PODCAST
Steven Malanga interviews WPRI's Christian Schneider about Wisconsin and public-sector unions.
To the public sector unions, it has to be particularly galling that the recent anti-government employee collective bargaining movement is most visible in Wisconsin. Public sector unionization is a longstanding feature of Wisconsin's culture. It is the state where AFSCME was first organized. It is the first state to grant the ability to collectively bargain to public employees. Governor Scott Walker's attempt to limit public sector union influence in Wisconsin is akin to the Pope limiting the use of giant hats in Vatican City.
Since 1959, when Democratic Governor Gaylord Nelson granted public employees the ability to collectively bargain, public sector unionization has grown to cover nearly 50% of all state and local government employees. Unionization is the default - which is why it was so jarring for so many public employees when Walker proposed significantly restricting the public sector unions' negotiating power.
By now, the details are familiar: in order to balance a $3.6 billion budget deficit, Walker proposed requiring state and local employees to pay 5.8% of their salaries towards their pension benefits, up from the zero that the overwhelming majority of government workers pay. Walker also proposed increasing the government worker health care contribution to 12.6% of their premiums, up from around 6%. (Who could have guessed a month ago that people in Budapest would know the arcane details of the Wisconsin health and pension benefit structure?)
From the beginning, Walker argued that rolling back union power was necessary to balance the budget - something his predecessors were unable to do. In Wisconsin, 55% of the money raised by the state is returned to local governments - in order to balance the state budget, Walker was going to reduce that local aid by about $1.4 billion.
To guarantee that there wouldn't be further draconian cuts in local services, Walker allowed towns, cities, and school districts to make up that lost aid through greater employee benefit contributions. In many cases, local governments would come out ahead in the revenue department with implementation of his plan.
Walker argued that with union power scaled back, local governments would better be able to manage the cuts in aid he was sending their way. If school districts wanted to encourage more volunteer or parental involvement to teach kids in a more effective way, there would be no cumbersome teacher contract to prohibit them from doing so. If school districts wanted to move to a less expensive health plan, they could do so. Right now, about 65% of school districts in Wisconsin use WEA Trust insurance, which is run by the teachers' union itself - studies have shown that moving school districts to the state health plan could save local districts around $68 million. But many union contracts currently prohibit changing insurers.
The public unions have argued that their objections to Walker's plan have nothing to do with money. Yet despite public union leaders saying they would accept Walker's financial concessions, local government unions began running back to the negotiating table to "Walker-proof" their generous benefits.
Of course, unionization is very much about money. After Wisconsin teachers began to unionize in the 1970s, the spread between inflation and the growth in per-pupil spending rose dramatically. It was also during this period that teachers were granted full pensions without making any employee contribution - the very practice Walker is seeking to reverse in 2011.
By limiting public sector power (primarily through making joining public unions voluntary), Scott Walker has upset the balance that unions had hoped would never change. And they vow to pay Walker back for daring to set the state's finances straight.
Christian Schneider is a senior fellow at the Wisconsin Policy Research Institute.
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