbitration) is the impasse resolution procedure, the threat of turning to that process creates leverage for public sector workers during negotiations, even if the arbitration process is not actually called into play to settle a negotiation. 10

The elasticity of demand for labor is also a key determinant of relative bargaining power in the public sector as workers and unions in the public sector are likely to consider the trade-off between improvements in contract terms and the number of jobs as they assess whether to use their ability to press for improvements in compensation. Given the fact that public sector workers provide crucial and special- ized services to the public, alternative sources of providers are typically much more limited in the public sector than they are in the private sector. Thus, the demand for labor tends to be more inelastic in the public sector than it is in the private sector. In particular, international sources of supply are more limited for public services, although the availability of private domestic sources can signifi cantly increase the elasticity of demand. We address the factors that infl uence relative power more fully in the next section by analyzing the role of Marshall ’ s conditions. It would be helpful to compare and contrast the discussion of Marshall ’ s conditions with the discussion of those conditions in the private sector in Chapter 3 .

How Marshall ’ s Conditions Operate in the Public Sector

Alfred Marshall ’ s fi rst condition states that employees have more bargaining power (face a smaller reduction in employment from an increase in wages) when it is diffi cult for management to substitute other factors of production for employees. On this score, public employees, on average, should have more bargaining power than private employees do. It is diffi cult, for example, to substitute machines for public school teachers or police and fi refi ghters.

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338 Part V. Special Topics

Some substitution of capital for labor is feasible even for public services: computers can at least partially substitute for teachers, police can acquire more cars and other equipment, and fi refi ghters can use more and better equipment. Nevertheless, public employees probably have some advantage because of the relative diffi culty of fi nding effective substitutes for them.

Marshall ’ s second condition concerns how price affects the demand for the fi nal good. Here again public employees, on average, should have an advantage over most private employees. Governments are typically the sole providers of public goods or services. A public employer cannot typically go out of business or move to some other area to escape higher labor costs. As a result, the demand for many public goods is not strongly infl uenced by price. 11 This makes public employment relatively insensitive to increases in wages.

Marshall ’ s third condition concerns what happens to the price of substitute factors of production if the demand for them increases. Here there is no clear difference between the public and private sectors.

With regard to Marshall ’ s fourth condition, the fact that increases in labor costs will not lead to large reductions in employment if labor costs are a small share of total production costs, public employees are likely to be at a disadvantage. In most cases, labor costs constitute a substantial share of total production costs. The ratio of labor costs to total costs varies in the public sector from a high of around 90 percent in police and fi re departments to a low of 60 to 70 percent in education and other public services. This means that wage increases have a signifi cant effect on total increases in government budgets. Labor costs are a prime target when the public demands lower taxes and lower expenditure levels. In the long run, then, the high percentage of labor costs to total costs may act as a major impediment to the power of public employee unions.

In the context of the public sector, Marshall ’ s conditions predict that the demand for public services is relatively uninfl uenced by the price of those services and that increases in labor costs should lead to relatively small declines in employment.

Shifts in the Demand for Public Services

Marshall ’ s conditions concern the responsiveness of employment to wage changes in the short term when other environmental infl uences on bargaining power are constant. The bargaining power public employees had after the mid-1970s and then again in the 1990s, however, was limited by the fact that economic pressures were building. Tax revenues were declining in some jurisdictions, and the public wanted governments to be more effi cient. These pressures led to cutbacks in government expenditures. The public ’ s demand for more effi cient government services was, in part, a product of the public ’ s reaction to the increase in relative earnings public employees had received earlier

The taxpayers’ revolt was to some extent a delayed “price effect.” The public was more intensively demanding that government be more effi cient in response to the rising cost of those services. Thus, the long-term demand for labor in the public sector is much more elastic than the short-term demand for labor. 12 It just

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Collective Bargaining in the Public Sector 339

takes a while for politicians to reduce employment levels signifi cantly in response to wage increases.

Strike Leverage for Public Sector and Private Sector Workers Compared

The strike leverage of public employees is infl uenced by their ability and willingness to sustain income losses during a strike. Just as in the private sector, striking employees in the public sector rely on alternative sources of income, such as temporary jobs or the earnings of other members of the household. The critical factor for public employees is the high penalty they face if they choose to strike.

In the private sector, an employer ’ s willingness to continue a strike is heavily infl uenced by a company ’ s ability and willingness to sustain the income losses that result from the shutdown in production and sales during the strike. In the public sector, income is not necessarily tied to sales and production. Public agencies typically collect revenue through taxes and do not charge explicitly for services. 13 Thus, during a strike, a public employer generally continues to receive revenue and is not under pressure to agree to the strikers’ demands because of fear of potential bankruptcy. Public agencies also do not typically face competitors who may continue to produce during a strike and strip the struck employer of customers. This absence of a link between strikes and employer revenues clearly works in favor of public employers during strike situations.

While a public employer will not lose income during a strike, a strike can certainly anger the employer ’ s constituents, namely, the public. The public is sometimes hard pressed to do without certain public services, such as police and fi re protection, education, and hospital services. These are essential services. Few substitutes for these services can be made available quickly and the absence of these services can create hardships and, in some cases, health risks for the public.

Public services vary substantially in the degree to which they are essential. While it is clear that police and fi re protection are essential services, do city clerks and engineers provide essential services? Parents may vocally complain when schools are closed by striking teachers, but there is rarely a public outcry when social workers strike.

