Saturday, July 28, 2012

Collective Bargaining, State Employment and You: Garbage on Strike

Many of our excellent readers here may have at one time or another worked in some capacity for a government. If so, and if you've read your employment contracts carefully, you'll often find a clause in there prohibiting strikes.

As for me, I've only had one private union job and the stipulation against striking was for wildcat strikes only, which makes sense once you understand the public choice arguments about the function of unions, including regulatory capture, rent-seeking, and loss aversion.

When workers strike, the suffering is felt by customers, owners and the workers themselves (via foregone wages and having to trudge a picket line in often unforgiving weather). For private businesses (mine was a button manufacture), public privation isn't much of an issue. Even if people needed to buy a handful of shirtwaist buttons each and every lovin' day with their morning latte, there are plenty of other sources of buttons than one small Connecticut factory floor. Ditto for cars: if UAW workers hit the picket line, sympathetic drivers can hold off on buying that new Explorer for a while until Ford yields.

State employees are another bag of kittens altogether. Suppose the fire brigade takes to the picket line and Mrs. O'Leary's cow kicks over a lantern. Chicago burns to the ground. For those of you who remember the parts of Robocop 2 that weren't Tom Noonan mugging in his exoskeleton, the local PD got fed up and took to the picket lines, leaving poor Robocop to the miserable task of battling an overpowered, drug-fueled foe in the mean streets of Old Detroit. The key difference here is BATNA. The state holds ultimate monopoly rights, and when a monopoly shutters operations, the customers are left twisting in the breeze.

Ease of substitution is one part of determining BATNA, but so is simply doing without. Fire and crime protection isn't something folks will gladly do without, so we bar strikes and make up for it by being generous with compensation.

I'm curious if this is really enough to make the whole arrangement euvoluntary. Notable exceptions aside (LAPD in the late 80s, eg), I think it's fair to say that most folks are happy with the police protection they've got*. Most folks send their kids to public schools and few clamor to shut down municipal fire departments in a bid to shift to volunteer forces (of course, those with volunteer fire departments rarely urge local councils to move to full-time protection).

It occurs to me that this is very much a taco-truck-in-the-desert scenario: citizens are at risk of dying of thirst (or from criminals or an inferno or a bad education or whatever) and what we've decided to do is mandate that there's only one Juan and he has to serve everyone all the time, or else (or else what, I don't know). Part of the compensating differential is that we make sure he's well-stocked and has a generous pension coming his way when his buddy Pedro takes over the business.

Can you think of other arrangements that might also solve the monopoly problems of so-called public services? How technically feasible are your solutions? How politically feasible? What other constraints might you encounter? Are vital services like fire and police protection different in kind than vital services like water, sewage, and electricity?

*this is a reminder-to-self to check up on this in the GSS when I get a chance

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Do you have suggestions on where we could find more examples of this phenomenon?