Mead on labor reform: are we heading for a ‘Blue Civil War’?

There is precedent for fratricide between unions and their progressive allies, and the aftermath of a labor-versus-the-left donnybrook could very well create an opportunity for a free market oriented reformer.

Paul Kersey
Director of Labor Reform

Russell Mead over at The American Interest highlights some refreshingly frank comments about city worker pensions and Chicago’s overall financial condition from Mayor Rahm Emanuel. The mayor clearly recognizes the impossibility of funding pensions and providing city services, telling an interviewer from The Wall Street Journal that, “… [t]here’s a set of choices. Reform pensions and continue to be able do other things that are essential for a great city, or make pension payments and do certain things to the rest of the budget that are not part of a great city.” Based on this, Mead predicts a “Blue Civil War.”

Mead may be right; we may indeed see a political brawl break out between government unions determined to maintain their perquisites and liberal politicians determined to maintain public services at a time when the public’s ability to pay for either has reached its ceiling. But while the showdown may start on Emanuel’s watch, it’s unlikely that the mayor will be able to bring it to a conclusion. Rahm’s record dealing with union demands is not encouraging: the Chicago Teachers Union strike ended with pay raises averaging 17.6 percent over four years and a watered down evaluation system for teachers. He is better positioned to succeed on school closures, but the paring back of Chicago Public Schools is more a tactical retreat than an advance for those who believe in the benefits of an expansive government.

Nor are Gov. Pat Quinn and the statewide Democratic Party establishment likely to succeed against government unions. The American Federation of State, County and Municipal Employees was able to get most of what it wanted from the governor in its most recent contract without even calling a strike. The main pension reform plan pushed by the Democratic leadership in the General Assembly is a half-measure. It gives up too much in terms of giving state worker pensions priority over most other state programs, while getting too little in terms of cost controls in return.

If a “Civil War” breaks out between the unions and the rest of the left in Illinois, the smart money’s on the unions. But if history is any guide, that won’t be the end of things. It was a similar situation, where a left-of-center government failed to rein in union demands, which gave Margaret Thatcher her big chance.  During the “Winter of Discontent” in 1978 and 1979, the Labour government of James Callaghan attempted to impose a 5 percent per year limit on pay raises in the government and nationalized industries. The unions responded with a string of strikes that paralyzed Britain, discredited Callaghan and provided the opening that Thatcher’s Tories needed to take power.

So there is precedent for fratricide between unions and their progressive allies, and the aftermath of a labor-versus-the-left donnybrook could very well create an opportunity for a free market oriented reformer. But as I wrote yesterday, if that reformer is going to succeed, he or she is likely to have a battle with the unions too, and he or she will need to have a plan to outlast organized labor.