Public-Sector Unions in the United States: History and Impact

History of Public-Sector Unions

Labor unions are seen as the representatives of workers employed in American industries and are known as advocates of labor rights. Although labor unions are supposed to fight for the rights of the working class, whether they are performing that role efficiently remains a matter of debate. America has a century-long history of labor unions. The earlier part of that history showcases a violent attitude in labor union activities, which grew calmer toward the latter half of the twentieth century. What prompted that change in perspective, and how labor unions are viewed today by the public and by government, is a detailed subject worth exploring.

Labor unions are the legal representatives of workers who run the industries of the United States. Their role requires them to conduct collective bargaining over compensation and working conditions, and to represent workers in disputes with management or in cases of employment contract violations. These labor unions are affiliated with one of two major forums: the AFL-CIO and the Change to Win Federation (Lichtenstein, 2003). Both are responsible for devising policies and legislation ensuring the welfare of workers in the U.S., and both are quite active in politics (Crampton, Hodge & Mishra, 2002). Furthermore, the AFL-CIO is actively engaged in global politics pertaining to trade issues. The unions playing the most prominent role in protecting workers' rights are from the public sector. A public-sector union is responsible for protecting the interests of employees in organizations owned or supported by government. Public-sector unions are highly criticized by those who advocate downsizing the public sector, as publicly owned organizations in many parts of the world are claimed to be responsible for budget deficits (Lichtenstein, 2003).

The labor history of trade unions goes back to the early 1900s. Public trade unions were not a widely accepted idea at that time and were not supported by government. This is why President Roosevelt opposed their existence. Roosevelt once stated: "All government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management. The very nature and purposes of government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with government employee organizations."

Public-sector unions began gaining attention in the 1920s with the formation of public school teacher unions in large American cities. These unions later formed a unified board called the American Federation of Teachers (AFT). Similarly, a body called the National Education Association emerged to represent teachers in smaller cities and suburbs.

The history of labor unions in America more broadly dates back to the nineteenth century, when dissatisfaction with long work hours, poor working conditions, and the lack of safety standards drew many workers to unions. These unions formed a federation called the American Federation of Labor (AFL). Led by Samuel Gompers and founded in 1881, the AFL grouped together trade unions across the nation, representing workers ranging from meat packers to engineers and carpenters. However, it would take another seventy years for public-sector employees to begin full-fledged unionization.

Today, public-sector unions are controversial for a number of reasons. Some people believe they promote excessively high salaries — much higher than private-sector counterparts — and many contend that pension costs are excessive as well. Others believe that public-sector unions promote more uniform salaries and pensions, and that they can actually save taxpayers money in the long term.

When trade unions first formed in the late nineteenth century, working conditions were very different from today — and that difference is precisely why unions formed in the first place. Working conditions were often harsh and unsafe. Sweatshops existed in many industries, such as the garment industry, where employers forced workers to labor in terrible conditions: often locked in buildings, enduring long hours without breaks or safety protections. An infamous example is the Triangle Shirtwaist Factory fire in 1911. Two hundred seventy-five women worked in the factory. They were just leaving on the night of March 25 when a fire broke out. Many of the exit doors were locked, trapping workers inside, and many other doors opened inward, so the crowds of people trying to escape could not force them open. Fire escapes collapsed when workers tried to use them, and girls as young as thirteen perished in the blaze. In all, 146 women died. The working conditions in the factory came to public attention; the factory owners faced trial but were eventually acquitted. The fire led to increased calls for labor unions to oversee working conditions, hours, and safety standards, along with higher and fairer wages (Yaz, 2010).

Labor unions began to grow after the fire and continued to grow for decades. While private-sector workers were allowed to join unions, public-sector employees were not permitted to unionize until the 1950s and 1960s. There were some early union associations — the International Association of Fire Fighters (IAFF), for example, began as a social and fraternal group in the late 1880s but joined the AFL in 1918, making it the oldest non-educational public employees' union. The National Teachers Association (now the NEA) formed in the early 1860s as a professional organization. The American Federation of Teachers (AFT) formed in 1916, and many police unions began as social organizations around the same time as the firefighters' groups (Adler, 2006).

