Collective Bargaining in Government
Updated 2/22/2013


In a 2/7/10 article titled Public-sector unions bleed taxpayers, conservative political analyst Michael Barone says:

Last month the Labor Department reported that private-sector unions lost 834,000 members last year and now represent only 7.2 percent of private-sector employees. That's down from the all-time peak of 36 percent in 1953 and '54. But union membership is still growing in the public sector. Last year 37.4 percent of public-sector employees were union members. That percentage was down near zero in the 1950s. For the first time in history, a majority of union members are government employees.

The National Labor Relations Act (a.k.a Wagner Act) does not apply to government employers:

The term "employer"  . . .  shall not include the United States or any wholly owned Government corporation, or any Federal Reserve Bank, or any State or political subdivision thereof . . .

Collective bargaining for government employees in Michigan was established by the Public Employment Relations Act (PERA), Public Act 379 of 1965. That act was actually an amendment of Public Act 336 of 1947, which did little more than outlaw strikes. The Act can be seen in its present form here on the Michigan Legislature's website.

I have 3 objections to government unions:

  1. They obtain wages and benefits for government employees that are well above the market rate, increasing the cost of government - and our taxes.

  2. They interfere with a government entity's authority to make policy decisions and conduct business as it sees fit.

  3. In the form of union dues, they take money from government employees - money that comes ultimately from the taxpayers - and use it for union administrative expenses and political activities.

Excess pay. The market wage is what government employers would pay if they paid no more than necessary to get qualified employees. The purpose of a union for government workers is to get above-market wages for their members, just as unions do in the private sector. The difference is that for government workers, the excess wages are paid for by the taxpayers, and they can't be rationalized by claiming that workers are just getting their share of the profits earned by a fat, arrogant corporation.

The Mackinac Center, a conservative think tank based in Midland, has published several reports showing that public sector compensation in Michigan is substantially higher than for comparable private sector jobs:

And there was this 2007 report published by the American Legislative Exchange Council. It was co-written by the Mackinac Center's Michael LaFaive:

What Price, Government? Michigan’s Financial Crisis: A Case Study

Excess pay for government workers means tax increases, or when tax increases are politically impossible,  reduced funding for government programs. It even hurts government employees by increasing their workload to make up for cutbacks in staffing.

Privatization. If government workers were paid the market rate, it would kill the push for privatization. Without the lower employee costs offered by private companies, they have no advantage. In fact, they are at a big disadvantage: they have to make a profit. And although a function or project might be privatized, the government still has the expense of selecting the contractor and supervising the contract.

Diminishing the people's sovereignty. This is a democracy, so - in theory - our elected officials and government administrators are carrying out the will of the people. They are authorized to act on our behalf. Michigan's Public Employment Relations Act: Public-Sector Labor Law and Its Consequences, a September 2, 2009 "policy brief" from the Mackinac Center, found that collective bargaining infringes upon our leaders' authority to make policy. Quoting from the Executive Summary:

  • Work rules found in collective bargaining agreements add to the scope of the “union veto.” In practice, government union negotiators can manipulate any political issue that can be expressed in terms of employee compensation, job duties or work standards and be included in a collective bargaining agreement.

  • Court rulings have consistently held that collective bargaining trumps local statutes and even local charters. PERA has arguably subverted the home-rule principles expressed in the state constitution.

The same issue was addressed way back in 1987 by the Citizens Research Council of Michigan. This is from the introduction to a report titled The Public Employment Relations Act: Conflicts and Possible Alternatives:

Local governmental units in Michigan are accorded powers of home rule by the state Constitution . . . One of the tenets of home rule is that the electors of a charter unit be accorded the flexibility to shape their local government structure as their needs require, subject of course to the Constitution and general law. Conflicts between the constitutional right of home rule and the constitutional authority of the Legislature to provide for the resolution of public sector employment disputes through statewide law have proven difficult to resolve. Constitutional conflict has also arisen between the autonomy guaranteed to the state’s public higher education institutions, by Sections 4 through 6 of Article 8 of the state Constitution, and the Legislature’s authority to provide for collective bargaining for public employees, including those employed by colleges and universities.

