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- [00:00]
Lynne Thoman
Foreign I'm going to start this episode today by asking my guests to read an excerpt from his book Not Accountable. Philip, Please go ahead.
- [00:13]
Philip Howard
Bad schools, unaccountable police and other endemic failures of modern American government share one defining trait. They are impervious to reform. No matter who is elected, no matter the voter demand for change, government almost never changes how it works. The effects are predictable growing citizen frustration and anger, Broad distrust of police and other governing institutions. Students ill equipped to compete and even to be self sufficient and stupendous. Public inefficiency and waste.
- [00:51]
Lynne Thoman
What's going on? Hi everyone, I'm Lynne Thoman and this is three Takeaways on three Takeaways Ways I talk with some of the world's best thinkers, business leaders, writers, politicians, newsmakers and scientists. Each episode ends with three key takeaways to help us understand the world and maybe even ourselves a little better. Today I'm excited to be with Philip Howard. He's a leader of government reform in America. He has advised both Republican and Democratic parties. He's also an author in his most recent books, Our Everyday Freedom and Not Accountable. I'm looking forward to finding out why no matter who is elected, government almost never changes how it works. Welcome, Philip, and thanks so much for joining three TAKEAWAYS today.
- [01:46]
Philip Howard
Nice to be with you, Lynn.
- [01:48]
Lynne Thoman
It is my pleasure. Let's start by talking about Derek Chauvin, the policeman who murdered George Floyd in Minneapolis in 2020. Chauvin had a history of citizen complaints against him, but the police commissioner couldn't fire him. He couldn't even reassign him. Why not?
- [02:12]
Philip Howard
Because the union collective bargaining agreement in Minneapolis, as in most places, severely restricts public managers from reassigning personnel or disciplining personnel or changing their responsibilities. And in Minneapolis, I think there had been, well, he had a history of complaints, but in Minneapolis more broadly, there had been, I think in the prior decade something like 2600 complaints of police misconduct, of which a grand total of 12 led to discipline. And the most severe discipline was a 40 hour suspension. So you basically have a government system that's completely unaccountable.
- [03:02]
Lynne Thoman
That is horrifying. Is it the same for other government employees such as teachers, social workers, highway crews, sanitation workers and others?
- [03:13]
Philip Howard
Yeah, pretty much. It varies a little bit by state, but for example, There was an 18 year study in Illinois of teacher accountability that found that an average of two teachers out of 95,000 were terminated for performance each year. That's basically zero. That's actually twice the rate as in California. So there's no accountability. And the harm of no accountability is much worse than having bad people on the job, which is bad enough. The harm is that when everyone knows performance doesn't matter, it's almost impossible to have a healthy culture within an institution because there's no mutual trust that everybody's doing their share because everybody knows performance doesn't matter.
- [04:02]
Lynne Thoman
And you believe that much of the blame for this stems from public sector unions. Collective bargaining. Can you explain?
- [04:11]
Philip Howard
Government was never efficient. Right. It's a government, so it lacks those sort of market pressures and of business organization. But until the late 1960s, the rule was that public employees could not collectively bargain. FDR was a firm opponent of collective bargaining, in part because it was a breach of duty of loyalty, and in part it was because the dynamics of public bargaining are very different than trade bargaining in a business context. If the union demands too much, everybody loses their job because the business goes out of business or moves to another town or sends the jobs offshore, as happened to Detroit, you know, with demanding too much back when. So government doesn't work that way. You can demand all you want and government can't go out of business, nor can it move out of town. So what's happened is that almost without anybody really paying attention, the public unions levered the rights revolution in the 1960s into a kind of a plea of fairness. Why can't we have collective bargaining too? 38 states gave it to them. And almost immediately they started getting controls that effectively prevent any manager from dismissing anyone.
- [05:34]
Lynne Thoman
Can you talk more about how collective bargaining agreements in the public sector preclude and limit management choices generally? And then we'll talk about some more specific examples.
