Government unions face new challenge

Most of organized labor in the United States looks to the next two years of President Bush with trepidation.

"We're going to have the White House, the House, and the Senate in hands hostile to working families," AFL-CIO president John Sweeney said after the elections.

Since then, the Bush administration has given trade unions no reason to feel otherwise. Last Friday, Mr. Bush reduced pay raises for most civilian federal workers. Earlier last month, Congress passed a bill that gave Bush broad powers to hire, fire, and move workers in the 22 agencies that will be merged into the new Homeland Security Department.

In addition, the administration has announced a plan to place as many as 850,000 government jobs up for competition from private contractors in coming years.

Actually, that's not entirely the case. Possibly not all the jobs will be outsourced by a competitive procedure. The new guidance ruling, out for public comment until Dec. 14, allows the administration to turn over civilian government jobs to the private sector without a competition of any sort if there is a "reasonable chance" it will save money.

"It's pretty vague," says Paul Light, an expert on the federal bureaucracy at the Brookings Institution in Washington. "That would make me nervous if I was a federal employee."

Certainly, the American Federation of Government Employees (AFGE), the biggest union representing federal workers, is concerned.

"This is a conscious effort to finish off federal trade unions," charges Wiley Pearson, an analyst at the AFGE in Washington. His union has 200,000 members and represents some 600,000 federal employees.

Decades ago, organized labor was regarded by political scientists as one of three "countervailing forces" in the American system. Business and government were the other two. The three, it was thought, would balance each other off in a useful way in Washington.

Labor unions helped make sure the "invisible hand" of capitalism didn't just serve the already well-heeled in business.

That's not so true now. Trade union power has shrunk dramatically. Business, contributing 12 times more in campaign funds than unions, flexes great political muscle today.

Union members account for only 9 percent of the private-sector labor force, and 13.5 percent of the entire labor force. In the public sector, trade unions represent 37.5 percent of all employees - practically the only area where unionization has been succeeding.

From 1983 to 2001, the number of male union members dipped from 11.8 million to 9.5 million. The number of female members, many in government, grew from 5.9 million to 6.8 million.

"You are really going at the jugular [of the trade union movement] by privatizing these government jobs," says Jared Bernstein, an economist at the Economic Policy Institute in Washington.

If thousands of AFGE members lose their jobs, it would strike at the finances not only of that union, but of the AFL-CIO itself, a federation of 66 national labor organizations.

The administration says the goal of outsourcing federal jobs to private contractors is efficiency and economy.

Mr. Light says he doesn't know whether contracting out federal jobs actually does save money. Sometimes contractors bid low for a task, and then raise their price in later years once there are no longer civil servants to give the work back to.

Apparently no long-term studies on savings from privatization exist. "The claim of savings is a charade and sham aimed at hiding the goal of shrinking government," says the AFGE's Mr. Pearson.

In a sense, government wouldn't really be shrunk - just the number of civil servants. The government-sponsored tasks would still be there - running cafeterias for remaining employees, making travel arrangements, mowing lawns, picking up trash, and many other "commercial" or "semi-commercial" activities.

During the last presidential campaign, Democratic candidate Al Gore used to boast of how the Clinton administration trimmed the number of government employees.

In terms of federal employees, the government was smaller in 2000 than under President Kennedy in 1961.

Under Bush, the number of government workers has soared. There are new jobs in law enforcement, border control, customs, immigration, intelligence, transportation, and defense. By 2005, there could be 2.1 million federal employees, compared with 1.78 million in 2000, estimates Light.

In the next election, President Bush may find himself spending "an awful lot of time" defending himself from charges of growing government, says Light. By contracting out jobs, that risk diminishes.

More cynical observers say the Republican party and the administration hope to rake in political contributions from those contractors winning government tasks.

That's what happened in Florida, according to a story in the Miami Herald. After Florida turned over many state government jobs to contractors, these firms made "millions of dollars" in campaign donations to Gov. Jeb Bush, other Republican politicians, and the Florida GOP.

Light says he's not sure political donations by contractors are large enough to be "the driver" in this Bush administration move.

Mr. Bernstein's big concern is for the employees of contractors that take over federal jobs. Any federal cost savings, he fears, will come from paying these nongovernment workers low wages, offering little or no paid healthcare, trimming pensions, and shrinking vacations.

On average, unionized workers earn wages that are 11.5 percent higher than nonunion workers if experience, education, and other factors are considered. They are 28.2 percent more likely to have employer-provided health insurance.

And 71.9 percent receive employer-provided pensions, compared with 43.8 percent of nonunion workers.

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