of public employee unions with university of washington labor studies director michael mccann. this event from january is hosted by town hall seattle. it's about an hour. [applause] >> thank you so much for coming out. i've been really looking forward to this having read daniel's book and whether you agree with it or not, he presents some really interesting arguments that we're going to get a chance to get into here. of our format this evening is going to be fairly simple. they'll be ten minutes, first from daniel -- the guy with the tie -- and how many people are related to michael by the way? he said he had some relatives here. [laughter] so there'll be ten minutes from daniel, ten minutes from michael, then five minutes each sort of to respond to one another x then i'm going to take the moderator's prerogative to ask 15 minutes of questions of my own roughly and then you'll have a chance to come to the microphones to ask your open questions. this is being recorded by c-span for possible broad and by wuow -- kuow and i peapt they'll probably -- anticipate they'll probably be airing the entire debate on kuow and perhaps a short or version of it on the show that i host. wisconsin governor scott walker has recently been mentioned as sort of a second tier republican candidate for the presidency, and he's well known for his animosity towards public employee unions. so although this is an issue that is not quite simmering at the highest plain of the national level i'll be curious to see whether he brings into -- [inaudible] and if he catches fire as he might, whether this become more of a national debate. so we might be here talking about some things that you'll be hearing a lot more of in the coming months and years. so to begin, let's hear an opening statement from daniel. go right ahead daniel. and we'll have ten minutes, and it's kind of dark up here. we have a timekeeper in back who, i guess, may have to come closer. can't see very well. so we will start ten minute clock right now. go ahead daniel. >> well, thank you very much for that generous introduction, and thank all of you for coming out tonight to listen to a debate about public sector unions, a subject that really until scott walker's reform efforts in wisconsin had laid dormant and people didn't really care and weren't really interested in it. i also want to thank michael for agreeing to come out, and it's a real ohioan for me -- honor for me to be up here with such a distinguished scholar with such a long and distinguished record. so let me get right into my book. i think i'll have to be a little bit more policemen call tonight because this is a -- polemical than i am in the book but that'll be a little bit more fun. i think public sector unions have been really at the center of state and local government and our pollices since the great recession -- politics since the great recession. obviously, wisconsin really brought the issue to national and international attention, but in many states from indiana to michigan to rhode island to california to new york to illinois this is where the action has been in state and local government, and i think that going forward we're going to see public employee unions as being really getting a lot more attention in the press and in the media and the subject of a lot more scrutiny than they had been prior to 2008. so i think that prior to 2008 journalists didn't cover public employee unions very closely scholars didn't either. as i document a little bit in the book there's -- when it comes to labor historians, political scientists, there just isn't much written looking at public employee unions. so my book is really the first to try to take on this big, and fascinating subject and kind of synthesize what we know offer some new research and make some arguments or conclusions from that. so, and i think it's very interesting because the study of public employee unions is really fundamental to our political life because be we're studying the state -- if we're studying the state we're really studying the political activity of government's own employees. so what do i argue in the book? well, i start out and i try to make a conceptual, i think, very important distinction between unions in the public and the private sectors. a lot of us, myself included came into this project thinking about unions as being sort of more older style industrial or craft unions guys in hard hats, steel-toed boots who worked very difficult jobs on a daily basis and that was a sort of romantic image many of us have. but that's not really what the labor movement looks like today. about half of the labor movement in 2009 for a little while a majority of all union member were public employees, many of whom are relatively affluent with master's degree or college degrees. so this distinction public and private, i argue has, can be made in a number of different ways why these two entities are different. first is history. public employee unions have a very different historical trajectory. private unions are governed by national law passed primarily in the 1930s and supplemented at other points. public sector unions are governed by state law and local ordnances passed really in the '60s and 1970s. so as private sector unions have declined, public sector unions have remained very stable or constant. so their histories are different, their sources of law are different. and i also argue that the way they operate and their policy effects are different which is to say public sector unions get what i call two bites at the apple. that is, they can win things directly for their members first through collective bargaining and that failing also through politics. that is, through participating in the political process electioneering and lobbying in a way that their private sector counterparts can't. third, public employee unions are different in the sense that they can exercise influence on both sides of the bargaining table in a way that private sector unions can't hope to do, which is through that second bite at the apple -- that is, lobbying and election eering -- public employee unions can gain in a way that private sector unions whether that's machinist unions as here in seattle has no say over who boeing's ceo or cfo is. and is that's not the same -- and that's not the same in the public sector. and, fourth, the big difference between the two that structures the incentives and behavior in different ways is that there's a