In Laws Enabling Public-Sector Collective Bargaining Have Not Led to Excessive Public-Sector Pay, Jeffrey H. Keefe, professor emeritus at the School of Labor and Management at Rutgers University, examines how the rapid growth of public-sector collective bargaining since the 1960s has affected public employee wages. Though the share of public-sector employees with the right to bargain grew from 2 percent to 63 percent from 1960 to 2010, this growth did not cause excessive or distorted public employee compensation, according to the report.
When some local governments began to adopt parts of the private-sector model of collective bargaining in the late 1950s and 1960s, many policymakers were concerned that giving public employees the right to strike would result in a glut of economic and politically powerful workers. A number of states did extend the right to strike, to more than 20 percent of public employees, who are in non-public-safety positions. These employees earn about 2–5 percent more than employees without the right to strike. Public-safety employees, meanwhile, are covered by interest arbitration, which prevents strikes by requiring management and the union to submit conflicts to an outside arbitrator in the event of negotiations that do not produce a settlement. This has prevented strikes and has resulted in no increase or decrease in wages for these employees than other forms of dispute resolution.
“For 55 years, people have been saying that the right to strike would have huge consequences and that public-sector unions would distort the budgets of their agencies,” said Keefe. “Neither of these fears has played out. Public employees in states that have permitted collective bargaining have seen relatively small pay increases, and in many cases, the public employer has retained considerable power.”
Union security provisions, which require employees to contribute to the financial support of the union representing them, vary by state, locality, and occupation. Provisions requiring nonunion employees to pay a narrowly tailored fee to support a union’s collective bargaining activities are associated with significantly higher wages, ranging from 2–7 percent for public employees. So-called “right-to-work” laws that prohibit union security agreements are associated with significantly lower public-employee wages—employees working under these laws have wages that are 4–11 percent less than employees working without such a prohibition.