Happy Labor Cartel Day

Most people have warm and fuzzy feelings about labor unions.  On the national holiday created to “pay tribute to the contributions and achievements of American workers,” we will hear these organizations praised endlessly.  What’s good for the UAW or SEIU is good for America, many elected officials and media pundits will tell us. 

Unfortunately, this is less often true than we might hope.  And because of fallout from the Covid pandemic and the campaign to reform policing, a couple of troubling illustrations of this fact are on center stage right now. 

As a new school year commences, for example, parents and students are wondering whether teachers unions are really doing what’s in the nation’s interest or just what’s in their members’ interests. 

A couple of anecdotes from teacher friends illustrate the concerns.  One, who teaches kindergarten at a private elementary school in Baltimore, has been working with her colleagues all summer to ensure that in-person teaching could commence as safely as possible this fall.  Normally, they would enroll enough kindergarteners to fill one classroom.  But this year they had enough demand – even at a non-negligible tuition – to fill ten classrooms, if they had them. 

At the other end of the spectrum, a teacher at a private Baltimore County high school reports that over the summer his classroom was reconfigured and outfitted with safety equipment.  He has spent considerable time rehearsing with new hardware and software so that a portion of his students can be in class while others tune in from home, alternating to yield a healthy mix of in-person and virtual learning.  He expresses amazement – and not a little disgust – that public school systems are unwilling or unable to do the same things. 

Clearly, there is both demand for and supply of safe in-person schooling getting underway in Maryland – but only in the private, non-unionized sector.  This is very important:  the CDC and other experts in public health and education have concluded that relying exclusively on remote learning carries a steep cost in reduced achievement, lost opportunities for socialization, and heightened mental health risk to students – to say nothing of the burdens on parents.  By and large, though, the unions that wield the hammer in America’s public school sector simply don’t want to expose their members to any risk from the coronavirus, so… in much of Maryland, see you in January.  Maybe. 

Then we have the other great controversy consuming America:  policing.  If you are suitably woke, you consider that police forces are “systemically racist” and, therefore, need to be defunded or abolished.  But even if you have sorted through the evidence on police use of force and are, therefore, not that extreme, you understand that greater efficiency and accountability of police departments is desirable. 

And that awareness should lead us to question whether the proper exercise of the monopoly of force which we grant to police is consistent with unfettered union power – via one-sided contracts that often insulate their members from the consequences of bad actions.  Just look at Ground Zero of this summer’s unrest over police misconduct, Minneapolis:  of 2,600 civilian complaints filed against cops in that city since 2012, less than one-half of one percent led to any form of discipline.  Most were written warnings, with the harshest penalty a one-week suspension.  Clearly, the contracts that result from “collective bargaining” can guarantee unmerited job security as well as pump up wages. 

And, of course, above-competitive police wages can themselves damage public safety.  Camden, NJ’s experience here is instructive.  In 2012, its homicide rate was 87 per 100,000 population – half-again higher than that prevailing today in Baltimore, America’s most dangerous large city.  Since busting their police union by forming a new county force in 2013, however, Camden has cut its homicide rate almost two-thirds. 

The problem was that Camden’s cop cartel had pumped up average annual costs per officer (including fringe benefits) to $182,168.  At that price, the city could afford just 175 cops; during peak night-time crime hours, only a dozen might be on patrol.  Busting the union reduced costs to $99,605 per officer, enabling lots of new hires while keeping total expenditures roughly the same.  Within a couple of years, Camden’s force exceeded 400, enabling more pro-active policing, more money for training, and greater accountability, so that many lives have been saved – most of them Black. 

Suggesting that union power ought to be taken down a notch is not, of course, a popular or politically correct sentiment.  Because America’s “labor collectives” or “guilds” are not fixing the price of a commodity like oil but merely setting wages rates, we resist calling them cartels.  We tolerate them in labor markets in the (often erroneous) belief that profit-seeking employers hold so much market power that it is necessary to fight fire with fire.  But even as he encouraged unionization in the private sector, Franklin D. Roosevelt deemed public employee unions “unthinkable and intolerable” because they might “obstruct the operations of government.” 

If we want better schooling for our kids and safer streets for all, we might heed FDR’s long-forgotten words. 

Stephen J.K. Walters (email: swalters@mdpolicy.org) is chief economist at the Maryland Public Policy Institute and the author of Boom Towns: Restoring the Urban American Dream