- [05:47]
Philip Howard
Sure. So what's happened since collective bargaining was authorized in the 1960s is there's been a steady accretion of controls. One benefit is to have wages go up. And I'm not, you know, I think that's the least of the sins here. The second thing that happened is that unions and political leaders figured out they could make promises with pensions in the future without having it come out of the current budget. So then they made promises for future pension and healthcare benefits that didn't affect the current sitting political leader. But then you have these two to 300 page agreements which have gotten more and more detailed over the years, where the controls almost look like it's control for its own sake. So the disciplinary proceedings require objective proof, all kinds of warnings in advance. In police contracts in many jurisdictions, you can't interview the police officer for several weeks. The police officer and his Representative get a chance to view all the other witness statements first so they can conform their story to what other people are saying. The discipline is resolved by arbitrators who are approved by the unions. And if they don't go along with what the union wants, then they won't be approved next time. So it's their job, so they've been paid off as well. And then there are these management controls by the federal government. Anytime there's a new word processing program, the union gets to negotiate how the training works. Whenever there's any reallocation of resources or asking somebody to do something out of their job description, the answer is no. You only can work within your job description. So let's say a work crew is fixing the Long Island Railroad, for example, and there's an overhanging branch on the tree. The work crew fixing the rail track isn't allowed to pull down that branch. You have to call in a worker whose job it is to clean up the branch. I mean, it's just there are controls that are designed for inefficiency.
- [08:12]
Lynne Thoman
Can you give some specific examples? Let's start with the police. What are some restrictions or limitations on the police?
- [08:21]
Philip Howard
The police is interesting. Police is less rigid than, say, highway work crews or teachers or bureaucrats because the police job is generally on the sidewalk. Right. So they have to respond to what they see. So the biggest problems with the police contract are the ones having to do with general management, allocation of people from this job assignment to another job assignment. And in discipline, I mean, like with Derek Chauvin in Minneapolis, people said they had never seen a police officer who had been terminated for misconduct. Thinking about what are management tools? Well, the main tool is accountability. The next best tool is resource allocation. You can't do that. You can't allocate resources differently. You can't manage it differently. You can't even make suggestions.
- [09:13]
Lynne Thoman
It's shocking to me that these contracts govern who can teach what and when they can teach. They limit the number of parent conferences that they limit student evaluations and performance assessments. Are these contracts, these restrictions and limitations one of the main reasons, in your view, that the majority of US public schools have such bad outcomes for students?
- [09:40]
Philip Howard
Yes. I think there are two sources of school failure in this country. The first is that no one has authority to close bad schools by March in the union states or authority to manage them differently. So in Chicago, there are 45 schools where not one student is proficient in reading or math, and no one in Chicago has the authority to do anything about those schools. So a combination of kind of excessive red tape and union controls have made it so that the really important and honorable but profoundly human institution of teaching. It's human. You can't have a good school unless the educators are free to be themselves. And what's happened is that teachers have been disempowered and principals have been disempowered by the union controls that make it unmanageable when by red tape that makes so you feel, well, special ed teachers spend half the day filling out forms. So you've got to put humans back in control of schools. And we've created this horrible kind of rigid, bureaucratic institution that's designed to fail.
- [10:57]
Lynne Thoman
Let's talk about the impact of collective bargaining and rules on a couple of other sectors. Can you talk about sanitation, for example? Garbage collection?
- [11:09]
Philip Howard
Right. So you have unions bargaining over how to collect the garbage. And the result of that is that garbage, municipal garbage collection in the big cities cost basically twice what private garbage collection in those same cities cost because of the union rules on what the routes are and what the hours are and everything else. There's just no flexibility in the system. And so presetting work schedules in advance denies the basic microeconomic truth that nothing works unless you make it work on the ground, on the spot. You constantly have to adjust and adapt. And public unions instead rigidify everything in advance and it fails. There's a great phrase from Thomas Edison, Nothing that's any good works by itself. You got to make the damn thing work.
- [12:09]
Lynne Thoman
How about correctional officers, prison guards?
