in Milwaukee: PATCO Revisited
by Gary North: World's
Longest-Using WordPerfect Author Abandons WordPerfect After 30 Years
I have waited
50 years for this: a showdown between the teachers' union and a
state legislature. It took successful revolts in Tunisia and Egypt
to get members of the teachers' union into the streets. They see
themselves as liberationists. In fact, they are Mubaraks.
We are now
seeing the equivalent of Custer's last stand. The question is: Who
is Custer in this confrontation, the governor or the teachers' union?
teacher's salary for the state is $49,000, but that does not count
medical benefits and retirement. The
total compensation package for Milwaukee teachers is $100,000.
This is for eight months of work per year.
are not teaching. They are taking a paid sick leave in the streets
of Milwaukee. The union is telling the voters and the state legislature:
"Either we retain our privileged position, or else!" Are
we seeing a replay of Blazing Saddles?
PATCO SHOWDOWN: 1981
showdown between the Federal government and a government union came
in 1981, Reagan's first year in office. The head of PATCO, the air
traffic controllers' union, called a strike. This strike was illegal.
He did not care.
for years been president of the Screen Actors Guild. He knew how
to deal with unions. He knew that the voters would not tolerate
blackmail: "Deal with PATCO or we will shut down the friendly skies."
He issued a deadline. They had to be back at work on a particular
day or else lose their jobs. A few of them went back to work. Most
did not. The government hired replacements, and PATCO was busted.
No Federal union has attempted anything like PATCO's walkout since
then. They got the memo.
There is a
huge teacher glut nationally. (Glut: oversupply at an artificially
high price that is set by the government or a government-licensed
monopoly.) The ability of Wisconsin's school districts to replace
every teacher on strike with a certified teacher over the summer
would be easy. They could probably replace them at 70% of today's
leaders know this. They know that the benefits reflect the privileged
position of the union-restricted access to bidding. If every qualified
teacher in America who wanted to bid was allowed to bid, the compensation
packages offered to teachers would fall like a stone.
could replace over 11,000 PATCO workers out of 13,000, without shutting
down the airlines, think of how easy it would be to replace every
striking teacher in Wisconsin.
We are back
A FROZEN LEGISLATURE
The 14 Democrats
in the legislature have adopted a unique way to keep the governor's
proposed union-busting legislation from getting passed. They have
refused to show up. The legislature lacks a quorum by one vote.
So, there can be no new legislation dealing with money. The Democrats
supposedly are all in hiding in Illinois. They receive salaries
for this. Call it a paid vacation.
I hope the
idea spreads. I would prefer to pay legislators to flee the state
rather than pass laws. I would even support expense accounts for
this. The Democrats are saying: "no new funding laws." The story
of Br'er rabbit and the brier patch comes to mind. Think of the
legislatures of the United States in which there would be no new
spending laws passed from now on. I would call that deliverance.
Yet this is the Big Gun in Wisconsin. Somehow, I don't think the
newly elected governor will regard this as a threat to be taken
is obviously bogus. Any political party that threatens to hijack
the political process is going to find itself out of power after
the next election. The Democrats will return to the legislature,
and the political battle over the teachers' union will get settled,
one way or another. Their bluff will not work.
We are back
to Blazing Saddles.
are jockeying for support by the voters. The union thinks the voters
will back its demands. The governor either thinks otherwise, or
else he just does not care. He has indicated that he will not budge.
question is this: Is the public's concern over the retirement packages
offered to unions greater than its concern over showing support
for public employment unions? We do not know yet. What we do know
is this: voters eventually vote their pocketbooks. If voters perceive
that they will be called to sacrifice for the sake of retired government
employees, they will rebel. It may be now. It may be later. It will
In much the
same way that protests in the Arab world have been spreading, so
have union protests. They have taken place in Ohio and Iowa. But
the protesters represent a minority: the unions. The protests in
the Arab world represent a long-suppressed majority of voters. The
unions think that the key is public protest by shutting down the
government. That is unlikely to work for minorities that are deep
into the voters' pocketbooks.
ECONOMICS OF TRADE UNIONS
what is at stake, you must first understand the economics of all
assert the moral authority and legal right to use violence against
any person who offers to work for less than the union is demanding.
Usually, this violence is hidden: the government's threat of fines
against employers who hire non-union members, but not always:
violence against "scabs."
assert that if they get a majority vote in favor of this legalized
violence in one company election, they should continue to exercise
- The union
decides who gets membership. It reserves the right to exclude
people. This restricts the labor market, thereby raising wages
- The members
assert a legal right to "their" jobs in a strike. After the strike,
they must be re-hired by law. All people hired in the interim
must be fired.
- The unions
claim to represent "labor," but at all times the vast majority
of laborers are not members.
favoring union members discriminates against the vast majority
of Americans, who do not belong to unions.
- The goal
of all trade unionism is to raise costs of production.
- The economic
effect of higher costs is reduced output.
- The economic
effect of reduced output is the reduction of wealth for most customers.
workers must seek employment with firms that were their second-choice.
