U.S. Recovery Might Need Public-Sector Unions: Tom Juravich

Wisconsin Governor Scott Walker is wrong. The way to fix his state’s fiscal crisis isn’t by destroying public-sector unions and the half-century tradition of collective bargaining among teachers and state employees.

Walker argues that given the growing state deficit, there is no other choice than to slash the wages and benefits of public-sector workers whose compensation, he suggests, far exceeds that of workers in the private sector. He says he needs to gut collective bargaining because he and political leaders at the local level need flexibility to institute further cuts if necessary. Upon examination, his position is rooted more in the rhetoric of the Tea Party than in economic reality.

There is no evidence that public-sector workers in Wisconsin have higher total compensation than their counterparts in the private sector. It is true that a gross comparison shows many public-sector workers earn more, but they are significantly better-educated than most workers in the private sector. When one compares Wisconsin public-sector workers with their real counterparts, as the Economic Policy Institute has done, Wisconsin pays its public-sector workers 14.2 percent less than workers in the private sector.

Walker and other Republican leaders in the state have made a big deal of the “gold-plated pensions” of state workers, yet median state and local pensions in Wisconsin are less than $23,000. Fewer than 2 percent receive pensions of $100,000, the threshold bantered around in the press as commonplace. These pensions are most likely the managers and top administrators, as well as senior police and firefighters, who, coincidentally, are excluded from Walker’s draconian legislation.

Fiscal Responsibility

Given these modest wages and benefits, political leaders in the state haven’t been fiscally irresponsible, as Walker has suggested.

However, little has been made of Walker’s own fiscal frivolity. The Legislative Fiscal Bureau of the Wisconsin Legislature released a report in January indicating the state should have a surplus of $124 million on June 30, which instead would turn into a $137 million deficit because of some twists in the budget process. Walker, in a special session in January, went on to grant $117 million in tax cuts to business. Clearly it’s not the state pensioners at $23,000 a year who are the real problem in Wisconsin. These corporate tax cuts should be reversed immediately.

Responsive Unions

Union leaders in the state haven’t been unresponsive to this fiscal crisis. They have already agreed to significant wage and benefit reductions, yet Walker hasn’t budged on the savaging of collective bargaining and refusing to allow unions to collect dues automatically. The manner in which union dues are collected has absolutely no impact on the state budget, but can only be seen as a political move by the governor to eviscerate his political rivals.

If Walker is successful, the wreckage of labor relations in Wisconsin will drag down the state budget for years to come. What will happen to the productivity and commitment of workers who not only have their wages and benefits slashed, but have no union to file grievances on their behalf when their supervision is unfair or abusive? Walker will have created perhaps one of the most agitated and least productive workforces in the country.

If the governor is serious about creating a more productive public sector, he should negotiate with the democratically elected representatives of the workers. After all, it’s the teachers and the public-sector workers, not the governor, who know their jobs best and where the waste is.

‘Line in the Sand’

Instead, the governor talks about “drawing a line in the sand” to balance the budget. Without collective bargaining and with an open season on public-sector workers, state and municipal services may well descend into chaos.

Maybe this is what Walker had in mind all along. Destroy the unions and underfund the public sector so that it truly becomes ineffective, and then try to justify wide-scale privatization. While Republicans like Walker see privatization as the magic bullet, Walker’s own botched experiment with privatizing union courthouse security guards in Milwaukee illustrates just how disastrous it can be.

Besides the workers, the real losers in Wisconsin are its citizens. If Walker is successful in underfunding and undermining pride and dignity in the public sector, there will be long-lasting harm done to education and public services across the state. No matter what Walker believes, we know that people care passionately about their schools, their streets and their neighborhoods. These aren’t political abstractions.

While we can drive wages and benefits in the public sector down to Wal-Mart levels, it won’t deliver the kinds of public services we have come to expect. Following the low-road approach in the private sector brought us to economic ruin. Decent union jobs in the public sector can be a fundamental part of our economic recovery.

(Tom Juravich is professor of labor studies and sociology at the University of Massachusetts, Amherst. His latest book is “At the Altar of the Bottom Line: The Degradation of Work in the 21st Century.” The opinions expressed are his own.)

To contact the author of this column: Tom Juravich in Amherst, Massachusetts: juravich@lrrc.umass.edu

To contact the editor responsible for this column: James Greiff at jgreiff@bloomberg.net

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