With the stroke of a pen, Gov. Spitzer has cleared the way for 60,000 home-based day-care providers to join New York’s growing quasi-public-sector labor cartel. And in the process, on the heels of a first-year budget that increases spending at more than three times the inflation rate, he has further undermined his ability to control the cost of government in the Empire State.

Spitzer late last week signed an executive order that will allow the United Federation of Teachers (UFT) and the Civil Service Employees Association (CSEA) to move ahead with their plans to organize day-care providers in New York City and the rest of the state, respectively.

The providers in question are independent contractors, subsidized by government grants but hired by parents. Some are licensed day-care operators; others are friends or relatives of the low-income working moms whose kids they watch. In recent years, unions across the country have been eying these informal caregiver networks as a new frontier for building membership rolls and political influence.

Spitzer’s administration unveiled the day-care deal Friday as part of a “Labor History Month” celebration. But it made no mention of the potentially costly implications of the new chapter that the governor has just opened in that history.

Unlike a bill vetoed by Gov. Pataki last year, Spitzer’s order doesn’t formally redefine the subsidized day-care providers as state employees. For all practical purposes, however, the financial and political effects will be virtually the same.

Unions representing the daycare providers will be authorized to reach agreements with the state that go beyond pay, benefits and working conditions to include “the stability, funding and operation of child-care programs.” In other words, on top of their established budget-busting legislative priorities, the UFT and CSEA will have an incentive to push for expanding New York day-care subsidies, which already consume $900 million in federal, state and local funds.

Spitzer’s order was silent on the likely costs of unionization, but the Bloomberg administration last year estimated that the similar bill vetoed by Pataki would have cost the city alone $55 million to $100 million a year. Absent added state funding, the executive order will translate into a loss of 15,000 day-care “slots,” Mayor Bloomberg predicted last week.

UFT President Randi Weingarten was equally quick to promise that Spitzer’s executive order is “just the beginning of the providers’ quest to get the respect, recognition – and fair wages – they deserve for the important work they do.” Translation: Taxpayers, reach for your wallets.

But the impact won’t be limited to state and local budgets. By raising the compensation floor for a large number of day-care providers, Spitzer’s “Labor History” gift to the UFT and CSEA will tend to push up day-care expenses for all working parents in New York – whether or not they receive government subsidies. Ironically, more parents will have an incentive to use unlicensed, unregulated day-care providers who don’t accept government-subsidized payments – the only group not subject to Spitzer’s order.

The executive order also sets a disturbing precedent. Just for starters, the case for unionizing state-subsidized in-home daycare providers for the disabled – and, for that matter, foster parents – could be at least as strong.

Spitzer’s order is the latest in a series of victories for organized labor on this issue around the country. Laws or executive orders unionizing providers have also been signed by Democratic governors in Illinois, Wisconsin, Oregon, Washington, Iowa and New Jersey. (However, such laws have been vetoed by Republican governors in California, Rhode Island and Massachusetts.)

The public is not necessarily clamoring for such changes. After last year’s veto in Massachussets, the law was presented to Bay State voters as a ballot question. There was no organized opposition and unions mounted a million-dollar campaign for a “yes” vote – yet the measure lost handily.

Although his executive order ignores the funding issue, Spitzer’s first Executive Budget was hardly parsimonious in other areas. The governor’s expressed concerns over “long hours, limited benefits and low pay” for day-care providers could easily have been addressed more quickly through the recently completed appropriations process.

In the final analysis, however, it seems clear that Spitzer’s initiative isn’t really about the providers or their clients.

It’s about unions.

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

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