Public-Sector Unionism: A Review

Abstract

In the larger policy debate over the role of public sector unions, there is a tendency to blur the lines between the history and goals of the private sector union movement and those of the public sector union movement, and thereby misunderstand their unique effects. The public sector union movement shares a link to the history and institutional structure of private sector unionism, yet they are also distinct movements, differing in origins, goals, approaches to bargaining, philosophies, and effects. These two unionisms operate in different spheres. Private unionism operates as a labor cartel within the market economy and thus affects the profitability of firms, economic growth, the demand for labor, and consumer prices. Public sector unions function as a monopoly provider of labor within a bureaucratic-political realm. Public sector unionism introduces an unelected body into policy-making, thereby undermining the sovereignty of the state. Public sector employees are able to influence through political lobbying their ―employer-sponsors‖ or politicians, who may seek to enhance union employment as a means of expanding their constituency. This study reviews the origins, goals, and fiscal effects of public sector unionism.

Keywords: public sector unions, pensions, budget, government, collective bargaining, economic policy, bureaucracy, labor laws

JEL Classification: J5, J51