lack of market incentives. that is, markets really structure the dynamic between private sector unions and management and there's a lack of market forces in the public sector where the government is often the monopoly provider of many services or the near monopoly provider. so then after i make this distinction, i go into trying to document what is the power of public sector unions. so there i try to get as much empirical data, and i can't share all the richness of it in ten minutes on how much public employee unions spend on campaigns. that is, how much they give to candidates, how much they spend on initiatives and referenda campaigns, what's their lobbying spending. and then i look at some of their overall political advantages compared to both private sector unions and other interest group players that are trying to get their way in american politics. and those differences include they have easier access to politicians, they have much more easy to mobilize their membership for election campaigns and protests rallies because they're public workers themselves. they're right on the foot of the state capitol. third, they have a much more steady and stable revenue stream through dues checkoff and agency shop legal provisions. we can explain what those are later if people are interested. and fourth as i said, up until the great recession they were really operating in a low visibility policy environment without a lot of media or public scrutiny. so not only do they have a lot of political power -- and again, to give you a couple of examples, for example, the california teachers' association outspent the next three largest interests in the state combined in the first decade of the 21st century in donations to candidates and parties. in new york state, for example, the state democratic party is very honeycombed in with many of the public employee unions in the state firefighters and teachers even to the point of sharing its campaign office is basically office space shared with united federation of teachers in lower manhattan. so that's what i mean when i get at the question request of access. question of access. then i look at some of the incentive structures in collective bargaining in the public sector and i argue they tend to favor the union position over time. and this mainly has to do with the political incentives or management incentives in the public sector where politicians are operating with different time horizons than their union adversaries, and there's a lot of information asymmetries. the unions very much know what they want, but politicians aren't always so clear what exactly is in the public interest. so what's the effects of this power? i try to martial a lot of empirical evidence to show that, basically, the effect of allowing public employees to unionize and bargain collectively has increased the cost of government through increased pay, increased benefits, for example, cities where firefighters are unionized, pay on average about 9% more in salary and about 25% more in benefits than cities where firefighters are not unionized. for no measurably different increase in service quality or fire protection. second, i try to find some empirical evidence to show that it actually reduce cans government productivity, that the union negotiation of work rules that often shield workers from management can stymy or squelch innovation in the public sector such that, in a sense management that you're paying agency managers in different areas really doesn't have many management rights or many management tools so you're paying management, but they're not able to really manage in that sense. so productivity is reduced, managers can't credibly threaten workers with dismissal, they can't transfer them in some cases they can't even assign them duties that would be appropriate to their skills. third, i argue that the effect of back loading -- and this is an interaction between collective bargaining and defined benefit pension systems -- is what i call crowding out. the rising cost of pension and health care for pluck employees that is pushing -- for public employees that is pushing so much of their compensation back into retirement has led to a squeezing of public budgets such that, you know, activist government can't do things that it might otherwise want to. i think i'll basically kind of wrap up here as i'm running out of time, but i would say that there's obviously been raised some questions of whether agency shop provisions other provisions surrounding collective bargaining in the public sector actually compromise workers' rights, and that's been the summit of supreme court litigation in two high profile recent cases, knox v. sciu and harris v. quinn whether this is actually a violation of some workers' first amendment rights by organizing it this way. and i guess i would just finish with promoters of public sector unions or defenders of public sector unions haven't, as far as i can tell, really made a positive case for why organizing our public labor markets in this way benefits the broader public. that it benefits the public workers themselves is clear, and it would be surprising if it didn't do that. but what benefit rebounds the taxpayers to the consumers of public services i have not seen a strong, powerful, first principle case that it does to that. i've seen some negative cases that it doesn't have certain negative effects, but i haven't seen a powered first principle case. and i'd just leave it there. >> great. michael mccann, ten minutes. >> thank you. i want to thank the organizers for inviting me here. i want to thank you for the opportunity, daniel to talk about public sector unions. it's important, we were chatting just before we came out, we're both political scientists. the study of unions in general has received very little attention from political scientistses, so this is a welcome opportunity. i should say i'm not a specialist in public sector unions, and i'm not a debater by trade. we were talking about that as well -- >> [inaudible] >> yeah, we are now. so we're going to try and play the role as best we can. i should say that i am here in the introduction, the primary reason why i think i was asked for this is i'm the director for the harry bridges center for labor studies at the university of washington that's my current role. so we're going to start the debate. and i think just because you may not sign it later would you sign my book? of. [laughter] >> michael, i'm from new york, don't worry -- >> all right. let me start with one point of agreement. 