In an attempt to better understand what is happening in the state, we've collected commentary from across the political spectrum. Above is a Heritage video making the Republican case against public sector unions. On the other side of the aisle, here's Drum:
Of course unions have pathologies. Every big human institution does. And anyone who thinks they're on the wrong side of an issue should fight it out with them. But unions are also the only large-scale movement left in America that persistently acts as a countervailing power against corporate power. They're the only large-scale movement left that persistently acts in the economic interests of the middle class.
A core problem with public sector unionism is that it creates a uniquely powerful interest group. In theory, bureaucrats are supposed to work for and be accountable to the elected representatives of the people. But suppose those bureaucrats organize into large, well-funded, powerful unions that can tip election results. With very few and very unique exceptions, no workplace in which the employees elect the supervisors functions well for long. ... In effect, public sector unionism thus means that representatives of the union will often be on both sides of the collective bargaining table. On the one side, the de jure union leaders. On the other side, the bought and paid for politicians. No wonder public sector union wages and benefits are breaking the back of state budgets. They are bargaining with themselves rather than with an arms'-length opponent.
The flip side of this is that if labor loses after elevating the Wisconsin battle into a national battle, anti-labor activists will seize on it to embolden other governments to move forward. Indeed, I spoke to one anti-labor activist who said he's relishing a defeat for labor in Wisconsin, because it will stiffen the spines of other governments eyeing similar efforts. In other words, what happens in Wisconsin could have major ramifications for whether the phenonemon Krugman describes -- the undermining of one of the last institutions representing the interests of middle-class and working-class Americans -- will continue apace with the further erosion of public employee rights in other states.
As I said in my earlier post, a great many public employees are severely underpaid--this is especially true at the federal level, where the scientists testing drugs at the Food and Drug Administration or the bank regulators at the SEC could probably double their salaries by sliding into the private sector. But it's also true at the bottom of the wage scale, for the school bus drivers and home health care workers. The only rationale for public employees unions to exist is to create wage floors for such workers. But the public unions have set about, largely unimpeded, to build walls (work rules) that constrict government innovation and ceilings (opposition to merit pay) that make it less likely that the most talented professionals will remain in public service. That is the fundamental problem of governance we're facing as we attempt to compete in a global economy.
Politifact is policing the debate. Rachel Maddow claimed that "despite what you may have heard about Wisconsin’s finances, the state is on track to have a budget surplus this year." Politifact corrects the record:
There is fierce debate over the approach Walker took to address the short-term budget deficit. But there should be no debate on whether or not there is a shortfall. While not historically large, the shortfall in the current budget needed to be addressed in some fashion. Walker’s tax cuts will boost the size of the projected deficit in the next budget, but they’re not part of this problem and did not create it.
State and local budgets are in bad shape. They'll need deep reforms across a variety of categories, from tax increases to service cuts to changes to employee compensation. But the focus on public employees -- and the accompanying narrative that they're greedy and overcompensated -- obscures a lot of that: It makes it seem as if the decisions that have to be made are easy and costless and can be shunted onto an interest group that some of us, at least, don't like. It's the Republican version of when liberals suggest we can balance the budget simply by increasing taxes on the rich. But it's not true.
[O]nce we’ve embraced best practices, increasing productivity is fundamentally a process of search and experimentation. Rigid work rules make search and experimentation really hard, which is why I’m skeptical about the virtues of organized labor in most domains, including the public sector. The issue of public sector reform and flexibility isn’t about who to blame. Rather, it is about trying to make government work better for everyone, including taxpayers.
At the federal level, it’s now cliché to deplore talk of cutting spending by cutting “waste and abuse.” The recent focus on public sector pay largely strikes me as a revival of the same trope. In either case the name of the game is to persuade people that lower taxes are compatible with an identical level of government services. We’ll have all the same people do all the same stuff but just pay them less! I don’t buy it. Of course if you cut teacher salaries across the board they don’t just all quit and leave to be replaced by worse people. But what happens at the margin is that the best people leave, to be replaced by worse ones. There are (big) problems with teacher compensation schemes in the United States, but that doesn’t solve any of them.
Clearly, the public has begun to recognize the largess of the Wisconsin pension system. According to a Wisconsin Policy Research Institute report in February of 2010, a private sector worker would have to earn $70,000 per year to earn the same pension as a public sector employee that makes $48,000. The average employer contribution for private sector plans is 5.3 percent of payroll, compared with the Wisconsin Retirement System, in which the employer contribution ranges between 10.55 percent and 13.3 percent of payroll.
A new paper by the Economic Policy Institute breaks down the numbers and finds that Wisconsin’s public workers are, if anything, underpaid relative to their private sector counterparts. Of course, Walker and his allies insist that the real problem is not so much wages as health benefits and pensions. But the researcher who wrote the EPI paper, Jeffrey Keefe of Rutgers University, considers that possibility. Although public employees may pay less for some benefits--in particular, their health insurance typically comes with lower premiums and cost-sharing--he argues they still fare no better than their private sector counterparts when it comes to total compensation.
Taking a crisis and using it to serve a “longtime ideological objective” is a pretty good description of a lot of what went into the ARRA, including a lot of the infrastructure investments and Race to the Top. You might argue that “well those are just good policy!” and with some of it I might agree, but they are long-term goals and not the best use of short-term stimulus, and they certainly had ideological detractors on both the left and the right. These parts of the ARRA strike me as fairly comparable to what Governor Walker is doing, so I’m not sure why anyone who didn’t complain about that aspect of the ARRA is complaining about this if they object to this type of policymaking per se. My guess is that most people are fine with this when the long-term ideological goals being met are their own.
American labor -- and all the good and the bad that it does -- is one unit, combining the density and dues of both its public- and private-sector members. If public-sector unions had never been founded, labor would've been much weaker in the 20th century. If they're killed now, a resurgence of private-sector unions becomes even more unlikely going forward. The stakes here are for American labor -- and the public -- as a whole. They are not limited to a few public-sector unions.
[T]he impasse seems to have softened the Republicans a bit; Dale Schultz, a moderate Republican senator, has offered a compromise proposal. Will it work? Maybe, maybe not. But insofar as part of the reason we have legislatures is to give people a mediated space to air their grievances, the uproar in Wisconsin has had that benefit for the state.
In most lines of work, individuals' power to negotiate higher wages with large organisations is very limited. In government employment, individuals' power to negotiate higher wages is utterly non-existent. An individual teacher who bargains with a private school for a higher wage than her peers is going to have a tough negotiation on her hands; an individual teacher who tries to bargain with the City of Milwaukee for a higher wage than her peers is going to be laughed out of the superintendent's office. In his initial post on this subject, my colleague ventured that civil servants would constitute a powerful bloc able to protect their wages even without unions. I'm not really sure what this means. Through what mechanism are civil servants supposed to bargain for wage increases if they don't have unions? Who's supposed to do the bargaining?
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