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Arbitration has no place at the table

Is mayoral candidate Martin Walsh for or against binding arbitration for public-sector labor contracts? He certainly is.

Like presidential candidate John Kerry in 2004, who voted to fund the war in Iraq before he voted not to fund the war in Iraq, Walsh — a state legislator and long-time union official — would like to have it both ways on binding arbitration. In January, Walsh filed a bill giving third-party arbitrators the power to impose “final and binding” terms for police and firefighters’ contracts, stripping municipal councils of their legal authority to approve the award before it can take effect. It wasn’t the first time Walsh supported such a measure. If it ever became law, public-safety unions would have even more of an incentive than they already do now to make extreme demands and then hold out for arbitration.


But when an arbitrator’s panel last week decreed that Boston police patrolmen should get a raise of 25.4 percent over the next six years — an exorbitant decision even by the usual outlandish standards of public-sector pay hikes — Walsh sounded a different note. “My ultimate goal as mayor will be never to go to arbitration when I am negotiating a contract with city workers,” he said in a statement. Perhaps Walsh emphasized the word “never” to dispel any impression that he was the lead sponsor of a bill titled “An Act providing for binding arbitration for firefighters and police officers.”

In truth, arbitrators should play no role in setting the terms of public-sector employment contracts. The staggering award to the Boston police, which amounts to more than twice the pay raise accepted by 30 of the city’s other unions, is only the latest evidence that arbitration is invariably a sucker’s game for the taxpayers. The same was true in 2010, when an arbitrator ruled that bellicose Boston firefighters should be rewarded with a 19 percent raise over four years.


The most obvious problem with binding arbitration in government labor negotiations is that it erodes any incentive for unions to negotiate in good faith. Elected officials have no interest in dragging out contract talks, especially with high-profile public-safety employees. So why shouldn’t unions stonewall until the city or town agrees to arbitration? They know perfectly well that arbitrators will never come back with less than what the government has already put on the table.

Where strikes by public-sector employees are prohibited by law, recourse to binding arbitration as a way to settle contract negotiations is commonly thought of as a reasonable tradeoff. But there is nothing reasonable about it. Police and firefighters are barred from striking to protect the public’s safety and welfare; it isn’t a concession for which they deserve to be rewarded, or to perpetually hold taxpayers hostage.

Former Detroit mayor Coleman Young, a one-time union organizer and an original sponsor of Michigan’s binding arbitration law, eventually realized just how damaging such arbitration could be. “Compulsory arbitration has been a failure,” Young told National Journal’s Neal R. Pierce in 1980. “Slowly, inexorably, compulsory arbitration destroys sensible fiscal management.”

Yet even if labor arbitration awards were invariably scrupulous, wise, and restrained — even if arbitrators were more protective of taxpayers’ dollars than of their own — there would still be a fundamental problem with allowing unelected third parties to play such a decisive role in determining the wages and benefits of government employees. The compensation of public personnel is a matter of public policy. That policy should be decided by officials answerable to the public.


Under our system of self-government, citizens with an interest in shaping public policy have every right to do so by working through customary political channels. Motorists who think the speed limit should be raised don’t have the option of making demands, digging in their heels, then waiting for an arbitrator to award them most of what they want. Neither do business groups that want tax rates lowered, or welfare critics who want food stamps curbed. The pay and perks of Boston’s police should be no different.

Binding arbitration should have no place in public-sector collective bargaining — above all because it unfairly rigs a political system in which every citizen, not just public employees, ought to have a say. So when Walsh says contract negotiations should “never” go to arbitration, he’s exactly right. If only he understood why.

Jeff Jacoby can be reached at jacoby@globe.com. Follow him on Twitter @jeff_jacoby.