FDR’s warning: Public employee unions a no-no

President Franklin D. Roosevelt, the patron saint of the American labor movement, was a man of strong character. One has to look no further than the heroic way he coped with his crippling polio. This dreadful disease undoubtedly made him the consummate realist.

For example, although he had a lock on labor’s vote, he expressed caution about public sector unions. In a little-known letter he wrote to the president of the National Federation of Federal Employees in 1937, Roosevelt reasoned:

“… Meticulous attention should be paid to the special relationships and obligations of public servants to the public itself and to the government. All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations … The very nature and purposes of Government make it impossible for … officials … to bind the employer … The employer is the whole people, who speak by means of laws enacted by their representatives …

“Particularly, I want to emphasize my conviction that militant tactics have no place in the functions of any organization of government employees. Upon employees in the federal service rests the obligation to serve the whole people … This obligation is paramount … A strike of public employees manifests nothing less than an intent … to prevent or obstruct … Government … Such action, looking toward the paralysis of Government … is unthinkable and intolerable.”

To get this in historical context, Congress enacted the landmark National Labor Relations Act (“Wagner Act”) in 1935 – the Magna Carta of the American labor movement. It excluded federal, state and local employees. It created the National Labor Relations Board to enforce the rights of labor. Employers were legally obligated to bargain collectively with their employees. In 1937 in a Senate speech, Roosevelt intoned, “The denial or observance of this right means the difference between despotism and democracy.” (One would be led to think that before 1935, America was not a democracy.)

But FDR had no inkling of what the end game would be. In 1958, New York City Mayor Robert Wagner signed an executive order allowing civil workers to unionize. It was an obvious appeal to union voters. A Wagner aide suggested that city workers would be a large enough constituency to guarantee his re-election.

This opened up the floodgates around the country as other Democratic legislators followed Wagner’s lead. In 1959, Wisconsin became the first state to enact public employee collective bargaining laws. President John F. Kennedy then followed with an executive order granting federal employees the right to bargain collectively. As journalist Roger Lowenstein wrote in his recent book detailing the explosion of government pension debt, “Membership in public unions rose exponentially.”

Let’s take a look at some quaint language in “Labor Relations in the Public Sector,” a text authored by Professor Richard C. Kearney who cites commentators from days gone by:

“Public work was regarded as a short step above the dole … for people willing to exchange a decent wage … for security and an undemanding job.” No longer. With benefits – they are making twice as much. (It is not surprising that of the 10 counties with the highest per capita income, six are in the Washington, D.C. area.)

Fast forward to the counterculture years: “Federal employees were thought to have been professionalized into objective, politically neutral competence, cleansed of radicalism … and made both happy and prosperous by very generous salary increases.

The outbreak of protest in the federal service obviously jarred these conceptions. Why the sudden militancy of public workers in the 1960s?”

Politically neutral competence? For starters, how about Kennedy’s executive order unionizing the federal bureaucracy, ignoring FDR’s advice. Federal employees were the missing piece of the public sector work force, so Kennedy cemented the special relationship between all public sector unions and the Democratic Party.

Kearney observes that until 1965, public workers were “generally perceived to be … humble servants of the people … They scarcely seemed part of the American labor movement.”

My how times have changed.

In 2009, private sector union members were outnumbered by their public sector brethren for the first time. Some private sector union officials are warning their public sector counterparts that they are killing the goose that laid the golden egg with their greed.

Federal employees have been enjoying a boom in employment and compensation and benefits at the expense of taxpayers. Local governments can’t threaten to move elsewhere; nor do they have any threat from foreign competition, both of which decimated private industry, and in turn, its union membership.

One expert tells us that “one-third of the so-called stimulus money went to state and local governments to avoid layoffs of public employees.”

Most of us don’t have a sense of where this is all heading. On the private sector side, Sen. Bob Casey, D-Penn., proposed a massive bailout for underfunded union pension plans in March. Private pension funds are estimated to be underfunded by $165 billion. This legislation would create a special fund for unions within the Pension Benefits Guarantee Corporation (PBGC), courtesy of taxpayers, as an “obligation of the United States” rather than an obligation of the PBGC through its insurance premiums.

It is guesstimated that state and local retirement plans are underfunded by several trillion dollars. On the public sector side, we will probably see more municipalities declaring bankruptcy. Federal workers pretty much have a stranglehold over taxpayers as well as state employees.

In many states, union lobbyists made certain these benefits were contractual and constitutionally or statutorily protected. But many states – particularly the Democratic strongholds of Illinois, California and New York – will simply run out of money. Some states may simply stop paying these generous benefits; but more likely, they will press the federal government for bailouts. That means us – the taxpayers again.

What happened is precisely what FDR told the unions. “The very nature and purposes of government make it impossible for officials to bind the employer ..” Wrong. Unions make certain that taxpayers are on the hook.

The problem is there is no “collective bargaining.” Public sector unions are a client of a Democratic bureaucracy that wants their vote. The taxpayer – the “employer” – isn’t a player in the bargaining process.

Public sector unions now threaten to overwhelm our economy with financially untenable compensation packages. We are broke. Legislators should put an end to these abuses; and while they are at it, craft major structural reforms with a complete downsizing of selected government “services.”

A limited government becomes an affordable government.

John Reiniers, a regular columnist for Hernando Today, lives in Spring Hill.