PI Original Ellyn Fortino Monday October 19th, 2015, 4:34pm

Report Makes Case Against Restricting Public-Sector Collective Bargaining Rights

In a new report, Jeffrey Keefe with the Economic Policy Institute blasts the notion that collective bargaining has caused "excessive" pay for public-sector workers. 

As Illinois Gov. Bruce Rauner continues to press state lawmakers to approve union-weakening policy proposals on his pro-business "Turnaround Agenda," a new report finds that laws allowing public employees to collectively bargain "have not led to excessive public-sector pay."

"For 55 years, people have been saying that the right to strike would have huge consequences and that public-sector unions would distort the budgets of their agencies," said report author Jeffrey Keefe, a research associate at the Economic Policy Institute, a liberal think tank based in Washington, D.C. 

"Neither of these fears has played out. Public employees in states that have permitted collective bargaining have seen relatively small pay increases, and in many cases, the public employer has retained considerable power."

Between 1960 to 2010, the share of public-sector workers in the United States with collective bargaining rights increased from 2 percent to 63 percent, the research showed.

"Collective bargaining has resulted in higher public-employee wages in the range of 5 percent to 8 percent," Keefe, a former professor at Rutgers University's School of Management and Labor Relations, wrote in the report.

Keefe's research further showed that public employees who have the right to strike earn 2 percent to 5 percent more than their counterparts who do not.

As of 2010, 20 percent of public employees had the right to strike, not including public-safety workers, many of whom are covered by binding interest arbitration.

After a labor contract expires, binding interest arbitration is used to prevent worker strikes and settle disagreements between a public employer and employee union over a new agreement. Under such a procedure, an arbitrator's decision on a labor dispute is binding.

Binding interest arbitration, according to the report, is associated with public worker wages that are 3 percent to 4 percent higher than mediation, another form of dispute resolution. Among public employees covered by collective bargaining, binding interest arbitration had no wage effect when compared with mediation.

Through mediation, labor disputes can be resolved with the help of a neutral third party. A mediator does not decide labor disputes.

Fact-finding, or non-binding arbitration, is another method of resolving labor disputes. The procedure "tends to favor the public employer" and is associated with a decrease in public worker wages of between 2 percent to 5 percent compared to other forms of dispute resolution.

"Critics of public-sector collective bargaining based on the private-sector model have raised concerns that it could result in distortions of democracy that would shift governmental resources disproportionately toward public-employee compensation and result in the overemployment of economically and politically advantaged and powerful groups of public employees," Keefe wrote. "This fear was never realized. The full private-sector model was never transplanted. The various state public labor laws that permitted collective bargaining resulted in relatively small pay increases for public employees. In many circumstances, even where there is a duty to bargain, the public employer has retained considerable power by adopting laws that provide for mediation and fact-finding as the final steps in dispute resolution."

Bob Bruno, professor of labor and employment relations at the University of Illinois at Urbana-Champaign, said the report's overall findings "track very closely" with other research on the subject.

"It's a cautionary note that if, in fact, you weaken collective bargaining rights in the public sector, you are, in fact, going to further disadvantage public-sector employees, in comparison to opportunities to work in the private sector," Bruno said. "There's already a bit of a wage penalty when you work in the public sector, though it's somewhat traded off because of benefits."

EPI's research on collective bargaining and public-employee compensation comes during the fourth month of the state budget standoff in Illinois. Rauner and Democratic leaders remain at odds over a spending plan for the 2016 fiscal year, which began July 1.

Rauner has been using the budget process in an effort to install policies from his controversial pro-business, anti-union agenda. He wants a budget agreement to include limits on collective bargaining in the public sector as a means to control costs.

Under the governor's union-related proposal, which is vehemently opposed by Democrats, local governments could eliminate collective bargaining with public-sector unions over wages, retirement benefits and other working conditions.

Bruno raised concerns about policies that limit collective bargaining in the public sector.

"Efforts to restrict collective bargaining rights in the public sector, they don't solve a problem, frankly, and they just do damage to the quality of the workforce that would be attracted to public service," he said. "And to do anything that further weakens or further reduces the level at which (public-sector workers are) compensated ... It's a very risky venture."

"Bargaining in the public sector is not a burden on the treasury. It doesn't lead to over-paid workers, so you're not solving an economic problem by attacking bargaining rights in the public sector," Bruno added. 


Franklin D. Roosevelt, who wrote in an Aug. 16, 1937 a letter to Luther Steward, the president of the National Federation of Public Employees"

"All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management. The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations. The employer is the whole people, who speak by means of laws enacted by their representatives in Congress."

"Since their own services have to do with the functioning of the Government, a strike of public employees manifests nothing less than an intent on their part to prevent or obstruct the operations of Government until their demands are satisfied. Such action, looking toward the paralysis of Government by those who have sworn to support it, is unthinkable and intolerable."

Read the press conference here:


Log in or register to post comments