The following passage from Iain Murray and F. Vincent Vernuccio?s article in the new National Review offers a good snapshot of why public-sector unionism has run amok in the 50 years since Wisconsin became the first state to allow government workers to unionize:
Such outlandish public-employee compensation is economic folly and bad policy ? so why has it gone on for so long on such a massive scale? Quite simply, because government employees have, for years, cared more about their compensation than most taxpayers have. As public-choice theory shows, organized constituencies that stand to gain concentrated benefits have a great incentive to agitate politically for those benefits. Meanwhile, the large, unorganized general population that has to pay the taxes to support those benefits has much less of an incentive to oppose them, because the costs are diffused among a much larger number of individuals, each of whom bears only a small fraction of the total.
This results in a vicious circle. Politicians kowtow to government-employees? unions, who in turn support their election campaigns. Once those pro-union candidates are elected, they can provide more pay and benefits to the unionized government employees. The union then collects dues from its members, which enables it to give more political support to the politicians, and the cycle goes on.
But politics can only trump economic reality for so long. Ultimately, such an arrangement is not sustainable. And the American people are now waking up to the fact that they?re getting a very bad deal.
Want more wisdom from the public-choice school of economics? A nice place to start is the book Common-Sense Economics.
