Tag Archives: Fred Siegel

Mischievious Factions: The New Unionism

There are two Executive actions to remember when considering the fiscal straits of many state and municipal governments.

E.O. 10988, signed by President Kennedy in 1962 allowedpublic sector workers to unionize. Since 1962  public sector unionism has swelled, creating what Rutgers economist Leo Troy calls, “The New Unionism.” Today 36.8 percent  of public sector workers belong to a union. (Union participation is most dense on the local level at 42 percent.)

In 1993, President Clinton signed the Hatch Act Reform Amendments, allowing government workers to engage in political activities, such as fundraising.

Put them together and watch the near-bankrupting of California and New York, with New Jersey not far behind.

Unlike private sector unions which must negotiate with private owners, as Fred Siegel and Dan DiSavlo writing in The Weekly Standard point out…” public sector unions have no such counterweight. They are a classic case of client politics…with influence on both sides of the bargaining table.”

Public sector union workers campaign and vote for politicians who then control pay and benefit negotiations.

Seigel and DiSalvo recount how this worked in Washington State. In 2002 the Association of Federal, State, County, and Municipal Employees (AFSCME) got collective bargaining rules lifted. By 2005, their numbers doubled. More dues means more political influence. In 2004, Christine Gregorie was elected governor in a close race that was decided after AFSCME donated $250,000 for a recount. She quickly repaid the favor, negotiating salary contracts with double-digit increases.

The New Unionism is the faction politics that James Madison warns of in Federalist 10 – the only, “method for curing the mischeifs of the faction: the one by removing its causes, the other by controlling its effects.”

With the interests of politicians and their clients in such symbiosis, the extent to which such corrosive lobbying can be reversed depends on how much fiscal pain those ultimately paying for public services are willing to bear.

Conflicting Trends in Urban Development

In 1970, the first Business Improvement Area was instituted in Toronto, Ontario, and the concept has since  spread throughout North America and the world. In the United States, these organizations are most commonly known as Business Improvement Districts (BIDs), and they are collectives of neighboring business people who work together to maintain their public spaces at a higher level than their municipalities would.

BIDs have been highly successful in many areas of the United States, including New York, Los Angeles, and Washington, because they allow businesses to pay for specific services that are beneficial to their immediate vicinities rather than providing these services through an unpopular and inefficient tax levied at the city or state level. Business owners may elect to use allocate this funding to market their neighborhoods, provide street clean-up or security beyond the level offered by their municipality, or enact improvements to storefronts and building facades.

In parts of the Midwest, the trend is developing into organizations known as Special Improvement Districts, allowing both residents and businesses to participate in neighborhood governance. A Crain’s Cleveland Business article explains:

These groups are encouraged by the success of the downtown Cleveland SID, which was created in 2005. The SID, which is operated by the Downtown Cleveland Alliance, has gotten high marks for a program it calls “Clean & Safe” that has put a team of “ambassadors” in yellow shirts on downtown streets. They scour sidewalks, water plants, provide directions to pedestrians and keep an eye out for any bad behavior.

The downtown group also sponsors special events designed to bring people downtown and markets downtown as a tourist destination.

Property owners agreed to a special assessment that raises about $3 million a year for the program.

The SID concept is effective because the taxing authority is devolved to the lowest possible level, the neighborhood. This direct democracy allows for the fees collected to be spent as desired by those who pay them. Obviously the demand for various services varies across different neighborhoods’ organizations. Additionally, those who pay SID fees are likely to closely monitor how they are spent, rendering it unlikely that the money will be spent wastefully or lost to corruption.

As this grassroots concept is gaining momentum at the local level, a new White House initiative, the Office of Urban Affairs, is taking a top-down approach to urban issues. The purpose of this new office is to promote the administration’s urban policy agenda, heavily influenced by the ideas promoted by the Brookings Institution’s Metropolitan Policy Program, in municipalities across the country.

A Washington Post article explains that some critics of the program believe that urban issues should be handled at the local level, varying with the diverse challenges and opportunities that face different cities across the country:

“Cities improved dramatically in periods when the federal government backed off the most,” said Fred Siegel, a history professor at the Cooper Union who served as an adviser to former New York mayor Rudolph W. Giuliani (R).

Undoubtedly, research institutions have valuable insights to offer neighborhood and municipal leaders in the fields of transportation, land use, and community development. However, a one-size-fits-all approach to implementing these ideas in urbanities across the country is impractical and will be weighted down with many layers of bureaucratic inefficiencies. Rather, BIDs, SIDs, and city governments should have the freedom to select the policies that are most practical and efficient for their localities.