State Monopoly-Bargaining Laws Closely Correlated With Higher Taxes

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For many years, observers of American public policy-making have recognized that Big Labor officials, and especially the bosses of government-sector unions, are our country’s most powerful lobby for Tax-and-Spend politics.

In an early 2011 Wall Street Journal op-ed, for example, Steven Malanga of the Manhattan Institute pointed to union officials’ use of dues and fees that public employees were forced to fork over as a job condition “not only to run their daily operations but to wage political campaigns in state capitals and city halls.”  (Thanks to the U.S. Supreme Court’s 2018 Janus decision, argued and won on behalf of an independent-minded Illinois civil servant by National Right to Work Legal Defense Foundation staff attorney Bill Messenger, forced financial support for a union as a condition of public employment is today no longer legally permissible anywhere in the U.S.)

Malanga went on to say:

[P]ublic-sector unions especially have become the nation’s most aggressive advocates for higher taxes and spending. They sponsor tax-raising ballot initiatives and pay for advertising and lobbying campaigns to pressure politicians into voting for them. And they mount multimillion dollar campaigns to defeat efforts by governors and taxpayer groups to roll back taxes.

While government union chiefs push hard for higher taxes and more public spending in all 50 states, they naturally do so with greater success in states that authorize and promote union monopoly bargaining over public workers’ terms and conditions of employment.

Well over 30 states legally require public employers, under certain conditions, to recognize a government union as the “exclusive” (monopoly) bargaining agent for their employees with regard to pay, benefits, and work rules.  On the other hand, two states, North Carolina and Virginia, have statutory prohibitions against any government-sector bargaining.  And a number of others states, including Arizona, Arkansas, Colorado, and South Carolina, have no statewide statute or state constitutional provision forcing any category of government employer to engage in any form of bargaining with any union.

One rough, but useful gauge of how much coercive power public-sector union kingpins wield in any state is the share of public servants who are subject to union monopoly bargaining as reported in the Union Membership and Earnings Data Book, edited by labor economists Barry Hirsch and David Macpherson and published by Bloomberg BNA.

By simultaneously reviewing government-union-density data for 2016 supplied by Hirsch and Macpherson and data on state-and-local tax collections for that same year as reported by the nonpartisan Tax Policy Center, one may get a grasp of just how valuable monopoly-bargaining privileges are for Big Labor bosses who want taxes and government spending to be higher.

Among the 17 states with the highest share of public employees under union monopoly control, state and local taxes combined consumed 11.0% of all personal income in 2016.  That represents an aggregate state-and-local tax burden 22% heavier than the aggregate burden for the 16 states ranking in the middle for monopoly-bargaining density, and 26% heavier than the average for the 17 states where government union bosses wield the least coercive power over public employees.

In other words, every year, residents of government-union-stronghold states have to work an average of an extra week, plus an extra Monday after that, just to pay off their state and local taxes, compared to residents of states where relatively few if any public employees are forced to accept union representation, like it or not, in order to keep their jobs.

Eight of the 10 states with the heaviest aggregate state-and-local tax burdens are high government-union-density states.  In stark contrast, just one of the the 15 states with the heaviest overall state-and-local burdens is a low-government-union density state.

What quality services do residents of Big Labor-dominated states get in exchange for paying higher taxes?  A carefully conducted 2018 study for the Cato Institute by economist Stan Liebowitz and research fellow Matthew Kelly found that six of the nine states where ethnically and racially diverse students do best relative to how much schools spend — Texas, Virginia, Arizona, Georgia, North Carolina and Colorado — either expressly prohibit or do not statutorily authorize union monopoly bargaining in K-12 public education.  And the other three states in the top nine — Florida, Indiana and South Dakota — have longstanding Right to Work protections for public educators.

Even in states where public employees retain the freedom to deal directly with their employer on workplace matters, government union bosses are a powerful lobby for Tax-and-Spend policies.  But the Tax Policy Center data on state-and-local tax burdens are compelling evidence that state lawmakers can give taxpayers a fighting chance against the pro-government spending union machine by refraining from granting special bargaining privileges to union bosses, or by revoking such privileges if they are already part of state law.

Manhattan Institute scholar and urban-policy specialist Steven Malanga: “[P]ublic-sector unions especially have become the nation’s most aggressive advocates for higher taxes and spending.” Image: pbs.org