Category Archives: Labor Unions

The Great Recession, The Resulting Budget Shortfalls, The 2010 Elections And The Attack On Public Sector Collective Bargaining In The United States

Source: Kenneth Glenn Dau-Schmidt & Winston Lin, Hofstra Labor & Employment Law Journal, Volume 29, No. 2, Spring 2012

The institution of collective bargaining is under serious attack in the United States.

American public sector unions and collective bargaining have been subjected to a vicious attack under the auspices of balancing government budgets, promoting “equity” between private and public employees, and limiting the impact of “special interests” on government policy. The American and world financial crisis of 2007 resulted in the Great Recession of 2008 and substantial budget shortfalls for local and national governments worldwide. This financial crisis and the resulting disintegration of aggregate demand and employment are eerily similar to the financial crisis and collapse that led to the Great Depression of the 1930s. However, unlike the calamity of the 1930s, in the present emergency, American conservatives, funded by the moneyed class, are attempting to use the predicament as an opportunity to attack collective bargaining and other institutions of support and power for the American middle class. This grasp for power represents an assertion of power and control by the American upper class not experienced since the rise of scientific management, the deskilling of jobs, and the destruction of the trade union system of collective bargaining in the 1890s.

In this paper, we outline the recent attack on public sector unions’ power in the American economy and the accompanying changes, as well as proposed changes, in American law. We will briefly describe the impact of the recent financial crisis on the American economy, the balance sheets of American state and national governments, and the opportunism of the American plutocracy in using this crisis to propose and enact legislation to undermine the institution of collective bargaining and political proponents for the middle and lower classes. In particular, we will discuss the recent efforts in Indiana, Wisconsin, Ohio, and Michigan to severely limit or prohibit public sector collective bargaining and the political influence of American public sector workers. This attack on collective bargaining constitutes the largest grab for economic and political power by the American upper class since the destruction of the labor guilds in the 1890s and the rise of the “Gilded Age” in the late nineteenth and early twentieth century.

Who Sits at the Table in the House of Labor? Rank-and-File Citizenship and the Unraveling of Confederal Organizations

Source: John S. Ahlquist, Journal of Law, Economics, and Organization Volume 28, Issue 3, August 2012
(subscription required)

From the abstract:
Labor unions, religious denominations, political interest groups, and others often aggregate the interests of their members through confederally structured organizations. But governance rules, central authority, scale of membership, and scope of activity vary across time and organizations. Furthermore, unlike citizens of federally organized nation-states, individual members are rarely direct (voting) members of confederal organizations. I present a simple model of public goods provision under the threat of exit showing that distributive conflict over the appropriate balance between the gains from cooperation available in confederal organizations with the loss of control for individual groups can explain this variation in governance as well as the infrequent enfranchisement of the rank-and-file at the confederal level. I illustrate my conclusions with a comparative examination of the origins and development of the Knights of Labor and American Federation of Labor. I conclude with some observations about the recent schism in the American labor movement.

Privatizing Government Services in the Era of ALEC and the Great Recession

Source: Ellen Dannin, University of Toledo Law Review, Vol. 43 no. 503, Spring 2012

From the abstract:
Events in 2010 and 2011 suggested that we were headed on a privatizaton trajectory.

The American Legislative Exchange Council (ALEC) burst onto the scene, with privatization of public services as a major focus. On March 11, 2010, newly elected New Jersey Governor Chris Christie responded to the state’s financial crisis by issuing an executive order creating a privatization task force – popularly known as the “Zimmer Commission” – to address the state’s financial crisis. The executive order’s list of reasons for creating the Task Force included being “hindered by legal impediments, many of which were needlessly self-imposed by the prior administration”; agreeing to “an unreasonable “memorandum of agreement” (“MOA”) that purports to prevent the State from taking common sense management approaches to achieve personnel efficiencies in the near term”; “delaying previously negotiated wage increases until after the end of the prior administration has resulted in the State having reduced flexibility to manage its workforce and effectively increased the costs that will be associated with achieving near-term savings by ensuring rounds of litigation in order to preserve basic managerial prerogatives with respect to the size and composition of the State workforce”; and “needlessly” limiting the flexibility needed “to manage its wage and salary payments and the size of its workforce “…while simultaneously preventing meaningful managerial control of the State workforce.” And New Jersey was not alone.

This article examines attacks on public sector employees, the operation of ALEC, and the effects ALEC bills would have on teachers, unions, and education if enacted.