- This subsidizes
firms that are not unionized: a larger supply of labor at a reduced
is the economics of trade unionism within civil government. All
of the previous applications of the law of supply and demand apply.
There are some new twists, as in twisted arms.
a geographical area, a civil government exercises a monopoly or
cannot seek alternative sources of supply.
- The union
exercises clout at election time: a concentrated focus.
- The government
comes to voters in the name of necessity.
- The government
union works under the umbrella of this government claim of necessity.
With this as
background, consider the economics of government officials when
dealing with trade unions.
for 70 years have promised higher retirement benefits rather than
offering immediate pay raises.
officials run up the bills for future elected officials.
- Union leaders
go along with this, since they can claim easy victories.
- Union members
actually believe that they will receive these enormous retirement
and health insurance benefits.
- They vote
for politicians who make these promises on behalf of future politicians.
seek these votes.
- The general
public until 2009 has ignored these promises, believing that future
taxpayers would pay them.
- The combination
of focused beneficiaries (union members) and unfocused victims
(present taxpayers who will live long enough to become future
taxpayers) has led to enormous state and local public debts
debts that cannot be paid and so will not be paid.
in 2009, a minority of voters, called Tea Party voters, has become
aware of what their predecessors should have seen as far back at
the 1960s: the unfunded liabilities of the state pension and medical
insurance programs are escalating rapidly. In short, politicians
will not be able to kick the can for another decade. The bills are
will not elect politicians who insist on paying off these debts,
let alone politicians who campaign on a platform of continuing to
make these promises to union members.
SLOW DEATH OF AMERICAN UNIONS
union members are acting as though they are convinced that the New
Deal's attitudes toward unions in general did not die in the 1970s.
They are wrong. We are no longer living in the 1970s. This
is taken from a Website written by university-level professional
the United States, unions grew through the 1970s and, despite some
decline since the 1980s, European and Canadian unions remain large
and powerful. The United States is different. Union decline since
World War II has brought the United States private-sector labor
movement down to early twentieth century levels. As a share of the
nonagricultural labor force, union membership fell from its 1945
peak of 35 percent down to under 30 percent in the early 1970s.
From there, decline became a general rout. In the 1970s, rising
unemployment, increasing international competition, and the movement
of industry to the nonunion South and to rural areas undermined
the bargaining position of many American unions leaving them vulnerable
to a renewed management offensive. Returning to pre-New Deal practices,
some employers established new welfare and employee representation
programs, hoping to lure worker away from unions. Others returned
to pre-New Deal repression. By the early 1980s, union avoidance
had become an industry. Anti-union consultants and lawyers openly
counseled employers how to use labor law to evade unions. Findings
of employers' unfair labor practices in violation of the Wagner
Act tripled in the 1970s; by the 1980s, the NLRB [National Labor
Relations Board] reinstated over 10,000 workers a year who were
illegally discharged for union activity, nearly one for every twenty
who voted for a union in an NLRB election. By the 1990s, the unionization
rate in the United States fell to under 14 percent, including only
9 percent of the private sector workers and 37 percent of those
in the public sector. Unions now have minimal impact on wages or
working conditions for most American workers.
is lower today than in the 1990s. This
is from the United States government's Bureau of Labor Statistics.
7.6 million public sector employees belonged to a union, compared
with 7.1 million union workers in the private sector. The union
membership rate for public sector workers (36.2 percent) was substantially
higher than the rate for private sector workers (6.9 percent).
Within the public sector, local government workers had the highest
union membership rate, 42.3 percent. This group includes workers
in heavily unionized occupations, such as teachers, police officers,
and fire fighters.
won an Oscar for Norma
Rae, a 1979 film about unionizing a nearly bankrupt textile
plant in the South. The film won 9 Oscars and had nominations for
six others. That movie was a classic example of Hegel's statement,
"The owl of Minerva flies only at dusk." He meant that the justification
of a practice peaks at the end of that practice's dominance. So
it has been with trade unions. In 1979, the movement was in steep
decline. After 1981, it collapsed, except for government unions.
Now a government union is trying to pull off a Norma Rae. It is
way too late.
of Wisconsin says, "We're broke." The state has a $3.6 billion deficit.
In order to cut this deficit, he says, "collective bargaining is
the key," he says. The unions must lose this hammer lock. He learned
this when he served in county government.
think we really are seeing the equivalent of Reagan's busting of
PATCO. If the union loses, this will throw the fear of politics
into the hearts of government union officials all over the United
States. They will know and their members will know
that the days of strikes are roses are over. The days of "Deal with
us, or else," is going to be answered: "Go ahead and shoot."
wrote of the reserve army of the unemployed. Today, we have a reserve
army of underemployed and formally certified. These people will
bid for jobs that are not protected by union rules against making
I have waited
half a century for this. I wish that Sylvester
Petro had lived to see it. He stood firm against strikes and
roses when it was academic suicide to do so.
North [send him mail]
is the author of Mises
on Money. Visit http://www.garynorth.com.
He is also the author of a free 20-volume series, An
Economic Commentary on the Bible.
2011 Gary North
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