Big Labor Monopoly Leads to Fiscal Disaster Across the U.S.A.
(download the June-July 2016 NRTWC Newsletter)
In 1998, public-sector union bosses and lobbyists arm-twisted elected officials in the Commonwealth of Puerto Rico into handing Big Labor statutory monopoly-bargaining power to negotiate municipal employees’ working conditions.
At the time, the union-label politicians who bore the responsibility for adopting the monopoly-bargaining law vowed that it would not hurt taxpayers or undermine the territory’s solvency.
But over the past 18 years, it has become increasingly clear that all such promises were hollow and, frankly, wrong. As multiple national media reports have pointed out over the past few months, Puerto Rico is now struggling under the weight of $72 billion in debt.
Public officials desperately need to cut the territory’s heavily unionized government payrolls, which now consume more than two-thirds of the commonwealth budget.
Also absolutely critical are labor-policy and regulatory reforms to halt the secular shrinkage of the entire territorial workforce.
The commonwealth’s total payroll employment decline of 14.4% from 2005 to 2015 is a major reason why Puerto Rico can’t pay its bills. And rather than remain jobless, a substantial share of Puerto Rico’s working-age population has moved to the mainland.
Puerto Rico’s Working-Age Population Decline Is Far From Unique
“While Puerto Rico undeniably has several unique problems, its debt crisis stems primarily from the same source as the fiscal and job-climate woes of many states: government-promoted forced unionism,” said Mark Mix, president of the National Right to Work Committee.
“And although Puerto Rico’s fiscal downfall is now at a more advanced stage than that of any state, a number of states where compulsory unionism is entrenched are manifestly headed in the same direction.
“In some regards, Puerto Rico is actually in less dire shape than several of its mainland counterparts.
“For example, according to the U.S. Census Bureau, from April 2010 to July 2014, the number of Puerto Rico residents in their peak-earning years, aged 35-54, fell by 5.7%.
“Over that same period, 12 forced-unionism states suffered even steeper declines in their peak-earning year population. For example, Big Labor-controlled Ohio endured a 6.6% decline in 35-54 year-old population.
“In forced-unionism Pennsylvania, there was a 6.7% drop. And in non-Right to Work Vermont, the peak-earning-year population plummeted by 9.8%!’
Lack of Right to Work Protections Makes Economic Recovery Extremely Difficult
“What Puerto Rico, Ohio, Pennsylvania and Vermont all need,” Mr. Mix noted, “is Right to Work protections for all types of employees and legislative rollbacks of union monopoly bargaining in the government sector.
“Decades of experience show that, as long as Big Labor has compulsory-unionism privileges, it will virtually always wield them to elect and reelect Tax-and-Spend, business-bashing politicians and perpetuate counterproductive work rules and outrageous featherbedding in government workplaces.
“Since Puerto Rico’s Government Development Bank defaulted on a $422 million loan payment last month, the pressure on the U.S. Congress to bail out the commonwealth has intensified.
“It’s critical that Capitol Hill leaders and rank-and-file members avoid punishing taxpayers across the U.S. for poor governance in Puerto Rico.
“Instead, Congress must encourage public officials in Puerto Rico to rein in monopolistic government unionism and implement other reforms that will make it possible once again for the commonwealth to attract jobs for its residents and pay its bills.