100% agreement. daniel begins this book by saying he's very much in favor of private sector unions. he comes from private sector family background and that he appreciates the role of private sector unions have played in terms of representing workers providing workers a voice counterbalancing the power of concentrated capital, promoting conditions for safe and healthy work for raising wages, providing social security, i mean lobbying for social security, for health benefits and for really contributing to the rise of the middle class over the 20th century in america. we agree there. where we disagree is about not so much whether public unions are different, but whether they are different in a negative way, in a less beneficial way. where i e disagree with him is that public sector unions are inherently more selfish or narrow in their goals, that they are less democratic in the means by which they advance those goals and which they impose costs on government and more broadly on the citizenry that squeeze out other kinds of agendas and especially those that might benefit the most disadvantaged. so and i should point out because i'm not sure it's clear from this talk my reading of your book is a large part of the argument is really about the shortfalls in pensions, sort of putting -- that are making for a crisis within government and the squeezing out of other kinds of funding. and while there's certainly talk about a variety of different public sector unions teachers play a very important role. i do hope we get to talk about teachers and teachers' unions. so let me start with the economic argument about pension shortfalls and the fiscal crisis that i see very much driving what this book is all about. daniel's right that there was well demonstrated, palpable shortfall in funding for pensions that became apparent in the last seven or eight years. the degree of that shortfall and how much it's a crisis people will disagree about. but one of the things that's important to emphasize is that shortfalls were really quite different in different states, and that's going to be very important to what i want to say about the causes. there's lots of information in this book. covers lots of different unions lots of information about union stability over time about how much union workers make, the pensions and so forth. and but what i didn't see in this book was a clear causal argument. there's a lot of assertion that unions impose these costs, but i didn't see clear evidence that really made a clear causal connection between what unions were doing and the problems that we see and the costs that they are imposing. i do see the evidence of costs, certainly the states experience deficits and many states experience shortfalls in the funding of pensions. we see that unions are very active in terms of bargaining at the table and also engage in electioneering as you called it and campaign contributions and lobbying and so forth but i didn't really see the clear evidence that there was a causal connection between thosement now -- those. now, to my reading there actually is good data about this good data that helps us test this basic thesis about causal impacts of public sector unions. and so i'm going to invoke a number of labor economists, in particular alicia minow who's the director for retirement research at boston college sylvia -- [inaudible] at the industrial relations center at berkeley the sort of dean of labor economics, richard freeman at harvard, and a number of other scholars. i'm not going to bore you with all the numbers but give you just a picture -- because they've been looking at this issue to try and test whether this argument about what public sector unions have done really stands up. a lot of things they have told us some of which you mentioned which is the public sector's been relatively stable over a period of time the overall number of public sector workers since the early '90s has been stable, the percentage of state budgets, the percentage of workers relative to the population, all that's been relatively stable. there wasn't some, you know rising trajectory that created some sort of crisis. we also know from the data that public sector workers make roughly an overall compensation what their private sector counterparts do. they tend to make less wages and there's been a lot of study of that showing that public sector workers as a whole may vary from a particular occupation but on the whole 93-96% of private sector counterparts when one controls for experience and skill and so forth. but they do tend to make, have more generous pensions. and that in some ways is relevant, i think, for your argument. when you balance out lower wages, higher pensions compensation's not radically different. and i do want to say the book begins with some sort of examples of public sector workers who are retiring on lots of money and have made lots of money, but i think that's really misleading about the overall picture. okay. the other thing that we know from these various kinds of studies is that there's no correlation between with union density both collective bargaining loss and union density in states and either the deficits that we saw in the states in the ten years or the shortfalls. there's a very small correlation -- linkage between the density of public sector unions and the shortfalls, but that's corrected according to sylvia and her colleagues who once you add in the control for housing costs, that difference -- that correlation no longer becomes statistically significant. okay. so if, and several scholars said our public sector unions are really responsible for the shortfall. and her answer is, basically no. but she does offer an answer by looking at different variables. she found the strongest explanation for what happened with the shortfall pension was two related things. one thing was overall fiscal crisis that first kicked in in 2005 and got much worse through 2007 and 2008 '11 and the recession we're just coming out of. about 8.5% deficits on average in all the states. so you put that together with states that experienced the greatest shortfall, the explanation is amidst the crisis were those states that experienced very bad management by politicians and those that they appoint as managers accounts for where those shortfalls are. now, and she -- that data, to my reading, is quite consistent