- [12:13]
Philip Howard
Well, first of all, the correctional officers have gotten involved in the making of policy. So they were one of the biggest proponents of the three strikes in your out rule in California because that meant more people went to jail, which meant more demand for correctional officers. Well, you know, it was a terribly unfair rule. You know, somebody who steals a banana goes to jail for life because he had earlier stolen a golf club. And then they have all these recent work rules. So in New York, I figured it was New York City or the state, one of the rules is you can have unlimited sick time. So last year, there were sick kids. Nobody came to work. Prisons were literally out of control. And the people who were the supervisors had in their contract that they never had any obligation to go into the cell blocks. So you had people in the central office refusing to fill in after the officers all declared that they were sick, even if they weren't. It was just chaos. You know, people get killed in situations like that.
- [13:16]
Lynne Thoman
How about the cost? What does this do to costs?
- [13:20]
Philip Howard
There have been very few studies that have attempted to calculate the costs. At one point, David Osborne, who wrote Reinventing Government, and he and a colleague had estimated that costs went up by 35 to 95% depending on the area of government. But I think that understates it. When Covid hit, there was a thought early on that maybe it could be transmitted by hand contact on the subways, for example. So the MTA New York decided to have regular cleanings of the subway cars. They'd go clean all the bars for the sanitating, and they didn't have enough cleaning workers, so they hired outside contractors to come in and clean. Well, the outside contractors apparently did three times the work for the dollar. And that's an example of the ineffectiveness.
- [14:09]
Lynne Thoman
You've given a couple of examples about New York. I think New Yorkers are shocked that the Second Avenue subway cost was two and a half billion dollars a mile, more than five times the cost of a similar subway in Paris.
- [14:23]
Philip Howard
Yeah, that's right. And that was because of work rules that required feather bedding.
- [14:29]
Lynne Thoman
Yep. So far we've talked about the impact of these rules on the ineffectiveness of government services and agencies. Let's flip. And now talk about some of the examples of the benefits that government employees get. Let's start with early retirement.
- [14:49]
Philip Howard
So the contracts have been negotiated in a way that's designed to avoid public awareness. Benefits in the future don't show up in the bottom line this year. So early retirement pensions that aren't put on the balance sheet this year, that sort of thing, most public employees can retire. Again, varies widely by the contract. Public safety officers, often after 20 years. So we're talking about retirement. Somebody in their early 40s and you get a pension. Studies show that the pensions are materially richer than private pensions by some significant percentage. And then if someone retires early in many jurisdictions, then they go back to work. So they get their pension, which in many cases is almost the same as their salary, and then they go back to work and start all over again. So they're collecting their pension and they're collecting their salary, and it's called double dipping.
- [15:51]
Lynne Thoman
How about spiking? What is that?
- [15:54]
Philip Howard
Spiking is when the contract provides that your pension will be determined by your average compensation in the last year or two years of work. And the practice, which has been ended in some jurisdictions, but not in all jurisdictions, is to give the person who is nearing retirement as much overtime as possible so that their $100,000 job becomes a $250,000 per year in the last year or two, so that their pension is determined against the base of $250,000.
- [16:31]
Lynne Thoman
How about health benefits? Do public sector employees and retirees get better health benefits than private sector ones?
- [16:40]
Philip Howard
Yes, and indeed, the budget in New York City, I think, would be dramatically improved if only public workers had to pay the same percentage of health benefits as private industry does. In many jurisdictions, health benefits, when working are free. There's no deduction for them, and then after they retire, they're also free. The difference in state and municipal budgets is apparently just radically altered by the fact that there's no contribution as required in the most private sector context.
- [17:13]
Lynne Thoman
So what you're describing essentially is that these public sector unions get benefits for their members in terms of rigid work rules and job restrictions and much higher pensions and health benefits. And in return, what do the politicians get?
