John Locke Update / Research Brief

The case against public-sector collective bargaining

posted on in Education, Education (PreK-12), Spending & Taxes
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Sometimes the legislation with the fewest words unleashes the greatest harm.

For example: “G.S. 95-98 is repealed. This act is effective when it becomes law.”

That’s the full text of House Bill 710 and Senate Bill 575, both filed by Democrats in the General Assembly last year to repeal the state statute that prohibits collective bargaining for public-sector employees. Passage of either one would have imposed significant costs on taxpayers without commensurate benefits.

While neither bill advanced far during the last legislative session, it signaled that public-sector unions, employee associations, and the Democratic Party’s radical wing have repeal of the statute in their sights. A Democratic majority in 2021 would open the door to public-sector unionization in a state that has remained relatively free of labor union coercion and continues to prosper as a result.

The N.C. General Assembly approved a ban on collective bargaining by public-sector employees more than six decades ago. This legislative effort to ban collective bargaining was led by Democratic Rep. Frank Snepp of Mecklenburg County, who filed the bill in response to an attempt by Jimmy Hoffa and the Teamsters to organize Charlotte police. The General Assembly passed the ban on collective bargaining by a large margin in spring 1959.

Since passage of the ban, a few Democratic lawmakers have filed bills to reverse course, but neither Democratic nor Republican leaders of the General Assembly have allowed proposed legislation to reach the governor’s desk. Instead, North Carolina has remained a state that has discouraged efforts by labor unions to organize its public-sector workers.

Today, North Carolina, South Carolina, and Virginia are the only three states to have statutory prohibitions on collective bargaining of all public-sector employees. By this time next year, the number of states will fall to two. Lawmakers in Virginia approved legislation earlier this year that would allow certain local government workers, including teachers, nurses, and firefighters, to bargain with their employers collectively. The legislation becomes effective May 1, 2021.

While South Carolina appears to be safe from efforts to expand public-sector unionization in the Southeast, North Carolina is not. In 2018 and 2019, the N.C. Association of Educators organized “Red for Ed” walkouts that inspired thousands of public-school employees and advocates to travel to Raleigh on a school day in May. In 2020, the group’s members elected leaders who were “inspired by the powerful organizing and social justice focus of the Chicago Teachers’ Union” and have embraced the strategies and tactics employed by their teacher union comrades in Chicago and other large cities. And the NCAE is working hard to elect like-minded, pro-union candidates for legislative and state offices.

Because G.S. 95-98 repeal appears to have political momentum, researchers from the John Locke Foundation and the Economic Research Center at The Buckeye Institute produced a new report that estimates the cost of repealing the collective bargaining law. We found the repeal would increase state government spending by between $889 million and $1.32 billion, depending on the type of dispute settlement mechanism adopted by lawmakers. This translates into an additional cost of between $84.75 and $126.03 for each North Carolinian and a decrease in state gross domestic product.

Public-sector unions increase government expenditures in two ways. The first and most obvious way is to use the collective bargaining process to negotiate higher salaries, more generous benefits, and expanded employment opportunities for union members and those covered by union contracts. Increases in salaries, benefits, and employment necessitate higher aggregate government spending, which invariably leads to higher taxes on individuals and businesses. The report outlines the tax implications of allowing public-sector workers to bargain collectively.

The second way is to use the political process to support prounion candidates for key local and state offices. Sympathetic elected officials can then use their regulatory and legal authority to protect union interests while using the power of taxation to raise revenues necessary to accommodate compensation and employment demands.

Indeed, public-sector unions depend on elected officials, rather than the market economy, for financial support. This dependency adds a powerful incentive for public-sector union leaders to immerse their organizations in political activity. According to one theory, the transformation of public-sector unions into organized political machines may have spurred the growth of unionization of state and local government employees in the 1960s and 1970s. Today, the state and local governments where public-sector unions are strongest are the same dismal localities with unsustainable budgets, broken pension systems, and corrupt, one-party rule.

Unions, employee associations, and their supporters argue that the costs of collective bargaining would be offset with improvements in public services and economic benefits from increasing student achievement in public schools. But the research basis for such claims is unconvincing. As such, I’m skeptical that embracing public-sector unionism in North Carolina would produce substantive improvements in public services or continue to spur economic growth.

The primary goal of unionization is self-preservation, often at the expense of the public purse. Economist Thomas Sowell summarized this perspective succinctly: “The biggest myth about labor unions is that unions are for the workers. Unions are for unions, just as corporations are for corporations, and politicians are for politicians.”

North Carolina’s public-sector workers should work for the people of the state, not for union bosses and the politicians they control.

This column appeared in the October 2020 print edition of Carolina Journal.

As Vice President for Research, Dr. Stoops oversees the research team’s writing and analysis across the spectrum of public policy issues. He specializes in pre-K-12 education. Before joining the Locke Foundation, he worked as the program assistant for the Child… ...

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