and quite compelling. and we have a lot of -- so the aggregate data suggests you put together the fiscal crisis but then exposes the fact there'd been mismanagement. what's the mismanagement? mismanagement is that workers and employers, public sector pay into long-term pension plans. what politicians were doing was not paying all the money that they were committed to workers into those pension plans. they were siphoning off for other purposes, diverting for other kinds of causes. and what happens in the fiscal crisis? the deficits of 2005-2011 is that all of a sudden the states are in crisis and exposes fact. and you can look at specific case studies like kentucky which is probably the worst and i draw here partly on the book "kentucky fried pensions." [laughter] chris was an accountant who became a whistleblower to the sec about the mismanagement in the state of kentucky. and what he shows is that the politicians only paid about 28% of the money that was committed over time, and then when the fiscal crisis hits, they have this massive shortfall of unfunded liability into the pension plans. other states not quite as bad but like illinois that had 38%, other states not quite as bad yet but still up to 50-60% of unfunded liabilities such as massachusetts, pennsylvania your home state, new jersey concern. >> oh, god. [laughter] >> okay, california. there's a number of states. only some of those states. some states did not experience a shortfall. one of the primary states that didn't is washington state. washington state money for the pensions was paid in. there are various adjustments over time various adjustments negotiated with the unions and that in 2000 there was 100% coverage of the pensions. when the economic crisis hit all but two very old pension plans were funded at 100% and they were barely under 100%. so that the argument which is made very convincingly was that the real reason was political mismanagement, was politicians who were siphoning off funds. okay. so this is the story, and that's the primary story. the public sector unions didn't control that. the politicians have to make their decisions. so quick -- do i have -- >> you're out of time. >> out of time. okay i will raise the other points -- >> okay. five minutes to respond from daniel disalvo. go right ahead. >> well, thank you. i appreciate michael's comments. i'm glad he picked up -- i'll sort of take them in order which is, in a sense, he starts out with the negative case; that is, that public employee unions, it's not that they're good it's just that they're not doing harm. which is to say that they didn't contribute to deficits during the recession, and i cite in the book the study arguing that. that they're not responsible for pension underfunding. i also cite the study and her book which i also reviewed. however, those aren't the other studies out there. and if i wanted to even make michael's case stronger -- that is the no-harm case -- i would also add that they're not, and he -- that they're not overpaid. so those would be the three points of the negative case. no harm, they're not overpaid, they didn't contribute to pension underfunding and they doesn't contribute to budget deficits. but that's still not a positive case, and it still doesn't take into account i think the vast amount of evidence that i show of the downsides of the costs. now, i don't want to in five minutes get into the warover the -- war of the studies. but sylvia and alicia aren't the only scholars out there, and there are some other excellent scholars like terry moe at stanford who has a good paper coming out in one of the top tier journals in political science that shows that the public employee unions using the same sophisticated empirical techniques were responsible for driving up both the size of pensions and their underfunding in some key states. of now i'll even leave aside whether public employee unions are responsible enough for the underfunding issue in some states. you know, there's clearly some bad actors where there's a lot going on. new jersey is one of them, illinois is another where the pensions are in fairly bad shape. but leaving that aside i think there is a good causal connection to show that the size of the pension even if they're well funded using, again, the government's current accounting techniques which are also a little bit questionable my home state of new york, for example is 100% funded if you use the 8 percent government discount rate. however, the size of pensions as public employee unions have grown since the 1970s in strength, the size of pension -- that is, their overall liabilities -- are enormous. they went from being, say roughly 25% of a state's budget annually now to being the liabilities being three times or even in some cases four times the size of the state's budget. so these are much, much larger funds that are much much riskier. and in order to make those returns to stay 100% funded, a lot of the pension funds are now getting into much riskier investments in hedge funds, in equities. that's part of another story. so i still didn't hear a sort of -- and then to take michael's second point that there isn't a causal connection, i find that kind of interesting if one lays out, i think as much as i do, the evidence for how much power in state and local are governments public employees are exercising, the amounts of money they're contributing and spending. there's a clear causal connection between that and certain pay raises, certain work rules that are negotiated. and if one had reversed it and provide those evidence -- that same evidence and taken out wherever i put public sector unions and put corporate business, everyone would have said oh, yes, there's a clear causal connection. i think partly that can be a kind of ideological point which is to say in social science a clear causal connection i think we can make our best judgments but even in the most sophisticated empirical techniques, it's still going to be a very delicate question whether you have an ironclad, causal connection. but i think there you do see some -- i think as far as political science goes, this is about as strong a causal connection that these costs are being driven and some of the effects that i lay out are driven in part or in whole by public employee unions. i'll leave it there. >> michael mccann. your rebuttal. >> okay. two things as quickly as i can. one is the politics of this because i think the politics of it is