While those were among the first strides toward representing public workers, there were significant setbacks as well. In 1919, the Boston police officers were affiliated with the AFL, but when they requested a meeting with the police commissioner about wages and working conditions, he refused. As a result, 1,200 officers walked off the job. One historian noted, "The AFL had granted a charter to the Boston Social Club on the promise that they would never strike. All of the strikers were fired" (Adler, 2006). The strike caused police unions to suffer dramatically for many years, and many people came to believe that unions had caused the breakdown in police protection and public safety.

The director of the state civil service system, Col. A. E. Garey, formed the Wisconsin State Administrative, Clerical, Fiscal and Technical Employees Association to create unity among management and white-collar workers (Adler, 2006). They had concerns about the incoming Democratic administration and sought to protect their merit system. The organization eventually changed its name to the Wisconsin State Employees Association (WSEA), applied for and received a charter from the AFL, and went on to establish employee associations in several other states. By 1935, it became known as the American Federation of State, County, and Municipal Employees (AFSCME), which remains one of the largest public-sector unions today.

During the 1930s, some business owners believed that the higher wages unions called for helped stimulate the economy and boost business. Congress passed several progressive acts, and one of the most important was the National Labor Relations Act (NLRA), commonly called the Wagner Act. It is still largely the framework guiding private unionism today. President Roosevelt signed it into law on July 5, 1935. Critically, it specifically excluded public workers from unionization (Brown, 2010).

It was not until the 1950s that the first public-sector employees were allowed to form their own unions. In the 1940s and 1950s, many public-sector workers wanted to unionize, but a series of laws prohibited this. Brown states that New York's Condon-Wadlin Act (1947) prohibited strikes and did not explicitly affirm the right of public workers to collective bargaining. Throughout the immediate post-war period, other states established similar statutes limiting the rights of public employees. In the late 1950s, New York became the first state to allow public employees to unionize. During this era, many did not believe that public workers should be able to strike or bargain, arguing it would "undermine the government's sovereignty" (Brown, 2010). In 1958, the New York governor signed an act allowing public unions to organize after a series of strikes crippled the city.

In 1947, the Taft-Hartley Act was passed, removing many union gains secured under the Wagner Act. It explicitly denied public workers the right to strike and required that workers who did strike would be dismissed (Brown, 2010). Despite this legislation, support for public unions began to grow as public employees demanded change. One challenge of the 1960s was the battle for collective bargaining rights. The age of teacher militancy began in November 1960 with a one-day walkout by the United Federation of Teachers of New York City; two years later, the UFT won the first comprehensive teacher contract in the country (Edwards, 2010).

In 1962, President John F. Kennedy signed an executive order allowing federal workers to unionize. As more public employees formed unions, membership grew, and more states responded to pressure from their employees. "The [Kennedy] order triggered collective-bargaining laws in states such as Michigan, New York, Washington, and Pennsylvania, all of which had substantial private-sector unionism. Only half a dozen states in the south and west are completely free of such laws promoting public-sector unionism" (Reynolds, 2009). By the 1970s, public union membership was soaring. Reynolds (2009) states that "despite major regional variations, by the 1970s public workers were pulling themselves in line with their private-sector counterparts; in the early 1960s only 13 percent of government employees belonged to unions, but by 1990 over 35 percent did."

Ironically, as public-sector unions grew and strengthened, private-sector unions began losing large numbers of members — a trend that continues today. With the enactment of the National Labor Relations Act of 1935, unions represented over one-third of private-sector workers. Beginning in 1970, private-sector unions began to lose power, and today fewer than 10 percent of private-sector workers are unionized (Adler, 2006).

Throughout the 1960s and 1970s, politicians recognized that public-sector unions, through political campaigns and endorsements, wielded considerable power. Most politicians therefore enacted legislation that encouraged public-sector unionization in their districts (Edwards, 2010). One of the issues that angers many people about public-sector unions today is their promotion of higher wages for government workers. This was not always the case: between 1950 and about 1980, average compensation in the public and private sectors moved in lockstep. After 1980, however, public-sector compensation growth began to outpace private-sector growth (Edwards, 2010). Between 1980 and 2000, public employees remained at an advantage, but in more recent economic times, many unions have had to make concessions because of rapidly falling budgets.

