Public Sector Unions and the Costs of Government

Abstract

As recent political battles in Wisconsin, Ohio, and a number of other states attest, public sector unions are among the most active interest groups in American politics. They are also different from other interest groups in two key respects: they engage in collective bargaining, and are thus in a position to shape the organization of government in ways that other groups are not, and their members are the government’s own employees — its bureaucrats — who not only influence government from the inside through their official roles, but also from the outside through their unions. For all of these reasons, public sector unions are eminently worthy of scholarly attention, and yet political scientists have almost never studied them. This paper is an attempt to make some headway. Our focus is on how unions and collective bargaining in the public sector affect the costs of government. We present three separate studies, using different datasets from different historical periods, and we examine a range of cost-related outcomes: wages and salaries, health benefits, employment levels, and pension liabilities. In all three studies, our findings show that strong unions and collective bargaining do tend to increase the costs of government, and the impacts are both substantively and statistically significant. In presenting these findings, we hope to encourage other scholars to view public sector unions as important subjects of analysis.