Labor Dazed in California

The heated discussion in my childhood home each August was predictable. Should my mother renew her membership in the National Education Association? A lifelong teacher, Mom felt obligated. Dad considered it a waste of money.

I don’t recall a year Mom didn’t win. Neither do I remember a benefit Mom received from her membership. (Perhaps the benefits were muted by stories of her progressively unrulier students!) Nevertheless, she paid in to her union. Millions of Americans do. But what does America get out of them?

Undoubtedly, labor unions had a meaningful role in the developing U.S. economy. Are American workplaces safer and more rewarding for workers because of them? Definitely. Are unions outstaying their welcome? Probably.

Earlier this summer, after helping drive General Motors and Chrysler into bankruptcy with their unsustainable benefit packages, United Auto Workers was rewarded with ownership stakes in the two car companies. Only in Washington, D.C.

With examples like this, it’s not surprising what Gallup found in June. In a poll measuring Americans’ confidence in various national institutions, only 19 percent of Americans had “a great deal” or “quite a lot” of confidence in Big Labor. Unions ranked just a few percentage points better than HMOs and Congress.

Once a part of the proverbial solution, unions seem to be more and more a part of the problem. Nowhere is this more apparent than in California, where public sector unions are helping transform the Golden State into Pyrite Place.

California’s woes are well-documented and Californians are fleeing from them. Case in point: The Economist noted recently that it costs nearly three times as much to rent a one-way moving truck to go from San Francisco to Austin than the other way around.

Legal emigration, illegal immigration, unemployment, budget shortfalls and heavy tax burdens are casting long shadows on California’s clement climate. The exception: California’s public sector. Employment there has never been more profitable.

Labor-friendly laws dating back to the ‘60s (e.g., collective bargaining and no-secret-ballot voting) have prompted local government unions to expand widely. A 2008 UCLA study that found that 57 percent of California’s government workers were union members, compared to 37 percent nationwide.

As a result, California teachers and prison guards are among the highest-paid in the nation, a fine honor badge if its education and criminal justice systems were the envy of states nationwide. They are not.

Union-driven local governments are paying ever-higher wages and benefits to workers providing mere basic services. They are funding plush pensions and salary boosts with oppressive taxes and fees. Building permits can cost as much as the construction projects they authorize. No wonder individuals and companies are moving east in record numbers.

There will be a day of reckoning in California like there was at GM and Chrysler. Public sector unions can’t bargain themselves spoils from the public largesse in perpetuity. The goose can only lay so many golden eggs before it gives out.

But will California be salvageable by the time it does? And will California’s enterprise-dampening, labor-friendly model sweep the nation before then?

Hopefully, California will sober soon from its labor daze and America will learn some labor lessons from its left coast.

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