It is impossible to calculate the cost of the unions’ greed on the rest of us, but several recent studies provide some sobering, and frankly piss-offing (off-pissing?) indications. Policy Exchange, a conservative think-tank, calculates that people in the British private sector work 23% more hours than their public-sector counterparts over their lifetimes, thanks to public-sector strikes, sick days, fat holiday benefits and early retirement.
Barry Bluestone, a left-wing economist, calculates that the price of America’s public services increased by 41% in 2000-08, while that of private services rose by just 27%.
Eric Hanushek, an economist at Stanford University, argues that replacing just the bottom 5-8% of American teachers with merely AVERAGE performers could move the United States from near the bottom to near the top of the international math and science rankings.
Public Sector Unions – death to thinking
The rigidity of the public sector does not merely reduce the quality of services. It also discourages innovation. In the private sector innovative firms routinely experiment with new business models, measure the success of those models and then expand the successful ones. But whenever public-sector managers have tried to do the same—by establishing magnet schools that focus on certain subjects, or charter schools with longer teaching days, for example—the unions have opposed them. Rabidly.
Greed Kills – How the Unions chewed off the teat that fed them. Public-sector unions now face the biggest challenge in their history. Governments almost everywhere—particularly in the rich world—are being forced to cut back public spending. Many governments (for example in Ireland, Greece and Spain) are cutting public-sector pay. Others (for example in Japan and America) are freezing it. Greece is increasing the retirement age from 58 to 63 and making it possible to fire public servants. Britain is cutting government departments by as much as a quarter, and is reviewing pensions.
In the United States several rising Republican governors are keen to turn the short-term struggle over pay and benefits into a bigger battle about trade-union power. New Jersey’s Chris Christie and Minnesota’s Tim Pawlenty have both eagerly taken on the new “privileged class” of public-sector workers. Do the public exist to serve public-sector workers with their high pay and inflated benefits, they ask, or do public-sector workers exist to serve the public?
Tellingly enough, even people on the left are beginning to echo these complaints. Andrew Cuomo, the incoming Democratic governor of New York, is rattling his sabre against public-sector unions despite the fact that they make up an important part of his base. Davis Guggenheim, an impeccably liberal film director whose credits include Al Gore’s “An Inconvenient Truth”, subjected the teachers’ unions to a merciless critique in “Waiting for Superman”, flagellating them for perpetuating a broken system and presenting Randi Weingarten, the head of the American Federation of Teachers, as “something of a foaming satanic beast”, as one reviewer put it.
The unions have responded by proclaiming war on cost-cutting governments. They have already organized strikes and protests. Millions of French workers marched against Nicolas Sarkozy’s modest plans to raise the retirement age by two years. Hundreds of thousands of people have taken to the streets in Ireland and Greece against austerity measures. London Underground workers have repeatedly paralyzed transport in the city. Cities across the US needed to be fumigated after the Occupy Whatever Flea Party came through town after town.
Despite all the bloviating “take them out” references by the likes of Hoffa and the putrid acts of the OWS fleabags, public-sector unions will find it hard to win these battles in the long run. Or even the short run.
They have not been particularly successful in mobilizing public anger, considering the scale of the cutbacks, nor have they notched up any notable victories. The Greek and Irish governments have implemented their austerity packages and Nicolas Sarkozy has raised the retirement age in France. They are also discovering that many people in the private sector regard their public-sector colleagues as an overprivileged, underworked remora on the belly of productive society. Spanish civil servants were shocked at how little support they got when, last June, they protested against a 5% cut in pay. And a recent poll showed that 65% of people in stick-in-the-mud Greece want civil servants to lose their job security.
The pressure to rationalize the public sector is likely to continue in coming years. The debt level in OECD countries is expected to rise to 120% of GDP by 2014, thanks to a combination of ageing populations and inherited obligations, some of them driven by the public sector’s insatiable appetite for pensions. Joshua Rauh, of the Kellogg School of Management at Northwestern University, reckons that seven American states will have exhausted their pension assets by 2020. America itself will have its debt level over 108% of GDP – not far off from Greece in a year or two.
Check your boots for cling on poop.
It would be a mistake to write off the public-sector unions. They are masters of diverting attention from strategic to tactical questions. Undoubtedly the unions will lose some of their privileges over the coming years; the scale of the debt crisis makes this inevitable. But will governments have the courage to tackle the root causes of the problem (such as pensions) rather than dealing with secondary problems (such as wages)?
And will they dare to tackle questions of power rather than just pay and perks? If they are to claim victory in the coming fight, they need not just to restore the public finances to health - rather they need to remove the tiger grip of mediocrity placed around the necks of scociety by the uions and the limp souled politicians that support them.
Buy union made? I'd rather go without.
