The cronyism between big-labor and big-government is costing taxpayers billions

By Michael Schaus
  • Tuesday, May 3, 2016
As labor unions increase control, taxpayers pay the price

For the last half century American labor unions have been increasing their control over local and state governments by colluding with big-government advocates to create laws that protect their influence.

And taxpayers have been paying the price.

A new study by The Heritage Foundation — coauthored by Nevada Policy Research Institute’s former director of research, Geoffrey Lawrence — shows that this crony relationship between big government and big labor results in big costs for local budgets.

When Nevada passed its first collective bargaining law in 1965, it expressly prohibited government from engaging in collective bargaining. Had the Silver State simply maintained that prohibition on public-sector unionization, state and local spending in 2014 would have been between $1 billion and $1.8 billion lower.

In states that have mandatory collective bargaining laws, the difference was even greater. Nationwide, if union membership was simply made voluntary, state and local governments would have been able to save between $127 and $164 billion in 2014 alone.

As impressive as these numbers are, the study shows more than just raw data. It highlights the cronyism inherent in collective bargaining laws, and quantifies the burden taxpayers carry for this marriage between big government and big labor.

By their very nature, public sector labor unions — tasked with “protecting” the interests of public sector workers — are dedicated to growing both the size and cost of local and state governments. It’s not necessarily some nefarious conspiracy. It’s merely self-preservation. As the size and cost of government continues its upward trajectory, so do the union’s membership and collected dues.    

When representing workers in the private sector, union bosses must balance their demand for more generous collective bargaining agreements with the company’s ability to turn a profit. Refusing to do so, after all, results in the employer being fiscally incapable of employing any additional labor.

But in government, where a seemingly endless supply of taxpayers fund operations, there is no such organic cap on what the unions can, and often do, demand. While private businesses are limited by the amount of cash they bring in, governments are only limited by the amount they can tax.

And as we know all too well in Nevada, politicians seem perfectly willing to raise taxes.

It’s no surprise then that the burden government has placed on taxpayers has grown exponentially along with the rise of public sector unionization. While this study supplies us with hard data, the theory has been around as long as unionization.

In fact, even the most stalwart union-sympathizers — such as Franklin D. Roosevelt — warned against government-sector unionization early in the 20th Century. Nevada’s first collective bargaining law also reflects this common-sense apprehension about public sector labor unions.

Considering that such a ban on public-sector collective bargaining could have saved Nevada more than $1 billion in 2014 alone, maybe it’s time taxpayers begin paying closer attention to big labor’s influence over, and collaboration with, big government.

 

You can access the study by clicking here.

Watch The Heritage Foundation’s full panel discuss the findings of the study by clicking here.

 

Michael Schaus is communications director of the Nevada Policy Research Institute, a nonpartisan, free-market think tank. For more visit http://npri.org


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