Unionized government workers now outnumber unionized workers in the private sector. What does this mean for taxpayers?
Dr. Daniel D’Amico of Loyola University points out, “with collective contracts it is difficult to maintain good incentives for individual job performance.” In other words, better workers get the same wage as lower performing workers. Further, “if a union obtains better terms for its members, then the costs of production paid by employers increase.” The higher production costs will be shifted to the consumer, resulting in higher priced goods and services.
The Cato Institute‘s Chris Edwards analyzes the cost of public-sector unions for our overall economy. Specifically, his statistical analysis shows that the state’s public debt increases as the size of the unionized state workforce increases. Further, Edwards demonstrates that the state’s management quality decreases as the union’s share in the state workforce increases.
Due to their political influence, public-sector unions are not subject to competition and their workers are indirectly granted preferences over non-union members. By relying on government’s preferential treatment, public-sector unions skew market forces: collective bargaining in the public sector creates higher labor costs. Further, states provide lower quality services while taking on increased financial pressures.
In order to safeguard taxpayers’ money, legislators should end their political preference for public unions and limit public unions’ influence by encouraging competition across the public sector. These measures will improve the quality of public services by limiting excessive increases in labor costs and the unnecessary waste of taxpayer money.