very important and i'll try to at least start to make the positive case. positive case is sort of easy to make, but okay. [laughter] there's a poll the ticks to this, and i think it's very important -- politics to this. 2011, we have budget deficits 8.5 percent on average around the country, we have these shortfalls in a number of states, and you have politicians who are trying the to deal with this crisis. and the crisis presents a challenge but also an opportunity. one thing it does, it provides an opportunity for political leaders. are they going to say well, we're the ones who mismanaged it? no, they've got to find someone to blame. they said the unions are the ones who caused that, and they scapegoated the unions. that's part of why we see all this attention, because they're the ones who caused the crisis even though i will suggest that the best statistical data we have does not show there is not even a vague cause -- it's rejected by the people who study that. .. there is an effort to scapegoat the public sector workers and it's not entirely republicans against democrats but it's mostly, after some exceptions like that, rhode island but, so that the politics. the third thing that's important that isn't addressed in the book at all is what's going on but there's an opportunity for financial investors is in the 1970s and 80s private pensions were replaced by 401(k) type private investment schemes. many of you probably have retirement funds in those. it's an effort, the primary argument is when need to replace the pension funds in the public sector with those private investment schemes. there's a lot of people pushing the. the private investor got us into the economic crisis to begin with and what you want to do is they want to push governors and legislators to make the workers pay for the cost of the shortfall in terms of higher contributions, lower benefits, lower wages. washington state we have had cost-of-living raises, public employees in the last six years to do that and and promote investment plan to the hedge fund brokers who are going to invest that and make tons of money in their fees, and they're the ones are trying to breakup the unions. that's quite a deal. that's quite a deal. even by american standards that is a pretty shocking story. i think there's a whole larger story and there is none of it in the book. none about the politics especially the fact some of the people who have a direct interest in the financial reform that it's going to go to the private investors are members of the board of the manhattan institute where you are a fellow. i understand there is a connection there. aldie, real quickly, positive case for the unions. take what i just said public sector unions, teachers employers and firefighters less democratic than hedge fund managers want to take over these $2.6 trillion in funding? one of your points is that public sector unions are not the counterbalance to concentrated capital or owners and of course, the same and the private sector. of course, they are because they're pushing agendas which are about raising wages about increasing working the public sector but they are working with the private sector unions together. you see all kinds of alliances between public sector and private sector unions. the last point i make is one of the arguments is they are playing democracy at both ends. people do that all the time. i contribute to partisan politics, i rally in the street. i go argue in public forums like this. unions because they're pushing democratic talks are increasing democracy and they're doing it increasing with allies of the private sector for the great many underpaid and insecure workers. >> this is getting good. rather than throwing questions to cut her throat off track daniel, i'd like to hear your response is somewhat which assert from michael, particularly to the last point. you say public unions have two bites of the apple and michael tsang look around it's taking place in a lot of areas. >> i wouldn't start there because it's not taking, not in the same way, if you take the two bites of the apple apart public employee unions are but don't want to get to negotiate with governments or with their employer directly for salary benefits and working conditions but can also lobby that same employer through the political process for that now. many of us now participate in civic life. all of you are here. i so many of your cynically engage. you may contribute to the sierra club or the nra. you may go to protests and rallies but those groups have to get people are interested in guns interest in the environment, they have to organize to make their case. they don't get to collectively bargain with the government, too. and private sector unions, for example, they get to collectively bargain with their employers for pay benefits, and working conditions and they do certainly participate in politics but the private sector unions participation of politics is, or is in a sense a broader set, a broader agenda not necessary but things are going to immediately affect the livelihood of their members. they may in the long-term improve society, improve things for the members but it's a much more long-term project than lobbying the government for a pension sweetener that would change the formula that is going to allow people to benefit. i guess i would come back to michael in a couple of points. i think he's being a little unfair to both -- to say that not citing the most sophisticated empirical studies. i think that they are into. i think there are other studies than the ones he wants to look at. i try to parse them as carefully as possible in a chapter on comparative pay. but if you look at pay premiums and the public sector, that's the term economists use for when comparable workers and the public and private sector, when there is a premium. if you look at the states where the premiums are the largest they are also correlated strongly with the highest union percentage of states. so i do think there's an empirical causal connection there. i do also in the book there's a chapter on lobbying, look at some of the ways in which public employee unions have gotten into bed with some of the big financial interests that michael degrandis, in the sense -- decries. in the sense they're very much involved and big hedge funds are very much interested in managing the money of these pension funds and that sometimes lobbied for pension sweeteners along with the