In addition, how the public reacts to strikes varies signifi cantly over time. In the late 1960s and early 1970s, public agencies did not often push back against the demands of striking public employees. However, in the mid- and late 1970s and again more recently, some taxpayers seemed eager to confront striking public employees as part of their efforts to lower taxes and the cost of government. The public ’ s willingness to sustain public sector strikes seems to sway with the political and economic winds.

Public Sector Bargaining Structures

Key aspects of bargaining structure are the degree of centralization of employer interests in the formal bargaining structure and the breadth or scope of employee interests in bargaining units. Collective bargaining in the public sector is highly decentralized. Almost all bargaining is done on a single-employer basis; that is,

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340 Part V. Special Topics

with a particular government or agency. There are only a few isolated examples of formal multiemployer bargaining.

Several factors have contributed to the continuation of decentralized bargaining in local governments. The diverse fi nancial conditions that exist in local govern- ments make both employers and unions hesitant to consolidate bargaining units. Another pressure that limits centralized bargaining is that local governments like to have autonomy in decision making.

However, information sharing and informal coordination do occur across state and local governments. As public sector bargaining has grown, so has the number of organizations of labor relations professionals in the public sector. These groups share information and conduct surveys to assist one another in the conduct of their separate negotiations.

There has been some recent movement toward greater centralization in the fi nancing of public education. If this continues, it may lead to greater centralization in teacher bargaining. The pressure to centralize school fi nancing comes from court rulings that heavy reliance on local property taxes to fund public education violates state constitutions. Box 13.1 describes several state court decisions on New York school fi nancing that requires greater state support for schools in districts that have relatively low property wealth. In recent years, some state governments have shifted toward state sales or income taxes to replace the local property tax. As a result, public school fi nancing is becoming more centralized and may become substantially more centralized if the court decisions described in Box 13.1 spread. As school fi nancing becomes more centralized, it is likely that collective bargaining structures in the education sector will also become more centralized. Imagine how awkward it would be if bargaining over public school teacher contracts continued at the local school district level in states where most school funding comes from state government. This is an issue worth watching in the future.

BOX 13.1 The Financing of New York Public Schools

In 1982, the New York Court of Appeals (the state ’ s highest court) ruled that the state constitution entitled all students to a “sound, basic education.” This deceivingly straightforward judgement became the basis of a legal battle that has lasted for sixteen years, through the administrations of three New York City mayors.

The Campaign for Fiscal Equity sued New York State in 1993, arguing that many school districts were underfunded to the extent that they deprived students of their constitutional rights. The campaign was a community-based group of parents, educators, and social activists concerned with the poor conditions of city schools.

The campaign won an initial victory in January 2001, when the New York State Supreme Court ruled in its favor, agreeing that additional funding was required to provide adequate education based on the rights the state

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Collective Bargaining in the Public Sector 341

constitution stipulated. In June 2002, though, the Appellate Division of the state supreme court overruled the initial decision, claiming that “society needs workers in all levels of jobs, the majority of which may very well be low level,” and that an eighth grade reading level is suffi cient to perform the civil duties a state education prepares students for. Then in 2006, the state ’ s highest court, the court of appeals, ruled in favor of the Campaign for Fiscal Equity. The court ruled that the state was required to increase funding of the city schools, but only by $1.9 billion, signifi cantly less than the $4.7 billion the lower court had ruled necessary.

However, this did not put an end to the matter. In 2014, the campaign and other reform groups threatened to open new suits against the state for not allocating the court-ordered funds to several schools (some of which are in New York City), in compliance with the 2006 judgement. The issue has become entangled in a battle between New York City mayor Bill de Blasio and Governor Andrew Cuomo over who controls the New York City schooling system. The governor has sought to tie reform funding to increased state control of failing schools, in tandem with the implementa- tion of new teacher evaluation criteria. In 2015, the courts gave Mayor de Blasio an extension of one year to demonstrate that his policies of community-based control would result in measurable improvements in the schools.

Sources : “Campaign for Fiscal Equity v. State of New York,” Brennan Center for Justice, New York University School of Law, November 20, 2006, https://www.brennancenter.org/ legal-work/campaign-fi scal-equity-v-state-new-york ; David Herszenhorn, “N.Y. Is Ordered to Pay $1.93 Billion for City Schools,” New York Times , November 20, 2006.

The Scope of Bargaining Units

Bargaining in the public sector tends to follow occupational lines more than is the case in the private sector. A city government is likely to have separate bargaining units for police offi cers, fi refi ghters, blue-collar workers (either in one citywide unit or in separate departmentwide units), and various professional groups. Public schools tend to have separate units for teachers, clerical and secretarial employees, bus drivers and maintenance workers, and school principals.

The rivalries that separate police and fi refi ghters in many cities effectively limit the potential for coalition bargaining with these two groups. Nevertheless, in the vast majority of municipal governments, the wages and fringe benefi ts of police and fi refi ghters are tied to each other through pattern bargaining.

MULTILATERAL MANAGEMENT STRUCTURES IN THE PUBLIC SECTOR

Managerial authority and responsibility are widely shared in the public sector. As a result, collective bargaining in that sector is multilateral, not bilateral, as it is in the private sector.

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342 Part V. Special Topics

Consider the typical elementary (or secondary) public school district. Each of the following groups has some managerial role to play in any collective bargaining that exists between the school district and its employees: the district superintendent; the professional industrial relations administrators who report to the superintendent; the elected school board; the mayor of the city where the district is located; the citizens who approve school tax measures and elect the school board; the parent groups active in the community (including the PTA); the state legislature and the state governor, who regulate state education aid; the state education department offi cials who regulate school programs; the federal education department offi cials who regulate school expenditures and school programs; and possibly other parties.

