(Editor's Note: This article was published first at Illinois Policy Institute).
Unions contributed $15.1 million to the campaigns of Illinois lawmakers who put a constitutional amendment on the ballot to make union powers permanent.
That averaged $119,000 per “yes” vote. State lawmakers who voted against the ballot question averaged $9,300 in union contributions.
In Illinois, government unions already possess unprecedented power to call the shots on everything from opening schools to how much the state spends. This amendment, Senate Joint Resolution Constitutional Amendment 11, would permanently raise the cost of government services.
Most importantly, it would give unelected union bosses – through the government leaders their political contributions elect – much greater power over what happens in Springfield than taxpayers have.
For more than two decades, Illinois labor market performance has persistently lagged the rest of the country. Less job creation and fewer prospects for workers have meant longer unemployment for everyone. If SJRCA 11 becomes permanently enshrined into Illinois’ constitution, the state’s labor market performance will continue to lag.
SJRCA 11 creates a protected class of public sector unions at the expense of everyone else, especially job seekers.
Illinois already has some of the most unfair laws in the region when it comes to negotiating with government worker unions. That, in turn, drives up the cost of government services.
A ballot measure to make permanent this unfair power dynamic shouldn’t surprise anyone.
By creating a “fundamental right” to collective bargaining for employees – including government workers – SJRCA 11 would guarantee unions continue this control over lawmaking and the allocation of public funds in Illinois. It would also harm the state’s economy.
High union membership in the public sector crowds out private sector hiring
While only 8% of private sector workers are members of a union, 55% of public sector workers are union members, according to data from the Current Population Survey.
In the public sector, the ability to bargain over anything means the cost of government services will only continue to increase. Public sector union demands tend to lead to higher taxes despite fewer or lower quality services. This is because public sector unions are in the business of raising salaries and benefits, and protecting job security regardless of employee performance. In the case of police unions, it could also mean limits on investigation of officers after alleged wrongdoing and the destruction of disciplinary records. In the case of teachers unions, although union bosses claim protecting students is their top priority, unions can be a roadblock to investigating teachers accused of misconduct.
The bulk of evidence also suggests public sector hiring reduces opportunity for job seekers. If public sector hiring did not crowd out private sector hiring, then an increase in public hiring would be associated with a decrease in the unemployment rate. However, data from all states from 1981-2016 reveals higher public sector employment is associated with higher unemployment rates. This is because wages in the public sector are relatively unresponsive to productivity differences. Higher public sector employment may also lower productivity by reallocating resources from the higher- to lower-productivity sectors.
History shows why enshrining government union power in the Illinois Constitution is dangerous
In 1970, government unions succeeded at enshrining pension protections in the state’s constitution. The result: the worst pension crisis in the nation.
The state has increased pension spending by more than 533% during the past 20 years, adjusting for inflation. Health insurance spending has gone up 127%. As pension debt continues to increase, so do required pension contributions. Pension contributions now consume 26.5% of the state’s general funds budget, up from less than 4% during the years 1990 through 1997.
As pension costs capture an increasing share of the state’s budget, the state raises taxes while at the same time forgoing desperately needed public investments. The estimated total cost of pensions had soared to nearly $28 billion on average each year in forgone income and direct payments to the pension systems by 2017.
At the local level, property taxes go up and yet an increasing share of municipal budgets go to pensions instead of key services and new public investments. From 1996 to 2016, Illinois property taxpayers sent an additional $396 million to police departments, but pensions consumed a vast majority of these funds. Statewide, 81 cents of every additional property tax dollar for police departments – more than $322 million – went to pensions rather than police protection services. The same held true for fire departments, which levied an additional $260 million in property taxes from 1996 to 2016. Most of that money went to pensions. Statewide, 78 cents of every additional property tax dollar for municipal fire departments – more than $200 million – went to pensions rather than fire protection services.
The fact that nobody could have predicted a slowdown in economic growth would have led to declining investment returns and lower inflation than the pace of pension benefit increases should serve as a warning. Economic policy should adjust based on changing economic conditions. It should not be permanently enshrined into the state’s constitution.
Unfortunately, in 2022, history could repeat itself. Illinoisans will vote on a constitutional amendment that attempts to give government unions unlimited power forever: SJRCA 11.
The amendment would permanently allow government unions to negotiate anything and everything into their collective bargaining agreements – not just wages and workplace benefits – giving most public sector workers the right to go on strike for just about any reason.
SJRCA 11 would hurt the vast majority of Illinoisans
If SJRCA 11 is added to the constitution, all Illinoisans will lose again. The evidence is overwhelming that the unemployment rate is an increasing function of unionized public sector employment – reduced labor market freedom – and that policymakers should: (a) not elevate the state’s minimum wage too aggressively; (b) limit the extent of government employment; and (c) favor laws limiting the extent of government union collective bargaining agreements.
SJRCA 11 does the opposite.