Are Public Employee Unions To Blame For States' Budget Crises?
A disturbing number of people are blaming public sector unions for states’ current budget crises (also here, here and here). Their basic argument is that unions have seriously exacerbated budget shortfalls because a significant proportion of state spending is tied up in employee compensation, and unions, via collective bargaining, increase salaries and benefits. As a result, so the line goes, unions have created unsustainable expenses for state governments in a time of declining or still-recovering revenues.
Needless to say, the relationship between unions and state revenue/spending is complex. The claim that unions are responsible for state budget gaps (or at least for larger gaps) is therefore extremely difficult to examine, especially during a fiscal crisis. Nevertheless, we can take a quick, modestly rigorous look.
There are 30 states that provide collective bargaining rights for state employees, virtually all of them via state laws. One way to evaluate the merit of the accusations above is to see whether states that allow collective bargaining have more severe budget problems than those that do not.