Collective bargaining turns teachers into teamsters.

By Peter Brimelow

Probably because of a career spent toiling financial journalism—where being wrong matters, unlike in political journalism—I’ve grown very fond of Stein’s Law. Formulated by the late economist Herb Stein, it states: “If something can’t go on forever, it will stop.” That’s what we used to tell ourselves when I was at Forbes and we repeatedly predicted an end to the great bull market, which ignored us.

Then—guess what?

Current case in point: the sudden outbreak of hostilities between the governors of several states, notably Wisconsin and New Jersey, and their public-sector unions. The thing that cannot go on forever is public-sector unionism itself. Although this was generally lost sight of in mainstream media coverage of Wisconsin governor Scott Walker’s brawl with his state’s government unions and Democrats—the two are barely distinguishable—public-sector unions are in fact quite new. They are fundamentally different animals from private-sector unions. And they are simply not a sustainable life form.

Even in the heroic age of American liberalism, labor union advocates like long-time AFL-CIO President George Meany and President Franklin D. Roosevelt viewed unionization of the public sector as unthinkable. It was simply obvious that public unions would have too much power. From an economic point of view, all unions are engaged in trying to monopolize the supply of labor in their particular industries, in order to increase the price of work in the form of wages. But a public-sector union would be a monopoly on top of a monopoly: governments, after all, do not allow much competition in the services they provide.

Teachers’ unions, in fact, benefit from a third level of monopoly: parents are legally compelled to send their children to school. And most parents have no affordable alternative but to send their sons and daughters to the government school that they have been taxed to support—partly because they have been taxed to support it. After paying taxes, few families have the income left for private-school fees.

Unlike consumers in the private sector, taxpayers cannot easily vote with their feet to choose a better service provider. So during the golden age of organized labor, public-sector unions were prohibited by law. But this reasonable inhibition—like so many others—abruptly vanished in the 1960s. In return for labor union support, President John F. Kennedy issued an executive order allowing collective bargaining for federal employees. Similar developments occurred at the state level. Indeed, Wisconsin led the way, permitting teacher unionization in 1959.

Most prominently, collective bargaining for New York City teachers was won in 1961 after a bitter battle by the American Federation of Teachers under its legendary leader Al Shanker. This was the period that won Shanker his fearsome reputation. They even made a movie about it. In “Sleeper,” Woody Allen awakes from a 200-year sleep and discovers that the world has been destroyed. He asks what happened and is told “a man by the name of Albert Shanker got hold of a nuclear warhead.” Shanker thought this was quite funny and could recite the scene from memory.

The National Education Association, which until then had actually been the professional association that many people think it still is, began to lose prospective members to the AFT. Pro-unionization militants inside the NEA—mostly from the labor state of Michigan, including future executive director Don Cameron and future presidents Keith Geiger and Terry Herndon, known collectively as the “Michigan Mafia”—were able to seize control. They transformed the NEA into a full-fledged labor union—it’s now the biggest in the country, with 3.2 million members—although its headquarters in D.C., conveniently near the Soviet Embassy, continued for many years to enjoy a professional association’s property tax exemption, to Shanker’s great rage.

Unionization wasn’t always pretty, though the ugly episodes are typically glossed over by a pro-union media. Many teachers were opposed to unionization and deeply distressed by traditional labor union methods. For Swartz Creek, Mich. teacher Kay Jackson, who didn’t want to join any union, the coming of unionization meant over a decade of litigation and ostracism—even, she believed, dead cats being thrown at her house and the murder of her German shepherd. Some 24 years after it all began, interviewed at the age of 78 by my co-author Leslie Spencer for our June 1993 Forbes cover story on the NEA, she burst into tears at the memory.

The result of schoolteacher unionization: a weird institutional mutant, part labor union, part insurance conglomerate (of all things—it’s a long story), part self-perpetuating staff oligarchy. And part political party, as Edwin Vieira, a former constitutional law professor and key legal strategist for the National Right to Work Foundation, argued in a seminal 1978 DePaul Law Review article.

“Collective bargaining”—which should more properly be called “monopoly bargaining”—is the key to this mutant’s power. In a labor-friendly state like Wisconsin, the union can capture the exclusive right to represent all teachers and force them to pay for the privilege through so-called “agency shop” laws. It’s not cheap. Dues for the NEA’s Wisconsin affiliate, the Wisconsin Education Association, are $400–$500 a year.

