The controversy surrounding the State of Wisconsin’s move to partially limit public-sector collective bargaining rights is certainly a hot one. Arguments for and against the action have been largely emotional or political in nature, with few stepping back to analyze the issue in a non-partisan light. As someone who has been a consultant to public-sector union negotiators and a college professor currently represented by a union, I understand the perspective and validity of most of the arguments.
My goal for this article is not to advocate for one position or another, but rather to explore the non-emotional “business reasons” why public-sector managers might oppose bargaining on nonwage issues. Even if you oppose restrictions on bargaining, the following list might help you understand why some have an opposing view.
Possible Reasons Public-Sector Managers Resist Union Actions
The following “business-impact” reasons have a reasonable likelihood of occurring in a large public-sector union. When appropriate, I have also noted where public and private sector unions differ.
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- Long-term contracts can limit flexibility — in a fast-changing world, flexibility and agility are required to stay afloat. Long-term union contracts “fix” many things in place and prevent public-sector managers from making major changes fast in response to shifts in the economic, business, and governmental environment.
- Work rules can limit reengineering and innovation — strict work rules make it difficult during a departmental reengineering effort to move workers and to redesign jobs in response to budget cuts and the need to continuously improve government services. You seldom hear the word “innovation” in the context of government, in part because rigid work rules make it nearly impossible. Unions place high value on adhering to “past practices,” which by definition restrict innovation and change.
- “Members first” values can limit technology — public-sector unions are by definition advocates of their members. Union leaders are well aware that leveraging new technologies may result in reduced membership. In order to maintain membership levels, it is not unusual for unions and their members to engage in efforts to slow down the implementation of new technologies, even though the technologies would reduce costs and increase efficiency.
- In a monopoly situation, strikes can cripple — in the private sector, if a union goes on strike, there are often many alternative product and service suppliers available to customers. Because many government agencies operate as a monopoly, work slowdowns, sick outs, and strikes can really damage a community. Faced with this severe damage, government executives can give into demands that would not be agreed to in a non-monopoly environment.
- Maintaining jobs can limit productivity — primary union values often include maintaining jobs. Unfortunately, protecting jobs can limit flexibility and increase costs in area where a reduction in staff is really necessary. Putting “people first” also frequently means reducing all expense items to the point where it can hamper productivity, when travel, training, and the latest tools are essential for improvement.
- Seniority first might restrict performance — citizens and businesses both demand that government agencies maximize their performance. Unfortunately, seniority is not the same as performance, so getting the most senior slotted into work assignments and schedules prohibits those assignments from going to top performing employees. Promoting the most senior, rather than the most qualified, into management jobs will also likely lower productivity due to weak management. Employees with nothing but seniority (which could include dated experience and obsolete knowledge) are becoming a poor substitute for employees with the latest skills, knowledge of technology, and the ability to innovate. Senior people might turn out to be the best performers but they should have to prove their superior performance each and every time.
- Across-the-board rewards can limit performance — unions routinely push across-the-board pay. Unfortunately, this almost eliminates a manager’s ability to incent and monetarily reward individual performance and innovation. Governments instead need a performance culture, where those that produce dramatic results get significantly differentiated rewards compared to those that simply show up. Without an incentive for individuals or the team to produce, it is also easier for union stewards to implement secret limits on productivity (bogies) that they expect all members to adhere to.
- Across-the-board rewards can increase top performer turnover — once top performers realize that they won’t be treated differently or rewarded for their results, they will likely leave for businesses that reward performance.
- Job security as a value may reduce necessary terminations — strong union support for job security may lead to severe restrictions on firing poor performers (a major issue in schools districts across the country). Some union contracts mandate steps and appeals so elaborate that managers simply give up, or that result in employees remaining on the payroll without assignment.
- Local regulation can create imbalance — private-sector unions are regulated uniformly by the federal government and its highly trained labor regulators. Because so many states and unions are involved at the federal level, things move slowly but there is also little chance of a major regulatory error. Most don’t realize that state, county, and municipal unions are regulated locally. These local regulators are likely to be less trained and are more likely to be political. The net result is that it is much more likely that a major error will be made in the local regulations or laws, resulting in an imbalance favoring one side or the other.
- Voted on once but they stay forever — under federal regulations, it is not uncommon for private sector unions to be voted out and decertified. In contrast, under completely different rules, it is highly unusual for public-sector unions to be completely decertified. That means a single employee vote, one that may have occurred years ago, may result in a permanent union presence.
- Public union members can also vote, shifting the balance — unions in the private sector have only one choice to get what they want: successfully negotiate with their business leaders. However, public-sector unions have two options for getting their way. They can negotiate at the bargaining table, but they can also vote, support candidates, and lobby legislatures and city councils. With this added political influence, they can end up with a richer contract then they could have earned through negotiations alone.
- Required union support is more likely to increase power further — because of their combined voting power, political fundraising, and powerful lobbying capabilities, public-sector unions are likely to convince political leaders to force public employees to either join the union or pay the equivalent of union dues. With a larger membership and more funds, they increase their ability to pressure negotiators and public officials.
- Grievance procedures are tedious — managers in the business world are driven by the need to produce quarterly results. Because of that, business managers learn to negotiate grievance procedures so that they begin and end relatively quickly. Because public-sector managers don’t have that quarterly drive to produce immediate results, they all-too-often negotiate grievance procedures that can literally draw out for years.
- Poorly trained managers can be weak advocates — training for managers in the public sector is almost always minimally funded. As a result, in many cases public-sector managers are not equipped to handle union representatives who are well trained and supported by a national union. In addition, it is a common practice in government agencies (but less so in business) for management pay to be directly tied to union pay. As a result, some management negotiators have little reason to fight against significant pay and benefit increases, because immediately after the negotiations are over, they themselves will receive the same percentage increase as the union gets.
- Taxpayer support for union officials drive up costs — it is not unusual in large government agencies for union representatives or stewards to receive government pay — part-time or even full-time for conducting union work — instead of any regular job duties. This practice increases costs and agency paid for help will increase the ability of union leaders to keep their members in check.
- There is no profit incentive to keep costs down — because businesses are driven to make industry-leading quarterly and yearly profit, most labor relations executives learn quickly not to give away the farm. Without that profit incentive, in the public-sector there is a tendency for managers to give greater concessions. Those concessions are primarily in non-pay areas (work rules and benefits), where the public and the press are not nearly as likely to notice and create an uproar.
- Bumping rights can be damaging — both private and public sector unions have contracts that allow job bumping. Job bumping is the practice where an employee losing their job can literally take any job beneath them and the employee that they bumped can then bump someone below them, etc. The practice is always disruptive but can be particularly damaging in the public sector where training budgets are miniscule. As a result each “bumper” is forced to learn their new job painfully, through trial and error.
As a professor of management and an advisor to hundreds of corporations, I certainly cannot claim to be an unbiased observer, but my goal was to present a list of business reasons why public sector managers oppose collective bargaining on non-wage issues. I considered writing a follow-up article from the union’s perspective, but I decided against it because public unions have so far done a noticeably better job of providing objective arguments in support of their cause then the opposition has.Post your non-emotionally charged additions to the list; I and many others will look forward to reading them. If for some reason you feel obligated to send me hate mail from either side, my e-mail address is email@example.com.