In Unions There Is Strength - For Whom?

Public-sector unions vs taxpayers is a zero-sum game.

We've discussed the impact that money from outside the state is having on the effort by Wisconsin liberals to replace Governor Walker.  The unions and their liberal supporters desire to punish him for limiting the power of public-sector unions to fleece the taxpayer and they want to send a message to other Republican governors not to try the same thing.  40% of the teachers in Madison County called in sick and then picketed at the state house to block the new laws.  Democrat state legislators moved out of state to keep the legislature from having a quorum, and liberals poured much money into elections for the state Supreme Court in an attempt to block the law.

Threaten My Rice Bowl, Will Ya?

What did Gov. Walker do which roused so much fury?  The New York Times reports:

Among key provisions of Mr. Walker’s plan: limiting collective bargaining for most state and local government employees to the issue of wages (instead of an array of issues, like health coverage or vacations); requiring government workers to contribute 5.8 percent of their pay to their pensions, much more than now; and requiring state employees to pay at least 12.6 percent of health care premiums (most pay about 6 percent now) …

Once the law went into effect, it turned out that removing health care from bargaining had the biggest short-term effect.  In the past, union contracts had required that school districts purchase health care from a specific union-owned provider.  Once they were free to ask insurance companies to bid on the job, cities found that they could purchase health care far more cheaply than from the union-favored firm.

This saving allowed most school districts to balance their budgets without cutting pay or laying off teachers.  Once can only speculate on how much tax money that was supposed to pay for health care wound up in the coffers of the unions who required that school districts hire that specific company.

The Washington Post went into more detail:

No, what the public sector unions really can’t abide is the legislation’s requirement that public employees vote every year on union representation, coupled with an end to the automatic dues check-off on state paychecks. For the first time in decades, these organizations would actually have to prove on a regular basis that they’re voluntary; and they would have to collect their own political war chests, instead of relying on the government to extract the cash for them.; [emphasis added]

Re-read the sentence above - under Walker's reform, unions have to prove by secret ballot that they're voluntary organizations instead of holding members and their cash by intimidation and the power of law, and they have to prove that the services unions provide are worth their cost to the workers who pay the dues.  Although there were essentially no government employees laid off after Walker's law went into effect, there were layoffs - the union had to lay off many members of its administrative staff once their former captives had the ability to refuse to pay union dues and gleefully exercised it.

It's Do Or Die!

Wisconsin is an unusually union-friendly state which is why their budget crisis seemed so dire.  The loss of dues income by the Wisconsin teachers shows plainly that the only way public sector unions can exist is through coercion and intimidation.  When given a choice, teachers would prefer not to pay the union dues because they don't believe that the services the union provides are worth the price demanded.

The only way that unions can gain members is to badger legislators into passing laws requiring government employees to pay union dues as a condition of being hired.

The 2010 elections showed that Wisconsin voters are concerned about budget deficits and don't want taxes to go up.  Having overcome a great deal of illegal opposition including faked sick calls, the Republicans are in no mood to let the unions' good times roll.

Hot Air tells what’s at stake:

The standoff in Madison could become a seminal moment in American politics. At stake is control over public policy. Will that control go to the voters who rejected years of Democratic policies that brought huge budget deficits in Wisconsin thanks to pandering to public-sector unions, or to the unions who need to perpetuate those policies in order to get the cash necessary to wield power? Will Wisconsin have a representative government at all, or merely a rubber stamp for union bosses?  [emphasis added]

Hot Air and the Washington Post have it right - this is a do-or-die moment for government employee unions.  If the Republicans are able to deny union-coerced dues in Wisconsin, of all places, other Republican governors will do the same.

As with teachers' unions who oppose any change in classroom technique no matter how many children graduate without being able to read, this dispute over Governor Walker's hold on his office has nothing to do with the interests of the members whom the unions claim to represent.  Changing health care providers cut costs enough that most cities were able to avoid layoffs.  Not having to pay union exactions saved teachers a lot of money.

The only real "harm" done was to the unions' cash flow.  Since this money is the source of their political power, the union leadership is pulling out all the stops to try to defeat the reforms.

If Republicans can kick union snouts out of the public trough in Wisconsin, it can be done anywhere.

Regardless of how the effort to recall Governor Walker turns out, there's simply no way the state can pay the gold-plated union pensions which were "negotiated" over the years.  Those pensions won't be paid no matter what happens.

If Governor Walker stays in office, he plans to make further adjustments to keep his state solvent.  If the voters throw him out. the state will go broke in pretty short order.

That's why this is such a "Go for broke" vote, in both directions.  If the unions win, the state will go broke, if the unions lose, the unions will go broke and their leaders will have no more political power.   We're looking on with bated breath to see how it comes out.

Will Offensicht is a staff writer for and an internationally published author by a different name.  Read other articles by Will Offensicht or other articles on Economics.
Reader Comments

When the producers yield to the demands of the looters (unions) they are not praised but despised. The more the looters will demand until every last drop of blood is extracted from the corpse. The looters all throughout history have used the mantra of the public good and fairness to justify their demands. Each time it has ended in everyone starving and devastation. The producers act like slaves as they allow the burden of feeding not only their own families but those of the looters.

The voters of Wisconsin have a clear choice, vote free money and benefits for the unions from their very own pockets or say no, make your own way, we will no longer participate in our own suicide. If Wisconsin can do this at one point in time they will begin to question why they have exorbitant taxes extracted from their checks. A consumption tax is the fairest way to fund government as everyone would see what the real cost is.

A seminal election? Yes, one that could possibly put our country back on the track to capitalism, the system that raised serfs and peasants out of poverty and into a wealth that they could only dream about.

January 27, 2012 7:50 PM
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