Symposium: Public Employment in Times of Crisis

Source: ABA Journal of Labor and Employment Law, Volume 27, Number 2, Winter 2012
(scroll down)

From the editor’s page:
…The 2011 legislatures acted in the midst of some of the most difficult economic conditions for state and local governments in many years. Politicians enlisted the support of taxpaying opponents of government spending, arguing that public workers are overpaid, underworked, and far too secure in their employment. Critics, however, argued that Republican officials took advantage of economic conditions to enact restrictions for political reasons, including a desire to weaken unions that have been strong supporters of the Democratic Party. The articles in this issue, written by speakers at a symposium entitled Public Employment in Times of Crisis, sponsored by the Labor Law Group, the University of Richmond School of Law and Center for Leadership in Education, and the American Constitution Society, shed light on the intensive debate about the legal and policy issues relating to public employment….

Articles include:
• The Legislative Upheaval in Public-Sector Labor Law: A Search for Common Elements
By Martin H. Malin
• The Constitutional Dimension of Unilateral Change in Public-Sector Collective Bargaining
By Stephen F. Befort
• Public Pension Benefits Under Siege: Does State Law Facilitate or Block Recent Efforts to Cut the Pension Benefits of Public Servants?
By Eric M. Madiar
• Discipline and Discharge of Public-Sector Employees: An Empirical Study of Arbitration Awards
By Laura J. Cooper
• The Impact of Employee Performance in Adverse Actions in the Federal Sector
By Susan Tsui Grundmann
• The Effect of Pension Accounting Rules on Public-Private Pay Comparisons
By Andrew G. Biggs and Jason Richwine
• State and Local Public Employees: Are They Overcompensated?
By Jeffrey H. Keefe
• Evolution of Public-Sector Retirement Plans: Crisis, Challenges, and Change
By Robert Clark
• The Sheathed Sword: Public-Sector Union Efficacy in Non-Bargaining States
By Ann C. Hodges and William Warwick
• The Wisconsin Public-Sector Labor Dispute of 2011
By Paul M. Secunda
• Untested Assumptions in NLRB Proceedings
By Phoebe Taurick
Related:
UR School of Law – Public Sector Employment in Times of Crisis Conference – Panel 1a: Public Employee Compensation – Public Sector Pensions in Crisis

UR School of Law – Public Sector Employment in Times of Crisis Conference – Panel 1b: Public Employee Compensation : Excessive or Inadequate?
UR School of Law – Public Sector Employment in Times of Crisis Conference – Panel 2: Collective Bargaining, Existing Frameworks and Recent Changes
UR School of Law – Public Sector Employment in Times of Crisis Conference – Panel 3: The Constitutional Framework for Public Employment
UR School of Law – Public Sector Employment in Times of Crisis Conference – Panel 4: Education Reform: The Role of Teachers
UR School of Law – Public Sector Employment in Times of Crisis Conference – Panel 5: Public Employee Job Security and Termination

Making Labor Pay: Recent battles in Wisconsin and San Jose show why we need universal pensions

Source: Katherine Sciacchitano, Dollars & Sense, no. 302, September/October 2012

The political economy of the recovery is making the United States even more unequal than it was during the bubble years. Incomes fell across the board during the crisis: median family income is 6.3% below what it was in 2001. But the top 1% garnered 93% of income growth in the first year of recovery. Housing, still the main source of wealth for middle-income families, remains depressed while stocks are close to pre-crash highs. Moreover, the drive for more tax cuts for the wealthy continues. And policy initiatives to cut Social Security, Medicare, and Medicaid would weaken the safety net even as it is most needed.

A spate of attacks on state and local public-sector pensions now threatens to make inequality even more entrenched and painful, and to undermine both short- and long-term economic growth.

The power of labor is dead center in this agenda. Despite a long-term decline in workers covered by union contracts, unions have over 16 million members: they are still the social force most capable of combating the assault on workers’ incomes and militating for greater equality. Crippling their political power therefore remains both a tactical and a strategic objective on the right. With only 6.9% of workers in the private sector covered by union contracts, versus 37% in the public sector, public-sector unions are bearing the brunt of the attacks. And public pensions are the battering ram.