Not only is managerial authority divided among numerous actors, there also tend to be substantial differences in the goals of the various public sector managers. This is because public sector organizations usually lack a clear hierarchy of decision makers who can facilitate internal confl ict resolution. Confl icts between the mayor and the city council, for example, are as likely to occur in collective bargaining as they are over other political issues. The consequence is that the internal confl icts in management ’ s ranks frequently spill over into the formal negotiations process. 14

Given this complex array of managerial interests and the diffusion of power, the role of the management negotiator in the public sector is a diffi cult one. Like the representative of any employer, the management negotiator must both coordinate the interests of the public sector employer and represent the employer in its dealings with the union. The more internal diversity there is and the more power is shared among different individuals, the more diffi cult the job of internal coordination becomes.

When unions have considerable access to elected offi cials, the management negotiator may fi nd it particularly diffi cult to hold elected offi cials together as a united management team.

The Negotiations Process in the Face of Multilateral Bargaining

Multilateral bargaining is a negotiations process that includes more than two distinct parties. In multilateral bargaining, no clear dichotomy exists between the union and the management organization. This type of bargaining leads to novel bargaining techniques. One frequently observed union tactic in public sector negotiations, for example, is the “end run,” in which union offi cials try to sidestep the formal management negotiating team and take their proposals before an alternative group—city council representatives, school board offi cials, or even the city or state legislature. As the teachers’ strike in Chicago illustrates (see Box 13.2 ), local public sector disputes often involve a variety of actors, including citizens, mayors, city councils, and the courts, all of whom have a stake in the issues in dispute. In the Chicago teachers’ strike, the support teachers received from the public clearly helped strengthen their bargaining position.

Another form of multilateral negotiations occurs when a decision-making group rejects a negotiated agreement and refuses to implement it. Civil service com- missions, school boards, or city councils, for example, often must ratify the fi nal

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Collective Bargaining in the Public Sector 343

BOX 13.2 A Chicago Teachers’ Strike

In 2011, Chicago Mayor Rahm Emmanuel faced a strike by the Chicago Teacher ’ s Union (CTU) only months before the reelection campaign of his former boss, Barack Obama, who had long relied on labor as a decisive ally. These events nicely illustrate the multilateral political pressures that commonly infl uence public sector labor relations.

Illinois state legislation gave teachers the right to strike, with the condition added in 2011 that 75 percent of the relevant bargaining-unit members had to formally vote in support of a strike for a strike to be legal. On June 11, 2012, 90 percent of Chicago teachers voted to authorize a strike if negotiations reached an impasse. A key aspect of multilateral bargaining is the fact that public attitudes play a critical role. The CTU was bolstered by a poll that found that 47 percent of Chicago residents supported the strike.

The key issue that led to an impasse in bargaining between the teachers’ union and the city was not wages but the way teacher performance was evaluated and policies about class size and the length of the school day. The city had implemented a new teacher evaluation system that closely tied evaluations to student scores on standardized testing in order to conform with President Obama ’ s Race to the Top initiative. The union feared that Emmanuel ’ s ultimate objective was to weaken the union ’ s strength and security to ease a transition toward privatized charter schools, a notion that was reinforced when he circumvented the union by making a compromise offer directly to teachers on a school-by-school vote. After the teachers’ union voted to continue striking for a second week, Mayor Emmanuel fi led for a preliminary injunction to end the strike, citing Illinois state law that expressly prohibits strikes concerning noneconomic issues. The mayor withdrew his request for an injunction when the unions called off the strike when a contract settlement was reached.

Both sides claimed victory in the settlement. Mayor Emmanuel succeeded in gaining a longer school day, one of his major campaign promises. At the same time, the union slowed the implementation of the new teacher evaluation system and bargained for the addition of an appeals process to the evaluation system. The union also obtained guarantees that school boards would give greater consideration to teachers who had been laid off due to school closings when they hired to fi ll open positions. Given the national attention it received, the strike became an arena for debates about the role and future of public sector bargaining.

The strike and the settlement revealed that the public ’ s attitudes continued to critically infl uence the course of public sector labor relations and confi rmed that school bargaining remained multilateral. The strike also clearly strength- ened the bargaining power of the teachers’ union, defying claims that strikes and strike threats no longer matter.

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344 Part V. Special Topics

Diffi cult relations between the union and Mayor Emanuel continued after the 2011 strike. On April 1, 2016, the Chicago Teachers Union staged a one-day walkout to bring attention to the school funding issues and the fact that contract negotiations had stalled. This walkout came after the union rejected settlement recommendations provided by a fact fi nder.

Sources : Julie Bosman, “Chicago Teachers Approve Call to Strike as Contract Talks Stall,” New York Times , December 15, 2015; and Michael Pearson, “Wins, Losses, and Draws in Chicago School Strike,” CNN , September 19, 2012, http:// www.cnn.com/2012/09/19/us/illinois-chicago-teachers-strike/ .

agreement. At the ratifi cation stage, political pressures from constituent may convince offi cials to change the terms and conditions of the bargain.

Another example of multilateralism arises when community interest groups become involved in the negotiations process. As the scope of bargaining in teacher negotiations expands to deal with issues such as student discipline, the curriculum, or the welfare of minority interests, community groups increase their involvement in negotiations.

