Broken Budgets and Busted Unions

Progressives fight for labor rights in the Cheesehead State

“Let’s face it–Wisconsin is broke.”

Wisconsin Governor Scott Walker’s justification for the sweeping, right–wing measures enacted against public unions is relevant for many states across the nation as their budget deficits continue to grow. In the greatest recession since the Great Depression, 44 states and the District of Columbia are projecting budget shortfalls for fiscal year 2012, most on top of budget shortfalls in FY2009 and FY2010.

According to a report released by the Center on Budget and Policy Priorities, total state budget shortfalls will equal nearly $112 billion for FY2012. Many of these discrepancies are due to a decrease in state tax collections since the recession, a high demand for state-funded services and the decline of state funding through the national government.

Wisconsin, which had a budget gap for FY2010 of $3.2 billion, is one of the few states that is taking radical measures to ensure that its future budget will be balanced. On February 11, Walker introduced his Budget Repair Bill to remedy the effects of the state’s budget deficit.

Passed by the Wisconsin Legislature on March 10, the bill aggressively seeks to diminish the power of public unions to demand higher wages and benefits from their employers. New measures in the bill would destroy the ability of public unions to collectively bargain and would set a cap on public employees’ total wage increases based on the consumer price index. Additionally, the bill requires that public employees contribute to 50 percent of their annual pension contribution and to pay at least 12 percent of their health insurance premium costs.

In an official statement, Walker said that the “reforms contained in this legislation, which require modest health care and pension contributions from all public employees, will help put Wisconsin on a path to fiscal sustainability.”

Many, however, see the bill as a political agenda and an attack by the right on public unions. All fourteen of Wisconsin’s Democratic Senators fled to Illinois to prevent quorum in the Wisconsin Senate. The largest protests in state history, with close to 100,000 people in attendance, erupted in the capital.

“I feel like I have no say and no voice,” explains Lynn Herman, a public school teacher from northeastern Wisconsin. “I don’t understand taking money from the middle class. I don’t understand these hits on Medicare and public education.”

One of the most noticeable effects of the bill is on public education in Wisconsin, which has long been the envy of other states. While Walker claims that the bill will give local school boards the tools to manage spending reductions, cuts in revenues are much greater than any potential savings. Due to cuts in state funding and the amount schools can tax local citizens, many schools have been forced to cut academic programs, reduce employee benefits, and perform widespread teacher layoffs. “Public education is in the toilet. It’s done. We are going to have a bunch of dummies,” says Herman.

With one of the largest unions in the state, public school teachers’ salaries and benefits will be cut substantially. While school boards will be able to get rid of under-performing teachers and give bonuses to exceptional ones, Wisconsin will undoubtedly face a large teacher exodus in coming years. With surrounding states offering teachers higher salaries and better benefits, few teachers will likely choose to remain. “If you are an ambitious young teacher starting out at $32,000 you will never get above $40,000. It’s a dead end job; who would want into that?” said Martha Luber Pelrine, a public school board member in Northeastern Wisconsin.

While the benefits and detriments of the bill are controversial, the effect it has had on the state’s historically progressive tradition is not. In 1959, Wisconsin became the first state in the union to allow collective bargaining among public employees. 75 percent of all states soon followed in Wisconsin’s footsteps. “Wisconsin embodies a progressive position,” explains Claremont McKenna Professor of History Lily Geismer, who focuses on US political realignment and other political movements. “Many people have had issues with the bill because Walker and the legislature are working behind closed doors.”

The events in Wisconsin have ushered in a new era of government-labor relations. While most assaults on workers unions gathered bipartisan support, conservative leaders have always warned of unions taking over and shutting down the government. No action was ever taken because their threats were never realized. The severe recession and the state’s budget crisis, however, have bolstered their argument that the government can no longer afford public unions.

“Even during the PATCO [Professional Aircraft Controller Organization] strike in 1981, Ronald Reagan still believed in collective bargaining,” explains Geismer. “I think the big question is what do Walker’s actions mean for the future of the GOP?”

These attacks on public sector unions also come at a critical time in power reversal between public and private sector unions. Soon after Wisconsin became the first state to allow collective bargaining in its public sector unions, the membership of the workforce in private sector unions was 31.9 percent compared to only 10.8 percent of the public workforce. However, as the US economy has transformed since then, those numbers have been reversed with 36.3 percent of public sector workers belonging to unions compared to 6.9 percent union membership of private workers in 2010.

The greater number of benefits given to public sector workers was an attempt to balance the higher compensation of the private unions in the 1950s and 1960s. As globalization has transformed the economy, many private sector jobs have been outsourced, creating a resentment among private sector workers towards the public sector, who now face not only greater compensation and benefits, such as health care plans and pensions, but greater job security as well. This “pension envy” has served as the perfect target for Walker’s attacks on public unions.

“If you look at blogs, listen to talk radio, all you hear today is that bureaucrats are getting fat pensions,” explains Claremont McKenna Professor of Government Frederick Lynch, who studies inequality and social movements as well as benefits such health care and pensions.

Was it the right target? Even in states that do not allow collective bargaining among their public unions, such as North Carolina, budget gaps are greater than Wisconsin’s. Furthermore, the claim that public sector employees being compensated nearly twice as much as private sector employees monopolizes tax payer dollars is inaccurate. Most jobs in the public sector are white collar, while those in the private sector are blue collar with lower compensation. “You’re comparing apples and oranges,” explains Lynch. “I want to see a compensation comparison between a public and private sector accountant.”

These issues are beginning to spill over the Wisconsin border into states across the nation, including California. With a projected budget shortfall of $24.5 billion, nearly 30 percent of the state’s FY2012 budget, California exhibits one of most extreme budget issues in the country. By comparison, Wisconsin’s budget shortfall of $1.8 billion is only 12.8 percent of the states projected FY2012 budget. “We do have a major budget crisis here in California,” says Lynch. “We are going to have to reform Medicare, Social security and public employee benefits, or else we will go broke. The question is how much reform?”

Various parties in California, trying to capitalize on Wisconsin’s bill, have tried to expose the same issues. In February, the bipartisan Little Hoover Commission released a report suggesting cuts in public pensions and other public employee benefits. “Two different things are happening here in California,” explains Geismer. “It’s almost less about the actual pension and budget cuts and more about undermining public unions.”

As two of the most progressive states in the nation with large public service sectors and a dire financial situation, both California and Wisconsin are the perfect vehicles for the conservative Republicans to initiate their attacks against public unions. While tough decisions will need to be made in response to the budget crisis, many are critical of the influence that political agendas are playing in policy maker’s decisions. “There are two ways for public opinion to react to the situation,” explains Lynch. “Blame the public unions; or realize it is the system that is screwing them, not public unions.”

Hailing from the great state of Wisconsin (he has never met a brat he didn't like), Sam is Editor Emeritus. He enjoys cheese curds that squeak, his Pandora disco and 80's pop radio stations and anyone who can recite the exact depth of Lake Baikal from memory. He is a dual major in Chemistry and International Relations.

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