Measuring the Effect of Public-Sector Unionization on Criminal Justice Public Policy

Source: Derek Cohen and Jay Kennedy, University of Cincinnati, November 2012

From a press release:
…UC’s Kennedy and Cohen used a range of data going back as far as 15 years to test three broad impacts that popular wisdom sometimes ascribes to unions. They examined
– whether what’s called “public choice theory,” another way of saying that individual voters vote to benefit themselves, can be applied to collective bargaining units. “Public choice theory” stands in opposition to “communal will theory,” where it’s posited that individual voters opt for the good of the many or group vs. their own individual goods.
– whether unions associated with the criminal justice system engage in “competitive rent seeking,” seeking to maximize specific expenditures into the criminal justice system above and beyond a cost-recovery level in order to benefit specific unions, say a police vs. a corrections union.
– whether states with more liberal ideologies are likely to have smaller per-capita prison populations, and, alternately, whether states that are less liberal have higher incarceration rates. (The researchers are interested whether more-liberal states with stronger unions associated with the criminal justice system might not have harsher laws/sentencing requirements as a means of “guaranteeing concentrated benefits” or prosperity for unions associated with the criminal justice system.)….

…In their research, Kennedy and Cohen found that, yes, when unions associated with the criminal justice system make expenditures related to state issues, there is a broad, diffuse impact. In other words, if one union spends to support an issue benefiting functions in the criminal justice system, the state’s broad public safety sector is likely to generally benefit in the form of more funding, but not necessarily the specific union or sector that made the expenditure….Correspondingly, they found no evidence that competitive rent seeking was taking place. In other words, there is no lion’s share of the spoils (in the form of jobs) going to any specific union making expenditures on behalf of a state issue. So, in general, a specific union making ballot initiative expenditures will not see a relative increase in employment numbers one year on….

Organized Labor, Democracy, and Life Satisfaction: A Cross-National Analysis

Source: Lauren Keane, Alexander Pacek, Benjamin Radcliff, Labor Studies Journal, Vol. 37 no. 3, September 2012

From the abstract:
In this paper we attempt to assess how labor unions affect cross-national variation in life satisfaction. We argue that cross-national differences in the extent of labor organization play a significant role in determining why citizens in some nations express greater subjective satisfaction with life than others. We examine this proposition using data on nations that cover the political and economic spectrum. To anticipate our findings, we show that individual union membership has a consistent positive effect on individual well-being. Our main focus, though, is the effects of the national level of union density on the general, overall level of satisfaction within a country, considering both union members and nonmembers. We find that union density is strongly associated with the general level of well-being but that this effect is conditioned, as we expect, by the level of democracy: in democratic countries, union density produces greater levels of life satisfaction, while in highly authoritarian settings, it appears to reduce satisfaction. In each case, these effects obtain for members and nonmembers alike, thus highlighting the importance of labor unions for the general, overall level of quality of life across nations

The Rise of the Super-Rich: Power Resources, Taxes, Financial Markets, and the Dynamics of the Top 1 Percent, 1949 to 2008

Source: Thomas W. Volscho and Nathan J. Kelly, American Sociological Review, Vol. 77 no. 5, October 2012
(subscription required)

From the abstract:
The income share of the super-rich in the United States has grown rapidly since the early 1980s after a period of postwar stability. What factors drove this change? In this study, we investigate the institutional, policy, and economic shifts that may explain rising income concentration. We use single-equation error correction models to estimate the long- and short-run effects of politics, policy, and economic factors on pretax top income shares between 1949 and 2008. We find that the rise of the super-rich is the result of rightward-shifts in Congress, the decline of labor unions, lower tax rates on high incomes, increased trade openness, and asset bubbles in stock and real estate markets.

We Can't Win This on Our Own: Unions, Firms, and Mobilization of External Allies in Labor Disputes

Source: Marc Dixon, Andrew W. Martin, American Sociological Review, Published online before print October 18, 2012
(subscriotion required)

From the abstract:
To cope with steep losses in membership and eroding legal protections, some unions have begun to look outward for help. Scholars likewise point to broad-based coalitions as a potential route to labor’s revitalization. Yet surprisingly little is known about union coalition work, from when and why it occurs to what union allies typically bring to the table. We take up these issues with a unique dataset on strike events from the 1990s and 2000s, contributing to labor and social movement research. First, we show that despite considerable academic interest in union outreach to other social movements, this phenomenon remains fairly rare. Second, our findings demonstrate how the immediate threat to unions posed by employer intransigence matters not just for the mobilization of external allies, as the social movement literature would expect, but also for the assistance brought to bear by those allies, which has received relatively little attention from scholars. Third, although we find important distinctions in unions’ propensity for outreach, results suggest a more nuanced picture of union activity than previously conceived. In various ways during strike events, both social movement unions (typically highlighted in the literature) and declining industrial unions are turning to coalition partners.