Contributor

John Campbell

John Campbell (R-Irvine) is an Assemblyman representing the 70th District in Orange County. Mr. Campbell is the Vice-Chairman of the Assembly Budget Committee. He is the only CPA in the California State legislature and recently received a national award as Freshman Republican Legislator of the Year. He represents the cities of Newport Beach, Laguna Beach, Irvine, Costa Mesa, Tustin, Aliso Viejo, Laguna Woods and Lake Forest. He can be reached through his Assembly website and through the website for his California Senate campaign. [go to Campbell index]

Thatcher Had It Right
Public unions are the problem in California, too.
[John Campbell] 2/3/04

Margaret Thatcher was elected in 1979 as the first female prime minister of Great Britain. She was leader of the Conservative Party in the UK and remained in power for 11 years. When the "Iron Lady" took over, Britain was in the grips of a sustained and structural economic decline and was known as "the sick man of Europe." Thatcher proclaimed: "The two great problems of the British economy are the monopoly nationalized industries and the monopoly trade unions."

She immediately instituted reforms that included privatizing nationalized industries, restricting the power of union leaders, and breaking the monopoly grip of the trade unions on government with various changes - including making union membership optional for workers. These reforms restored prosperity to Britain, transforming its economy from one of the worst in Europe to one of the best.

So, what does Great Britain in 1979 have to do with California in 2004? A lot, actually. The similarities are striking. Although the depth of California's economic malaise now is not as great as Britain's then, our budget deficit, business climate, tax rates, credit rating and insurance costs are among the worst of all 50 states. Our problems are persistent and structural in nature.

And the root causes of our problems are much the same as England's were. We have too many parts of our economy that have been "nationalized" by the state, and the power of public employee unions is perverse, destructive and way too high.

Let's take these one at a time. When I talk about "nationalization" by the state, I do not mean that housing and transportation have been taken over by the state (although there are many elected Democrats who would like to do this). I refer instead to the increasing tendency of state law to prohibit public entities from "contracting out" for services and instead requiring them to use government union workers. Such a law was recently passed and signed by Gov. Davis that prohibits school districts from contracting out for janitorial and bus services. Such a policy costs the Capistrano Unified School District more than $3 million annually because they cannot shop for the best service at the lowest price. That's $3 million that could be spent for class-size reduction or music programs, or that could be saved in their budget. But instead, state law requires that it be spent on inflated government union salaries and benefit packages. That's $3 million for one school district alone. Statewide, it is hundreds of millions of dollars.

And that's just schools. Such prohibitions on allowing private sector providers to bid on public sector jobs exist all over the government. CalTrans has nearly 10,000 engineers on staff and in their union. But we are building a lot less roads (and no new freeways). Wouldn't it make sense to reduce this staff to a minimum and contract the engineering out on a job-by-job basis? That way, we would have flexibility so that we are not paying for staff to design roads that are not being built, we could competitively bid for the best work at the lowest price, and taxpayers would be relieved of the obligation to pay expensive government pensions.

It all sounds so logical, you say. What could possibly keep us from allowing any government entity to contract out anytime? Therein lies the second barrier to economic recovery in California; the power of the public employee unions.

Almost all of the largest campaign contributors in California are unions (with a few Indian tribes mixed in). Most of those are public employee unions with the California teachers association being the biggest spender. Many cities have prohibitions against a council member voting on an issue that affects only a company that has been a campaign contributor. But all elected officials are routinely allowed to vote on pay and benefit increases and contracting out prohibitions that affect the very unions who are their biggest campaign contributors.

We have seen it over and over again during the past few years. Unions contributed millions to Gray Davis and pro-union monopoly legislators. They then turned around and voted for pay and benefit increases costing you and me hundreds of millions in taxes. It's a great return on investment for the unions. It's a lousy use of taxpayer's money.

And it's wrong. You should not be able to contribute to the very people who determine your paycheck. Other campaign contributors are usually supporting a philosophy or indirect benefits like lower taxes and lower worker's compensation insurance premiums. But the public employee unions are the only ones that can actually make a contribution, and get the money returned directly to them through increased salaries and union dues. That's why they contribute so much. That's why they have so much power. That's why our budget is out of control. And that's why we must change this abusive system.

Mrs. Thatcher, by her own admission, could not have fixed Britain's economy without curbing the power of the unions and de-nationalizing business. We cannot fix California's structural budget and economic problems without doing the same thing. We must allow the state and cities and counties and school districts to always get the best job at the lowest cost, be it contracting out or in-house; be it union or non-union. We must not compel government employees to join a union if they don't want to. And we must prohibit unions from contributing to anyone who votes on or negotiates their pay and benefits.

It took the "iron will" of the "Iron Lady" to do this in Britain. It will take a similar will to do it in California. But we must develop the courage to face down the power and money of these abusive unions and break forever the tyranny of these few that threatens the welfare of us all.

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