The Big Payback
Wisconsin unions got their share - now it's the public's turn

by Frederick M. Hess
The Daily
February 23, 2011

http://www.frederickhess.org/8827/the-big-payback

Madison, Wis., has become ground zero in the attempt to rein in the unaffordable promises made by a generation of craven state and local officials. The political stakes are vast.

Wisconsin Gov. Scott Walker, elected last fall, inherited a 2011 budget shortfall of $137 million, and is eyeballing a $3.6 billion budget gap over the next two years. As part of his budget balancing, he wants public employees to start contributing 5.8 percent of their salary toward their pensions and 12.6 percent of what the state pays for insurance premiums. He also wants to curtail the collective bargaining rights of public employees (aside from police and firefighters), permitting them to keep bargaining over wages but ending their right to bargain over work rules or benefits.

In response, Wisconsin's Senate Democrats have bolted the state to avoid a vote, President Obama is decrying Walker's proposal as a mean-spirited attack on unions, and tens of thousands of public employees have walked off the job (closing Wisconsin's schools for several days). Some anti-Walker protesters carry signs that compare him to Hitler and Mussolini, and others signs that feature the cross hairs of a rifle sight over Walker's face.

Wisconsin's public employees have done well during the past decade and they're intent on holding on to their gains. Take schooling, where Wisconsin has boosted spending by more than a third since 2000. The National Education Association, which tends to lowball such things, reported that Wisconsin teachers made an average of $52,644 in 2009-10. Teacher Portal reports that the average teacher received a 4.7 percent raise last year. Nationally, per-pupil spending has grown even during the Great Recession — from $10,297 in 2007-08 to $10,792 in 2010-11. The problem is that padded payrolls and expansive benefits have soaked up the new spending, so that new dollars do little more than maintain the status quo.

Walker, who comes to this fight with first-hand experience and hard-won expertise after serving as Milwaukee's county executive, is making the tough but necessary call. Put bluntly, the right of public employees to collectively bargain is a bad idea. Why?

Normally, union appetites are kept in check by industry competition, which forces firms that make unaffordable concessions to eventually do better or fall by the wayside. Overly aggressive unions — say, the United Auto Workers confronting General Motors — must recalibrate their demands or push their employer into bankruptcy.

When it comes to public employee unions, these restraints don't exist. After all, public employees are an enormous, influential force in electing their bosses. And state employees know that state and local governments don't have to worry about lower-priced competitors putting their employer out of business.

The result is that state and local officials have good reason to keep on giving away the store until a budget crisis makes it impossible, or voters say "no more." With Wisconsin seemingly at that point, it's both sensible and admirable for Walker to push for an ambitious reset, and not merely try to settle the short-term problem.

The Pew Research Center reports that the U.S. public is split on unions, with 45 percent viewing them favorably and 42 percent unfavorably. The polling firm Rasmussen reported on Monday that 38 percent of voters think teachers, firemen, and policemen should be allowed to go on strike, while 49 percent said they should not. Yet, when asked whether they tend to side with unions or with state and local government in a dispute, respondents opted for the unions 44 to 38.

Union leaders are nervous about how this will end. Politico reported this week that some labor officials "are beginning to fret that a large-scale defeat in Wisconsin will have a devastating ripple effect, weakening labor state by state throughout the rest of the country." One labor official worried, "If the labor movement rallies and gets run over in Wisconsin, it opens [the gates] in every state."

The end game will turn on whether Walker can convince the public that he's just asking public employees to do their share, or whether the unions succeed in portraying his effort as, in the words of National Education Association president Dennis van Roekel, "a politically motivated attack." The outcome is going to determine whether Wisconsin school dollars are going to fund benefits or classroom instruction. But its impact will also be much broader, foretelling what's next for public unions and public coffers across the nation.

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