Saturday, January 22, 2011

My Idea: Union-Breaking Incentive Plan

A number of states are faced with a conundrum: Public-sector employee unions are exercising far too much influence in state government. There is growing public support for diminishing the power of these unions. Public employee unions have utilized their power to negotiate unacceptably generous salaries and benefits for their members, and pensions systems which are literally breaking state budgets. Unfortunately, unions have embedded their influence through negotiating contracts for these obscene salaries and benefits- contracts which cannot be lawfully broken. These contracts guarantee that states must continue to pay wages the taxpayers can't afford.

Hence, the conundrum: How can states break the collective bargaining power of unions, without breaking contracts negotiated with unions?

The power of unions comes from their volume of membership- literal "strength in numbers"- and the dues paid by this mass of members. If we want to break unions, we have to deprive them of members and money.

So here is my idea- provide public employees an incentive to not join the union!

Obviously, this would only work in states which have a Right-To-Work law.

The concept works like this: Take the combined salary and state cost of benefits of a union employee, cut a bit, and offer the remainder to non-union employees as a total salary.

For example (this is just for illustrative purposes, real numbers would likely be different):

A position pays a salary of $40,000 per year, and the states' cost of benefits is $12,000, for total compensation of $52,000. Under this plan, a non-union employee would be paid a salary of $46,800- a 10% reduction in total compensation.

Stated differently- the incentive to offer is the freedom of choice. The employee can choose between unresponsive union representation and one-size-fits-all benefits, or a larger bring-home paycheck and greater freedom in spending it.

Of course, benefits would still be offered- but the employee would pay for them. For example, one could choose between the "Cadillac" health plan, or a basic health plan (or heck, even an HSA). Union members have one option- the union health plan.

This plan could solve many problems inherent to this debate. Taxpayers are satisfied because each non-union employee saves them money. Those who might be uneasy about more aggressive union-busting measures can be totally comfortable with this, because it's an individual choice.

Best of all, unions have no leg to stand on to fight it. They won't want to put themselves in a position of arguing against the freedom of choice; and they can't claim pay discrimination, because their total compensation is higher.

Meanwhile, unions lose dissatisfied members- and those members' dues- and the value of their bargaining power diminishes. And the more members who leave, the more money the taxpayers save.


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