Wednesday, February 23, 2011

Unions and the Politics of Budget Cutting

So, I guess my post on Ronald Reagan didn't exactly whip the conservative masses into a polemical frenzy.  Here an issue that's a little more timely.

I've been following with interest the goings on in Wisconsin and other states as well as the political posturing over the federal budget.  I have to admit that public service employee unions were never particularly near and dear to my heart.   The one time I attended a local school committee meeting the teacher's union, trying to move along difficult contract negotiations, was out in force.  I felt very sorry for the school committee members as they had to listen to endless harangues and put up with what struck me as an appalling lack of basic civility. I could also never understand the concept of teacher tenure.  I always assumed that tenure existed to protect scholars from political interference in their academic research, not to guarantee school teachers lifetime employment.  And I've been dismayed at times by the behavior of police and fireman's unions whose concept of solidarity seems to mean defending their members who abuse their power regardless of the circumstances.

So I certainly can see how public service unions could be improved, and I don't dispute that the budget crises facing states are very real.  But looking at what the Republicans have undertaken, I can help but conclude that reforming the public service sector and balancing the budget are secondary concerns at best, and that the real motive is to enact a political agenda.  It's hard to take Republican new found religion on budget deficits seriously, first of all, when they have done so much to create the deficits with their mania for tax cuts and military spending.  Rather, they are using the pretext of budget cutting to launch an all-out assault on the state run social safety net in general and on unions in particular.   It is very revealing that that the governor of Wisconsin has refused to conduct any negotiations at all with the public employee unions despite their willing to agree to all the financial concessions he has proposed.  If his primary goal was balancing the budget, this should have been enough, but it's clear that he has other goals in mind, goals shared by his right wing sponsors who funded his electoral campaign and helped put him in power.

I know my friend Lev has very different views on these matters, and I'm interested to hear his response. 

17 comments:

  1. This comment has been removed by the author.

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  2. Surprisingly, I agree with almost everything what you said. The only difference between us is that I think that eliminating unions of public employers, as a part of political process, is a good thing, a long overdue return to normality in relations between public employees and their employer, the government. This issue is so simple that it is really hard to come up with any "original" arguments. Some discussion of the history of the question can be found here . I would like, however, comment on the connection between safety net and unions that you make in your post. In reality, unions contribute to diminishing the safety net by extorting money from the states significantly decreasing resources available for the safety net. But this is not simply the money issue. Public unions are not just useless, they are actually really evil. They affect the safety net also by creating a culture in which incompetence is rewarded. What they do is to use their collective bargaining tool to rob strong and capable in order to pay to those who are weak and incapable. As a result, unions become a magnet for losers; they feed and feed on losers' fright to face the reality of competitive world, in which the rest of us have to exist. So, if Republican's agenda is to get rid of public unions for good, I am all for that. Let each person to negotiate his/her compensation in commensuration with their abilities. Just like we all do, really.

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  3. Some numbers would seriously help this conversation. And the qui bono qui prodis matters, too: these "unions" are big 0bama supporters (maybe the biggest) moneywise, so here's the scam – they get the Fed money and pump it into 0's war chests for reelection. And one of Guv's actions they object to is to stop automatic withholding of the union dues.That alone would undo them, much like domestic drilling would damage our enemies and fix our budget.
    Numbers to chew on (we all know that it's hard to trust anyone on this, but...):
    "the unweighted average for Wisconsin teachers for the 2010 school year: a $51,000 salary, plus $30,000 worth of benefits (for a total of $81,000 worth of compensation). For an average private sector worker, he said, the salary in 2010 was $46,000 with $20,000 worth of benefits (total compensation $66,000)" (I chose this source http://www.politifact.com/truth-o-meter/statements/2011/feb/23/eric-bolling/fox-business-news-eric-bolling-says-wisconsin-teac/)
    The unions can use binding arbitration, like everybody else, to solve their collective "ideas", after all.
    The bottom line is that the school teachers in this country do a very poor job. Generalization is dangerous, of course, but you can say "US engineers are good" and be right. Or "US athletes are good". On this level, and seeing the outcome, the decline, the ignorance (and denigration of those striving to be substantial and knowledgeable in the MSM, until they make their first 10B) I think, it's fair to give them a very low grade.

