Will the Supreme Court Save America from the ‘Greek Disease?’

As Greece teeters on the edge of collapse this week, the Supreme Court agreed to review a case that could help America avoid a similar fate — that is, a financial catastrophe largely brought on by a bloated and recalcitrant public-sector workforce.

The case is Friedrichs v. California Teachers Association, and it is a challenge to the ability of public-sector unions to forcibly collect dues from non-members. More important, it is a challenge to the practice of letting public-sector employees have an outsized influence on our political system because of the dues they collect from non-members. If we want to know about the dangers of public-sector unions, we should look to Greece as an example.

Between 1970 and 2009, Greece’s public-sector employment increased at a rate of 4 percent per year. By the close of the first decade of the new century, public-sector employment had quintupled in 40 years. By contrast, private-sector employment grew at only 1 percent per year.

Some might wonder why this is a bad thing. A job is a job, after all, and if government is doing a lot, it makes sense that there will be lots of people working in the public sector. But public-sector employment is driven by politics, which need not correspond, as the market must, to either demand or efficiency. Imagine an absurd government agency, say the Department for Painting Things Blue (DPTB), and then consider the forces that determine wages and policies for employees of the DPTB. There are few reasons to save money — a constant problem with government — and many reasons to expand staffing levels at the DPTB.

By the time of the first crisis in Greece, in late 2009, the OECD determined that many government agencies were significantly overstaffed. Each new employee is a voter who will probably never vote to constrain DPTB spending or employment, and so each politician must guarantee that the DPTB will always be maintained on his watch.

After a few decades, the department can be a nearly unstoppable political force. Combine that department with employees at every other agency and you’ve created an irresistible political tailwind toward bigger and more expensive government. Even asking, “Why do we have a Department for Painting Things Blue?” can be political suicide.

Ending the privilege of public-sector unions to collect money from non-members is indispensable in controlling spending.[/pullqupte]

Unionizing those public-sector employees and allowing them to strike and to forcibly extract dues makes things much worse. In areas such as education, transportation, law enforcement, and fire protection, strikes can be the political equivalent of a gun to the head. In order to fix a strike or the threat of a strike, politicians focusing only on the next election will give the unions whatever they want, which usually includes very extravagant pensions. The costs of those pensions are put on future taxpayers, who, thankfully for the politician, can’t yet vote.

The entire situation is a predictable recipe for disaster. Throughout the Western world, high levels of public-sector employment are a reliable indicator of slow growth and long-term fiscal insolvency.

Which is why Friedrichs is an important case to help keep America from sliding down the same slope. In the 1970s the Supreme Court ruled that the First Amendment prevents public-sector unions from forcing non-members to fund political advocacy. But the Court allowed unions to continue extracting money from non-members in order to fund supposedly non-political activities related to collective bargaining.

The government should not put a thumb on the scale by giving teachers extraordinary privileges that other groups, such as parents, don’t enjoy.

Dissenting from that distinction, Justice Lewis Powell asked what the basis was “for distinguishing collective bargaining activities’ from political activities’ ” because “collective bargaining in the public sector is political’ in any meaningful sense of the word.”

Powell was correct. When it comes to public-sector employees, what activities are “non-political?” Teachers’ unions advocate politically, but what they can’t achieve at the ballot box they achieve through collective bargaining. Union-negotiated teacher contracts include limitations on class size, work hours, qualifications, and much more, each of which is a core part of education policy. Those policies should be determined politically, not negotiated in back rooms. The government should not put a thumb on the scale by giving teachers extraordinary privileges that other groups, such as parents, don’t enjoy.

In Friedrichs, the Court will revisit the question of whether the distinction makes sense in light of the First Amendment’s protections against forced political speech and association. A victory, which is likely, will not end public-sector unions; it will simply make them rely on voluntary rather than forced funding. In other words, they’ll be just like every other interest group.

The Greeks have taught the Western world a lot about democracy and government. This new lesson, unfortunately, is going to be quite a painful one for the Greeks. Good governance requires structures and constraints to ensure that government doesn’t run off the rails. Giving public-sector unions the power to extract dues is a horrible idea that tends to lead to bloated government and, eventually, possible fiscal collapse. The Supreme Court is now poised to remove that contagion from American government.