The AFL-CIO, the New York Times reported, recently distributed an internal memo warning its members that in several states around the country, Republicans may pursue new laws with the goal of financially starving labor unions. This trend has public employee unions worrying that lawmakers will finally scale back the extent to which unions eat up state budgets.
In New York, newly sworn-in Democratic Governor Andrew Cuomo promises a one-year pay freeze for government workers to combat the state’s fiscal woes.
Ohio’s new governor, Republican John Kasich, is taking on unions by, among other things, looking to ban teachers’ union strikes. “If they want to strike, they should be fired,” Kasich said recently in a speech. “They’ve got good jobs, they’ve got high pay, they get good benefits, a great retirement. What are they striking for?”
Similarly, Scott Walker – the new Republican governor of Wisconsin – wants to take away the right of government workers to collectively bargain contracts. “The bottom line is that we are going to look at every legal means we have to try to put that balance more on the side of taxpayers,” he said recently.
And in California, where the budget and pension crisis has arguably hit the hardest, even Democratic Gov. Jerry Brown is eyeing labor union reforms. He promised to review the benefits packages given to state union workers that account for a large part of the state’s budget shortfall.
One organization involved in union reforms is the American Legislative Exchange Council (ALEC) – an individual membership organization of state legislators. There, task forces comprised of partnerships between public and private members have actually come up with model legislation that promotes bargaining transparency and giving taxpayers a bigger say in contract negotiations, a spokesperson told The Daily Caller.
Their reasoning? “Public employee unions increase the cost of government,” said the spokesperson. “Taxpayers rely on the government to provide services, which allows public employee unions to demand benefits that exceed what would be provided in the private sector.”
The question now is what this will mean for labor unions, especially when as of 2009, 52 percent of their membership were government employees?
“You’ve got a moment right now where people are willing to consider reforms where before that’d be completely off the table,” James Sherk, a policy analyst at the Heritage Foundation told, TheDC. “I think the concern is instead of [unions] being untouchable, that they’re now saying it’s not just possible take them on but it’s now good policy and good politics to take them on.”
He also credits New Jersey Governor Chris Christie for paving the path to make it acceptable to take on labor unions, and for showing that you can be successful at doing so.
According to Sherk, states could start to reform by passing restrictions on collective bargaining and the right to strike, or by either scaling back pensions and retirement benefits, making employees share in the cost, or raising the retirement age altogether.
But no matter what, the way unions have done business is bound to change.
On November 2nd, 26 new governors were elected in the middle of some of the harshest fiscal realities their respective states have seen. The pension crisis in California, for example, is one of the worst in the country. There, the state government has $500 billion in unfunded pension liabilities, and the taxpayers are not only footing the bill to cover current union employees, but retired ones as well.
“The kicker is in the benefits,” Sherk told TheDC, “that guaranteed them much better pension packages and retiree healthcare benefits, for example.”
“Now in theory, if the government was setting aside money for those costs, it would be ok,” he added. “But they didn’t.”