Unions: Arbitration’s intolerable bind

Courtesy of Jeff Jacoby and The Boston Globe.  Juicy part:

Arbitration can be an excellent means of settling quarrels that arise under existing contracts, and it is frequently used in the private sector as a means of resolving disputes without going to court. But arbitration makes little sense as a mechanism for drawing up binding contracts in the first place.

As state and local governments have learned to their chagrin, once binding arbitration becomes part of the collective-bargaining process, it doesn’t facilitate compromise — it undermines it. Unions quickly figure out that they risk nothing by making extreme salary or benefit demands, rejecting reasonable counteroffers, and then waiting for the ensuing impasse to go to an arbitrator. How can they lose? They know that the arbitrator will almost never award public employees less than the government’s final offer.

Instead of speeding up public-employee contract negotiations, mandatory arbitration delays the process. In Michigan, notes the Mackinac Center for Public Policy, a respected think tank, “the average arbitration process takes 15 months to reach a decision.’’ When those decisions are reached, the price tag is generally high. A task force appointed by former Michigan Governor Jennifer Granholm surveyed the economic literature and reported in 2006 that the overall impact of binding arbitration in states that require it “is to raise municipal expenditures . . . by 3-to-5 percent relative to other states. While small in percentage terms, this impact is large in dollar terms.’’

Perhaps the worst effect of binding arbitration, however, is the way it erodes self-government. It takes away from citizens and their elected officials the power to shape local budgets, and to establish wages and working conditions for public employees. Those essential civic decisions are made instead by an outside arbitrator who likely has no ties to the community, and who will not have to live with the consequences — or be taxed to pay the costs — of the settlement he imposes. In Governor Kasich’s words, “He goes back to Kokomo — and we pay the bill.’’

But as taxpayers find it harder to pay the bill for public employees, more are coming to see why collective bargaining and government service are a bad mix. In the public sector, mandatory arbitration is not a reasonable trade-off for the right to strike. In either case, after all, it is the public at large that pays the price.

Uh-huh.  Ban Public-employee unions.  H/T: Betsy’s Page

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