More “Takers” Than “Makers”
Another Labor Day is upon us, but the organized labor union movement in Pennsylvania has very little to celebrate this year. Union membership in the private sector continues its decades long free-fall, and the bottom is now in sight. At the same time unionized jobs are leaving the Commonwealth, fewer remaining workers are convinced of their need to embrace union representation.
But not all the news is bad for Pennsylvania’s labor unions—at least for those in the government sector. Recently, the Pennsylvania Manufacturers’ Association (PMA) announced that the Commonwealth—a once-upon-a-time powerhouse of manufacturing—has more Pennsylvanians working today for the government than are employed in the Keystone State’s private manufacturing sector. It is this growth of government jobs that has been a boon for labor unions.
“The continuing expansion of government in the face of stagnant growth in the commonwealth’s over-taxed, over-regulated, lawsuit-riddled private sector will leave Pennsylvania with more ‘takers’—whose salaries are paid by the taxpayers—than ‘makers’ who add value to the economy by manufacturing products,” said Jim Panyard, president of the PMA. “That is an unhealthy trend for Pennsylvania’s well-being, and ultimately an unsustainable one.”
Although overall union membership has been in a steady decline for decades, government-sector union membership has experienced significant growth in Pennsylvania. Between 1983 and 2002, the number of government-sector union members increased by 6.3 percent, while private-sector union membership fell by 45.9 percent. As the percentage of unionized private-sector workers decreased from 23.2 percent to just 10 percent—a 56.9 percent decrease in less than two decades—the percentage of unionized government workers rose from 51.4 percent in 1983 to 55.3 percent in 2002.
Within the private sectors of construction and manufacturing—two of the most prominent segments of the organized labor movement—unions experienced a dramatic erosion of their membership and unionization rates. Construction union membership in Pennsylvania fell by 6.4 percent between 1983 and 2002, while more than two-thirds (66.9 percent) of manufacturing union membership—305,200 workers—simultaneously disappeared.
Although private-sector unions (such as the UAW and the USWA) and government-sector unions (such as the AFSCME and the PSEA) have consistently presented a united front on most matters political, the increase in “takers” and decrease in “makers” is gravely bad news for private-sector labor unions. The loss of family sustaining private-sector jobs in Pennsylvania has devastated private-sector union membership.
But it is this steadily rising and disproportionate power of government-sector unions that is perhaps the greatest threat faced by private-sector unions and their remaining members. Indeed, the economic and fiscal consequences of this shift are potentially devastating for all taxpaying Pennsylvanians.
In 2002, Pennsylvania government-sector workers had a unionization rate 453 percent higher than their private-sector counterparts—and that unionization rate was 46.3 percent above the national rate for government employees. It is clear that in Pennsylvania, the state’s “makers”—the tax generators remaining in the Commonwealth—are increasingly being forced to support an ever-growing number of “takers”—the heavily unionized and politically powerful government-sector tax consumers.
The gains made by government-sector unions have been at the expense of many private-sector union members who lost their jobs in Pennsylvania’s inhospitable business climate. Dollars that would otherwise have been invested to create or retain jobs for private-sector workers—unionized or not—have been siphoned off to maintain ever-growing government jobs.
Eventually, the more-takers-than-makers trend will end in an economic and political disaster. However, the coming crisis could be averted if policymakers dramatically curtail their taxing and spending habits. Only when politicians recognize that sustained economic growth occurs when the “makers” far outnumber the “takers”—and that government doesn’t create economically productive jobs—will Pennsylvania pull itself out of the economic doldrums.
Private-sector unions must also recognize that it is the rapid growth of government that ultimately threatens their future in Pennsylvania. If only for their own survival, private-sector unions must begin opposing their government-sector counterparts that effectively cannibalize the paychecks of non-government union workers. They should view the lobbying efforts for higher taxes by government-sector unions like the PSEA or AFSCME as a truly hostile action toward the private-sector union members they have promised to protect.
If Pennsylvania continues to increase the number of “takers” while driving out the “makers,” Labor Day just won’t be the same when there are no taxpayers or privatesector union members around to take the day off and celebrate.
Grant R. Gulibon is senior policy analyst at the Commonwealth Foundation, a free-market public policy research and educational institute based in Harrisburg.