public employee unions because there will be more money for them to manage. i think on the political side i didn't get to in my initial remarks but i would also set to come back and say one of the big problems that comes out of this on the political terms is the rise of public employee unions and the ways they've driven up costs and created this problem or contributed to the larger problem of crowding out, has created a huge political conundrum for democrats and really divided the democratic party over this. you can see this with you look at rahm emanuel in chicago rhode island on one side and then the mayor of my own city bill de blasio or of the politicians, the illinois democratic state legislature on the other side. this is a real divide within the state by those ancestors wings of the democratic party's about how to handle this problem because if a democrat and we believe that government can do a lot of good for people and a lot of good for society, you are really between a rock and and a hard place with the rising pension and health liabilities which are very very large because they're squeezing out what you can spend to be one of the things. they are cutting into library hours. that's what drove rhode island -- she's a bus service in rhode island that she saw library hours being cut in order to pay these back pension liabilities. >> one more quick question for you daniel and response from michael, and the microphones are up and hope you will bring your own questions. let's say that you are right, that public unions have unfair advantage that made it such an unfair advantage that outweighs the benefits that they provide to the public. if that is so what is to be done? >> well, that's a hard question. one i usually try to dock last night -- try to duck. [laughter] i try to analyze this phenomenon as we both agree hasn't been that state. i think as michael mentioned, and he's right there's an enormous amount of variation. this book is mostly about state and local government, about states and cities and lots of variation across the country. so some places have big pension problems. think of illinois, new jersey. other states have big pay premiums. my home state of new york for public employees, that's the case. that's on a global -- not equitable. those will require different solutions in different places. but i think in state for public employee unions are very strong it could be different things that can be done at a think it's going to depend on the culture of those particular places. >> michael, what are your concerns about what might be done should this rise that public unions take unfair advantage of the public, takes hold and moved further forward? >> the whole premise is i don't agree with the public sector unions have imposed until bring real benefit. let me address a couple of points. the two bites out of the apple, and one thing is that the two forms, tend to do with other issues but by and large and this is been well documented. most of the which issues are burgeoning but the pensions are set to legislation to those are different venue to venue to fight in different forms. so right there, i don't really understand what you are arguing the the second thing about that is when public sector unions participate in electioneering to try to influence legislators there's only one small piece of the overall picture. they don't have a limited number of voters. they give a lot of money in some states for certain kinds of policies but there's a lot of other people and big business and financial interests are in almost every state giving more money when the something at stake for them to do that. that doesn't begin to get at the imbalance that exists because large corporations don't have to give a lot of money because of the dependence of states and cities on those large corporations who provide employment and sometimes provide taxes. anybody in the state of washington knows about boeing. boeing doesn't have to spend a lot of money by blogging but they disagree will leave if we don't get billions of dollars in subsidies. so to say there's some sort of public sector union dues money that's all they have. strikes are outlawed in most states and state what they're allowed in this context where public sector unions are being stigmatized as causing the crisis, which they didn't cause they are not likely to go on strike because that's a very bad situation to do that. all discomfiting stuff i don't think it addresses the issue of power. let's come back to the positive issue. the other thing about not pressing issues that are democratic in character and contributed equity and contribute to improving working conditions for workers and for middle-class is just wrong. public sector unions are lined with private unions all the time engaging in issues. i've been very attentive to and participating in the local minimum wage campaigns in seattle. that was pushed by public sector union working with community groups, faith groups, of the unions but it was a public-private union sort of mixed project. that has become one of the primary causes around the country. minimum wages for everybody. pressing on whole variety of social programs that would benefit working people that have been taken away or whittled away. the final thing to say to make this case they are undemocratic and even means for an end the primary standard for your book and this is true in utah is about markets and about the way our kids were. in many ways what this is all about is contributing to this for neoliberal projects of privatizing government, of privatizing the pension plans, privatizing prisons and much of the contracting out of government, which is i would say that something i would necessarily equate with democracy. for better or for worse, that's not a democratic project. it's really getting into the increasing inequality between concentrate wealth and concentrated capital. i don't see where the solution is. >> i would like to open it up to those of you who have questions. if you could just up to either microphone, step up close unlike what i'm doing, so they can pick you up on c-span. say your name and give us your question. >> why name is stephen miller and than full disclosure i am a teacher. i will very quick, i will get to the question but i want to help in the debate. i appreciate michael that you point out that boeing was able to hold the state of washington hostage for the largest tax cut ever in u.s. history