Three Cheers for Calvin Coolidge

Now that New York City is in a midst of a transit strike that has caused immediate and palpable hardship to millions of its citizens, I think that we should tip our hats in the direction of Calvin Coolidge, who, as governor of Massachusetts said, “there is no right to strike against the public safety by anyone, anywhere, anytime.”

That’s more words at one time than Silent Cal was known for, but the soundness of his position should persuade us to forgive his loquacity. The transit workers have been given by state and federal law a chokehold over essential public services. The original quid pro quo was that they should be entitled to have union representation in exchange for a no strike pledge, which in this instance is honored only in the breach. It is time to rethink that basic structure and make a few fundamental changes in civic organization.

The first task is to rethink our approach to unions generally. As a traditional common lawyer, I think that unions should be governed by the same rules that apply to all voluntary associations, including those that govern the restraint of trade Applying those laws to this case is a simple exercise. The union has a monopoly position over the transit system. It therefore engages in a collective refusal to deal that is a classic antitrust wrong. The only reason that they are not liable under the Sherman Act is because of an explicit exemption for union activities contained in the Clayton Act. Repeal that exemption, and criminal and civil actions should follow as the night the day.

That approach, of course, goes far beyond this situation, and points to what is a long overdue social reform, which is the repeal of the mandatory collective bargaining provisions of the National Labor Relations Act, by which Congress gave its blessing to collective union action. In the short run, that is not going to happen, so one has to think of more focused approaches that hit at this particular strike without calling the entire body of labor law into question.

One obvious response is to use all the available fines against union leaders and members. If that does not work within 24 hours, then the Transit Authority should fire the striking workers and open up permanent positions to new employees until the rank and file comes to its senses.
In the long run, however, other structural reforms imperative. If there are unions, then let there be two, one for trains and the other for buses. Make it so that the contracts in question expire at different times. Make it illegal for the one union to engage in a sympathy strike with the other. And by all means make sure that no labor contract expires until after the Christmas holidays.

Even more fundamentally, open up the public roads to alternative forms of transportation: jitneys and private services should be allowed to go into business now. That means that the City has to repeal its archaic (and unconstitutional, I believe) rules that make it impossible for any rival carrier to operate in the vicinity of any city bus route. The easiest way to do this is to allow any private carrier to pick up and unload passengers at any regular bus stop. Other stop offs should be allowed as well if consistent with traffic safety.

One of the great dangers of unionization is that its influence is not confined to decisions that deal with wages and prices. In order to gain greater leverage in their own negotiations, unions actively support any legal rules that prohibit entry of rivals who threaten to undermine their bargaining position. Free entry is an indirect form of relief that reduces union monopoly power without having to take on the labor statutes that govern union-management relationships.

What should be done with public transit should also apply to public education and other areas. We have to recognize that monopoly power becomes intolerable when protected and sanctioned by legal rules. Our first priority should be to make sure that free entry and exit applies in all labor, service and product markets so that no union, or any other kind of organization, has the power now put into the hands of New York’s Transit Workers Union. Calvin Coolidge had it right. The progressive reformers had it wrong, and now New York City is paying the price for their intellectual confusion and political mistakes.

Comments

[marsha]

Or maybe the money hogging heads of the MTA could actually pay their workers the money they deserve FOR keeping us safe. Their striking is made illegal by laws that serve the upperclass.

The cost of living in NYC is rising exponentially. 50,000 is middle class here. Barely.

The MTA is constantly crying poverty, raising rates (another tax on the poor) and then finding millions of dollars, have a billion dollar surplus and will not open the books, and cry the same wolf cry of "we're going broke" in the future too often for me to believe. We've passed many of those future dates.

These are people that do hard, ugly, dirty, skilled jobs. The person having to stand on frozen platforms, spraying them from large hoses full of soap, bleach and water, at 3 am in the morning, one of the most menial of MTA tasks, deserves the money to raise a family in this city.

Sometimes the Law is wrong.

It is astounding how so many of the people who have nice comfortable lives seem to think these workers don't deserve it.

[Goldberg]

Professor Epstein is anti-union! stop the presses!

On a serious note, the MTA forced the union into this position by it's last-minute "offer" which, while only saving the MTA $20 million over three years, has the effect of a substantial pay cut on the majority minority TWU workers. (see http://tinyurl.com/c3kce) Workers, it should be added, who, by virtue of having a union, are able to be middle-class, own homes and in general help to raise the standard of living in New York's minority communities.

and to say there was quid pro quo for the right to unionize and the right not to strike is, well, a bit of a disingenuous reading of the history of the Taylor law.

Lastly, the union knows their strike is illegal. Gov. Pataki and Mayor Bloomberg (and others including law professors) going around and yelling this does nothing to solve the crisis.

[washerdreyer]

This is an obvious point, and I'm sure if I'd taken labor law I'd know the answer (but I'm only halfway through law school, I still have time), but why doesn't the logic that because this is a vital government service the workers ability to organize should be restricted also apply to the workers ability to quit their jobs? That is, what if a very large number of transit workers decided simultaneously that their jobs weren't remunerative enough and all quit? Surely they're allowed to, yet how is this particularly different?