EFFECTS OF PUBLIC SECTOR UNIONS ON PAY

Although the magnitude of the union effects on wages vary across studies, the vast majority have found a wage differential between unionized and nonunionized public employees. 15 These studies also indicate, however, that the wage effects of collective bargaining in the public sector are not greater than the effects of collective bargaining in the private sector. The wage differential between unionized and non-unionized public sector workers is typically in the range of 5 to 15 percent. That is, unions do not appear to have a stronger effect on the wages of public employees than they do on the wages of private employees.

There is also evidence that collective bargaining has had a positive effect on some fringe benefi ts of public employees. Unionism leads to higher pension benefi ts, fewer hours and days worked, and increased time off with pay. 16 The large pension increases public sector unions have won suggest that calculations that look only at the wage differential underestimate the compensation effects of bargaining.

Did the increases in expenditures on employees’ salaries and benefi ts for certain public services result in reductions in the number of people who were employed to provide other public services? Evidence that compares employment in union and nonunion cities suggests that public sector unionism raises or at least does not lower total employment in the public sector. Apparently public sector unions are able to lobby for greater government expenditures to eliminate any employment displacement caused by higher earnings. 17

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Collective Bargaining in the Public Sector 345

THE USE OF INTEREST ARBITRATION

Some form of interest arbitration, which determines contract terms, is available in twenty-two states for resolving impasses in negotiations between state or local governments and at least some of their employees. Police and fi refi ghters are the groups most frequently covered by the procedure. There is a wide variety of forms of interest arbitration, including conventional arbitration, fi nal-offer arbitration, and various combinations of mediation, fact fi nding, and interest arbitration.

Box 13.3 describes a recent interest arbitration case concerning the pay of New York City police offi cers. In this case, as in other public sector disputes, pattern bargaining and ability to pay were key issues.

BOX 13.3 The Use of Arbitration and Negotiations to Set Police Offi cers’ Pay in New York City

In early 2017, the Police Benevolent Association (PBA), the union that represents the 24,000 patrol offi cers in New York City ’ s 37,000-member police force, reached a negotiated settlement that provided a 12 percent pay increase over fi ve years. This settlement was noteworthy in part because it was only the second time since 1994 that the PBA had reached a negotiated agreement with the city rather than have wages set through interest arbitration.

Mayor de Blasio was elected in 2013 with strong support from most of the unions that represented the city ’ s 330,00 unionized employees. Yet, the mayor and the president of the PBA, Patrick Lynch, have been at odds over the city ’ s handling of police brutality complaints and the ground rules for the wearing of body cameras by offi cers while on patrol, in addition to their disagreements over offi cer pay. In the recent contract settlement, the PBA agreed to drop its litigation that challenged the city ’ s body camera policy.

The 2017–2022 police contract adheres to the basic terms of a pattern that had been set in a nine-year-long agreement negotiated between the City of New York and the United Federation of Teachers (UFT), which represents 110,000 teachers, in the spring of 2014. The teachers’ 2010–2018 collective bargaining agreement, which came only after extensive mediation, provides a total wage increase of 18 percent, including retroactive pay spread over the term of the agreement, and is fi nanced in part by $1.3 billion in planned health care savings. The police received an additional 2.25 percent wage increase above the pattern in exchange for agreeing to engage in more active “neighborhood policing” and for agreeing to reductions in the pay of future police hires.

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346 Part V. Special Topics

The City of New York and many of the unions that represented city employees favored pattern bargaining on the grounds that it provided stability and predictability in bargaining that involved 105 bargaining units. Under pattern bargaining, the city avoided potentially volatile bargaining and union leaders were able to answer potential criticisms that they had not done well in bargaining by following the pattern.

The PBA argued that police deserved more than the pattern given that the city ’ s police pay lagged behind police pay in surrounding jurisdictions and because police are responsible for an ever-growing array of security related duties in addition to addressing urban crime.

Sources : John Herzfeld, “NYC, Police Union Settle on Milestone Tentative Agreement,” Daily Labor Report , February 1, 2017 A-12; “New York Offi cers and Mayor Reach Deal for 12% Raise Over 5 years,” New York Times , February 1, 2017, B-1.

DOES INTEREST ARBITRATION ADVERSELY AFFECT COLLECTIVE BARGAINING?

There is much controversy among labor relations scholars about the long-term consequences of binding interest arbitration. 18 Some claim that interest arbitration violates the spirit of free collective bargaining. Interest arbitration also has been criticized on the grounds that the availability of these procedures reduces the parties’ incentive to bargain, thus imposing a chilling effect on the negotiations process. The parties avoid making compromises they might otherwise be willing to make because they fear the fact fi nder or arbitrator will split the difference between their stated positions.

A management negotiator, for example, may believe that it is better to go into fact fi nding or interest arbitration offering only 4 percent when management would actually be willing to offer 6 percent to avoid a strike or impasse. By going in at 4 percent, the negotiator may increase the probability that the arbitrator (the fact fi nder) will recommend 6 percent. Put differently, if the negotiator were to enter the procedure offering 6 percent, that might increase the probability that the recommendation or award will be for something greater than this amount. The same rationale, it is argued, drives the union negotiator. Thus, the bargaining process is chilled: each party tends to hold back concessions instead of laying its best offer on the table.

Numerous analysts have studied the effects of interest arbitration on bargaining outcomes. Some researchers have found that the availability of interest arbitration has led to wage settlements that are only 5 percent higher and slightly more favorable nonwage contract terms. 19 In some states there is also evidence of less variation in collective bargaining outcomes in the municipalities that make interest arbitration available, although this leveling effect has not been found in some other states.