given to one corporation by the state government. so biting apple, that is quite a big bite. they took $9 billion. but equating public unions to the budget crisis is the equivalent of saying that the titanic sunk because of the waiters and maids are working on the titanic that day. so let's work with a simple concept using economic principles. you want to know what unions do to create a positive impact. so would you agree and both michael and daniel this is a question for both of you, higher wages for the average worker provide higher wages and benefits for most workers? >> okay. >> and washington state is a great example because with the highest minimum wage in the country and one of the lowest unemployment's. unions have played a very key role raising wages in washington state. so let's work on that simple economic principle. >> let's start with michael. >> it's mostly for him because i heard you agreeing with him. [laughter] but if i missed it you can tell me. >> i would start by correcting the record. i don't argue in the book that public employee unions with the cost of the great recession or are the single bullet cost of the pension crisis across the country, or that they caused higher deficits to go up. i don't argue those things. i do argue that states and again i go on richard freeman for the empirical data on this states with stronger public unions tended to have higher levels of public debt. that's different from the deficit, different than the recession. so i don't argue that in the book. book. everyone got the message here take that away. to the gentleman's question, what i do find is you raise a really interesting question. there's an old in economics called a threat of the. so if one company firm is unionized and raises wages, surrounded firms will need to match in hopes of staving off a union drive. so those unions threat affects whether private sector unions could not only help the workers say and one plant but in surrounding workers my knowledge no economist or very few economists have found threat affects in the public sector. the public sector can raise wages and benefits, but it tends not to have any effect on the surrounding labor market. this goes back to a point that michael was a little confused about. there is a deep connection between pay of negotiated through collective bargaining and pension. any pay raise is factored into the defined benefit pension formula. so the connection there, and there's often at least anecdotally we need to introduce you discover this, that public managers will often say look, we can't do anything for you unions, on pay right now because that's factored into the budget, what we can do something on the pensions longer-term, and that will be pushed off late and she can get that compensation in return down the line. so that they question is very much connected with the pension question is any pay raise is going to be factored into how the pensions articulate and what people's final average salary is. >> we can go to another question unless you would like -- >> two quick responses but on the last point, that's precisely what you just explained is politicians say we can't really give you a wage raise now but we can keep the pension other or vice versa. that's what you mean by mismanagement. that's and discipline. there's an incentive for politicians not to worry about down the road to say we'll give you this down the road but then steiff siphon that money off. they are not making those decisions. they are the ones with the benefits of losing security down the road and making concessions to pay for the politicians irresponsibility, exactly what is argued is the problem. second thing real quickly. about the impact of raising wages in the public sector. that's completed wrong what you said. if you raise wages and the public sector -- i wrote a book about gender pay equities in the 1980s, over 120 sites where i studied almost 30 in depth. this is what unions worked with local civic groups to organize women who are not unionized in the public sector to file lawsuits on their behalf and to detect those lawsuits to collective bargaining to raise wages because women workers are systematically underpaid. this is white women especially women of color. the same issue martin luther king went to fight for with sanitation workers when he was assassinated, which was, because certain jobs in both public and private sector are systematically underpaid based on race and gender. what happened in they were so this could economic studies in the bay area because there was a major pay equity activity for 10 years. when you raise the wages of clerical, secretaries and nurses and the public sector, that raised the wages everybody else in the private sector as well. that's what happened to announce thea ripple effect. it's not truly consequential that the wages of women in the 1960s on average were only 59 cents to every dollar that men made. there's a variety reasons, but that has significant part but that gap closes from 59 cents to about 77 cents per dollar. the downside is men's wages are stagnant or dropping so it's not entirely a good story. that's one of the many ways in which the public sector workers duke of raising wages and living conditions have ripple effects. sometimes local and local markets but if you do in lots of places, lots and lots of markets and lots and lots of ripples. explicitly fighting for the cause of men which is something that is not just aimed at public sector workers. it is aimed at raising the wages for everybody. >> a couple more questions in here. what is your name and what is your question? >> my name is john stafford. my question is for michael. the question might imply that i'm unsympathetic to publicans but, in fact, the opposite is the case. my question deals with process and it's my understanding in washington state that when you need to negotiate wage and benefit packages the general structure our model is that union representatives meet with the governor, reach an agreement, go to the legislature who can vote for it or against it but can't modify. that's received a lot of attention with respect to is that the appropriate process and the appropriate level of transparency. with respect to the process. i guess my question is twofold. one is is the washington state model sort of replicated reasonably uniform across the country, or are we sort of a standout in that respect? second, do you support the basic process