the growth of public sector unions

The most obvious answers are that government entities typically have monopoly power (where unions can thrive) and operate within the budget-maximizing environment of government activity (where inefficiency is easier to swallow)...

Here's more from Amity Shlaes, an overview of the history of public sector unions in the WSJ...

This weekend we celebrate Labor Day in a country divided between two kinds of workers. The first is the private-sector worker, the vulnerable one who rides the business cycle without shock absorbers. The second worker, who works for the government, lives a cushioned existence in which terminations take years, pension amounts are often guaranteed, and recessions are only thunder in the distance. Yet worse than this division is the knowledge that the private-sector worker will pay for public-sector comfort with ever higher taxes.

How did we get here? Over the course of the past century, officials and politicians of both parties have sought to shut unions out of government or, when that failed, constrain their power within government. Early 20th-century strikes by police and other public employees were effective but proved politically damaging. Over time, the unions opted for a more quiet form of coercion—what might be called compensation coercion. Their success in this area brought them to the privileged ground they hold today.

The origins of our current predicament began back in 1912. Presidents Theodore Roosevelt and William Howard Taft placed gag orders on postal employees to prevent them from communicating with Congress on any matter, including wages. The gag offended many members of Congress, who then supported a bill sponsored by the progressive Robert La Follette that aimed to curtail presidential authority by making it harder to fire public employees.

The Lloyd-LaFollette Act of 1912 gave federal workers the formal right to organize. What that might portend did enter the minds of the bill supporters....

In 1962, President John F. Kennedy signed Executive Order 10988, which permitted collective bargaining by federal employees. Widely seen as a gift to George Meany, the AFL-CIO head who helped Kennedy win the White House, the executive order was also a gift to government unions, both because it widened federal membership and because it signaled national approval of unions for state and local employees...

Another factor leading to the rise of the public unions is the decade-over-decade increase in the size of government....