Did Wisconsin Republicans need to attack collective bargaining?

Wisconsin Gov. Scott Walker said he needed to rein in collective bargaining in order to secure key long-term budget savings. Is he right? Here are the arguments pro and con.

Steve Apps/Wisconsin State Journal/AP
Dave Willoughby of West Allis, Wisconsin (r.) discusses differences with a protester on the Capitol grounds on Thursday, March 10.

Gov. Scott Walker and his Republican allies in Wisconsin have made it clear this week: They insist on a major rollback of union collective bargaining power, not just on some budget concessions from public employee unions.

Partisan conflict on the issue has only escalated this week. Republicans in the state Senate on Wednesday used a procedural gambit to pass a measure to strip key bargaining powers from state workers, without a quorum. The state's House approved the measure Thursday afternoon, as protesters thronged the Capitol and union members weighed the option of a general strike.

So, what is this debate over collective bargaining all about?

Beneath the ruckus is an issue that goes to the core of labor union power in today's America. To backers of organized labor, it's about defending cherished means of advocating on behalf of workers, at a time when a majority of unionized workers are in the public sector. To union critics, it's about rolling back powers they say are inappropriate in the government sector and harm state economies.

Governor Walker framed it this way in a statement after the Senate vote: "I applaud the Legislature’s action today to stand up to the status quo and take a step in the right direction to balance the budget and reform government. The action today will help ensure Wisconsin has a business climate that allows the private sector to create 250,000 new jobs."

Mark Miller, the state Senate's Democratic leader, has taken an opposite view: "Public workers have stepped up and agreed to ... increased contributions for health care and pensions," he said in a recent statement. "All they have asked for in return is to maintain the rights they have had for over 50 years."

Walker wants both the concessions on benefits and a shift in that 50-year tradition. The bill passed this week focused just on bargaining rights. By keeping direct budgetary issues out of the bill, the Senate was able to pass it without a quorum, although some argue the maneuver was illegal.

It's easy to see the drama through the lens of political self-interest. Public-sector labor unions are a vital source of campaign funding for Democrats, while some of the biggest donors to Republicans are business people who would like union clout to be pared.

Both sides say they're fighting for important principles that will make their state a better place to live – and they both make substantive points to back up their views. Here's a look at the arguments on both sides – and some of the evidence that might support or counter those claims.

The case for Walker's bill

Stripping away union bargaining power on compensation doesn't make Wisconsin unique. States have a patchwork of policies: Some require collective bargaining for many workers, others permit it, and a few largely prohibit the practice.

A core argument against collective bargaining in the public sector: Whereas private-sector employers' profits are limited by competition (moderating wage demands), governments have no competition and are funded by tax revenues. Political contributions flow from unions to politicians, who regularly support stepped-up union pay and benefits.

Walker also argues that his crusade is not just about taxpayer costs, but also about the quality of services government provides. What sense does it make, he asked in a Wall Street Journal op-ed, that an award-winning teacher gets laid off because of union-bargained rules that base job cuts on seniority?

Critics of public employee unions argue that their compensation has been rising faster than pay for other types of workers in America, and that this is a bad thing. It threatens states with a long-term budget squeeze, and finding a fix could be easier if unions weren't so powerful.

Outside experts agree that pension and healthcare benefits do pose a significant long-run challenge for many states. And research published last year by Chris Edwards of the libertarian Cato Insititute found that, since 1980, compensation has been rising faster in the public sector than in the private sector. And within state and local governments, he found that union worker compensation is about 40 percent higher than that of nonunion workers.

The case against Walker's bill

Foes of Walker's bill say Wisconsin's budget problems aren't the fault of public employee unions or collective bargaining, but relate to the aftermath of a deep recession.

Moreover, to the degree that public-sector workers have higher pay and benefits, that may be accounted for in higher levels of education and training, according to research by the liberal Economic Policy Institute. The group's report argues that in Wisconsin and elsewhere, public-sector employees are not overpaid.

The unions' defenders agree with critics on one point: Union workers reap a compensation premium over nonunion workers. They argue this is a good thing – a sign that collective bargaining is serving its intended function of balancing power between employers and workers. They say unions have often shown flexibility at the bargaining table, notably in tight fiscal times. And although state governments don't compete for consumers like private-sector firms do, there is still pressure on unions not to ask for too much. If state taxes go up too much, residents and jobs can move to other states.

States with strong union representation in the public sector don't show signs of having weaker economies than their less-unionized peers, they add. New York, where 75 percent of state and local government workers are unionized (according to Mr. Edwards' data), posted faster economic per capita growth since 1997 than Georgia, with the nation's lowest union share of state and local government workers (4 percent).

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