Nostalgia for simpler times is natural. There are even people today who say they prefer the simplicity of the Cold War to today’s uncertainties. In their view, things were easier to figure out then; it was them against us.
Those who lived through the Cold War might argue that its joys, and even its simplicity, have been exaggerated. Still, we cannot deny that we now live in a time where simplicity is hard to find.
In economics, for example, analyzing organized labor’s impact is no longer simple. Not too long ago, economic theory could characterize labor unions simply as market-inefficient. Unions restricted the supply of labor to raise wages for its members. This not only reduced employment and output but also raised prices for consumers.
As a society, we might decide that the unions’ market inefficiency was offset by the value of higher wages and better working conditions. But that did not change the economics or make the costs go away. We accepted the often-invisible costs as part of the tradeoff. Life, like economics, was simpler then.
The costs became more visible, and more painful, in the 1970s, when American industries began to feel the heat of global competition. Organized labor, its numbers in decline, shifted the main thrust of its efforts to the public sector and there it successfully organized police officers, firefighters, teachers and other government workers across the country. Its success there institutionalized the restless and uncertain relationship between organized labor and government.
There is no doubt that the unions’ political success in promoting pro-labor workplace laws contributed to their difficulties in gaining new members in the market-driven private sector. Why pay union dues to gain workplace treatment – overtime, minimum wages, etc. – already guaranteed by law?
The government sector, though, enjoys an Oz-like separation from the competitive realities faced in the private sector. As a result, when public-sector unions came to dominate the labor movement they became very active in the area that government understands best: politics.
One of the byproducts of labor’s expansion into the public sector was the “agency-shop agreement” where state legislatures authorize unions to collect fees equal to dues from nonmembers. This is not a big issue when proceeds are used to cover the costs of collective bargaining and membership expansion.
It is a problem, though, when the funds are used to promote political causes with which the nonmember workers disagree. And, in a pattern so familiar to us all, this problem led first to a law, and then a lawsuit.
The U. S. Supreme Court ruled on the matter on June 14th, in the Davenport et al, v. Washington Education Association case. It found that Washington State’s Fair Campaign Practices Act’s provision restricting the use of nonmember fees by public-sector unions is constitutional. The Court’s unanimous opinion stated, “We hold that it does not violate the First Amendment for a State to require that its public-sector unions receive affirmative authorization from a nonmember before spending that nonmember’s agency fees for election-related purposes.”
The ruling was described in some news media as a “slap down” of the Washington teachers union and, by implication, public-sector unions in general. And it was certainly a pointed reminder to public-sector unions that they cannot, like the WEA, ignore laws they don’t like simply by claiming that they inhibit their free speech.
But in many respects the decision targeted our state Supreme Court as much as the union. When the opinion noted parenthetically that, “…the First Amendment does not require the government to enhance a person’s ability to speak,” the sarcasm was clearly aimed at our high court in Olympia. It is one thing for a defendant to concoct a preposterous legal argument; quite another for the highest court in the state to validate it.
Our state’s Supreme Court seems intent on pursuing a legal approach that tends to undervalue the expressed wishes of the electorate and includes a special disregard for the initiative process. The fact that our state’s Fair Campaign Practices Act had its origins in a statewide initiative may have been a factor in our high court’s ill-considered and now vacated ruling.
What the legacy of this latest U.S. Supreme Court decision on the teachers union will be is not certain. But there are at least twenty states that have “agency-shop” laws covering public-sector unions, and the ruling could have a profound effect on organized labor’s political activities.
Unions wielding political power aren’t exactly new, but the shift from private enterprise to the public sector still has economists off balance, for the economic issues are often buried under political agendas. It was simpler when the coal miners or the auto workers wanted more money. But that’s just nostalgia, isn’t it.
James McCusker is a Bothell economist, educator and consultant. He also writes “Business 101” monthly for the Snohomish County Business Journal.
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