These unions gained significant political ground when New York Mayor Robert Wagner Jr. presented what became known as the "Wagner Act" at the city level. The act not only recognized the presence of labor unions but accepted them as the sole legal representatives of employees, placing bargaining rights over compensation and working conditions firmly in the unions' hands. Since the 1960s, these unions became very popular among public employees, and various unions were formed to represent teachers, foremen, clerks, and others — acquiring high compensation packages and generous pensions for their members. As Daniel DiSalvo notes, "in today's public sector, good pay, generous benefits, and job security make possible a stable middle-class existence for nearly everyone from janitors to jailors."

With the wave of recession, public-sector unions were not exempt from criticism. In fact, these unions faced intense scrutiny from conservative Republican legislatures in 2012.

Costs of Public-Sector Unions Over Their Benefits

Public-sector unions have been heavily criticized by those who believe that excessive public-sector workforces are responsible for budget deficits in the United States. Since the 1980s, public-sector unions have faced more criticism than support. They are considered an important political force primarily due to their membership base and their collaboration with activist organizations representing issues such as public healthcare and immigrant rights. Furthermore, public unions' demand to remove the secret ballot system is also highly criticized, as it would give unions the ability to pressure members into granting majority status through coercion (Feeney, 2008).

One must not ignore the fact that the compensation provided to public employees is paid out of tax revenue; therefore, the burden of high public-sector compensation falls on taxpayers. This was one reason why, when Chris Christie became New Jersey's governor in January 2010, he issued an order restraining political influence by unions. Legislation that had been imposed on corporations was similarly levied on unions, driven by an $11 billion budget deficit and extremely high tax rates imposed on the public (McGinnis & Schanzenbach, 2010).

New Jersey's initiative drew attention across states facing similar situations in large cities. Although these decisions faced intense opposition from public unions and their political allies, they were widely appreciated by government policymakers. The cost of compensation provided to public workers — which in many cases far exceeds the pay scale of private-sector employees — coupled with the generous pensions provided to retired government workers, is considered the main cause of deficits in federal and state budgets. Moreover, this cost is expected to increase substantially in coming years as the number of retired workers grows alongside an aging American population. If policymakers fail to balance this burden, an economic crisis may be inevitable (Hoffman, 1999).

Following New Jersey's lead, many states — including New York, Michigan, California, and Washington — are considering similar measures to combat the power of labor unions representing government employees so as to minimize their debt burdens. As the Wall Street Journal put it, public-sector unions "may be the single biggest problem...for the U.S. economy and small-d democratic governance." They may also be the biggest challenge facing state and local officials — a challenge that, unless economic conditions dramatically improve, will dominate the politics of the decade to come (Feeney, 2008).

Demographics of Labor in America

Over time, labor unions have lost their credibility as champions of government employees. However, they have caused enough structural change to produce a snowball effect in coming years. Since the 1950s, the labor landscape in America has undergone two drastic changes with major impacts on national politics. First, union membership in the private sector dropped dramatically. Second, the composition of the unionized workforce shifted considerably, with public-sector unions growing stronger than their private-sector counterparts and gaining greater power to influence government decisions in favor of their members.

According to the Bureau of Labor Statistics, in 2009, for the first time ever, more public-sector employees (7.9 million) than private-sector employees (7.4 million) belonged to unions. Today, unionized workers are more likely to be teachers, librarians, trash collectors, police officers, or firefighters than they are to be carpenters, electricians, plumbers, auto workers, or coal miners. The entire demography of the American workforce has changed, with serious implications for the years ahead. Today's union member is more educated and better established in American society than in the early 1900s. A growing segment of the educated workforce prefers government employment over private-sector careers, making it increasingly difficult for the private sector to attract suitable talent (Mosca & Pressman, 1995).

This rise in public-sector unionism is directly related to broader changes in the American economy. Public jobs offer financial security and stability, while private-sector employment is subject to tough competition, market fluctuations, income inequality, and lack of job security — making it the less preferred option for many workers. This growing discrepancy raises alarm about the overall effectiveness of unions for the broader economy rather than just one sector (Hogler & Henle, 2011).

