Saturday, March 19, 2011

Unions (Part 2)

In an earlier post (already 2+ months ago), I weighed in on the discussion about unions. Since then, anyone paying the slightest attention to the news would have observed a heated national debate on the role of public sector unions, especially in Wisconsin and Ohio. The argument generally breaks down like this:

Pro Public Sector Unions:

-Union negotiated pensions are earned benefits, protected by contract, and therefore ethically and legally should not be cut (though future pension benefits could be re-negotiated).
-Collective bargaining should be a right for workers in any industry. Especially for those providing public service it guarantees  that the workforce has a minimal level of negotiating power to keep salaries and benefits competitive.
-When compared to private sector, why are we asking why public sector "has it so good," instead of asking "why does the private sector have it so bad?" If the public sector unionized workforce has a compensation package that is attractive and the private sector workforce is struggling, shouldn't we be looking for measures to encourage a "race to the top" as opposed to a "race to the bottom?"
-Some public sector employees have already accepted pay freezes, unpaid furloughs, layoffs and other sacrifices. When will the the idea of "everyone pitching in" apply also to the richest sector of the population, who are growing wealth at epic levels thanks in part to government tax and regulatory measures?

Anti-Public Sector Unions, or Pro-Austerity:

-Governments are strapped for cash, and the benefits granted to public sector employees are unreasonable and based on an outdated evaluation of economic conditions.
-Collective bargaining presents a conflict of interest, for the unions are major donors to (mainly Democratic) politicians. Unlike private sector employers who must deliver profits to share-holders, politicians' main stake holders are also those they are supposed to negotiate with (donors and voters). Inflated compensation is the inevitable result of this conflict of interest, and dismantling collective bargaining would eliminate the conditions that give rise to this fiscally damaging decision making framework.
-The public sector unions are anti-competitive, and with their rules and protections make it extremely hard for government to adapt to new economic realities. Public agencies need to be able to change and streamline in order to provide better services and a more reasonable cost to tax payers. 

My assessment:
Is it unhelpful to say both sides are right? The problem with this debate is that neither side has the absolute truth on their side, and so it is impossible to determine whose predictions would actually bear out. A compromise agreement, well designed, could address some of the weaknesses of the current system, but if it is not well crafted it will do nothing beneficial. At the same time, no compromise almost guarantees the losing side's predictions will play out.

The real issue here is that this is NOT the debate most needed at the moment--we have greater systematic flaws that are projecting far more powerfully destructive ripples. Like Michael Porter at Harvard Business School repeatedly says, we need economic strategy. Our school system is outdated in it's entire design, our economy seems to be driven entirely by the interests of oligopolist firms and the uber-rich, we are still engaged in two wars, climate change rages out of control, and the ability to find sustained, national, meaningful discourse in the marketing and PR chatter is insanely difficult. Ultimately, if we discuss the real system wide changes needed to address much larger economic, social and environmental issues, in all likelihood a solution to the public sector union question would emerge naturally. 

Note: I am back from international trips to Israel and Spain, and am still working on getting to a regular posting schedule on the blog. Stay tuned for more on unions, this is definitely not the end of what I have to say on the topic. Also, please comment! Thanks for visiting. :) 

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