Public-Sector Unions and the Size of Government

AJPS Author Summary by Agustina S. Paglayan

Liberals and conservatives in the U.S. seem to agree on at least one thing: collective bargaining with public-sector unions leads to increases in public spending—which liberals think is good, and conservatives bad. This article challenges the widespread conventional wisdom about collective bargaining. It shows that the introduction of collective bargaining rights for teachers in the 1960s and 70s led to higher public spending on education only in states where teachers could credibly threaten to go on strike; but it shows also that, in most states where teachers were given the legal right to engage in collective bargaining, these rights came bundled with provisions that made it more difficult for teachers to resort to strikes as a weapon during collective negotiations. As a result, on average, the introduction of mandatory collective bargaining with teachers did not lead to increases in the level of resources devoted to education. When collective bargaining did increase education spending, the magnitude of the effect was small and cannot explain the bulk of the differences in education spending levels that exist across states today. In fact, most of these differences in spending precede the formation of modern teacher unions.

The findings of this study are at odds with the conventional wisdom because of two major improvements over prior research. First, this study pays attention to the political history behind the emergence of collective bargaining rights for public employees, showing that these rights were not introduced by an unambiguously pro-labor coalition, and that they were often accompanied by anti-labor provisions. In the U.S., public employees gained the right to engage in collective bargaining in the 1960s and 70s. By 1990, 33 states had ended long-standing prohibitions on teachers’ collective bargaining, instead establishing that school districts had an obligation to bargain with teacher unions. The introduction of these mandatory collective bargaining state laws led to a rapid increase in teacher unionization rates, which climbed from 6% in the late 1950s to 60% in the early 80s. It is common to assume that these were pro-labor laws introduced by pro-labor politicians, but a look at history shows these assumptions are wrong. The laws were shaped by counterbalancing interests with ample support from both Democrats and Republicans, and represented a mixed change in unions’ power. Yes, they gave unions collective bargaining rights, but they also introduced costly strike penalties designed deliberately to deter striking. Lawmakers realized that threatening to dismiss striking teachers was not effective to dissuade them from striking, because teachers knew that no politician wanting to ensure the smooth provision of public education would dare fire everyone who went on strike. Instead, to prevent strikes, most mandatory collective bargaining laws established strike penalties that could be enforced. If they went on strike, union members could lose two days of pay for every day on strike, the union could be heavily fined, decertified, and/or no longer enjoy automatic deduction of union dues from districts’ payroll. With striking capacity curtailed, collective bargaining did not have the bite to increase resources for education.

The second feature that sets this study apart from previous research is the data and methods it uses to quantify the effect of mandatory collective bargaining laws on the size of government. The study uses a new and publicly-available dataset that tracks the evolution of teacher salaries, student-teacher ratios, per-pupil education spending, and per-pupil non-wage education spending (including employer contributions to pensions, administrative costs, etc.) in all 50 states in the U.S. from 1919 on. This unprecedented breadth of data on public education in the U.S. confirms, as lay observers often note, that governments that engage in collective bargaining tend to pay higher salaries and spend more than those that don’t; but it also shows that collective bargaining is not the reason why they spend more. In 1919, when there was no collective bargaining with teachers anywhere, the states that would later introduce collective bargaining rights for teachers were already devoting considerably more resources to education than states that would not. On average, these historical differences in spending did not become wider after collective bargaining rights were introduced by some states but not others.

The evidence presented in this article revises our understanding of what public-sector unions do and where their power stems from. It highlights that, in most U.S. states, public-sector unions remain considerably constrained in their ability to exert pressure through collective bargaining, either because they don’t have the right to bargain to begin with, or because they have collective bargaining rights but not the ability to strike.

Liberals and conservatives may still have thoughts about public-sector collective bargaining. But the article sets the record straight: whether they support it or oppose it, their position cannot be based on the belief that collective bargaining rights per se lead to higher public spending.

About the Author: Agustina S. Paglayan is Assistant Professor in the Department of Political Science and School of Global Policy and Strategy at University of California San Diego. Paglayan’s article “Public‐Sector Unions and the Size of Government (https://doi.org/10.1111/ajps.12388)” is now available online in Early View and will be published in a forthcoming issue of the American Journal of Political Science.