The formation of powerful unions in the public sector did not happen overnight. Before 1950, assigning collective bargaining responsibilities to unions was strongly opposed by government officials, politicians, and economists. Even President Franklin Roosevelt only supported private-sector unionism (Hogler & Henle, 2011). In 1937, Roosevelt said, "meticulous attention should be paid to the special relations and obligations of public servants to the public itself and to the government....The process of collective bargaining, as usually understood, cannot be transplanted into the public service." Roosevelt further stated: "Strike of public employees manifests nothing less than an intent on their part to obstruct the operations of government until their demands are satisfied. Such action looking toward the paralysis of government by those who have sworn to support it is unthinkable and intolerable." Courts before the 1950s similarly held that assigning collective bargaining to labor representatives in the public sector amounted to delegating government power to non-governmental bodies — an unconstitutional act.

Beyond the financial burdens, one should consider the operational threats posed by powerful public unions. When public employees are given significant leverage, they can affect the daily machinery of American life. Consider the monopoly held by a metropolitan police force entrusted with the security of city streets — officers given the authority to protect the public also have the capacity to disrupt public order if their demands are not met (Llorens, Wenger & Kellough, 2008). Another common objection to collective bargaining is that the authority to represent the public is taken away from elected officials and given to union representatives who have not been entrusted with that power by the voting public. Furthermore, collectively bargained work rules can alter what public servants do day-to-day in ways not sanctioned by elected officials or the voting public (Llorens, Wenger & Kellough, 2008).

Several conditions explain why public-sector unions gained strength in recent decades. First, weak government structures at the state and city level created problems. The role of filling government jobs often rested with party machinery that was unable to perform this function efficiently, leading to high employee turnover directly tied to election cycles. Additionally, selected candidates in government jobs frequently devoted large portions of their working hours to political party activities, resulting in an inefficient government structure lacking professionalism (Budd, 2010). In response, civil groups and employee associations in the public sector emerged, believing that filling government positions with qualified employees would increase efficiency and reduce corruption. In the 1950s, according to historian Leo Kramer, the leadership of AFSCME "saw itself as part of a great movement to reform government," with one principal aim being "the extension of the merit system to all non-policy-determining positions in all government jurisdictions" (DiSalvo, 2010). The result was an end to politically driven employee turnover and the retention of talented workers in government offices. As unions grew stronger, political interference in employee management diminished, and increased job security made workers feel more invested — ultimately leading to greater unionization in the public sector (Llorens, Wenger & Kellough, 2008).

A second cause of public-sector union growth was the change in economic and demographic conditions following World War II. The need for a public-sector workforce increased tremendously, leading a large number of baby boomers into public service employment. As the demand for government workers grew, so did the need for teachers and trainers, which eventually led to the formation of the first teacher unions in the 1950s (Masters & Atkins, 1989).

Finally, a strategic alliance between organized labor and the Democratic Party solidified the foundation for unionization. When Roosevelt supported the Wagner Act — which backed unionization in the private sector only — Democrats earned the support of labor unions. This alliance grew so strong that Democrats began relying on labor unions as key sponsors and supporters during election campaigns. In the 1950s and 1960s, according to political scientist J. David Greenstone, "labor functioned as the most important nationwide electoral organization for the Democratic Party." As a political tag team, both Democrats and labor had an incentive to broaden the labor movement — and they came to see public-sector workers as the most promising new constituency, especially as private-sector union membership began to decline (DiSalvo, 2010). Public unions reached their peak in the early 1970s, and by 1972, nearly half of states had public-employee collective-bargaining laws in place at either the state or local level (Masters & Atkins, 1989). This strong alliance had a tendency to affect the relationships between public employees, the governments they work for, and the public they serve — often with less than beneficial results (Freeman & Ichniowski, 1988).

Conclusion

Public-sector unions are an important part of the economy and the working class of the United States. While they are important for ensuring that employees do not become instruments of their employers, they have also gained unnecessary power in American politics — which is against their original purpose. Over the past fifty years, public-sector unions have secured substantial benefits for their members, but they have also levied enormous financial burdens on states, contributing to large budget deficits. This is a primary reason why public-sector unions have lost credibility not only within government but also among the general public, who bear the cost through high taxes.