The Wages of Government Unions

The Economist‘s current Lexington column highlights the growing public resentment at the widening disparity between compensation and job security in the private and public sectros — which are largely the result of increasing unionization of government employees. (Subscription required for the Economist link.)

Those who are still employed have seen their wages stagnate and their pensions shrivel in the stockmarket crash. Their health insurance is insecure, but they don’t trust Congress not to make it worse.

Meanwhile, they can see that one group of Americans has been practically unaffected by the recession: government employees. Their hours have not been cut, their benefits are gold-plated and they are almost impossible to sack. In good times, few Americans notice these things, but in bad times, the disparity grates. Cops and firefighters can retire in their 40s and draw defined-benefit pensions for life. With overtime, one tenth of the police in Massachusetts made more than the governor’s annual salary in 2006, according to the Boston Globe. Including benefits, the average employee of New York City makes more than $100,000, according to Forbes, while some Californian prison guards “sock away $300,000 a year”.

And what do taxpayers get for their generosity? The bad bargains get all the publicity. Union contracts force the postal service to pay thousands of unneeded workers to do nothing. In New York, public-school teachers who can’t be trusted to teach but can’t be sacked either are paid to sit and do crosswords.

For more on the effects of public sector unionization, see the study, “Vallejo Con Dios: Why Public Sector Unionism Is a Bad Deal for Taxpayers and Representative Government,” co-authored by University of South Florida economics professor Don Bellante, Public Service Research Foundation president David Denholm, and myself, and published by the Cato Institute.