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  4. This is exactly the case! Republican governors are trying to exterminate unions as a political base for Democrats. I am not a big fan of state workers unions also if problem exists it should be solved by reasoning not by one-side partisanship. I can not take seriously Republicans as budget caretakers. The federal budget was in surplus in 2000, but George W. Bush made a huge hole by his tax breaks and just lately Republicans vigorously defended the extension of these tax cuts. The question is how these tax breaks made any good for American economy? These tax break money end up on Wall street creating the worst economical situation in decades.

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  5. Secondly. I think all this talk about strong budget economy in the situation of recession is just wrong. I am experimentalist I believe in experimental probing rather than abstract theories. Fortunately for the USA there are two experiments about budget control done already in two very well developed countries: Germany and UK. The example of the United Kingdom is the most interesting because they did almost everything that conservatives dreamed about. Now, we have first results. After several quarters of continuous growth UK economy had a negative GDP result in fourth quarter of 2010. The same result in first quarter of 2011 and UK will be officially back to recession. Germany was in better shape but it looks that it following the same way. I will wait for results in the first quarter of 2011 but preliminary experimental results shown that budget cuts on the way out recession is a bad idea. The US economy looks much better and recovering much faster. Fortunately for this country conservatives control only House of Representative. Can Republican governors by their own efforts plus Tea party members in the House turn the US economy into the double-dip recession? We will see.

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  6. As an experimentalist, Ildar should know that experimental confirmation of anything is a very tricky thing even in physics. In economics, the data he cites prove absolutely nothing because of too many uncertain variables. While it all sounds very authoritative, but after more careful look at all these data one will find that all this is just garbage. How one can honestly analyze situation in any single country without looking at the rest of the world, especially in EU? In some situations budget deficit is OK, in other situations it breaks the country. The devil is always in small details.
    But again, now we are talking about unions. I will be happy to talk about general economic policies of various countries on a special threat. This topic requires serious and careful analysis, for which, unfortunately, I do not have time right now, but I plan eventually to get to it.

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  7. Apropos Ildar's comments, budget cutting was part of the title of this post, so I think his points are on target. I'm all for looking at multiple variables, but there are numerous examples, both historical and contemporary throughout the world showing quite clearly that austerity measures do not lead to economic growth. I won't bore you with a long recitation, but the cases are there. I suspect that the Republicans are well aware of this and that in fact it doesn't bother them at all. Actually the worst thing politically for the Republicans would be a return to prosperity. Obama would naturally take credit, his popularity would soar and all hope of a Republican victory in 2012 would wither on the vine. Better to raise a stink about the deficit, cut social spending to the bone (while keeping all the tax cuts, of course, so that more money goes to the rich to stash in their offshore accounts) and watch the economy sink into the abyss. Hey, it didn't happen on our watch--vote Republican!

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  8. Now, on the topic of unions, the opinions expressed above reaffirm once again my thesis that liberals in this day and age are the true conservatives and conservatives are the real radicals. I define conservatism here along the lines of Edmund Burke--a conservative is someone who respects established institutions and traditions. A conservative doesn't try to tear down willy-nilly what has existed for long years and achieve perfection by starting from scratch, but rather takes what currently exist and asks, "how can this be made to work better."

    Union have been part of the fabric of American society for over 100 years. Certainly the union movement has had its unseemly aspects--the involvement with organized crime (mainly the teamsters), overly generous contracts that stifle innovation and drive jobs overseas, rigid work rules, provisions that make it almost impossible to fire incompetent workers, etc. etc. But before you consign unions to the dustbin of history, you should ask where would we have been without them. The answer, I believe, is that we would live in a much more violent, divided and impoverished society. I would even argue that it was the presence of unions, in part, that allowed America to avoid a deeply rooted communist movement or even European style Social Democracy. If American workers had not been able to improve their standing legally through collective bargaining, almost certainly their struggle for a decent living would have taken the form of violence as would the struggle of employers to hold back their demands. In fact this is largely the story of what labor relations were like before unions were given legal protection in the 1930s.

