SB 5: Putting Taxpayers in Control (Robert Roll Column)
The inevitable question came within the first minute of my first class of this quarter: What did you do over break? Well, I took part in one of the most transformative debates in recent memory.
Being a resident of suburban Columbus, I am only a short drive away from the Ohio Statehouse. Also being the political junkie I am, I decided to take a venture to the center of Downtown to see our government in action. When I got there, the place was packed with 2,000 protesters. They were there protesting Senate Bill 5.
For those of you who are not regular consumers of news, Senate Bill 5 was a bill in the Ohio Senate that would strip most collective-bargaining power from public-sector unions. The 2,000 people at the statehouse protesting were mostly teachers, firefighters, police officers, prison guards, and other public employees trying to dissuade the legislature from passing the bill. At the end of the day, however, the Ohio Senate did what was right and passed the bill.
Before I explain why SB 5 will be beneficial to all Ohioans, let me be clear: I respect the right of employees in the private sector to form unions, to collectively bargain, and to strike, if necessary.
We cannot, however, compare the rights of private-sector unions to the rights of public-sector unions. In the private sector, the union negotiators meet directly with management to try and work out a deal. In the public sector, the taxpayers are management. The taxpayers elect the Governor, Senators and Representatives to serve as their emissaries in union negotiations. The problem is that, more often than not, the taxpayer’s emissary has a conflict of interest. Unions are heavily involved in the political process. Every election cycle, unions give millions of dollars to politicians to help get them elected. For example, since 1989, the American Federation of State, County and Municipal Employees, a public sector union, has given over $43.3 million to political campaigns. This campaign cash causes politicians of both parties to agree to labor contracts that are not in the best interest of the taxpayers. The politicians know that if they vote against a generous contract for government employees, then not only will they cease to receive campaign cash from the unions, the unions will spend copious amounts of money to defeat them in their next re-election bid. The unions’ prodigious ability to dole out campaign cash is what creates a conflict of interest.
Another difference between private-sector and public-sector collective bargaining is that private companies can go bankrupt; governments cannot. Unions in the private sector know that they must be reasonable in their demands and must negotiate in good faith. If the private-sector unions get too sweet of a deal, then the company may go under, leaving the unions members without a job. That situation is a lose-lose for everyone. Because governments cannot go bankrupt, public sector unions have no real incentive to negotiate in good faith. What ends up happening is that the politicians must agree to a generous contract or face a politically suicidal government work stoppage, giving the public sector union a win at the expense of the taxpayer.
Not only does Senate Bill 5 rein in collective bargaining for public-sector unions, it has the chance to completely change the way government works. Included in SB 5 is a provision that all public workers, from teachers to paper-pushers, will be paid based on a merit-pay system. In short, the better you are at you job, the more you will be paid, which it just the way it should be. No longer will government employees get a raise by just subsisting another year on this earth, they must now earn their raises based on how good they are at their job. It is easy to see the benefits to this system. Workers in the Department of Taxation will now have an incentive to process your return in 5 days instead of 7. Teachers will now have incentive to make sure students understand concepts, not just memorize them. Politicians like to talk about running government more effectively, I can think of no better way of making this happen than by instituting merit pay, which is what Senate Bill 5 does.
Those who are opposed to SB 5 say that unions are necessary to “protect the workers from being exploited” and any effort to reign in collective bargaining is “an assault on the middle class.” The thing is that unions are not needed to protect workers from exploitation; the miraculous free market can do that. Let us take teachers for example. If a teacher thinks that she is underpaid and his or her working conditions are terrible, she is free to leave that school district and teach somewhere else. On the other side of the equation, school districts are always competing against each other for good teachers and will therefore increase teacher salaries and improve working conditions in order to attract the best teachers. It is this competition that protects workers from exploitation. Ohio has over 600 public school districts, so competition for teachers is alive and well. The same goes for firefighters, policemen and any other public employee.
As for the claim that any effort to rein in collective bargaining rights is “an assault on the middle class”, the true assault on the middle class comes from the ever-increasing taxes that are required to pay for the lucrative contracts public-employee unions get for their members.
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Robert Roll is a freshman majoring in Finance at Ohio Northern University, and the blog owner’s nephew.
