Study: Reducing Public Sector Unions by 50% Would Save Maine $263 Million


A study released this week by the Goldwater Institute details the crippling financial impact of public-sector unionization, and shows that a 50% reduction in Maine’s public-sector union membership would save taxpayers $263 million a year. This savings would more than double the amount needed to fill the current shortfall in the Health and Human Services budget.

The Goldwater study cites information from the U.S. Bureau of Labor Statistics that shows state employee wages are 44% higher than private sector wages. Further study shows that unionized state employees nationwide earn 42% more than state employees that don’t belong to a union. A 50% decrease in union membership across the nation is estimated to save taxpayers over $49 billion annually, and $263 million in Maine alone.

The study also notes a study from the Kennedy School at Harvard University, showing an increase in interest cost to states with high public-sector union membership.

The study’s authors note that union strength in a particular level of government…can indicate to bond markets that those governments may not be able to overcome the political pressure to implement budget-conscious measures when necessary.

“Those states with a more heavily unionized government sector tended to have higher borrowing costs relative to other states with a less unionized government sector.

“This study reinforces what Franklin Roosevelt told us more than 70 years ago – that the concept of public-sector unions is ‘unthinkable and intolerable’,” said Lance Dutson, Chief Executive Officer of The Maine Heritage Policy Center. “Maine taxpayers have been squeezed dry by public-sector unions. The very money that is taken from the pockets of working Mainers is used to reinforce their political stature in government, which allows them to squeeze more money from taxpayers. All of this is untenable, especially in light of recent budget developments.”

“The taxpayers of Maine have a strong willingness to help the least-fortunate among us, but state workers are not our least fortunate,” Dutson continued. “With the threat of cuts to our social safety net, the travesty of bloated union wages is especially poignant. It’s time to face the facts: public-sector unions drain precious resources away from Maine’s sick, elderly, and poor. Allowing this to continue in Maine is unacceptable, and we hope the legislature will take appropriate action to correct this terrible imbalance of priorities.”

The full study is available here: