If the trade unionist Jimmy Hoffa were alive today, he would probably represent civil servants. When Hoffa’s Teamsters were in their prime in 1960, only one in ten American government workers belonged to a union; now 36% do. In 2009 the number of unionists in America’s public sector passed that of their fellow members in the private sector. In Britain, more than half of public-sector workers but only about 15% of private-sector ones are unionized.
There are three reasons for the public-sector unions’ thriving. First, they can shut things down without suffering much in the way of consequences. Second, they are mostly bright and well-educated. A quarter of America’s public-sector workers have a university degree. Third, they now dominate left-of-centre politics. Some of their ties go back a long way. Britain’s Labor Party, as its name implies, has long been associated with trade unionism. Its current leader, Ed Miliband, owes his position to votes from public-sector unions.
At the state level their influence can be even more fearsome. Mark Baldassare of the Public Policy Institute of California points out that much of the state’s budget is patrolled by unions. The teachers’ unions keep an eye on schools, the CCPOA on prisons and a variety of labor groups on health care.
In many rich countries average wages in the state sector are higher than in the private one. But the real gains come in benefits and work practices. Politicians have repeatedly “backloaded” public-sector pay deals, keeping the pay increases modest but adding to holidays and especially pensions that are already generous.
Reform has been vigorously opposed, perhaps most notoriously in education, where charter schools, academies and merit pay all faced drawn-out battles. Even though there is plenty of evidence that the quality of the teachers is the most important variable, teachers’ unions have fought against getting rid of bad ones and promoting good ones.
As the cost to everyone else has become clearer, politicians have begun to clamp down. In Wisconsin the unions have rallied thousands of supporters against Scott Walker, the hardline Republican governor. But many within the public sector suffer under the current system, too.
John Donahue at Harvard’s Kennedy School points out that the norms of culture in Western civil services suit those who want to stay put but are bad for high achievers. The only American public-sector workers who earn well above $250,000 a year are university sports coaches and the president of the United States. Bankers’ fat pay packets have attracted much criticism, but a public-sector system that does not reward high achievers may be a much bigger problem for America.