There is also concern that these procedures are inherently conservative and that they favor the party that seeks the fewest deviations from the status quo. Thus,

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Collective Bargaining in the Public Sector 347

some policy analysts fear that the presence of these procedures stifl es innovation in bargaining or new breakthroughs in contract terms. Since 2000, there has been concern that arbitrators are ill suited to fashion major changes in collective bargaining agreements involving changes in work rules, the restructuring of fringe benefi t packages, work reorganization, and changes in the roles of labor and management.

Evidence on the Use of Interest Arbitration

Most negotiations that occur where interest arbitration is available are settled without the use of arbitration. One comprehensive study found that in states where it is available, interest arbitration is used in between 6 and 29 percent of negotiations. 20 The variance in usage across states is partially a function of the different forms of arbitration used. Final-offer arbitration, where the arbitrator must choose between the parties’ fi nal offers, for example, appears to be used less often than conventional arbitration.

Even though interest arbitration is not used often, it is still possible that particular bargaining units can become addicted to the procedure once they use it. However, researchers who have analyzed the experience of individual bargaining units over successive rounds of negotiations have found no evidence of widespread “addiction” to interest arbitration. 21 These procedures also may suffer from overuse even in the absence of a chilling effect if they cost less than a strike would. It is the income losses suffered during a strike that spur the parties to negotiate a settlement, and third-party procedures may lead to lower income losses.

Furthermore, use of interest arbitration may serve political objectives for a union or for management negotiators by allowing them to pass the blame on to the arbitrator. Parties faced with diffi cult internal confl icts may prefer to pass such issues to the fact fi nder or arbitrator. There is also the worry that these procedures may favor one side or the other. This would occur if the arbitrators make decisions that were different from what the parties would end up with if interest arbitration were not available as an alternative.

The evidence consistently shows that strikes occur less frequently in states where interest arbitration is available than in states where it is not available. 22 At the same time, the data show that even in states that require interest arbitration, strikes sometimes do occur.

Judgments about the appropriateness of interest arbitration should take into consideration the evidence that arbitration leads to wages and other contract terms that are very similar to what labor and management negotiate in jurisdictions where arbitration is not available and the lower incidence of strikes that results from the availability of interest arbitration. To date, the public generally appears to be satisfi ed with the use of interest arbitration, particularly for police and fi refi ghters, as an alternative to the right to strike.

DEBATES ABOUT THE RIGHTS AND REGULATION OF PUBLIC SECTOR UNIONISM

How should labor relations in the public sector be legally regulated? American labor law is governed by the premises that (1) an inherent confl ict of interests

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348 Part V. Special Topics

exists in the private sector between employees and employers; and (2) workers should have the right to pursue their interests through a union if they so choose. Furthermore, there is a strong preference for the process of free collective bargaining in which labor and management are given the opportunity to resolve their problems without extensive third-party interference.

However, government differs from a private sector employer because although government offi cials have traditional managerial responsibilities, they are elected by the public. The public thereby has a dual role to play in public sector industrial relations: as citizens who regulate the provision of public services and as consumers of public services (who pay for public services as taxpayers). The problem for public policy makers is how to maintain the right of public sector employees to infl uence their employment conditions, through collective bargaining if they so desire, while at the same time maintaining the right of citizens to infl uence government action.

Recently, critics of public sector labor relations have claimed that the current system has led to excessive pay for public employees. The research evidence, however, does not support that claim. Extensive research by Jeff Keefe and others has shown that on average the pay (including fringe benefi ts) of public sector employees does not exceed that of their private sector counterparts. 23 This research uses statistical techniques to appropriately control for the infl uence of “human capital attributes” such as years of education and experience. Keefe ’ s research does show that employees at the low end of the skill distribution in the public sector earn more than their counterparts, while the opposite is true for high-skilled (i.e., professional) public sector employees.

Harry Wellington and Ralph Winter, among others, have taken the extreme position that the primary responsibility of governments—to represent the public interest—makes collective bargaining inappropriate for the public sector. 24 Critics of public sector bargaining also claim that if labor unions are granted the right to exclusive representation and negotiations, they will acquire undue political power.

These positions, in our view, ignore employee interests and inaccurately assess the actual effects of collective bargaining in the public sector. It is our view that public sector employees, like private sector employees, have an inherent right to participate in the determination of their working conditions. Why should the mere fact that an employee works for a government strip him or her of the right to infl uence employment conditions through collective bargaining?

Another aspect of public sector labor relations that has become extremely controversial is the practice in many public school districts of granting teachers tenure and protection from layoff after a given number of years of service and satisfactory performance. Box 13.4 reviews several recent court decisions regarding teacher tenure rights.

There has also been much recent debate over whether public employee unions should be allowed to receive so-called agency-shop fees from individuals who are covered by the terms of a negotiated collective bargaining agreement but are not members of the respective union. This issue came to a head in a recent decision of the U.S. Supreme Court (see Box 13.5 ).

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Collective Bargaining in the Public Sector 349

BOX 13.4 Court Decisions about the Tenure Rights of Public School Teachers

Many public school systems award teachers tenure, which among other things make it diffi cult for districts to fi re teachers. Tenure is commonly awarded when a teacher completes a specifi ed number of years of service (often three) and is deemed to be performing satisfactorily. In recent years, tenure rights have become very controversial, with critics arguing that tenure protects teachers who perform poorly and makes it diffi cult to assign teachers to schools with low-income (and more diffi cult to teach) student bodies.

