North Las Vegas is in a financial mess.
Although Gov. Sandoval was able to broker a temporary deal between city officials and union bosses — allowing the city to avoid insolvency for the next year — the city’s long-term obligations still far outweigh its likely future revenues.
Even if the city council voted to raise property taxes all the way up to the legal maximum, the problem would still remain.
The underlying difficulty in North Las Vegas, however, isn’t restricted to that city alone. Instead, the city’s precarious financial position exemplifies what happens when government workers gain powers of legal coercion that allow them to turn the wheels of government for their own benefit.
To understand the phenomenon, it’s helpful to go back to the beginning.
Throughout the early 20th Century, Americans generally supported the rights of workers in private industry to form unions that would advocate in the collective interests of those workers.
When it came to unionization of the public sector, however, even prominent union advocates were opposed.
One such advocate was President Franklin Delano Roosevelt. Just two years after signing the National Labor Relations Act into law, he wrote in a letter to federal employees:
All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into 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 [because] the employer is the whole people.
Roosevelt’s argument rested on the notion that public-sector unionism inserts an unelected and self-interested private group into a privileged position in the process of government, inherently undermining the sovereignty of the people in a democratic republic.
Nevertheless, when union participation among private-sector workers began to decline in the second half of the century, national union leaders looked for new ways to sustain their own salaries. So they bucked the traditional view and began recruiting government workers.
AFSCME led this change in focus and was admitted to the AFL-CIO in 1955. Although AFSCME had already brokered collective bargaining agreements with several local governments in its home state of Wisconsin, no laws in the nation required public employers to engage with union representatives. The AFL-CIO gave AFSCME a national platform to advocate for policymakers to grant union leaders these legal powers of compulsion.
The first successes were at the municipal level, in Philadelphia and then New York. The first statewide law giving union leaders the power of compulsion was in Wisconsin, AFSCME’s home state, in 1959.
Other states were appalled. North Carolina immediately passed a law forbidding any state or local agency within its borders from signing a union contract. Nevada followed suit a few years later.
Both states were controlled by Democrats.
The AFL-CIO, however, lent its support to Democrat presidential candidate John Kennedy in exchange for a campaign promise to facilitate the unionization of federal workers.
Upon winning, Kennedy issued Executive Order 10988, which AFSCME and the AFL-CIO then began to use a model for passing similar provisions within the states. Between 1962 and 1984, 33 additional states joined Wisconsin in granting compulsory powers to union leaders. Union leaders worked almost exclusively through Democrat officials to secure these laws, along the way cementing public-sector unions as a core constituency of the Democratic Party.
Clark County’s teacher union played a major role in bringing such powers to union leaders in Nevada, which became the only state to reverse a prohibition of collective bargaining in favor of compulsory bargaining in 1969. The change was prompted by a long series of teacher-union pickets on the Las Vegas Strip designed to disrupt the state’s most important center of commerce. The ploy worked, as Strip business owners asked lawmakers to mollify the union by giving into its demands.
In the years since, the power to compel local governments to bargain with union officials has been supplemented with forcible dispute-resolution methods — such as binding arbitration — that guarantee union contracts. This leverage has limited the ability of the public to express its will about appropriate compensation levels for public employees through its choice of elected officials.
In fact, government unions’ ability to manipulate the outcome of elections through campaign contributions and explicit advocacy efforts helps to ensure that public-employee compensation will not reflect the will of the people. Thus, cities’ and counties’ public finances are pushed to their limit, and sometimes beyond. That’s the case in North Las Vegas, and other jurisdictions have experienced this problem also.
So what can be done?
The first step is to recognize that Nevada’s current labor laws undermine the democratic sovereignty of the people — just as FDR once observed. Negotiations are held in secret, and the public has virtually no control regarding government spending on personnel compensation. Subjecting these sessions to open-records and open-meetings laws would be a great first step.
Second, collective bargaining should at least be made optional for local governments. The practice could continue in jurisdictions where residents value it, but it would not be imposed on every local government.
Third, genuine democratic unionism would allow government workers to have some say over what union will represent them. Yet, few current workers have ever had that opportunity. That’s because votes to select union representation usually occurred decades ago, before the majority of current workers began their employment. Workers should gain the right to periodically vote on their own union.
All of these changes have worked successfully in other states, and they should mark only the beginning of labor reform in Nevada’s public sector.
If Republicans take on these reforms in 2015, they could help North Las Vegas rescue itself from bankruptcy — while also protecting other jurisdictions from similar catastrophe.
Geoffrey Lawrence is director of research at the Nevada Policy Research Institute, a non-partisan, free-market think tank. For more, visit http://npri.org.