The Corrupt Bargain Between Public Unions and Government

Public service unions have turned New York City and State into their own private ATM through political collusion. I have said it before on here on Taxpolitix: this is fraud, extortion, and collusion at the expense of taxpayers. Public employee unions help elect politicians, and those same politicians then negotiate contracts with the unions. Even though they are spending taxpayer money, their allegiance is not to the taxpayers who elected them. It is to the unions that got them into office. This is a clear breach of their fiduciary obligation to work on behalf of the people who hired them. In fact, the NY State Attorney General should pursue these politicians for breach of their fiduciary duty, but realistically, that will never happen because they too are elected by the same progressive politicians and union leadership.

Franklin Delano Roosevelt understood this problem almost 90 years ago. In 1937, Roosevelt wrote to the National Federation of Federal Employees (NFFE) warning that collective bargaining “cannot be transplanted into the public service.” He called public-sector strikes “unthinkable and intolerable.” Why? Because government workers are not bargaining against private owners risking their own money. They are bargaining against taxpayers. New York ignored that warning completely. Today, unions spend heavily on elections and lobbying to help elect friendly politicians. In 1975, Victor Gotbaum of District Council 37 of the American Federation of State, County and Municipal Employees (AFSCME) admitted the reality out loud: “We have the ability, in a sense, to elect our own boss.” At least he was honest about the racket.

The costs are enormous. Public sector contracts in New York include expensive overtime rules, almost impenetrable job protections that make it nearly impossible to fire anyone, and pension benefits that are many times greater than anything seen — or even negotiable — in the private sector.

When negotiations break down, disputes go to compulsory arbitration. Supposedly this process protects the public interest. In reality, these arbitrators are selected by the same partisan interests that negotiated the unfair settlement in the first place. Therefore, arbitrators approve compensation increases far above what comparable workers receive in the private sector.

This entire system is rigged against the taxpayer. The fix is obvious. Collective bargaining for public employees should be sharply limited so that compensation, benefits, and work rules do not exceed what is available in the private sector. In addition, the arbitration process should be reformed with truly impartial arbitrators who are required to focus on private-sector comparisons.

The tipping point is here. Honest leaders must name the collusion, confront the racket, and restore accountability. Taxpayers have paid enough.