Sunday, August 29, 2010

Public Sector Unions and State Debt

For those who take 5 minutes to look at the numbers, there is a clear and disturbing connection between public unions and state government debt.

Public sector unions and state debt go hand in hand


Online Opinion Editor


There are hundreds of reasons why states accrue debt. In some cases, it has to do with special programs they pursue. (See RomneyCare.) In others, it has to do with their method of taxation.
But the states with the highest per-capita debt all have something in common: Robust public-sector unions that have, over the years, cut sweetheart deals with politicians -- usually, but not always, Democrats.

In the graph below, each blue square represents a state (some are labeled), plotted by its per-capita debt and the percentage of state and municipal workers in public sector unions.

The data comes from the U.S. Census Bureau, the Tax Foundation, and the Bureau of Labor Statistics, whose labor numbers are charted in this paper from the CATO Institute. The numbers for unionization run from 2006 through 2009, and the numbers for debt are 2007, before the current crisis. If anything, this presents a rosier picture for most states than the current one.
A rigorous study would control for dozens of factors, but this chart demonstrates the correlation between state unionism and debt.
As you can see in the graph, the states coalesce into three main groups:
Among states whose government workers are less than 40 percent unionized, median per capita state debt is $2,238.
Among states with between 40 and 60 percent of their government workers in public sector unions, the average debt is $3,609.
Among states with more than 60 percent of the government workforce unionized, the average (median) per capita debt is $6,380.
As you keep an eye on the fiscal collapse of California, and New Jersey Gov. Chris Christie's (R) efforts to rein in the unions' power next year, bear in mind that this is quickly becoming the biggest fiscal issue in America today.
Do public sector unions really protect workers from exploitation, or do they merely bankrupt the treasuries of states nationwide? And more immediately, will the states that made poor fiscal choices get a second bailout from the federal taxpayer after the 2009 stimulus package?

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