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The Time is Now to Reform Labor Laws Which Threaten Our State's Future

Comments | Posted in mi perspectives | By MacIver Institute | Posted November 24, 2010 7:14 AM

By Brian Fraley A MacIver Institute Perspective

The next 60 days should bring a sea change to Wisconsin's anti-job creation, anti-innovation labor laws.

And it would not be a moment to soon.

In January a new Governor and Legislature will take office facing a state deficit as high as $3 Billion.  The current Governor and Legislature increased Wisconsin taxes-primarily on businesses and investors-to the tune of $2 billion. We provided more details about this disaster in our $13 Billion of Bad missive.  Such a burdensome tax load cannot be sustained.

Two simple but fundamental steps to kick start the Wisconsin economy and get our state budget mess resolved would be to repeal collective bargaining for public employees and to make Wisconsin a right to work state, giving private sector workers the choice of whether they want to pay union dues in their workplace.

Taxpayer advocates should champion both causes and praise and assist those who work to advance them.

Repealing collective bargaining rights for government unions may seem a tall order, but not when you consider history.  The concept of collective bargaining by public employee unions is not some century-old part of Wisconsin's foundation. We became a state in 1848.  The State of Wisconsin did not enact a collective bargaining law until 1959, led by then-Governor and later liberal U.S. Senator Gaylord Nelson.

Nelson's efforts fifty years ago made Wisconsin the first state in the nation to pass such sweeping legislation governing public sector labor relations and followed the lead of New York City.

One of the very first politicians to muscle through collective bargaining for public employees was New York's Mayor Robert Wagner who did so in 1958, a move seen by many at the time as a political trade off to ensure his re-election.  In 1962, President John F. Kennedy followed suit, allowing, for the first time, collective bargaining by employees of the Federal government.

Since those moves in the middle of the 20th Century, the cost and scope of government in the United States has grown exponentially. Government employs more, attempts to do more, involves itself more and more into previously private matters and consumes larger and larger amounts of private sector wealth to fuel this binge. This growth is fueled by the influence of public employee unions, who gain their power through taxpayer paid union dues, which in turn are used to leverage policies that lead to the increase in the size, scope and cost of government, which means more public employee union members, which means more union dues and the cycle continues.

The result?

We now have more government jobs than manufacturing jobs in Wisconsin.

We used to be a state where we make things. Now we are a state that makes excuses for why the government behemoth cannot be tamed.

That must change.

In recent decades the strength of organized labor has shifted from the private sector manufacturing and service sectors to governmental workers' unions like AFSCME and teachers unions like AFT and WEAC.  While this shift has occurred, the role of union funding in state and national elections has continued to grow, often making unions and trial lawyers the principal funders of  campaigns from the president right on down to legislative races.

Herein lies the problem with public employee unions: They determine the fate of their own bosses who in turn have dominion over their compensation. Public employee unions skew the labor-management equation through their political muscle and the fact that their contracts are approved by the very same politicians for whom they vote. Therefore, they have the power to perpetuate and accentuate their own wage and benefit structures at the expense of the taxpaying public.

Building painters in school districts with annual compensation packages of more than $98,000 and bus drivers making six figure salaries that translate into benefit-rich pensions are part of the driving force in the budget problems facing Wisconsin.

Unfunded and underfunded pension and retiree health care liabilities are ticking time bombs at every level of government.

Wisconsin's state budget doubles the trouble. As a matter of public policy Wisconsin lawmakers have chosen to fund a great deal of local governments' and schools' budgets as a means of controlling property taxes. Yet, as school boards and local government employers lack the tools and the will to control wages and benefits, these expenses skyrocket.

If step one in the road to Wisconsin's fiscal recovery is for government, as the employer, to be able to take back control of employee compensation by getting rid of public sector collective bargaining then step two is for Wisconsin to become a right-to-work state.

Federal law allows states the option to adopt right-to-work laws, which means that employees who go to work for a company that has a union can choose not to become a member of that union and to pay those union dues. Twenty two states are currently right-to-work states, and Missouri and Indiana are seriously considering right-to-work laws.

States without right-to-work laws permit the coerced payment of union dues. Whether you want a union or not, you are going to pay union dues, and even have those dues go to the support of candidates that you oppose, in non right-to-work states. More and more, younger workers want choice in their work environment, and they want the merit of their work to matter.  By rewarding time in service over competency, unions take advantage of those just entering the workforce, they stifle employee choice, and they ignore merit for all workers through convoluted work rules and seniority systems in the workplace.

Private sector labor unions occupy a unique place in American law and society.  They are the only entities, by law, that are exempted from anti-monopoly laws, that are given the power of coerced representation, and that receive millions of dollars from the Federal government in direct grants, and billions to state entities with heavy union representation that provide worker training.

The only counter balance to all of this is in those states that at least give workers a choice whether or not to support the union in their workplace with union dues from their hard earned wages. Again, this isn't some crazy, untried concept. Nearly half of the states recognize this form of workers' rights--and they continue to grow their economies and outperform those states that have not adopted right-to-work laws.

Coming off the heels of the most irresponsible, pro-labor union legislative sessions in my lifetime, it's time for bold moves in Madison. This isn't about payback, or leveling the playing field. No less than the financial solvency of our state and local governments may depend on these two measures.

The new Governor and Legislature can unleash Wisconsin's private sector employers and their workers from forced unionism by adopting a right-to-work law, allowing workers the choice to become part of a union, or not.

The alternative is to continue to operate Wisconsin's state government the way we have for the last several decades and expect different outcomes on the balance sheet.

The end of public sector collective bargaining, and the adoption of the right to work in the private sector are the kinds of fundamental change that will get Wisconsin's state budget and her economy back on track.

California may be the worst example of a state adrift, but it is not alone.

Wisconsin is on the verge of fiscal insolvency.  Tinkering won't suffice.