The Commonwealth Foundation, a think tank based in Pennsylvania, has recently released a study entitled “Transforming Labor – A Comprehensive, Nationwide Comparison and Grading of Public Sector Labor Laws.” It ranked every state in terms of the relative power of public sector unions. California, along with tiny Maryland, were the only states that got an F.
If you view the map presented in the Commonwealth study, there is a strong correlation between states controlled by the GOP vs those controlled by Democrats. Nearly all the Democrat controlled states with large urban populations get D grades, with the notable exceptions of Florida (C), and Texas (A). We can perhaps learn something from the outliers – why did Texas get an A and why does Montana get a D? But California is in a class by itself.
When performing this analysis, the studies author, Priya M. Abraham, created a checklist called “State Labor Comparison” that provides criteria for grading each state. California failed in every category:
(1) Is collective bargaining legal for government workers? – Yes.
(2) What items may be negotiated in collective bargaining? – Salaries, Hours, Pensions, Fringe benefits, Other terms.
(3) How are unions certified? – Mandatory card check, Optional card check.
(4) Do unions have a right to exclusive representation of workers? – Yes.
(5) Are there provisions for union release time? – Yes, by law.
(6) Are there union membership opt-out windows? – Written in union contracts.
(7) Are union contract negotiations open to the public? – May be closed.
(8) Is binding arbitration required during collective bargaining impasses? – Yes, for some.
(9) Is there paycheck protection? – No.
(10) Right to Work? – No.
(11) Legality of public worker strikes? – Legal for some.
Most everyone understands the obvious consequences of California’s status as the most enabling state in the U.S. for government unions. By the time most people read this, there is a good chance that Democrats will have captured a super-majority in the state legislature, allowing them to raise taxes at will. Also obvious, decades of increasing political control by government unions has lead to a state judiciary that consistently favors government unions. This happens not only in nearly all cases involving pension reform, but also in those cases addressing education reform. For example, the recent ruling against the Vergara plaintiffs who, gasp, wanted to reform the union work rules that have nearly destroyed public education in California.
There’s a deeper corruption, however, that is less obvious but even more consequential, and that is the effect union controlled government has on California’s business and financial communities. Corporations that want to do business in California understand that all legislation goes through the unions for approval. All of it. So they make deals, and implicit in any deal is that the union agenda – more government pay and benefits, more government employees, and more taxes and borrowing – is never challenged by the business community.
The financial sector also must adapt, and they’ve outdone themselves. In lieu of pension reform or proper bond oversight, financial firms make billions investing money for the union-controlled government pension funds and underwriting government bonds. For any partner at a financial firm in California to advocate pension reform would be financial suicide. They do what they’re told, or they go out of business.
The high-tech community in the Silicon Valley is probably the most tragic example of how government union power has corrupted an industry. A nefarious convergence of interests has evolved between government unions, utility companies, and high-tech entrepreneurs, to create artificial scarcity of land, energy and water. Hiding behind overstated environmentalist concerns, they have imposed de-facto rationing on Californians. This enables tax revenue that might have been used for infrastructure to instead go to paying government worker salaries and feeding the pension funds. At the same time, it takes the utility rate hikes that might have financed additional infrastructure and feeds it to Silicon Valley “entrepreneurs,” who develop expensive “green” energy solutions, along with systems that eventually will mandate every major household appliance be internet enabled, connected to smart meters, and capable of charging punitive rates if a consumer, for example, runs their clothes dryer at the “wrong” time.
If one refers again to the map showing public union power by state, another correlation becomes clear – union power, generally, is concentrated in states with the highest costs of living. California is again champion in this respect. Artificial scarcity has rendered prices in California for land, energy and water among the highest in the nation. State and local taxes are also among the highest in the nation. California is Exhibit A for how public unions and elite oligarchs have combined forces to create challenges for ordinary people that amount to outright oppression.
If the 2016 election will be remembered for anything, it will be remembered as a time of populist awakening. Americans in unprecedented numbers have registered their discontent with a system they consider rigged. But not once in what was one of the most visible national elections in American history did anyone, anywhere, identify the root cause of government overreach and capitalist corruption: Government unions.
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Ed Ring is the vice president of policy research for the California Policy Center.