There is now empirical evidence that greedy public sector unions do fiscal harm.
Neither conservatives nor liberals disagree that these unions raise wages and employment for their members (i.e., firefighters, teachers and police). But research I recently completed finds a solid empirical relationship between public sector unions’ concentration and the size and cost of state government, suggesting that what’s good for the public sector employee goose might not be good for the taxpayer gander.
Over the last three decades, union membership in the private sector has fallen precipitously, from 24.2% in 1973 to just under 7% in 2011. Over the same period, public sector union membership jumped by 14 points, from 23% to 37%.
I wonder what the stats are for New Zealand. The private sector stats are roughly the same…it would be interesting to see the growth in PSA memberships. Just like the US public sector unions, The American Federation of State, County and Municipal Employees spent $87.5 million in the 2010 election, leading all independent groups, the PSA here is highly politically active.
Tenured, well-paid and politically powerful — all would suggest a link between union concentration and the size and cost of government. My study tested this hypothesis, and over the period of 2003 to 2010 found that a 10% increase in public union membership expands government by as much as 4.25%.
The damage that comes from that is quite large.
I compared these rating to public union density, yielding an unsurprising conclusion: Expanding union memberships worsen business climates.
States where union membership was highest (New York, Rhode Island, New Jersey, Connecticut, Hawaii, Minnesota, Massachusetts, Michigan, Washington and California) averaged 43.4 on the business climate index; the states with the least union concentration (North Dakota, Texas, Idaho, Louisiana, Arkansas, Georgia, Mississippi, South Carolina, Virginia and North Carolina) averaged 13 on the business climate index.
Public unionism trends should be a concern for those interested in creating job opportunities outside of government, but also to union members, since they rely on businesses, their employees and customers to pay for the very government they are so expert in expanding.
Proof positive that unions are bad for everyone but their members.