Responding to Scott Walker's Contribution to the War on Unions
Previously published on Feb 27, 2011
Following through with the political agenda he pledged to enact during his 2010 campaign, Governor Scott Walker managed to engulf Wisconsin in controversy less than two months into his first term. After signing 140 million dollars worth of special interest spending into law, the Governor then turned to public sector employees and demanded cuts to their compensation packages worth around 154 million dollars for the next six months alone, plus their collective bargaining rights. Although unions had previously agreed to other cuts and pledged to work with the new Governor to balance the budget while State Congressional Republicans have tried to compromise with a temporary suspension of worker rights, Governor Walker's uncompromising stance, which cost his State an additional 137 million dollars in debt restructuring savings, reveals his true intent.
To be quite clear, the Federal government and many State governments do have fiscal problems that demand long-term, as well as short-term, solutions, including smart spending cuts, which improve efficiency without undermining important social services and tax reforms that boost revenue with a less cumbersome tax code. Due to their kick-the-can-down-the-road approach, Federal, State, and local leaders across the Nation did make extremely short sighted deals with public sector employees that exchanged pay raises for unfunded pension and healthcare liabilities, among other policy improprieties. Keeping in mind many civil servants have already accepted alternations to their compensation, government is essentially telling these hardworking Americans, "government will not honor the obligations it agreed to take on." Specifically in Wisconsin, the facts point to a political agenda steeped in a personal vendetta.
As a County Executive, Scott Walker had to deal with the reality of union negotiations and balancing a County budget, which depends on limited taxpayer dollars, during extremely tough times for average Americans. Certainly, this challenge is not for the faint of heart, yet it is a necessary process for better governance and stronger worker rights that enrich our economy. If collective bargaining could be eliminated, balancing a budget would be a lot easier. Of course, the police could do their jobs quite a bit easier, if the First, Second, and Fifth Amendments did not exist. The problem as far as worker rights are concerned revolves around the tendency of policymakers, as well as business leaders, to follow the most obvious, easiest path available to them when it comes to balancing budgets. On the left, this translates into tax increases; for the right, this means budget cuts. Consequently, the process must be moderated with leverage on both sides; otherwise, destructive policy decisions are made.
If a person believes unions only add costs, he or she probably looks at Walker's initial move as prudent. The problem with this perspective is that it assumes employers will offer employees acceptable wages versus suppressing wages. For executives and other individuals with highly coveted backgrounds, this reality is more or less valid. When it comes to those individuals with little leverage in their industry and workplace, collective bargaining offers them leverage over their employers, who can simply replace them. The benefits to nonunion workers come from higher standards of living and wages set by those who are represented by collective bargaining agreements. Such a reality may cost businesses in terms of higher wages, but these businesses also tend to benefit from a stronger, broader economic base.
Ironically, our society constantly speaks of free enterprise then uses government to undermine the collective bargaining rights of our citizens. We even proclaim the use of stock exchanges "democratizes" the pricing of commodities and the ownership of corporations, but justify action against American workers, because unions increase costs. Where unions help sustain Middle Class incomes and standards of living for a broad range of employees, wealthy business elites looking to earn big when prices peak, often largely due to speculation, use stock exchanges to push up prices. Through political pressure, legal measures, policies, such as supposed free trade deals that have too often hurt our domestic economy, our public officials have intentionally undermined a key segment of our free enterprise system, despite their professed devotion to it. Quite frankly, attacks on collective bargaining are clear examples of government overreach.
Markets work most efficiently when fundamental forces like supply and demand can act to properly price goods and services. If drivers, for example, could simply dictate what they want to pay for a gallon of gasoline, the price would fall to an undesirable, or even unsustainable, level. The same is true of employers, i.e. consumers of labor, when their employees must compete against each other and their own interests in terms of compensation. A lack of collective bargaining helps drive overall payroll costs down. This means lower pay, lower standards of living, smaller tax bases, and less consumer spending. In other words, a weaker economy exists when the bulk of workers do not have adequate leverage in the job market. Where employees work together in some fashion to help ensure their interests as employees are met, they improve their outlook and the outlook of the economy.
A downside to what remains of union influence can be a lack of competitiveness that results in lower workplace productivity and poor employee discipline, but this is a scenario that requires better employer-employee relations. Relationships between employers and unions have often been quite hostile due, in part, to the fact this free enterprise solution to unhealthy, abusive business practices was born in an era of violent corporate reprisals. As such, the solution is not to eliminate collective bargaining, but rather, to improve communication between managers and union workers for the betterment of business. Unions and other collective bargaining organizations have their faults, which must mainly be addressed internally, yet they are part of a healthy economy.
Many large corporations can easily crush smaller businesses and readily cause harm to communities in search of their interests, i.e. profits. Just as corporations hold great leverage in our economy, public unions continue to as well. Of course, the interests of public sector union members will always include improving their communities. Public sector unions may, at times, have greater leverage than what they should due to political influence, the option to raise taxes, and the robustness of government, but there are solutions that do not involve undermining the leverage of all US workers in the economy or government destroying Middle Class incomes for dedicated civil servants. Aside from learning to better engage unions, public officials should use third party negotiators where conflicts of interest arise, so taxpayer and employee interests are fully considered. Additionally, unions, especially those for professions like education, do need to restructure how they operate, including efforts to embrace merit-based pay.
Balancing budgets is a task every public official must aggressively undertake, if the US is to stabilize our long-term debt problems; however, weak consumer spending is also hindering a strong Main Street economy, so Middle Class incomes are needed. The unfortunate reality is that the majority of people working in the private sector have seen pay decreases over years due to a lack of leverage in the economy. Bringing public sector pay in line with this reality may lead to smaller budgets, but undermining public sector unions will not fix our economy while it certainly gives all workers less leverage in the economy. Instead of undermining our free enterprise system in a flagrant display of hypocrisy and creating resentment that can degrade the value of public services while leading to unnecessary shutdowns of government, individuals like Governor Walker might try to improve relations with public servants.