In New York, a Private/Public Sector Union Rift

The fact that government employee unions have been at the center of budget debates across the nation underscores their outsize influence on state and local government expenditures. Many states and municipalities face budget shortfalls so serious that even traditionally labor-friendly Democrats are having to confront the significant costs that unionization of the public workforce imposes. In some states, such as Rhode Island, Democratic politicians have implemented reforms in the face union opposition.

Now government unions seem to be experiencing strain in their relationship with another traditional ally: their private sector counterparts. In New York, a group of building trade unions have contributed to an organization that has backed Democratic Governor Andrew Cuomo in his efforts to gain concessions from his state’s government employee unions. As The New York Times reports:

Backed with millions of dollars in contributions from business, the Committee to Save New York has been Gov. Andrew M. Cuomo’s most important ally in his battles with public-sector unions over government spending, pensions and teacher accountability.

But the committee turns out to have another source of money: a group of building trade unions who contributed $500,000 last year. Their decision to back Mr. Cuomo — and help finance an offensive against their public-sector brethren — illuminates a deepening fissure in the labor movement.

Labor officials said the union contributions to the business group in 2011, which were revealed in records filed with the federal Labor Department and interviews with people familiar with the donations, reflected workers’ deep unease about a slowdown in the construction industry in New York and their hope that Mr. Cuomo and the business committee could persuade voters and lawmakers to support publicly financed building projects and encourage growth.

Therein lies the conflict. While private sector unions cannot go so far in their demands that they drive an employer out of business, government unions face no such brake. As a result, public sector unions have been intransigent in the face of elected officials’ requests for concessions to help close budget gaps. That runs counter to the interests of private sector unions that depend on a sound business environment where their members can find work.

However, government unions  are down but not out. In the auto industry, government intervention has blurred the line between the private and public sectors. The United Auto Workers may have undermined General Motors’ and Chrysler’s competitiveness, but never paid the consequences for it, thanks to federal bailouts. ObamaCare threatens to aggravate that situation, as government inserts itself more into the health care industry.

All of this gives some large private sector unions an incentive to organize public sector workers, as the Teamsters are now doing.

Two and half years ago, the number of union members in government overtook that in the private sector for the first time. Given unions’ increasing difficulty in remaining viable in the private sector, government’s share of total union membership is only likely to grow.

For more on public sector unions, see here and here.