And through its collective-bargaining power, this mutant claims privileged access to public policy-making. In the 1960s rush to recognize public-sector unions, a serious constitutional objection was never answered: public-sector unions inevitably end up bargaining policy with government. Other concerned groups are ignored—students, parents, and taxpayers. This is arguably alien to the principles of equal protection and republican government. Effectively, “workers” and “management,” who are both part of the government, decide between themselves how to divide up other people’s money.

It’s not just the public that is woefully uninformed. Many experts still haven’t grasped this mechanism. For example, Fortune recently quoted University of Toledo College of Law professor Joseph Slater claiming that “[T]here’s no correlation between collective bargaining and the state budget crises … . The vast majority of states have pensions set by law, not by collective bargaining. So it’s a common misperception that these costs are a result of collective bargaining.”

But who makes those laws? The Wisconsin Education Association, with 98,000 members, is perhaps the most powerful lobby in the state, even apart from its ability to call in support from the national union. The NEA requires its local affiliates to subsidize numerous full-time Unified Staff Service (“Uni-Serv”) professionals in every state. They have been called the finest field army in American politics and can achieve what might otherwise have to be accomplished through collective bargaining.

As former Education Secretary Bill Bennett once said of the NEA, “you’re looking at the absolute heart and center of the Democratic Party.” The NEA endorsed its first presidential candidate only in 1976—Jimmy Carter, in return for creating the federal Department of Education—but in recent years almost 10 percent of attendees at Democratic National Conventions have been NEA members.

The NEA’s extraordinary economic and political power is the result of one of those curious institutional accidents that can happen in a dynamic but structured economy like that of the United States. Occasionally, the framework of checks and balances that normally restrain an organized interest group gets broken. The interest then gets a chance to hold the rest of society to ransom and extracts what economists call “rents.”

Other recent examples: stockbrokers in the 1960s, who were able to make institutional investors like banks and insurance companies pay full commission rates when they bought or sold stocks because stock exchange rules forbade volume discounts; airline pilots in the 1970s, whose powerful unions extorted stratospheric salaries out of an industry straitjacketed by regulation; trial lawyers today, enriched by the interaction of contingency fees and the arbitrary judicial relaxation of liability law.

Eventually, the rest of society figures out that it’s being attacked by a rent-seeking parasite and does something about it. (We’re still working on the trial lawyers—also, by an amazing coincidence, a key part of the Democratic Party coalition.)

In the case of public-sector unionism, there’s been a critical ferment in the policy-wonk catacombs for many years, somewhat similar to the underground intellectual movement that undermined the mid-20th-century Keynesian consensus. Teachers’ unions are creatures of legal privilege, and to do something about them, you have to know something about labor law. In my 2004 book Worm In the Apple, I was able to profit from all this intellectual ferment to list 24 different ways to bust what I called, in homage to Ida Tarbell, the “Teacher Trust.”

These ranged from grand federal action—apply the Sherman Act? A federal right-to-work law?—to detailed local policies, such as providing alternative sources of discounts for teachers. Governor Walker’s proposal includes some of these ideas: for example, forbidding employers from collecting dues for the union. It’s notable that for all the huffing and puffing, Walker’s plan didn’t abolish collective bargaining, but merely limited it to wage negotiations.

At the time my book came out, the GOP controlled the legislative and executive branches of the federal government. Yet rather than disable the opposition party—and save American education—George W. Bush took what he presumably thought was the easier course of invading Iraq. Have Republicans learned their lesson? Don’t be so sure. Significantly, New Jersey Governor Chris Christie, who seems to be a Bushbot beneath the bluster, has said, “I love collective bargaining.”

When the Forbes story I wrote with Leslie Spencer came out, the National Right to Work Committee paid for scores of thousands of copies to be reprinted and spread throughout the country. An aide to one state governor told me that his boss was really excited—but eventually decided that taking on the union was not “politically possible.”

The lesson of the current uproar should be obvious: no one really knows what is “politically possible,” least of all professional politicians who follow their exquisitely sensitive snouts like blind shrews and never think about the long haul, nor even the medium term. The Teacher Trust is ultimately defending a system that cannot work: the socialized provision of education. The Soviet Union had the same problem. And absolutely no one expected it to collapse—but it did.

Peter Brimelow is the founder of

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