Where there’s a government union, there’s bound to be big government debt

Illinois Policy Institute

So what exactly do government worker unions do?

Along with negotiating contracts and lobbying politicians, they help create loads of debt.

The Massachusetts-based Beacon Hill Institute has done some sophisticated analysis of state-level economic performance, and the results indicate that government unions tend to go hand in hand with high government debt.

Suffolk University economists Ryan Murphy and Paul Bachman compared the percentage of government workers who are unionized with state and local government debt per person. Murphy and Bachman made this comparison for all 50 states using a regression analysis to account for other variables. The two estimate that if a state has one more percentage point of its government employees unionized, every man, woman and child in the state will on average have $78.13 in additional government debt to carry. Overall, government unions can add as much as a third to the overall government debt burden. The results are available in their new report: “The Public Sector ‘Union’ Effect: Pushing Up Unfunded Pension Liabilities and State Debt.” (Warning: This is a bit wonky.)

How does this happen? Here’s what Murphy and Bachman suggest:

The power of public sector unions leads to imprudent decisions in the public sector. States take on too much debt and make promises they cannot keep. As long as public unions keep their special bargaining privileges, the familiar story will unfold. Unions will lobby and fight for greater benefits, and politicians, given the choice between raising taxes and angering the union, choose none of the above. The bill for the payoff needed to secure the vote of the union is payable to future generations.

According to their report, government worker unions representing about half of the government workforce in Illinois are responsible for about $50 billion of the state’s debt, or approximately $3,900 for every man, woman and child in the state.

Murphy and Bachman’s paper is entirely consistent with unions that have too much power, and use that power to drive up the cost of government worker benefits without giving much thought to how those benefits will be paid for. This is something the General Assembly needs to address, before the unions bankrupt the state.

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