Public sector workers in their own Unionverse

Trade union memberships have generally fallen over the past 30 years around the world. In Britain it has dropped from 44% to 15%. Less than a fifth of workers in the OECD belong to unions. however there has been an interesting development in that more public sector employees are members of unions than their private sector counterparts. This has meant public sector workers have ended up with much better pay and employment security. The private sector is dominated by competition and turbulence. Performance-related pay is the norm, and redundancy commonplace. The public sector, by contrast, is a haven of security and stability. Many people have jobs for life and performance measures are rare. The result is a paradox: the typical public worker is better off than the people he is supposed to serve, and the gap has widened significantly over the past decade.

With the financial crisis requiring a massive cull of public sector workers, they receive little sympathy from their colleagues in the private sector who have likely already lost their jobs. Public-sector unions enjoy advantages that their private-sector rivals only dream of. As providers of vital monopoly services, they can close down entire cities.

Unions are powerful political machines, they can help to pick the people who sit on the other side of the bargaining table. Ed Miliband, the leader of the Labour Party, owes his job to trade-union votes. This has meant unions and politicians have been very accommodating to each other. unlike the private-sector bosses who stand to lose their business if they don’t negotiate with the unions, politicians are more interested in saving their own skins by rolling over to the unions; even if it means mortgaging the future generations. The unions have used their power to extract a wage premium: public-sector workers earn, on average, a third more than their private-sector counterparts. Unions have suppressed wage differentials in the public sector. They have extracted excellent benefits for their members. And they have protected under performing workers from being sacked.

Wage differentials are relatively small in the public sector. Lower-level workers, such as secretaries, are usually better paid than their private-sector equivalents, whereas higher-level workers are worse paid. This not only makes it difficult to attract high-flyers into the public sector, but also makes it hard to raise standards by, for instance, putting the best head teachers in charge of groups of schools.

Public sector workers as well as having higher pay have longer holidays, generous pensions, lighter workloads, more sick leave and almost impossible to get sacked. Private-sector unions have learned to exercise self-restraint when it comes to pushing for more manpower: they realise that more workers may reduce the wages of their members and that a higher wage bill may drive their employers out of business. But publicsector unions are relentless in demanding more resources and more personnel, which conveniently translate into more members and more dues.

When the union-backed New Labour government came to power in 1997, public spending accounted for almost 40% of GDP. When it left power in 2010 public spending was nearly 50% of GDP (partly, to be fair, as a result of recession) and 1m workers had been added to the publicsector payrolls.

Public-sector unions combine support for higher spending with vigorous opposition to more accountability. Almost everywhere they have demonised competition, transparency and flexible pay. Teachers’ unions have often acted as the Praetorian Guard in this fight. They are trying to kill “free” schools (academies), which can be set up outside local-authority control. It is impossible to calculate the cost of the unions’ inflexibility. But several recent studies provide some indications. Policy Exchange, a conservative think-tank, calculates that people in the British private sector work 23% more hours than their public-sector counterparts over their lifetimes, thanks to public-sector strikes, sick days and early retirement.

The rigidity of the public sector does not merely reduce the quality of services. It also discourages innovation. In the private sector innovative firms routinely experiment with new business models, measure the success of those models and then expand successful ones. But whenever publicsector managers have tried to do the same—the academies for example—the unions have opposed them.

With government departments to be slashed by a quarter and a review of pensions, the unions facea massive challenge. They have declared war by organising strikes and protests. It is not likely they will be successful in their endeavour considering the scale of cutbacks across the board, though causing much disruption to all. London Underground workers have repeatedly paralysed transport in the city; this is but the tip of the iceberg for what the unions have planned for this year as more cuts are announced. Do the public exist to serve public-sector workers with their high pay and inflated benefits, or do public-sector workers exist to serve the public?

By Shahanara Begum