Collective bargaining—negotiating over contracts—is a powerful tool that unions use to extract things from employers. In the public sector it’s more complicated. If the union has donated money to the campaign of the person who they’re negotiating with, that person might feel like they have to give the union more than they can afford—even if it leads to tax increases or to putting a city or state in a precarious financial situation.
Two recent examples show how bargaining power can go too far in the public sector. In Sacramento this spring, the teachers went on strike. After eight days of no school, a deal was reached, but unfortunately, it was not realistic—the city couldn’t afford what the negotiators promised. The school district is now facing financial distress, which could ultimately lead to a state takeover of the district. It doesn’t help teachers when their union makes demands and promises that will bankrupt a school district. That could lead to more teacher layoffs and potential school closures. Then, no one wins.
In New York, driven by pressure from the unions, the state enacted changes to the pension system in the most recent budget. Lawmakers rolled back some of the changes they made in 2012 when they added an additional “tier” to the pension system for new employees. The goal of creating a new tier was lessening the burden on municipalities for pension costs. So, while employees were asked to pay slightly more toward their retirements, it ensured the solvency of the system. The changes made this year will make the pension system less secure for all New York retirees. Everyone wants to retire with the best pension possible, but if you bankrupt the system, there won’t be any pensions at all. New York should instead focus on keeping the promises made to public sector workers and not turn into states like New Jersey and Illinois.
Let’s not forget, public servants wear two hats—they’re both public employees and taxpayers. While it’s important that states and municipalities ensure their employees earn a fair wage and good benefits, unions should not make demands that could ultimately hurt employees and their neighbors.