This great cartoon I saw at The Corner is a very good summary of what the public-sector “collective bargaining” issue is all about.
In private sector labor disputes, unions and management both have ample incentives to protect their respective interests.
With government labor negotiations, by contrast, that natural system of checks and balances doesn’t exist. There’s no strong incentive for politicians to be frugal stewards of taxpayer money – particularly when they negotiate very expensive fringe benefits that defer costs to future years.
Indeed, because government employee unions tend to be very politically active, often being huge contributors to political campaigns, politicians often have a strong incentive to be profligate with taxpayer money.