Wisconsin’s governor, republican Scott Walker, has proposed a bill that President Obama has called, “An assault on unions.” So what would Walker’s proposal do?
1. End collective bargaining rights for nearly all of the state, local, and county workers (excluding firefighters, police, and state patrol).
2. Prevent unions from seeking pay increases above inflation without voter approval via referendum.
3. Prevent unions from requiring members to pay dues.
4. Force unions to hold annual votes to stay organized.
5. Make public workers pay half of their pension costs and at least 12.6% of their healthcare costs, increasing the average public worker’s share of their pension and healthcare costs by 8%.
I don’t think #1 will hold up because I think it would run astray of the Constitution (1st amendment rights to assembly and petition). Aside from that, I’m all for the rest of the measures. #3 and #4 would make it harder for public unions to exist, too.
In looking at #2, if we’re seeing middle class incomes stagnate, why should public union workers be spared from that? They should have to share the pain. This logic also applies to #5. Frankly, they’d still be getting a sweet deal under #5 compared to the private sector workforce and they have exactly zero grounds to complain. Hear me out.
Over 80% of private companies no longer offer pensions, so most private workers are on a 401k plan. The average 401k has workers receiving a 50% match on their first 6% of contributions, yielding a 3% employer match. So, the worker is paying at least 66% of their retirement funding. If the worker puts in more than 6%, the worker’s percentage of contribution increases because the employer match is capped. If a worker puts in 12% instead of 6%, they still get the 3% from the employer, the contribution totals 15%, but the worker has now funded 80% (12/15). The public workers can’t complain.
As for healthcare, the private sector is shifting over to HSAs, and under those, the worker bears 100% of the costs of healthcare up to a set level, at which point the insurance company starts to cover some (typically 80% and the worker is on the hook for the other 20%). The public workers can’t complain here, either.
You might say, “Well, Tim, government workers make less than private sector workers.” That hasn’t been true in my lifetime, according to the chart below.
Public sector workers now make significantly more than their private sector counterparts (this is only state and local – federal workers do even better), plus there’s the added insult of increased tax burdens on us to pay for their excessive salaries and benefits. I got this chart from the Cato Institute’s Chris Edwards, found here. It’s a great read that I may discuss in the future.
The Wisconsin protests have resulted in several school districts being forced to close down because so many teachers ditched work to go protest. This is outrageously unacceptable. To quote Michelle Malkin, “Only striking government teachers could win federal praise for not doing their jobs.” I always thought education should put children first. Someone please tell me how such shameful and deplorable conduct is putting children first.
Also, since we’re talking about more hypocrisy, how is it that the democrats can plead for more civility in public discourse in the wake of the Arizona shooting and then praise such lawlessness? The liberals also contend Walker is retaliating at unions that didn’t support his campaign. That may be true, but even so, isn’t this just the flip side of Obama’s GM bailout that was a boon for the unions? It’s a dirty game that cuts both ways.
Lastly, their Wisconsin congressmen have gone into hiding to prevent the establishment of quorum, thereby preventing a vote and effectively paralyzing the legislature. I can’t say I ever recall seeing that. It’s an interesting tactic, to say the least. It’s blatantly obstructionist and has that, “I don’t like what’s going on, so I’m going to take my ball and go home,” feel to it.
I hope the GOP successful in Wisconsin. This will embolden others, like New Jersey’s Chris Christie, to continue fighting to remind public sector workers that they are civil servants whose salaries are paid by the taxpayers, not civil overlords.
Part 2 Extended:
What troubles me is the ticking time bomb of un(der)funded liabilities on government balance sheets (national, state, and local). Unions negotiating with politicians creates a win-win for both of them at the expense of the taxpayers and the... government's long-term financial viability. Unions get sweet pay and benefits for their workers (especially benefits because these costs can be easily hidden and kicked down the road for future governments to pay), the politicians get campaign dollars and votes, and the taxpayers get screwed.
The demise of GM shows us what happens to an entity when the unions are allowed to run amok. In that case, I blame GM's management more for not being tougher in negotiation, failing to look out for the company's well-being, then fielding an uncompetitive product mix.
In this case, I blame the politicians more than the unions because they're the ones failing to do what they're elected to do (represent all voters). Self-interest drives the union to get the best deal they can, just as it should drive government/management to not give away the homestead. The government, like GM's management, has failed to fulfill its end of the bargain to look out its own best interests and long-term financial viability.
Who's looking out for the taxpayers and who's looking out for our governments' financial well-beings? It should be the politicians, but they're not.
I can't think of a way to fix the process, so the only viable solution is to eliminate the need for the process. Even more significant concessions from the union wouldn't solve the underlying problem. It'd be akin to treating the symptoms versus the disease. Personally, I'm open to other solutions if they're put forth and actually solve the underlying problem. I just don't see any other way.
A state/local government default/bankruptcy wouldn't be the end of the world, but it would be a heck of a lot more painful for everyone and it would take much longer to recover from. I don't view that as an acceptable solution when other measures can be taken to stave it off.
Obviously, to accept my argument, one must accept my underlying assumptions, namely the severity and root cause of the problem along with the desire to avoid default/bankruptcy. Interestingly, rendered irrelevant is my view on public sector pay/benefits/job security outpacing all of that in the private sector (public or private, I think the overwhelming majority work hard and do good work).
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