The Elbert Files: Why government is inefficient

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Des Moines lawyer Leon Shearer has written a book that most people will find boring but which should be required reading for all elected officials in Iowa.

The title is “A Management Handbook for Public Employee Bargaining.”

In it, Shearer draws comparisons between public sector bargaining and labor relations in the private sectors, where he spent the bulk of his career until Gov. Terry Branstad hired him in 2012 to negotiate a new contract with state employees. 

After that experience, and a handful of others in the public sector, Shearer concluded that even though public employees in Iowa cannot strike, the evolution of public sector bargaining here has resulted in two major disadvantages for Iowa’s public sector managers. 

One is that few government employees face competition for their services, a situation that removes many incentives that the private sector uses to spur workforce efficiency. 

The other is that management in the public sector consists of elected officials who are not motivated by profit, as are private sector managers. 

Any desire to save tax dollars, Shearer notes, is offset by the need to win re-election. 

Elected officials know that public employees are more likely to vote and participate in campaigns, and workers know their jobs may depend on it. That gives public employees added advantage at the bargaining table. 

Also, government employees have greater access to the news media, and union negotiators have become adept at using it.  

“The greatest power that unions have today is vested predominantly in the public sector unions,” Shearer concludes. 

Unlike the private sector, government can’t go out of business. Higher costs aren’t offset by efficiency gains; they are simply passed on to taxpayers.

How do public sector negotiators overcome these disadvantages? It begins, Shearer said, with hiring an outside negotiator who must study the issues and figure out which are winnable. In Iowa, wages, health insurance, retirement benefits and work conditions are subject to negotiation.

He recommends dividing issues into “must have” items, “gray areas” and issues that can be used as trading fodder.  

The smart negotiator will “plan to lose a few issues and win the ones you want,” Shearer writes.

The 73-page book outlines a process for making those decisions. One tip is to keep management’s negotiating team small. In addition to the chief negotiator, the team should include someone well versed in past negotiations, a financial analyst familiar with all operating costs and a chief aide whose job includes taking notes and observing reactions on the other side of the table. 

Although these team members are essential, Shearer recommends against letting them know which issues are key and which are trading fodder. 

“There are few secrets in public employment bargaining that are kept secret for any meaningful time,” Shearer writes. There are bound to be leaks, he adds. So it’s better to know how to use a leak than to try to fix one. 

Don’t be afraid of sending false signals or trying to deceive the other side, Shearer says, but never show disrespect and only show emotion on rare occasions when trying to make a specific point.

“Issues are sold with fact, not emotions and table pounding,” he writes.

Never be afraid to go to arbitration. In fact, plan for it, which is what Shearer did in 2012-13. The result of those negotiations was an arbitration decision that denied state workers raises for two years. Perhaps the best part of Shearer’s book is the last page, which issues a wry warning in boldface capital letters of what will happen “if a business agent for a labor union buys the book and starts to read.”

If that happens, he writes, the book will “become blank within one minute after opening.”