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The real lesson to learn from Ohio

October 31, 2014

Although labor unions have been trumpeting their success in overturning Ohio’s ban on public sector collective bargaining after it was referred to the ballot in last week’s election, their victory was more about voter confusion than political strength. They successfully obscured the critical distinction between private sector and public sector unions. That distinction makes all the difference because it is precisely what justifies a ban on collective bargaining in the public sector that could never be justified in the private sector.

Unlike most private sector unions, public sector unions help elect their employers. Public employers thus have an interest in satisfying the demands of union members that private sector employers typically do not have. Not only that, public employers also have an inherently greater ability to pass the cost of any labor deal onto the taxpayer. Unlike a private sector business, government can forcefully seize money to pay labor costs through taxation. Although overtaxed residents can move away, a government’s tax base is far more captive than the shareholders or customer base of any private sector business.

These differences naturally cause public sector unions and employers to collude against the taxpayer far more often than private sector unions and employers collude against shareholders or customers. Taxpayers are uniquely vulnerable to fiscally extravagant and unsustainable compensation agreements being reached through collective bargaining between public sector unions and the governments that employ their members. Even worse, these fiscal abuses are imposed by government officials who are supposed to be public servants dedicated to protecting the taxpayers. A ban on public sector collective bargaining corrects that imbalance.

Governor Kasich and elected officials nationwide must not read more into this first defeat than they should. For now, it’s time to focus on better informing taxpayers about the critical differences between public and private sector unions. Once the seeds of information have been sown, genuine public servants and citizens at large will support banning public sector collective bargaining.

Nick Dranias holds the Clarence J. and Katherine P. Duncan Chair for Constitutional Government and is director of the Joseph and Dorothy Donnelly Moller Center for Constitutional Government at the Goldwater Institute.

Learn More:

Huffington Post: Ohio Issue 2: Controversial Anti-Union Law Defeated By Voters



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