Public sector unionism and collective bargaining are being widely debated in U.S. state and local governments, some of which have sharply reduced or eliminated public employee unionism and bargaining rights. These actions have occurred based on a belief that fiscal adversity facing state and local governments stems mainly from the over-compensation of public employees that has ostensibly resulted from unionism, bargaining and supportive state-level legislation that was enacted decades earlier. These contemporary policy changes, however, are being made with little or no consideration of empirical evidence about public-private sector pay and benefit relationships, the effects of unions on public employee pay, the effectiveness of employment dispute resolution procedures, including arbitration, and the ability of public sector labor and management to effectively combat fiscal adversity and enhance organizational performance.
In this paper we provide new evidence showing that, on balance, public employees are under-compensated relative to their public sector counterparts and that the effects of unions on compensation are considerably smaller in the public than in the private sector. We also review and summarize empirical evidence pertaining to the uses and effectiveness of public sector dispute resolution procedures and to public and private sector joint labor-management initiatives to reform work practices and enhance organizational performance. This evidence indicates that dispute resolution procedures work reasonably well based on process and outcome assessments, and that public sector labor and management can use mutual gains negotiations to benefit not just themselves but citizens and communities more broadly. In addition, we propose a research agenda for a new generation of scholars so that they, like their predecessors, can influence policy makers in making high stakes decisions about public employee unionism and collective bargaining.
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