[Miracle Max]

A proposal worthy of Mussolini.

Ciao.

[Doug Hoffer]

Great post Professor Epstein. Ultimately I think a big part of this issue comes down to people accepting more responsibility for their own welfare. With people living longer, it is unrealistic for employees to expect their employers to keep retiree benefits at current levels, and for employees not to share a larger portion of the load. Public employees seem to have the hardest time accepting this.

I think arguments about paying a living wage miss some big points.

First of all, like all public employees, the transit workers are guaranteed raises almost every year regardless of merit. If the company I work for has a bad year I might get no raise at all.

Second, like most public employees, the transit workers have terrific job security. Even if the government eliminates a certain job, it is likely the employee will be allowed to transfer into a similar paying job.

Third, the benefits public employees get are typically far better than those enjoyed by people employed in similar jobs in the private sector.

My points are not meant to seem overly critical. Both of my parents are members of public employee unions. It just seems like realism and perspective are missing from the union leadership in this case.

[Goldberg]

Doug,

cleaners and bus drivers have about a 57-year life expectancy.

[Gus]

Quick follow-up on Goldberg's life-expectancy point. While the 57-year expectancy is interesting, do you know what the expectancy is for those who make it to retirement age?

I expect that your purpose with the 57-year figure is to show that most of the employees will get either no- or little- time in retirement--a point particularly salient given that two of the union's (most unreasonable) demands are a reduction in retirement age from 55 to 50 and the elimination of the employees' 2% contributions to the pension fund. This, as opposed to the state's demands that new employees contribute 3% and not retire until 62.

The gut reaction to these numbers--given your 57-year figure--is outrage: the state is demanding that employees contribute about enough money to fully fund the pension--a pension that most will have died before getting a penny out of. This is clearly a bad deal--the employees would be better keeping the money and throwing it in a money market account.

But this reaction is wrong. The life expectancy for those who reach retirement is probably roughly on par with that of retirees in other industries. What's more, I expect that new employees today have a greater life expectancy than new employees did twenty or thirty years ago (both today, and when they reach retirement age)--so the new employees are both more likely to reach retirement age, and to live longer when they do. This amounts to a hugely increased burden placed on the pension system. It is perfectly reasonable to expect the new employees to pay more into the system and to vest into it later, simply to match the increased burden that they will place on it.

That all said, my point here isn't to argue against the union demands, but to remind us that a static life expectancy figure can be misleading. Indeed, it is somewhat surprising that the current employees aren't embracing the state's demands--were this not a state-run pension (and therefore "infinitely funded," from the employee's point of view), the current employees should be worried that the burden of the new employees would cause the pension to run dry! And that's surely the last thing that the current employees want, the pension fund to dry up before they die.

--Gus

[Goldberg]

Gus, I'm not sure how that age was calculated, and clearly it does matter (as we saw in the Social Security debates, when conservatives were gaming the numbers to pretend that SS was basically racist). but, unlike in that case, this is not a circumstance where it is possible that the 57-year number is a "from birth" life expectancy, just because you can't determine life expectancy from birth of TWU members until they, you know, become TWU members, which wouldn't happen until they are already in their twenties. (I hope I explained that well enough).

In any event, I agree that a more salient data point would be years of retirement, or years collecting a pension. obviously, these actuarial costs are important.

[p.lukasiak]

" It is astounding how so many of the people who have nice comfortable lives seem to think these workers don't deserve it."

Bravo! When Prof. Epstein is willing to live on the salary of the average MTA worker, I'll consider his opinion. Until that time, he's just another rich academic blowhard who thinks that being a rich academic blowhard confers privileges that are denied to people who work much harder under far worse conditions than he does.

[one who questions]

It's really quite interesting the number of responses that don't address any of Prof. Epstein's arguments, but rather try to 'refute' his argument by pointing out that he may not work and live in the same conditions that MTA workers do. I was under the impression that this was a law school, where we focus on arguments. Prof. Epstein's wealth or ease of life has absolutely nothing to do with the validity (or invalidity) of his argument. To self-righteously try to claim that it does is a travesty against reasoned political discourse and everything this law school stands for.

[David Nieporent]

It is astounding how so many of the people who have nice comfortable lives seem to think these workers don't deserve it.

They "deserve" their market value, nothing more. Nobody "deserves" a "middle class lifestyle" or a "comfortable life." I'd love to play professional baseball, but nobody is going to pay me middle class wages to do it, so I don't.

It's quite simple: if the MTA can attract lots of workers at their current salary levels, then they're not underpaid.

On a serious note, the MTA forced the union into this position by it's last-minute "offer" which, while only saving the MTA $20 million over three years,

I see that's the current talking point -- but why are you looking at three year savings? What does that have to do with the price of tea in China? We're talking about pension changes -- in fact, pension changes for new hires. By design, pension changes will have their greatest savings down the road, not in the next three years. (Yes, I know the contract itself is for three years, but it's still an irrelevant comparison.)

[mark]

This is just such exciting stuff. Great blog.