Pro-growth policy is good for public unions

The fight for a growing Chicago could use more allies.

To borrow from Frank Capra, every time we choose to build, our pension fund gets a bit more filled.

We talk a lot about why it’s important for Chicago to prioritize growth. Economic and population growth sit upstream of many of our civic challenges; if we’re able to grow more as a city, many of our issues get a lot easier to solve. But one thing I find interesting is that because of that, there ought to be a natural ally in the fight for more pro-growth policy who don’t appear to take much of a role. I'm talking about our public-sector unions.

A few months ago, I was listening to an interview between Sun-Times reporter Fran Spielman and Chicago Firefighters’ Union President Pat Cleary. One of the more remarkable exchanges was about how to fund pensions.¹ Given how underfunded the firefighters’ pension fund was, Spielman was asking, and given some questions about the viability of the Bally’s Casino development intended to save those pension funds, did Cleary have any proposals to the city about ways to ensure adequate funding to the plan? Here’s Cleary’s response:²

“That is not my job to do. That’s the city’s job. They should be looking at ways to fund it. They’re the one who has to pay the bill, not me.”

While he’s literally not wrong, that seems like a pretty blunt approach for a guy whose pension fund is close to empty. And when our unions do have more specific policy thoughts for the city, they’re often more focused on basic redistribution policies than anything to actually encourage growth. Here’s an appeal from the CTU to ‘tax wealthy corporations’ to fund Illinois schools. Here’s the union’s vice president calling for the state to ‘tax the rich’ to do the same:

To be fair, this is entirely their prerogative. The CFU and the CTU don’t owe the public anything. They’re supposed to advocate for their members, and to that end they can of course advocate for whatever policies they want. That said, my argument is that those unions and their members would be better served by advocating for policies to grow the City of Chicago.

What policies am I talking about?

To make something clear, I’m absolutely not talking about unions taking stances that directly hurt their interests. I don’t expect the CFU to suddenly accept a four-man staffing standard, even if I think it’s a good idea, or for LiUNA not to fight lower streets and sanitation staffing. I’m instead referring to areas of policy that don’t on the face really impact unions directly.

The most obvious opportunity is one we talk about a lot here - issues of zoning and housing construction, which often pit developers and renters against NIMBYs local homeowners opposed to new construction in their neighborhoods. Trade unions are often already advocates for these projects, given that they’ll be creating jobs for their workers. We’ve seen unions get involved in a helpful way in other pro-growth housing reforms, too, like the Chicago Federation of Labor’s endorsement of the 2022 Connected Communities Ordinance. But I think there’s a real opportunity here for more public unions to get louder in support of these policies and foster positive change.

Take, as an example, the Fern Hill apartment tower development in Old Town which passed earlier this year after several months of heated debate. Won’t public employees be major beneficiaries of the $10 million in property tax revenue the project is expected to bring in, making it easier to fund our pension funds? Won’t adding an extra 300 or so households to Old Town result in more demand for CPS schools (and teachers), more demand for garbage pickup (and sanitation workers), and more demand for public transit in the area (and bus drivers or El station workers)? I’m very grateful that Ald. Brian Hopkins was willing to put his weight behind the final proposal here - but it’d be great to make it easier for him and other elected officials to do so in the future! If public unions became more vocal advocates for more developments, upzonings, or pro-housing ordinance changes, I imagine they’d have an opportunity to sway alders and tip the scales on a lot of projects and policies.

Growth has concrete benefits to public unions

Let me take a quick step back from that example to outline why growth should matter to public unions.

A bigger, more prosperous Chicago is one where literally speaking we have more people and economic activity going on in the city. It’s a city with more kids, which means we’ll need more teachers and CPS won’t have quite as hard a time with empty schools and classrooms. It’s a city with more commuters, which means more demand for bus drivers and CTA workers. It’s a city with more people, which means we’ll need more streets and sanitation workers, and those people probably want to feel safe, so we’ll need more police officers and firefighters. Simply put, we’ll have a lot higher demand for city services, that demand will require public employees, and that’s good for them.³

But paying for that demand gets easier, too. Because we have more economic activity going on, we have more people to shoulder the tax burden, giving us greater capacity to pay for all of those workers. It’s not a coincidence, for example, that the highest median wages for police officers are in the San Francisco Bay Area, or that the lowest are in relatively poor southern metros like Jackson, Mississippi or Hammond, Louisiana.⁴ Prosperous, growing cities can afford to pay public employees well, and they do.

