Labor Day Has Become Government Day

Heritage Foundation

This Labor Day marks a milestone in the history of the U.S. union movement. It is the first Labor Day on which a majority of union members in United States work for the government. In January the Department of Labor reported that union membership in government has overtaken that in the private sector. Three times as many union members work in the Post Office as in the entire domestic auto industry. The face of the union movement is not a worker on the assembly line but a clerk at the DMV. This is a dramatic shift for the union movement. The early trade unionists did not believe that unions had a place in government. They believed the purpose of unions was to redistribute business profits from owners to workers … and the government makes no profits. Not until the 1960s did unionizing government employees become widespread. Now government employees make up 52 percent of all union members.

So what? Why should Americans care if unions are now dominated by workers who get their paychecks from governments, instead of workers who get their paychecks from private firms? There’s one simple reason: private firms face competition; governments don’t.

Collective bargaining, the anti-trust exemption at the heart the labor movement’s power, was created to help workers seize their “fair share” of business profits. But if a union ends up extracting a contract from a private firm that eats up too much of the profits, then that firm will be unable to reinvest those resources and will lose out to competitors. But when a union extracts a generous contract from a government, there is no check on that spending. Instead of being forced out by more efficient competitors, the government just raises taxes.

The shift from private to public sector has fundamentally changed organized labor’s priorities. Unions used to support policies that would help their private sector employers grow. But now that they are largely dependent on the government, the only growth that unions are interested in is the growth of government. So unions push for tax increases across the country. Consider recent union activism:

* Illinois. Unions want state lawmakers to increase the state income tax from 3 percent to 5 percent and to expand the sales tax to cover some services. In April 2010 they organized rallies of government workers outside the state capitol shouting “Raise my taxes! Raise my taxes! Raise my taxes!” At that rally, a government union member was caught on camera chanting “Where’s the money?” and “Give up the bucks!”
* Montana. The Montana teachers union openly sees itself as a supporter of tax and spend politics. Its President boasts, “Were it not for us almost any one of the … anti-tax and spend ballot issues proposed in the last 25 years would have passed.”
* New Mexico. Unions lobbied the state’s legislature to raise taxes to deal with its budget deficit. The union got its wish, but it was not the wealthy who paid – the legislature imposed a 2 percent sales tax on food.
* Washington state. Washington state has no income tax, and unions want to change that. They have placed an initiative on the November ballot creating a state income tax and are among the top donors to the campaign to pass it.

Government unions are the backbone of the Obama dependency economy. Taxpayers should not have to subsidize union campaigns, much less those that call for tax increases. At the very least Congress should end the automatic payroll deduction of union dues.