NCPA - National Center for Policy Analysis

Government Unions Have Leverage over Budgets and Taxes

March 7, 2011

Early labor leaders didn't believe unions belonged in government.  In fact, President Franklin Delano Roosevelt believed collective bargaining had no place in public service and that a government strike was "unthinkable and intolerable."  Union membership peaked in the private sector in the 1950s and unions came to see government employees as valuable, new dues-paying members.  Now, 52 percent of union members in the United States work for federal, state or local government, says the Heritage Foundation.

Unions operate differently in government than in the private sector. 

  • Private-sector unions bargain over limited profits.
  • Competition from other businesses moderates wage demands.
  • Governments earn no profits and have no competition.
  • Instead, government unions negotiate for more tax dollars.

Granting unions a monopoly over work done in government gives unions enormous leverage over budgets and taxes.  Unions use this power to raise taxes and get more of the budget spent on them.

Government unions win above-market compensation for their members.  The average government employee enjoys better health benefits, better pensions, better job security and an earlier retirement than the average private-sector worker, although cash wages are typically not inflated at the state or local level, says Heritage.

Source: "What Public-Sector Unions Won't Tell You: What Is Government Collective Bargaining?" Heritage Foundation, February 28, 2011.

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