A seminal showdown between public unions and taxpayers.
For Americans who don't think the welfare state riots of France or Greece can happen here, we recommend a look at the union and Democratic Party spectacle now unfolding in Wisconsin. Over the past few days, thousands have swarmed the state capital and airwaves to intimidate lawmakers and disrupt Governor Scott Walker's plan to level the playing field between taxpayers and government unions.
Mr. Walker's very modest proposal would take away the ability of most government employees to collectively bargain for benefits. They could still bargain for higher wages, but future wage increases would be capped at the federal Consumer Price Index, unless otherwise specified by a voter referendum. The bill would also require union members to contribute 5.8% of salary toward their pensions and chip in 12.6% of the cost of their health insurance premiums.
If those numbers don't sound outrageous, you probably work in the private economy. The comparable nationwide employee health-care contribution is 20% for private industry, according to the Bureau of Labor Statistics. The average employee contribution from take-home pay for retirement was 7.5% in 2009, according to the Employee Benefits Research Institute.
Mr. Walker says he has no choice but to make these changes because unions refuse to negotiate any compensation changes, which is similar to the experience Chris Christie had upon taking office in New Jersey. Wisconsin is running a $137 million deficit this year and anticipates coming up another $3.6 billion short in the next two-year budget. Governor Walker's office estimates the proposals would save the state $300 million over the next two years, and the alternative would be to lay off 5,500 public employees.
None of this is deterring the crowds in Madison, aka Mad Town, where protesters, including many from the 98,000-member teachers union, have gone Greek. Madison's school district had to close Thursday when 40% of its teachers called in sick. So much for the claim that this is "all about the children." By the way, these are some of the same teachers who sued the Milwaukee school board last August to get Viagra coverage restored to their health-care plan.
The protests have an orchestrated quality, and sure enough, the Politico website reported yesterday that the Democratic Party's Organizing for America arm is helping to gin them up. The outfit is a remnant of President Obama's 2008 election campaign, so it's also no surprise that Mr. Obama said yesterday that while he knows nothing about the bill, he supports protesters occupying the Capitol building.
"These folks are teachers, and they're firefighters and they're social workers and they're police officers," he said, "and it's important not to vilify them." Mr. Obama is right that he knows nothing about the bill because it explicitly excludes police and firefighters. We'd have thought the President had enough to think about with his own $1.65 trillion deficit proposal going down with a thud in Congress, but it appears that the 2012 campaign is already underway.
The unions and their Democratic friends have also been rolling out their Hitler, Soviet Union and Hosni Mubarak analogies. "The story around the world is the rush to democracy," offered Democratic State Senator Bob Jauch. "The story in Wisconsin is the end of the democratic process."
The reality is that the unions are trying to trump the will of the voters as overwhelmingly rendered in November when they elected Mr. Walker and a new legislature. As with the strikes against pension or labor reforms that routinely shut down Paris or Athens, the goal is to create enough mayhem that Republicans and voters will give up.
While Republicans now have the votes to pass the bill, on Thursday Big Labor's Democratic allies walked out of the state senate to block a vote. Under state rules, 20 members of the 33-member senate must be present to hold a vote on an appropriations bill, leaving the 19 Republicans one member short. By the end of the day some Democrats were reported to have fled the state. So who's really trying to short-circuit democracy?
Unions are treating these reforms as Armageddon because they've owned the Wisconsin legislature for years and the changes would reduce their dominance. Under Governor Walker's proposal, the government also would no longer collect union dues from paychecks and then send that money to the unions. Instead, unions would be responsible for their own collection regimes. The bill would also require unions to be recertified annually by a majority of all members. Imagine that: More accountability inside unions.
The larger reality is that collective bargaining for government workers is not a God-given or constitutional right. It is the result of the growing union dominance inside the Democratic Party during the middle of the last century. John Kennedy only granted it to federal workers in 1962 and Jerry Brown to California workers in 1978. Other states, including Indiana and Missouri, have taken away collective bargaining rights for public employees in recent years, and some 24 states have either limited it or banned it outright.
And for good reason. Public unions have a monopoly position that gives them undue bargaining power. Their campaign cash—collected via mandatory dues—also helps to elect the politicians who are then supposed to represent taxpayers in negotiations with those same unions. The unions sit, in effect, on both sides of the bargaining table. This is why such famous political friends of the working man as Franklin Roosevelt and Fiorello La Guardia opposed collective bargaining for government workers, even as they championed private unions.
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The battle of Mad Town is a seminal showdown over whether government union power can be tamed, and overall government reined in. The alternative is higher taxes until the middle class is picked clean and the U.S. economy is no longer competitive. Voters said in November that they want reform, and Mr. Walker is trying to deliver. We hope Republicans hold firm, and that the people of Wisconsin understand that this battle is ultimately about their right to self-government.
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