    OK, you might say, even if unions have played an important role historically, this doesn't mean they're necessary now, and it certainly doesn't justify public sector employee unions. It's true that in the private sector, employers have used the decline of manufacturing jobs, threats to send jobs overseas and in some case strategic incentives to roll back the level of union representation. The public sector, on the other hand, has been largely insulated from these pressures. No one, to my knowledge, has ever proposed shutting down the local police station or elementary school and reopening it in Hong Kong. So public employee unions have remained stronger. Is this such a bad thing? I don't think so. Lev says that there shouldn't be any public sector unions at all, but it seems to me that the difference between the public and private sectors here is overstated. Whether the employer is a corporation or a municipality, the purpose of a union is the same--to allow workers a chance to earn a decent living. The idea that individuals can achieve this on their own through one to one negotiations with employers seems to me rather naive and unrealistic. Clearly there is a power differential that makes negotiations on an equal footing almost impossible. Only when workers can come together to create an entity that balances the power of employers will they stand a chance.

    I've heard the arguments that public sector unions are corrupt in that they take money from the taxpayers through payroll deductions and then funnel them back to politicians in the form of campaign contributions. But there's more than a little of the pot calling the kettle black here. I don't see how this is much different than a defense contractor, for example, making campaign contributions to Republican politicians who then work to secure their contracts. It's not pretty, of course, but American politics is riddled with this sort of give and take. There's no law against interest groups donating to politicians who support their agenda. So why single out unions? I don't see what the big deal is--unless of course you happen to want to see unions crushed altogether, removing thereby, the last institution in America life that can at least partially offset the power of corporate interests.

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  9. One more point about teachers. Yura offers as evidence for the corruption of public service unions the point that teachers earn on average more than workers in the private sector. And still, he claims, teachers are doing a terrible job educating our children.

    First of all, I find the logic of this argument a bit shaky: teachers are doing a bad job and so the thing to do is to pay them less. OK, makes sense... Now we can be doubly sure that intelligent and well educated young people who aspire to a decent middle class lifestyle won't even think of going into the teaching profession. Let the poor educate the poor! If they watch enough commercial television, they'll never notice the difference. Anyone who can't afford private school doesn't deserve an education anyhow! (Gee, I could get used to being a blowhard--it's kind of fun).

    Actually, it seems to me that the pay rates for teachers are right about where they should be. After all, being a teacher requires at least a BA as well as special training and certification. Many teachers also go on to receive MA in their subject areas. According to the latest census data I could find, only 19% of the US population of over the age of 25 has earned a bachelor's degree [source]. If we accept the proposition that earnings should reflect levels of education and the amount of time required to undergo training necessary for a particular line of work, then it would seem logical that teachers should be in roughly the 81th income percentile. According to 2006 data that would mean a personal income of roughly $58,000 benefits not included. So actually, it looks like our teachers in Wisconsin are underpaid. Who knew! But wait, there may be a way out. It turns out that the average 2006 salary of BA recipients older than 25 employed full-time is $50,900. Add in a hundred dollars for inflation and we come out at the $51,000 that Wisconsin teachers make. The upshot: no matter how you measure it, teachers are not overpaid.

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  10. OK--so maybe teachers aren't overpaid, but are they doing a good job? Yura clearly thinks they're not, but I suspect that this notion of the abysmal quality of American education may be more urban legend than reality. A few months ago a lot of fuss was made over the PISA exams, which provide an international comparison of school test results. This was the test that showed that students in Shanghai were head and shoulders above all other students even in other places in China. It was sort of assumed that because the Chinese did so well, the Americans must have been abysmally low, down there with Sri Lanka and Sierra Leone. Actually this was not the case at all. In reading, which the tests measured in greatest depth, the US scored above Sweden, Germany, France, Great Britain, the Czech Republic, Taipei and Macao. The Math scores were not quite so encouraging, but they certainly were not a disaster. The US was within 10 points of France and Great Britain, tied with Ireland and well above Italy, Spain, Latvia and many other states including the Russian Republic and Israel. There is, moreover, an important mitigating factor suggesting that the performance of American schools may be significantly better than the PISA data suggests. America, of course, is home to a large immigrant population who come into American schools without a strong grasp of English and often with cultural traditions that do not place a strong emphasis on educational achievement. And, although we may not like to talk about it, there is also the so-called 'racial-gap' in America--minority groups who for various historical and cultural reasons tend to perform lower on the academic scale. If the PISA scores are corrected to factor out these groups, then the situation changes considerably. In a comparison of Americans of European extraction with native-born Europeans (excluding European immigrant groups) then America suddenly jumps to the head of the pack, almost 20 points above the EU average and exceeded by only a few European countries. The bottom line: say what you want about American education as whole, but we do a pretty good job educating white people.