It’s also worth remembering that we’re staring at a budget gap this year of over $1 billion - and if nothing changes, at some point that’s going to involve personnel cuts that impact these unions. More pro-growth policy means more tax dollars coming in, which makes the budget math easier and reduces our need for layoffs or cuts.

It’s also important in that it helps us avoid the worst-case scenario: a Chicago bankruptcy, which ought to matter for unions as well. Union members’ pensions are contractually protected payments, so, as Cleary was quick to remind us, by law they’re not going anywhere - unless the city goes bankrupt. Detroit’s bankruptcy, for example, resulted in higher retiree healthcare costs, cuts to base pension payments, and the elimination of cost-of-living adjustments for pensioners. Avoiding bankruptcy ought to be an imperative to ensure similar never happens to our public pensioners, and pro-growth policy is the way to do that.

So why doesn’t this happen?

I have to admit that the fact that this doesn’t happen puzzles me. I can come up with a couple main lines of reasoning, but I’m not sure any are all that satisfying.

For one, there’s probably some degree to which unions are concerned with ‘staying in their lane,’ so to speak. Their primary concern is to advocate for their members; if they start advocating for policies outside of those that directly impact their membership they open themselves up to criticism and attacks they might not want. There’s probably an aspect to which it might upset some of their membership, as well. But I’m not sure I totally buy this, since we do see some unions advocate for unrelated policies today. Here’s the CTUs’s press release from earlier this month denouncing ICE raids in Chicago, for example; I think advocating for denser, pro-family construction would certainly be more connected to the union’s interests than that is. They’ve even had instances where they’ve advocated directly against new construction development, like boosting activists who tried to prevent 314 new apartments from being built on a former parking lot.

In a related line, there’s probably a question of bandwidth. Given the short term budget headwinds we’re facing, they may be preoccupied with protecting their membership against job cuts in next year’s budget, or the next CBA they need to negotiate, and don’t have time to chase down every issue that might benefit their members in five or ten years’ time. I think that’s a mistake. The same way that Chicago suffers when we take on too much debt and have to pay bigger bills down the road, it seems likely to me that the unions and their members will end up taking a bigger hit down the road if the city fails to pursue growth today.

Finally, I wonder whether “pro-growth” is just regarded as coded for “pro-business” or “anti-union” policy such that they’re just turned off from this or view it as a Republican concept. It shouldn’t be. Democratic Governor Josh Shapiro in Pennsylvania has been held up repeatedly as a poster child for what prioritizing economic growth should look like, given his success on things like reopening the collapsed I-95 bridge in just 12 days or a permitting reform effort that’s dramatically accelerated project and business approval for the state. He’s also an unabashed champion of organized labor. Similarly, the entire abundance movement about prioritizing growth is aimed squarely at persuading those left-of-center.

Bottom Line

The bottom line here is that pro-growth policies are a rising tide which will raise all boats in Chicago, and it need more champions. Public unions ought to be a part of that coalition. If you’re reading this and you’re in the AFSCME, or SEIU, or LiUNA, or any other public union here in Chicago - please help! If you’re a public official who’s pro-growth and has strong union support, help bring them into this conversation. It’s time for our unions to champion growth - the city, the public, and those unions themselves will be better off for it.

1. Episode 271 of the Fran Spielman show, this exchange starts around the 19:15 mark.

2. In fairness to Cleary, he wasn’t entirely devoid of ideas - he later on references adding slot machines at O’Hare and Midway as a proposal to generate revenue. A 2019 analysis estimated that idea could bring in about $12 million per year in revenue for the city. For context, our budget gap last fall was $982 million (or 82x that amount), and as of the latest annual figures the firefighters’ pension fund has an unfunded liability of about $5.7 billion. I’ll let you draw your own conclusions here.

3. As one clarifying sidenote: as I’ve argued before, it is worth noting that this isn’t a 1:1 scaling factor; while our growth will require more public services and employees, there’s a net fiscal gain for the public, so we still come out ahead on a per capita basis. It’s a win-win!

4. It’s also worth pointing out here that it’s not like San Francisco is particularly pro-cop, or that the South is particularly anti-cop; this is fundamentally about a city’s ability to pay workers , not about a policy choice.