Posts tagged with: unionism

scotland-independenceWhat’s going on in Scotland?

On September 18, voters in Scotland will vote in a referendum whether they want the nation to become independent from the rest of the United Kingdom.

What is the reason for the push for Scottish independence?

Mainly for political and economic reasons. Scotland is more economically liberal than the rest of the UK and in favor of a broader welfare state. And because of offshore oil resources, many believe an independent Scotland would not only be wealthier than the rest of the UK, but would put the them in the top 20 of countries globally.

What’s the argument against independence?

As the Better Together campaign explains, “We think that the case for staying a part of the UK is a compelling one – and it is based around a simple notion: We have the best of both worlds in Scotland.”

The idea is that Scotland currently benefits from the safety and security of being part of one of the biggest economies in the world. They also have their own Scottish Parliament making decisions about many domestic policy issues, so leaving the UK wouldn’t be much of a benefit for the small country.

Wait, what’s the United Kingdom? Is that the same as Great Britain?
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What is a Right to Work law?

Right to Work laws are state laws that guarantee a person cannot be compelled to join or pay dues to a labor union as a condition of employment.

righttoworkWhy are Right to Work laws considered a matter of economic freedom?

Economic freedom exists when people have the liberty to produce, trade, and consume legitimate goods and services that are acquired without the use of force, fraud, or theft. Mandatory unionism violates a person’s economic freedom since it forces them to pay a portion of their income, as a condition of employment, to a third-party representative—even if they disagree with the aims, goals, or principles of the representative group.

What’s wrong with being forced to pay for union representation?
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According to figures recently released by the U.S. Bureau of Economic Analysis, federal workers receive on average about double what private sector workers make: $106,579 vs. $53,289. These numbers are based on total compensation.

A study done by the Cato Institute (PDF here of 2004 figures), under the direction of Chris Edwards, shows that for 2005, “If you consider wages without benefits, the average federal civilian worker earned $71,114, 62 percent more than the average private-sector worker, who made $43,917.”

In his WaPo op-ed, Christ Edwards points to a number of reasons for this disparity. He says that there are a number of contributing factors. “Federal pay schedules increase every year regardless of how well the economy is doing. Thus in recession years, private pay stagnates while government pay continues to rise. Another factor is the steadily increasing ‘locality’ payments given to federal workers in higher-cost cities,” he says.

Edwards continues, “Rapid growth in federal pay also results from regular promotions that move workers into higher salary brackets regardless of performance and from redefining jobs upward into higher pay ranges. The federal workforce has become increasingly top-heavy.” In addition, “The structure of that workforce has also changed over time. There are fewer low-pay typists and more high-pay computer experts in the government today than there were a generation ago.”

A WSJ op-ed also notes that “many federal employees are in white collar occupations that often command high pay,” so that may account for a small part of the disparity.

The WSJ states that “one market test is the voluntary quit rate of these workers, and data for recent years show that rate for federal employees is only one-fourth that in private sector occupations. High-paying federal jobs are so coveted that they are now like rent-controlled apartments in Manhattan: Once you’ve got one, you hold on to it for life.”

It seems to me that there is something deeper behind a number of these phenomena. Edwards hints at this element when he notes, “Federal workers’ unions try to convince Congress that their members suffer from a ‘pay gap’ with the private sector.”

Labor union membership in the private sector has declined steadily and stands at about 8%. By contrast, in the government sector labor union membership stands at around 37%.

This is itself a huge disparity, and one that I would think has large effects on issues of pay, benefits, and job security. Thus, I think there has to be a link between the rates of union membership and compensation between the public and private sectors.

As Dr. Charles Baird notes in a radio interview (mp3), “In the government sector there is no declining unionism, none at all.” And given how good the compensation and security of the jobs in the government sector are, why should there be?

More at Chris Edwards’ related post on Cato@Liberty.