TO MY LIMITED PARTNERS,
Loretta is a body on the second shift of the corrections kitchen I own under contract with the State Department of Corrections, 9 miles from where your parents live. She hand-scrapes a 60-gallon steam-jacketed kettle at 11 p.m. with a putty knife and the $2 nitrile glove I issue. The tilt-skillet valve runs 240 degrees. Her glove is rated for 180. The 1,842 inmates she feeds at dawn will eat at the same trays tomorrow night. The meal passed at $2.18 a portion on your tax receipt. The glove that would keep her palm from blistering costs $14. I do not stock it.
David Osborne wrote at National Review this week that government unions are clawing back — 230,000 dues-payers since 2024, 495 bills across the states, 87 of them already law — and that taxpayers will eat the cost. He is generous with the word eat. Let me put the meal where your accountant can see it.
I’m running Loretta’s kitchen on a five-year contract that came in $0.41 a meal below the unionized bid Osborne is warning you about. The $0.41 is the gap I won at award. The $0.41 is every refusal logged out of the post-award file: the steam-kettle I deferred to 2027. The second supervisor the state inspector recommended and I declined on the basis that the line ran within budget. The second break the manufacturer recommended I consolidated into the unpaid meal period. The $14 glove I traded for the $2 glove 1,842 times a night. The unionized bid priced all of it. Mine didn’t. The committee chose the bid that didn’t.
Let me slow you down here, because the number matters.
The differential per glove is $12. The differential per portion is $0.0065. Across the contract’s five-year run the differential adds up to a sum the state auditor would recognize as the as-spent figure when it doesn’t. The procurement officer recommended the upgrade in 2022. I’ve drafted the reply twice. I haven’t sent it. The glove has stayed.
Cedric washes the trays. Cedric is Loretta with a hotter rinse and an apron I haven’t replaced since the spring. He sprays 200-degree return water for 7 hours a shift. The apron the manufacturer rates for that spray is $22.50. The apron I issued is a $4.15 neoprene, third life, hand-me-down from the day shift. The differential is $18.35 a worker. The differential per tray is $0.024. Cedric’s station was added in 2023, the year the contract came up for renewal. The unionized shop priced a dish line at $0.18 a tray. I priced mine at $0.11. The unionized shop lost on price. Cedric won the trim on the margin.
You’d like to file Loretta’s glove under one bad contract, one out-of-state operator, one changeable RFP. Wider frame, partners. And I want you to hold this one, because it’s the part that pays.
The legislative liaison who drafted the request-for-proposal that named our firm by category is one of my graduates, Class of ‘17, evening seminar, “Cost Engineering for Public Procurement.” B average, A in the unit on at-will contracting. He’s now the deputy commissioner of procurement at the department that issued our RFP. He wrote the spec that named our category. Three of the seven members on his evaluation panel took the same seminar the same semester. The textbook they cut their teeth on is mine. The chapter is “Bidding Below the Floor Without Climbing Through It,” page 184 of the third edition.
I want you to hear that twice.
He doesn’t know he’s teaching you to underbid yourself. He thinks he’s teaching you to underbid me.
I’m not unusual. I’m a curriculum. I have spent 30 years grading men into this arithmetic. The young man who repriced that contract sat in my seminar 4 years ago, second row, and he ran the subtraction faster than I did. They arrive sentimental — most of them still believe a worker’s years mean something. I cure it by October. By spring the best of them see the differential before I do, and I say that with a teacher’s pride. One of them set the wage on the job you’re afraid of losing. The view you find monstrous is the median view of the people who run the firms you work for, and I know that because I graduated them into it. Right-to-work is not a single legislator’s idea. It is an operating instruction, handed down term after term, to a graduating class.
The same arithmetic travels. I run an appeals-processing center in Arizona — same margin, different kettle. Loretta’s cousin on that line answers 312 calls a day, not the 287 the state’s clinical workload model permits. The headset she’s entitled to under the federal ergonomic standard costs $87. The one she’s wearing costs $7. Her right wrist goes numb at 2:17 p.m. I do not stock the wrist brace. The brace costs $19. Stocking it would tell the workers we count their bodies, and we count them only on the line that pays us. A shop steward would have filed the ergonomic grievance in 2022. Arizona’s right-to-work statute — the one I helped draft — prevents the union from ever existing to file it. The arithmetic does not need the per-unit margin to be large. The arithmetic needs the per-unit margin to exist. I am not worried. There is always a margin.
“The labourer is worthy of his hire.” — Luke 10:7 (KJV)
The verse was written for the laborer. I’m the laborer’s payer. Osborne reads the verse as a tax receipt. I read it as a bid. I have determined what the hire is. It is the wage I set, on the line I set, under the statute I helped draft. I am the worth. I am the hire. The verse is satisfied. If a regulator one day rewrites the statute, I will rewrite the verse with him. I’ll quote it from the bench.
Now lift your eyes off the kitchen for a moment and look at the field.
The 495 bills Osborne counts as the comeback of public labor aren’t, on your P&L, a comeback. They’re the de-risking of your next contract. Every state legislator who votes for card-check is voting, whether he knows it or not, for our next five-year bid. The Connecticut $722 million Osborne cites as the proof of union overreach is the row that, in the proposal I’m submitting to Hartford in October, sits underneath our 2027 line item. The Utah $4 million vs. $130,000 referendum Osborne cites as proof of asymmetric union muscle is the number I’m citing in our bid as the $0.41 advantage. The trust fund the unions were saving toward was always a bet that the supply of paying hands would never run out. I am the one who made sure the bet paid this decade. I’m told the political map in Arizona is more favorable to my line than it was 2 years ago. I haven’t checked the map. The state contract is up for renewal in 2027. I expect to renew it.
I haven’t opened the Utah numbers. I haven’t computed, since the contract’s second year, what the next contract doesn’t buy. The 2027 re-bid is being drafted by graduates of mine, in the language I’ve written, in the categories I’ve named.
Loretta returns at 11 p.m. tomorrow. Her glove is the 2021 glove. The folder with the state inspector’s recommendation sits in the cabinet behind me. The folder’s been closed since 2022. I haven’t turned the page. Her personnel file sits beside it. I haven’t, in some time, opened that either.
The contract renews.
The folder doesn’t.
The Lord provides the lily its garment. He has provided me Loretta. The dividend holds.
Sterling A. Varice holds the Hayek-Friedman Chair and serves as Dean of Instruction at Warden University’s College of Business and Economics in Richmond, Virginia. He is the author of three textbooks: Divine Mandates for Labor Utilization, Social Obligations for Profit Maximization, and Calibrated Deprivation: A Manager’s Guide to Employee Motivation.