by which union contracts are negotiated at the state level? thank you. >> i say i'm not an expert, particularly what happens in washington said at that level forfor the negotiation. underunder the pension issues a large with my dissertation and that doesn't mean unions don't have a rule. they do meet with the governor presented the case and the governor presents that to the legislature and decide how to deal with the which often means there is ongoing negotiation after that in changing the overall budget which means the governor relegates the budget that the governor wants. at least in my experience in washington state. i'm sure there's room to talk about is that a fully transparent or democratic process. but it's different than undercutting public sector unions saying they are the problem. that's a process and the politicians are the ones who determine what the nature of the process is. i would turn back to that's a political question not something that is the fault of the liability of the public sector unions. >> let's bring it back over to this side. >> my name is karen strickland and also full disclosure i'm a former community college teacher and the president of the american federation of teachers washington. there's a little context for your. i'm a longtime activist in my union, and so my experience is really completely different than what you are stating, daniel, in terms of the role of unions and looking out for the own interests as opposed to the collective good of the public good. i make no apologies for unions looking out for the interests of their members as working people, it's also the case that my union, and i think this is true of many public sector unions, have actually read led the charge to protect the people that we serve. so in my case community college students -- >> what's your question? >> i'm getting to it. k-12 teachers and human service, state workers have taken on that role i'm curious if you could elaborate on your thinking around the last of the benefit for the public good in terms of union role? >> well, i'm glad you raised that question but it's a really good one. it brings back a few thinks michael is argued and try to put forward a positive case which is if you think about the activity of public employee unions, you can think about it as a set in terms of the issues stand in the things they're going to invest time, money and energy on. are a set of concentric circles. there's nothing wrong. starting with their own interests in let's say the union leadership's own interest in winning the best deal for their membership to a would be surprising if that was an agenda item number one. if it wasn't unions leadership is often elected democratically. someone would run against them and say we could win a better day, that a benefit for better working conditions. that's going to be item number one. going out from there, public employees unions today usually goes are connected to private sector unions. in some sense are supporting private sector. they are the heart and soul of the labor movement today. michael is right about that outlined. outlined. there's a lot of features and data lines but if you look at private sector unions in many places -- features. governor walker, they back romano where public sector unions went with her opponent. so there are fissures in the labor movement between public and private. beyond that, public employee unions as i briefly mentioned are deeply embedded or braided into the larger democratic party. so they adopt at least rhetorically lots of the main issue positions of the larger liberal coalition. they often underwrite other activist groups on the left of the political spectrum. such as the teachers unions, for example, has bailed out a couple points the naacp financially. financially. so in that sense it becomes not a principled case for why this is better for everyone. it just becomes a partisan case which is i support liberal politics, public employee unions are the financial, the money and manpower today behind the liberal coalition so, therefore, i support them. and that's in a sense the broader principled argument such as it goes. >> i'm going to take one more question but i'm sure both daniel and michael be around afterwards it would like to buttonhole temper of the questions. your name into question. >> has there been any analysis after the outcomes of scott walker's union legislation you know, the fiscal state of wisconsin or the county level end of education outcomes at the county level as well in terms of class size impact of other services at the state or local level? >> there has been some analysis. of course, the big effect of act 10 has been to reduce some union membership with job growth not as good as walker promised. how much she deserves it a credit or blame for that is always the subject of debate. some counties were able during the recession, counties and cities most notably milwaukee itself, were able to use act 10 to balance the budget in ways that they could have done before. in terms of longer-term outcomes on some of the questions you mentioned on class size, i don't know any the journalistic reports by no reliable broad studies. it's a little early i would say for some of those empirical questions to be answered. >> daniel would be doing a signing her afterwards but want to thank both of you for the truly enlightening conversation. i've learned a lot from it. thank you very much. >> thank you. [applause] [inaudible conversations] >> some news this morning, u.s. district are, u.s. district digester temporarily halted the president immigration executive order and his of the associate press is reporting. on monday as district judge in texas issued a temporary injunction getting a coalition of 26 states time to pursue a lawsuit that aims to permanently stop the quarter. that ruling possible by presidents orders that could spent more than 4 million people who are in the u.s. illegally from deportation. in the state of the white house said monday's ruling probably prevents the president lawful commonsense policies from taking effect. the justice department appealed the federal judge's ruling, according to the white house. some reaction from capital hill. john boehner released a statement that reads in part, please send democratically to post this executive overreach when i let the senate began debate on a bill to fund the homeland security dep

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