In April 2016, the fi rst court decision to take away tenure for public school teachers was overturned on appeal in a ruling that found that Cali- fornia ’ s tenure system does not violate the constitutional rights of students. Specifi cally, the California appeals court reversed a 2014 ruling by a Los Angeles judge that the state ’ s tenure laws left low-income and minority students disproportionately stuck with ineffective teachers and breached their fundamental right to equality in education.

California ’ s two largest teachers’ unions had joined the case to defend tenure and argued that the lawsuit was part of a broader effort to undermine organized labor. They contended that smaller classrooms and adequate resources were more relevant to improving public education than teacher tenure provisions. The state of California, which defended the constitutionality of teacher tenure separately from the teachers’ unions, claimed that tenure helps attract people to low-paid jobs in often-diffi cult work conditions and protects teachers from pressure by school boards when they teach controversial subjects.

In a related case, the state supreme court in North Carolina ruled in April 2016 that a 2013 state law that ended teacher tenure was unconstitutional because it applied to teachers who already had earned that employment protection. Essentially, the court argued that the retroactive application of the law was unfair and violated the contracts clause of the U.S. Constitution. However, the ban on tenure did continue to apply to teachers in North Carolina hired after 2013.

Source : Edvard Petterson, “California Teacher Tenure Survives Landmark Bad Schools Suit,” Daily Labor Report , April 15, 2016, A-3; Andrew M. Ballard, “N.C. Supreme Court Partially Reinstates Teacher Tenure,” Daily Labor Report , April 15, 2016, A-2.

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350 Part V. Special Topics

BOX 13.5 The Legal Fight over Agency-Shop Fees in Public Sector Unions

Public sector unions in the United States, like their private sector counterparts, have long relied on agency-shop fees to collect mandatory dues from all individuals covered by a collective bargaining agreement through automatic payroll deductions regardless of whether those individuals are members of the union. This sort of dues collection was deemed a violation of the First Amendment protections of free speech by some and the issue came to a head in a case that arose in California. In a 2016 Supreme Court decision, Friedrichs v. California Teachers Association , public sector unions narrowly avoided a curtailment of the right to collect agency fees when the court deadlocked 4–4 over the challenge.

The logic behind the mandatory collection of fees is that it is a guard against a potential “free rider” problem whereby nonunion employees covered by a collective bargaining agreement would benefi t from the bargaining power of the union made possible by dues-paying members without con- tributing their fair share to cover the cost of union operations. An unfavorable ruling would have severely affected union funds.

During the oral arguments for Friedrichs , Justice Antonin Scalia appeared to be among a fi ve-justice majority leaning toward reversing the Court ’ s support for agency fees. Public sector unions and their allies were in a state of near-panic, wondering what was to come if the case was decided against them.

Then, on February 13, Justice Scalia died unexpectedly before a ruling had been made. On March 29, the Court issued a 4–4 decision in the case. Tied decisions from the Supreme Court result in the affi rmation of the lower court ruling on the matter in dispute. The lower court had ruled to allow agency fees, so mandatory dues remain allowable.

For public sector unions, the “decision” was less a victory than it was avoidance of a crushing defeat and an assurance of future battles over this critical issue.

Sources : “Unions Win, but the Court Is Still Hobbled,” New York Times , March 29 2016; “ Friedrichs v. California Teachers Association ,” Forbes , January 12, 2016.

Public Attitudes toward Public Sector Unions and Collective Bargaining

Although some politicians have called in recent years for major limitations on public sector unionism and collective bargaining, evidence that public attitudes toward collective bargaining rights for public sector employees and public sector unions have fundamentally changed is very limited. For example, a February 2011 New York Times/CBS News poll asked a sample of citizens the following

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Collective Bargaining in the Public Sector 351

question: “As you may know, collective bargaining refers to negotiations between an employer and a labor unions’ members to determine the conditions of employ- ment. Some states are trying to take away some of the collective bargaining rights of public employee unions. Do you favor or oppose taking away some of the collective bargaining rights of these unions? If Favor or Oppose; Do you favor or oppose that strongly or somewhat.” Only 18 percent of those polled strongly favored and 15 percent favored somewhat curtailing the collective bargaining rights of public sector employees, while 38 percent strongly opposed and 22 percent opposed somewhat that proposition. 25 Another question in the same poll asked “In order to reduce state budget defi cits, do you favor cutting the pay or benefi ts of public employees?” Seventeen percent of those polled strongly favored cutting the pay or benefi ts of public employees to reduce state budget defi cits, 20 percent favored it somewhat, 29 percent were strongly opposed, and 27 percent were somewhat opposed.

When voters have been given the opportunity to repeal laws that curtailed collective bargaining rights, they have voted in favor of repeal on several occasions in the last six years. For example, in November 2011, Ohio voters (by a margin of 61.3 percent to 38.7 percent) voted to repeal legislation that would have limited the collective bargaining rights of public sector employees in the state. 26

Debates about Privatization

Another key challenge in the realm of public sector labor relations is calls for increased privatization of public services. While such have intensifi ed, there is increasing evidence that privatization does not improve effi ciency. In addition, there is growing empirical evidence that when privatization has occurred has had signifi cant, often hidden, costs and limited effectiveness. 27 This evidence shows that there has been no dramatic increase in the scale or success of privatization since 2000.

Summary

Recent attacks on public sector bargaining have led some states, such as Wisconsin, to place new limits on public sector unions and to declines in public sector union membership. If the pace of this decline were to continue in Wisconsin and spread to other states, the likelihood of signifi cant transformation in public sector labor relations would increase because large declines in union membership would inevitably lead to a decrease in the power of public sector unions.

