Ideas 2011 July/August 2011

The 14 Biggest Ideas of the Year

A guide to the intellectual trends that, for better or worse, are shaping America right now. (Plus a bunch of other ideas, insights, hypotheses, and provocations.)

7. Public Employee, Public Enemy

Jonathan Chait,
Senior editor,
The New Republic

The collapse of the financial sector led to a series of secondary collapses, including the collapse of the long-term financing of states and towns across the country. And thus public-employee unions emerged from a sleepy little corner in the demonology of American conservative thought to briefly occupy the role of villainus maximus in an ideology-laden fight over the soul of the American workforce.

At the vanguard of this redefining stood Wisconsin Governor Scott Walker. The public unions, argued Walker and a vast array of conservatives rallying to his side, constituted a fundamental menace to public finance, a menace that could be addressed only through virtual eradication. The argument ran like this: Perhaps unions have some role in the private realm, giving workers more leverage against employers seeking relentlessly to maximize their share of the firm’s proceeds, but the logic does not apply to government. Indeed, since the opposite side of the public bargaining table is occupied by disinterested public servants rather than capitalists, and since public unions can influence the outcome of the elections, the public unions are bargaining with ... themselves.

Diagnosis: public employees are fat cats with absurd compensation packages. Prescription: deunionization.

Naturally, Walker’s plan to destroy the public unions rousted liberals, largely asleep since November 2008, into a righteous indignation. They, too, had given little thought to the right of public workers to form a union. But confronted with Walker’s plan, they recoiled. Surely the state could remedy its fiscal problems without dismantling the unions, couldn’t it? After all, the unions had already agreed to fork over concessions.

The conservative damning of the public unions was not entirely wrong, but it was crucially incomplete. A powerful force is, in fact, arrayed against the demands of public unions: the desire of voters to pay low taxes. The trouble is that this desire takes the short view, demanding instant gratification. If an elected official pays his workforce more money, he has to jack up taxes. But if he can arrange to have his workforce paid more money years down the line, when he’s not the one coming up with the cash, he can enjoy the best-of-both-worlds outcome of happy employees and happy voters.

So that is what elected officials have done across the country. They’ve given their workforce reasonably modest wages, but plied them with vast pension benefits. By the time the bill comes due, the politicians who agreed to it will be retired themselves, collecting nice pensions, and perhaps being quoted in the local media opining that the new breed of elected officials doesn’t run a tight fiscal ship, the way they did back in the good old days.

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