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  11. Do these corections for the race, which Nathan mentioned, also differentiate between students educated in private or public schools?

    More on all of the above later when I finish writing those damn research papers.

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  12. Good question! As far as I can tell, the PISA test includes students at both private and public schools, I would assume at a ratio equivalent to the percentage of students studying in both. And since the number of students in private schools is relatively small in relation to public schools (I saw somewhere the figure of 10% for 2009), then the test results would reflect predominantly the achievements of public schools.

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  13. You should also take into account that, for instance, in Nassau and Suffolk counties on Long Island, which have one of the best schools in the nation, the teachers proudly belong to no union. I guess that this is not a purely Long Island phenomenon.

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  14. Interesting but anecdotal. If you mean to suggest a negative correlation between teachers' unions and education achievement, you'll need some firmer data.

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  16. It would be nice, but I am not sure if such data exist. Instead, I can offer a mechanism explaining how unionization of teaching profession negatively affect teaching outcomes. The collective bargaining removes all incentives for a teacher to work better, because no matter what you do, your compensation is predetermined by your seniority. What makes the situation even worse is that unions usually cater to those who are weaker and less capable, because strong and competent can survive on their own. As a result, unions become a magnet for incompetent people, creating a positive feedback further increasing overall incompetence of the profession. In the absence of union contracts, strong teachers, whose skills are in demand, would have a chance to negotiate a better compensation for themselves. In current situation, however, they just flee, in particular to Long Island, where teacher's salaries are much higher in spite of the absence of the unions.

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  17. No offense, Lev, but it seems to me that your mechanism is really not much more than a string of unsubstantiated assumptions and allegation. I doubt I can cover all the points, but this is what strikes me the most.

    1) Teacher performance is primarily determined by salary--i.e. compensation is the main incentive for teachers to work better. This would seem more or less intuitive, but in reality this assumption falls apart fairly quickly. In fact it's sometimes the other way around. A few years back my local newspaper published listings of teachers salaries and testing results for the school districts in the area. What struck me was that there was actually an inverse relationship between salary and test results. How could this be explained? As far as I understand it, teachers were willing to settle for lower pay in order to work in a better school district with better students. On the other hand, those who were willing to work in the rougher districts, expected to be compensated for the less rewarding work environment. But I don't think we can assume that their higher salary meant they were harder working or more effective in the classroom.

    What I would conclude from this is that in most cases teaching is a labor of love. Everyone knows that no one will ever get rich teaching K-12. People who don't have the motivation and passion to teach quickly find that there are easier ways to make a living. Of course, there are always a few burnouts and duds in every school, but I don't think the level of pay influences their status one way or another. Underpaid teachers may be disgruntled, discouraged, frustrated and demoralized, but a good teacher is still a good teacher and vice versa.

    2) Unions only help the weak while holding back the strong. It's true that unions make it harder to fire people and that incompetent teachers may benefit as a result. But is it only the incompetents who benefit? I don't think so. Often it is the more intelligent and assertive people who are most likely to challenge authority. These are the teachers that management would really like to get rid of and who, consequently depend the most on the protection of the union.

    The other question that comes to mind here is whether so-called good teachers could do better for themselves through bargaining with their school districts on a one on one basis. I'm very skeptical. First of all, this argument assumes that it's easy to tell who is a 'good' teacher. This might seem simple, but if pay rates are at stake the discussion would have to go beyond the intuitive know-it-when-I-see-it standard and bring in real data that actually show whether students are really learning. And right away this throws us into the whole morass of outcomes assessment, teaching to the test and performance evaluation by test score that has been shown in a number of critiques to be fundamentally flawed. Personally, I'm of the opinion that this whole assessment scam is the single most significant factor stifling American education today.

    Practically speaking, it seems to me quite unrealistic that school districts will give juicy pay raises to some teachers but not others just because they claim to be good. More likely the district will follow the path of my institution--you want to work, you accept our pay. End of story! It's not as if teachers are such a rare commodity that can command the highest price. Only by joining together as a collective do they have any hope of exercising clout.

    Oh and about those school districts in Long Island, I would point out that unions can exert an upward pressure on wages throughout an entire industry. So if some districts have been able to keep unions out, it is only because they offer wages that equal or exceed those in unionized districts. If wages were to fall, the unions would be there in an instant.

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