Union membership losses could decrease the direct power of public employee unions by reducing the number of unionized employee who could infl uence public budget measures or the electoral fortunes of candidates through their voting behavior. Less directly, reductions in union membership would reduce union dues and thereby decrease the fi nancial resources public employee unions could use to support political lobbying. Given the limited right to strike and the limited access to binding arbitration that exists in the public sector, it is less likely that

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352 Part V. Special Topics

future ballot measures will decrease the power of public employee unions much through placing further limits on strike or interest arbitration rights.

The likelihood that economic pressures will bring about fundamental change in the public sector is, however, limited by the fact that the various economic changes that propelled the transformation in private sector labor relations— international competition and a growing and more sophisticated non-union sector—have not yet occurred and may never occur in the public sector, given the inherent local and service nature of public service provision.

At the same time, four factors have the potential to lead to future transformation:

1. Given the importance of public attitudes for both total and relative power in the public sector and the potential volatility of those attitudes, major shifts in the public ’ s views about the legitimacy of and appropriate role for unions and collective bargaining in the public sector could produce measures to limit the union power of public employees. While current evidence suggests that public attitudes have not turned against public employee unions or collective bargaining, if those attitudes do sour, then a substantial deteriora- tion in support for public sector labor relations would likely ensue.

2. The amount of revenue that is available to governments critically infl uences the total power available to labor and management in the public sector. Hence, if such revenue were to decrease signifi cantly, whether due to reactions of voters against public employee unions or for other reasons, then public sector labor relations could face severe challenges.

3. Recent press coverage of the large pension liabilities and potential underfund- ing in public employee pension funds has been substantial. Public concern over pension liabilities seems to be infl uenced by more general worries about the size of the national debt and the “bankruptcies” occurring in several countries (e.g., Greece) and local governments (e.g., Stockton and San Diego in California). As a result, the condition of public pensions could well be a key factor that infl uences public attitudes toward public employee unions and public sector collective bargaining, regardless of whether there is evidence linking pension liabilities to public sector collective bargaining.

4. Elementary and secondary education employment and expenditures are a signifi cant portion of government activity, and local schools receive substantial attention in the press, given the concerns parents have about the quality of the education their children receive. This shows up in the signifi cant focus on the role of teachers and the unions that often represent them in debates about the U.S. education system. Correspondingly, the capability of unionized school districts and other unionized public sector jurisdictions to introduce cost savings and improvements in the quality of service through negotiated changes is likely to lead to reduced voter interest in reducing the infl uence of teacher unions.

Furthermore, the charge that collective bargaining leads to a perverse distortion of how governments allocate budgets is not supported by the facts. The evidence

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Collective Bargaining in the Public Sector 353

discussed in this chapter shows that public sector unions have had a modest impact on employee pay and other working conditions and that public sector employees do not on average earn more than their private sector counterparts. In fact, where they exist, public sector unions infl uence government decision making as one among the many interest groups that participate in this process. Public employee representation seems to enhance rather than detract from representative democracy. Our argument does not necessarily imply that public sector collective bargaining rights should be identical to those in the private sector. Because a variety of interest groups are affected by the decisions governments make, their diverse interests must be taken into account in the collective bargaining process. Public policy must balance these objectives.

Discussion Questions

1. What factors contributed to the growth of public sector unions and public sector collective bargaining in the 1960s?

2. Evaluate the power of public employee unions in terms of Marshall ’ s conditions.

3. Describe the structure of most public sector collective bargaining. 4. What do you think are the appropriate public policies regarding the right

of public employees to form unions, engage in collective bargaining, and go on strike?

Related Web Sites

American Federation of Teachers (AFT): http://www.aft.org/about

Federal Labor Relations Authority: https://www.fl ra.gov

Patrolmen ’ s Benevolent Association of NYC https://www.nycpba.org

Suggested Supplemental Readings

Katz , Harry C. “ Is U.S. Public Sector Labor Relations in the Midst of a Transformation? ” Industrial and Labor Relations Review 66 , no. 5 ( 2013 ): 1031 – 1046 .

Keefe , Jeffrey H. “ Debunking the Myth of the Overcompensated Public Employee .” Briefi ng Paper 276. Economic Policy Institute, Washington, D.C. , 2010 .

Kochan , Thomas A. , David Lipsky , Mary Newhart , and Alan Benson . “ The Long-Haul Effects of Interest Arbitration: The Case of New York State ’ s Taylor Law .” Industrial and Labor Relations Review 63 , no. 4 ( 2010 ): 565 – 583 .

Lewin , David , Jeffrey H. Keefe , and Thomas A. Kochan . “ The New Great Debate about Unionism and Collective Bargaining in U.S. State and Local Governments ,” Industrial and Labor Relations Review 65 ( 2012 ): 747 – 775 .

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354 Part V. Special Topics

Notes

1. The percent of local and state government employees represented by unions (i.e., covered by collective bargaining agreements) was 46.1 and 35.1 percent, respectively in 2008 and had fallen to 43.9 and 32.8 percent in 2016. “Union Members in 2008,” Bureau of Labor Statistics News Release, USDL-09-0095, www.bls.gov/news.release/archives/union2_01282009.pdf . 2016 data is provided in “Union Members—2016,” BLS U.S. Department of Labor News Release, USDL-17-0107, January 26, 2017, https://www.bls.gov/news.release/pdf/union2.pdf .