Buying politicians. The people ultimately responsible for setting wages of public employees are politicians: state legislators, school boards, county commissioners, city councils. They are elected to their positions, and need money to run their campaigns. This creates a special relationship between unionized public employees and the politicians: politicians are generous with public employee salaries; those salaries enable unions to extract hefty dues from unionized employees; unions use those dues to contribute to the campaigns of friendly politicians. Here are the dues collected from State of Michigan employees in 2008 and 2009:

  2008 dues   2009 dues   Change
MI St. Employ. Assn/AFSCME Local 5 $2,187,813.60   $2,237,746.82   +$49,933.22
UAW Local 6000 $5,838,655.20   $6,053,182.92   +$214,527.72
MI Corrections Org./SEIU 526M $4,959,645.28   $4,840,725.89   -$118,919.39
SEIU 517M $2,433,129.78   $2,721,664.04   +$288,534.26
MI St. Police Troopers Assn. $1,125,395.91   $1,182,965.34   +$57,569.43
AFSCME Council 25 $1,050,559.04   $1,056,008.47   +$5,449.43
Totals $17,595,198.81   $18,092,293.48   +$497,094.67

The above information was obtained by the Mackinac Center and reported in the 2/25/2010 article State Government Employee Unions Prosper in Midst of Recession. The article also says that union dues for the average employee are $469.64 a year.

And here are the dues totals for 2011 from the Lansing State Journal, 11/4/2012:

MI St. Employ. Assn/AFSCME Local 5


UAW Local 6000


MI Corrections Org./SEIU 526M




MI St. Police Troopers Assn.


AFSCME Council 25


Mich. Assoc. of Governmental Emps (OPEIU Local 2002)




State employee unions don't have to spend much on member services. The state Civil Service Commission already gets an amount equal to 1% of the aggregate payroll of the classified service for the preceding fiscal year to carry out its duties, which include fixing rates of compensation, making rules and regulations covering all personnel transactions, and regulating all conditions of employment. That leaves little for the unions to do to earn their $18 million. Aggregate payroll for fiscal year 2009 was $4,781,203,263, which means Civil Service's allocation for 2010 was $47,812,033.

For the UAW, it is easy money that makes up for their losses in the private sector. UAW membership totaled 355,191 at the end of 2009, down from 1.5 million members at its peak in 1978.

As mentioned in Democrats and Unions, the Michigan Education Association (MEA) and the United Auto Workers (UAW) PACs are among the top ten spenders on statewide campaigns, and from 2005-2008, the UAW PAC was by far the largest contributor to candidates for Lansing mayor and City Council and the Ingham County Board of Commissioners.

Ordinarily, unions spend more on representing workers in the workplace than they spend on political and lobbying activities. During the 2008 elections, however, two unions reported spending more nationwide on politics than on representation:


Worker Representation

Politics and Lobbying

American Federation of State, County and Municipal Employees (AFSCME)



National Education Association (NEA)



Here is 6/10/2011 commentary from the Mackinac Center on collective bargaining for public employees.

Repealing PERA

The people of Michigan can get the unions out of public schools and state and local government. All we need to do is repeal PERA, the Public Employee Relations Act. Our dysfunctional legislature can't be expected to do it, but we can do it ourselves through the initiative process. All we need to do is collect enough petition signatures to put it on the ballot. The number of signatures needed is 8 percent of the total vote cast for all candidates for governor at the last preceding general election at which a governor was elected. The signatures must be of registered voters.


Unions are Killing Michigan
The Wagner Act
What Economists Think
Why the Market Wage is Better
The Illogic of Collective Bargaining
Market Wage vs. Fair Wage
Imagining a Free Labor Market
Rights and Freedom
Destruction of the Middle Class
Employee Free Choice Act (EFCA)
Job Security
Collective Bargaining and Unemployment
Social Costs of Collective Bargaining
Ending Fringe Benefits
Democrats and Unions
Collective Bargaining in Government