A small but significant budget struggle is underway in the state of California, with labor unions, 'progressive' academics, and the Democrat—dominated state legislature on one side, and Governor Arnold Schwarzenegger on the other. At issue is a four million dollar per year state subsidy for propaganda favoring labor unions. Governor Schwarzenegger's budget eliminated the expenditure, but the Democrats in the legislature have restored it, with a cosmetic five percent cut.

Nestled within the lovely campuses of UC Berkeley and UCLA are the two offices of the University of California Institute for Labor and Employment (ILE).  The ILE, recipient of the taxpayers' four million dollars,  makes no secret of its pro—labor (union) orientation.  Founded in the year 2000, after heavy lobbying by labor unions, in an era when the legislative Democrats and then—Governor Gray Davis were throwing taxpayers' money in every direction, the ILE produces studies aimed at influencing public policy in directions favored by labor bosses and 'progressives.' It is a classic example of major campaign donors 'investing' their political donation money and getting a return in the form of tax dollars spent on their own interests.

Labor unions, it should be remembered, have many, many millions in annual dues in California alone, collected from members who are forced to join a union in order to hold their jobs, in many cases. With these riches at their fingertips, labor unions are able to fund huge campaign contributions. Nevertheless, they unashamedly demand public subsidy for academic research specifically designed to support their political positions.

Moreover, it should be remembered that public employees are the new heart of union membership. The union share of private employment hovers at about ten percent nationally, but among public sector jobs, the share is triple or more. Thus, the state of California bargains with labor unions, whose own propaganda research it funds to the tune of millions of dollars annually.

The effect of the ILE extends well beyond the propaganda effects of its research. By sponsoring graduate student conferences, offering research grants and postdoctoral fellowships, and publicizing its research agenda, it serves to encourage the leftward drift of academia, an already politically unbalanced force in American society.

The logic of affirmative action, with its stress on underrepresented minorities, which the ILE appears to endorse when it comes to university admissions, would indicate that the Unoversity of California ought to be subsidizing conservative free—market research institutes, at least until some semblance of political and ideological balance obtains on campus.

Four million dollars a year is not a big item when the state spends almost one hundred billion dollars annually. But every dollar wasted is another dollar that must come out of taxpayers' pockets. Moreover, the state of California spends tens of billions of dollars annually in salaries to unionized employees. Significant savings can result from adjusting the pay of state employees in the direction of market rates for jobs of the same skill and responsibility levels. Effective bargaining table tactics could save the state billions every year.

In defiance of Governor Schwarzenegger's budget, which eliminated ILE funding, the legislature restored it. Now, the Governator must either stand firm and veto the expenditure, or else cave in, and allow the millions to flow to his counterparts across the bargaining table.

We'll be watching.