2. The percent of public sector workers belonging to unions in Wisconsin declined from 53.5 percent in 2009 to 26.1 percent in 2015. Marc V. Levine, De-Unionization in Wisconsin and Metro Milwaukee: A Statistical Overview , Data Brief, February 2016, University of Wisconsin-Milwaukee, Center for Economic Development. The number of government employees in Wisconsin belonging to a union dropped by 48,000 in 2012 alone, to 139,000 from 187,000 in 2011. Barry Hirsch and David Macpherson, “Union Membership and Coverage Database From the CPS,” Unionstats.com , www.unionstats.com/ .

3. See Joan P. Weitzman, “The Effect of Economic Restraints on Public Sector Collective Bargain- ing: The Lessons from New York City,” in Government Labor Relations: Trends and Information for the Future , ed. Hugh D. Jascourt (Oak Park, Ill.: Moore, 1979), 334–346.

4. The events in San Francisco are analyzed in Harry C. Katz, “Municipal Pay Determination: The Case of San Francisco,” Industrial Relations 18 (January 1979): 44–59.

5. See Carnegie Forum on Education and the Economy, A Nation Prepared: Teachers for the Twenty-First Century (Washington, D.C.: Carnegie Foundation, 1986).

6. U.S. Secretary of Labor ’ s Task Force on Excellence in State and Local Government through Labor–Management Cooperation, Working Together for Public Service: Final Report (Washington, D.C.: U.S. Secretary of Labor ’ s Task Force on Excellence in State and Local Government through Labor–Management Cooperation, 1996).

7. Ellen Dannin, “Cash-Strapped Governments: Privatization as a Response to the Crisis of the Great Recession” in Public Jobs and Political Agendas , ed. Dan J. B. Mitchell (Urbana-Champaign, Ill.: Labor and Employment Relations Association, 2012), 79–104.

8. A summary of public sector strike experience is found in Robert Hebdon, “Public Sector Dispute Resolution in Transition,” in Public Sector Employment in a Time of Transition , ed. Dale Belman, Morley Gunderson, and Douglas Hyatt (Ithaca, N.Y.: ILR Press, 1996), 85–126.

9. See, for example, “New York City Transit Union Ends Subway, Bus Strike after Three Days,” Daily Labor Report , December 27, 2005; and “Transit Union Approves Contract that It Rejected Before,” New York Times , April 19, 2006.

10. Henry S. Farber and Harry C. Katz, “Interest Arbitration, Outcomes, and the Incentive to Bargain,” Industrial and Labor Relations Review 55 (1979): 55–63.

11. One early study (and many later studies) concluded that on average, the demand for labor in the public sector was more inelastic than the demand for labor in the private sector. See Orley Ashenfelter and Ronald G. Ehrenberg, “The Demand for Labor in the Public Sector,” in Labor in the Public and Non-Profi t Sectors , ed. Daniel Hammermesh (Princeton, N.J.: Princeton University Press, 1975), 55–78.

12. Robert J. Thornton, “The Elasticity of Demand for Public School Teachers,” Industrial Relations 18 (Winter 1979): 86–91.

13. There are some exceptions to this, such as the tolls collected on roads and fees collected at parks.

14. Thomas A. Kochan, “City Government Bargaining: A Path Analysis,” Industrial Relations 14 (February 1975): 90–101.

15. For a review of these studies, see Richard Freeman, “Unionism Comes to the Public Sector,” Journal of Economic Literature 24 (March 1986): 41–86.

16. Ibid. 17. See ibid. The researchers who conducted the studies of union effects on expenditures that

Richard Freeman summarized had diffi culty detecting whether higher government expenditures are caused by the same factors that cause public sector unions to grow or by the unions themselves.

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Collective Bargaining in the Public Sector 355

18. Carl M. Stevens, “Is Compulsory Arbitration Compatible with Collective Bargaining?” Industrial Relations 5 (February 1966): 38–52.

19. See, for example, Thomas A Kochan, David Lipsky, Mary Newhart, and Alan Benson, “The Long-Haul Effects of Interest Arbitration: The Case of New York State ’ s Taylor Law,” Industrial and Labor Relations Review 63 (2010): 565–583; and David E. Bloom, “Collective Bargaining, Compulsory Arbitration, and Salary Settlements in the Public Sector: The Case of Police Offi cers in New Jersey, Journal of Labor Research 2 (Fall 1981): 369–384.

20. Ibid. 21. Ibid. 22. Ibid. 23. Jeffrey H. Keefe, Debunking the Myth of the Over-Compensated Public Employee , Briefi ng Paper

276, Washington, D.C., Economic Policy Institute, 2010; and Keith Bender and John Heywood, “Trends in the Relative Compensation of State and Local Government Employees,” in Public Jobs and Political Agendas , ed. Daniel J. B. Mitchell (Ithaca, N.Y.: ILR Press, 2012).

24. This argument can be found in Harry H. Wellington and Ralph K. Winter Jr., The Unions and the Cities (Washington, D.C.: Brookings Institution, 1971).

25. “New York Times and CBS News Poll: Collective Bargaining,” February 24–27, 2011, http://www.nytimes.com/interactive/2011/02/28/us/28union-poll-results.html .

26. “Ohio Senate Bill 5 Veto Referendum, Issue 2 (2011),” http://ballotpedia.org/wiki/index.php/ Ohio_Senate_Bill_5_Veto_Referendum ,_Issue_2_%282011%29.

27. Elliot Sclar, You Don ’ t Always Get What You Pay For: The Economics of Privatization (Ithaca, N.Y.: Cornell University Press, 2000).

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