Forced Unionism Swells Citizens’ Debt Burden

Government Union Bigwigs Stoke Politicians’ Fiscal Imprudence

(Click here to download the March 2015 National Right to Work Newsletter)

A recent report by State Budget Solutions (SBS) adds to the evidence that government union officials empowered with monopoly-bargaining and forced-dues privileges routinely wield them to jack up governments’ long-term spending commitments.

As a consequence of Big Labor’s compulsory dues-financed lobbying successes, states that give more special privileges to public-sector union officials burden their citizens with more debt as well as heavier taxation.

In the aggregate, state public pension plans are underfunded by $4.7 trillion, according to “Promises Made, Promises Broken 2014,” an analysis by SBS Editor and General Counsel Joe Luppino-Esposito published last November.

Seven States With Highest Pension Liabilities Per Capita Lack Right to Work

That adds up to over $15,000 per American. But debt levels vary sharply from state to state.

And there is a strong negative correlation between a state’s per capita indebtedness and its having a Right to Work law on the books protecting employees from being terminated for refusal to fork over forced union dues or fees to an unwanted union.

The 26 states without such a law last year had an average unfunded pension liability of $18,125 per capita. In contrast, the 24 states with Right to Work laws on the books had a large, but much more manageable average per capita pension liability that is 38% lower.

All of the seven states with the greatest per capita government pension liability (Alaska, Connecticut, Hawaii, Illinois, New Jersey, New Mexico, and Ohio) lack Right to Work laws.

But nine of the 10 states with the lowest per capita pension liability  in 2014 (Arizona, Florida, Georgia, Idaho, Indiana, Nebraska, North Carolina, South Dakota, and Tennessee) were Right to Work states.

The only state among the 10 with the lowest per capita unfunded liabilities that did not prohibit forced union dues in 2014, Wisconsin, actually had adopted a statute in 2011 protecting the Right to Work of all K-12 employees and many other public-sector workers.

Expressed as a share of 2013 Gross Domestic Product by state, the average unfunded pension liability for forced-dues states was 32%, compared to an average of 23% for Right to Work states.

‘We Have the Ability, In a Sense, to Elect Our Own Boss’

National Right to Work Committee Vice President Matthew Leen commented:

“Obviously, Right to Work laws in themselves do not suffice to prevent politicians from making pension promises to government union officials that taxpayers can’t reasonably be expected to fulfill. But they do evidently help keep politicians’ irresponsibility from getting totally out of hand.

“The reason why isn’t hard to see. In jurisdictions where forced union dues and fees are permitted and union monopoly bargaining in the public sector is authorized, union bosses negotiate with government employers over civil servants’ pay, benefits, and working conditions.

“At the same time, government union chiefs funnel a large portion of the compulsory dues and fees they collect into efforts to influence the outcomes of state and local elections.

“And the outcomes of those elections often determine who represents the public at the bargaining table.

“In city after city and state after state, government union bosses wield their forced-dues privileges to amass huge war chests, with which they support and oppose candidates for public office.

“This is what New York City government union chieftain Victor Gotbaum had in mind four decades ago when he boasted, as reported by journalist Ken Auletta, ‘We have the ability, in a sense, to elect our own boss.’

“It is a terrible conflict of interest, which Mr. Gotbaum himself plainly recognized, even though he didn’t hesitate to take advantage of it.

“Mr. Gotbaum retired years ago, but his observation about how monopolistic unionism works in practice is even more pertinent today than when he first uttered it.

“To reassert control over their public-pension obligations and protect taxpayers, states like Alaska, Connecticut, Hawaii, Illinois, New Jersey, New Mexico, and Ohio need first to roll back Big Labor’s forced-unionism privileges. This is an indispensible part of public budget reform.”