- [17:34]
Philip Howard
The politicians get campaign contributions. So the politicians, in exchange for this, what is in effect, a new spoil system. The old spoil system, politicians would get campaign funds and then they would give people public jobs. No matter how bad a job they. And we supposedly got rid of that with the merit system. The union collective bargaining creates a new spoil system, except it's different because it's permanent. It doesn't change with the change in party control. And in this system, the unions consolidate the mass of big government with the mass of public employees, put all their contributions in a place, and then go to the political leader with a boxcar filled with cash. Effectively, and not just cash, but also working labor banks and call banks and knocking on doors. They literally recruit and they'll pay members to do this, to be campaign workers. So in New Jersey in the last election, the campaign of the winning governor was staffed by union members. The campaign director was a union officer. So you end up having this system where the unions basically provide the campaign resources and personnel, and in exchange, what they get is the continuation of this system in which government is unmanageable and in which the pensions and benefits are far beyond the market and that have rendered again, certain big industrial states effectively bankrupt.
- [19:20]
Lynne Thoman
What do the public sector unions generally want? Where do they come out on taxpayer initiatives to limit spending and reduce taxes?
- [19:29]
Philip Howard
They're the leading opponents of it. First of all, most of the union benefits and controls and actions are designed to preserve the benefits to the union leaders themselves. In many states, unions never even come up for recertification. They're certified once and that's it. And then they just stay in place. So union leaders make a lot of money. Anything that gets in the way of the union Prerogatives, such as reducing taxes or that sort of thing, they will consolidate national resources. Again, we're Talking about over $5 billion a year in annual dues to go and kill an initiative in Maine or some jurisdiction that's aimed at good government. And that's one of the reasons why political leaders won't take on the unions. Because if you're a union opponent, it's not just that you're fighting them in your jurisdiction. All this money is going to fly in from around the country to get you unelected.
- [20:34]
Lynne Thoman
Philip, can you read aloud from your book, please?
- [20:37]
Philip Howard
Union influence is unique compared to all interest groups. And it's not merely one of scale. The union elephants, say, versus all the hyenas. Public employee unions are not just getting some public favors. They're controlling the public policies on how government operates. Former California State Senate President Gloria Romero, a Democrat, put it this way. There's no aspect of state government operations or public policy that is untouched by the power of public sector unions and their allies in Sacramento. From enacting legislation to writing a state budget to confirming state board and commission appointees, labor's presence is omnipresent.
- [21:26]
Lynne Thoman
Can you summarize the impact of these public sector unions and collective bargaining agreements?
- [21:33]
Philip Howard
They've made government unmanageable and largely unaffordable.
- [21:38]
Lynne Thoman
So in your view, do elected executives, presidents, governors and mayors, or their appointees or public supervisors such as school principals, police captains and crew chiefs on high highway repair teams, have effective authority?
- [21:54]
Philip Howard
No. No, they don't. At every level of government, government has become unmanageable and unaffordable and unreformable. Because of the union controls, it's almost impossible politically to fix it. Let's go to the courts and have the unions declared unconstitutional. Because democracy is completely ineffective when the people who owe a duty of loyalty to the public have bought off the political system and are running government for their own benefit instead of the benefit of the public.
- [22:30]
Lynne Thoman
And what are the three takeaways you'd like to leave the audience with today?
- [22:36]
Philip Howard
The first is no organization works unless it's manageable. And that requires adaptive choices. At every level of responsibility, government is unmanageable. The second takeaway is we can't give public unions a veto on how government is run. Democracy exists to put executives in office who have the authority to try to run government for the benefit of the public. And that can never work if the public unions have the veto. And my third takeaway is this is a problem of constitutional dimension and we should understand that when democracy has in effect become a spoil system with billions of dollars for one purpose put into it, that the best solution probably lies in the courts, and it's based on the inability of democracy to do its job.
- [23:37]
Lynne Thoman
Thank you Philip. I very much enjoyed your books Everyday Freedom and Not Accountable.
- [23:44]
Philip Howard
Nice to be with you, Lynn.
- [23:46]
Lynne Thoman
If you're enjoying the podcast, and I really hope you are, please review us on Apple Podcasts or Spotify or wherever you get your podcasts. It really helps get the word out. If you're interested, you can also sign up for the Three Takeaways newsletter at Three Takeaways takeaways.com where you can also listen to previous episodes. You can also follow us on LinkedIn, X Instagram, and Facebook. I'm Lynn Toman and this is three Takeaways. Thanks for listening.