The Impact of Union Political Activities on Public-Sector Pay, Employment, and Budgets

Anecdotal evidence suggests that the political power of public employee unions has been a major cause of excessive growth in municipal expenditures. Previous studies, however, have not directly measured union political activities but instead have used some type of unionization or collective bargaining proxy. This paper uses unpublished data from the International City Management Association (ICMA) to develop a more direct measure of police and fire union political activity. It is found that increased union political activity leads to greater department expenditures but not necessarily to greater municipal expenditures or revenues. The results also suggest that unions increase department spending through political activity and not through the collective bargaining process itself. Further, it appears that political activity increases department spending through higher employment and not through higher compensation.