Who will win in Wisconsin - the people or the unions?

I've been watching events unfold in Wisconsin with interest and concern. For those who haven't been following the news, the new Governor and Republican-controlled legislature in that State have been trying to undo decades of excessive generosity to public-sector trades unions. They want to terminate collective bargaining agreements for all except a few issues, and require workers to pay part of the cost of their pension and medical insurance benefits.

The unions, needless to say, are vitriolic in their opposition. I'm amazed at their self-interested blindness, which is matched only by that of their Democratic Party allies. (That's not a jibe at the Democratic Party as such, by the way; I'm quite sure the Republican Party will be just as self-interestedly blind when it comes to its own core supporters.) In this case, the damage has been done over decades. As Patrick McIlheran points out in an opinion column in the Milwaukee Journal Sentinel:

[Governor] Walker's moves are prompted by the state's vast deficit. The alternative, he says, is to lay off thousands. Nonsense, charge the marchers: Just raise taxes. Unions and allies have for years been demanding more sales taxes, new business taxes and higher taxes on other people's incomes, all to keep the state flush and generous. We're taxed enough already, said a voting majority in November. Not yet, insist the unions that have become the largest players in Wisconsin politics precisely to counter any such voter sentiment.

Anyway, union leaders were conceding the pension and health care premiums by this week. They said they knew they'd have to pay more eventually - so when unions in December said such payments were tantamount to slavery, it must have been just maneuvering. Bygones, say unions, as long as Walker leaves them the power to set health benefits via bargaining. Leave that, they say, and it's peace.

Yeah? Recall how we got here. How is it that only in desperation will unions accept a deal that still leaves them better off than everyone else? How did we achieve not just next year's $3.3 billion deficit but the decade of structural deficits before? Easy: It's because labor costs for years have been outstripping taxpayers' capacity. That in turn was caused by officials, elected in a union-dominated political environment, buying labor peace via benefits, where it's harder for voters to see the costs adding up.

. . .

Walker talks of moving to consumer-driven benefits, as many companies have done, to restrain medical costs. That's anathema to unions, who will resist it contract by contract. Without bargaining reform, government costs will have taken only a pause in their ascent.

Union activists in Madison Tuesday spoke apocalyptically of "class war," hinting wildly at general strikes and takeovers of the Capitol. They correctly see their control of the state slipping and must figure that if they bring 13,000 shouting people to Madison, they can overrule the election.

There's more at the link. Bold print is my emphasis.

The last sentence quoted above says it all. Governor Walker and the current Legislature were elected by the people of Wisconsin precisely because they campaigned on a platform of cutting State expenditure and balancing the budget. Consider these facts:

• Wisconsin's forecast budget deficit for next year - the amount by which expenditure will exceed income - is $3.3 billion.
• According to the 2010 Census, the State's population is 5,686,986.
• That means that every man, woman and child in Wisconsin will have to contribute just over $580 - over and above all the other taxes, fees and service charges they already pay - to cover that deficit.
  

They can't afford it; and Governor Walker has made it clear that he won't ask them to pay it by increasing taxes. After all, according to the Wisconsin Taxpayers Alliance, "In 24 of the 38 years studied since 1962, the Badger State has been among the top five most-taxed states, including every year since 1991".

If taxes can't be raised to generate more income, then the State has no choice but to cut expenditure. The Governor can lay off thousands of State workers; or cut their benefits; or maintain jobs and benefits by asking those who receive the benefits to contribute towards them. Even with the contributions he's asking union members to make towards their pensions and medical insurance, they'll still be significantly better off than private sector workers. However, the unions aren't interested in compromise. They're terrified that the power they've wielded over the Wisconsin government for decades will be gutted if Governor Wilson's reforms are enacted. (They're probably right, IMHO.) Therefore, they're trying to overturn the clearly expressed will of the people of Wisconsin, and force the State Government to do things their way.

This is the most visible struggle of its kind in the USA at the moment, but it's far from the only one. The same thing will happen in many States over the next months and years. 48 out of 50 US States face budget deficits - some so severe that they're staring de facto bankruptcy in the face. In almost every case, deficit spending - financed by borrowing - has spiraled out of control, leading to the current crisis. In almost every case, bloated benefits paid to politically powerful unions and their members is a leading cause of the deficits that have created the problem.

In the past, the prevailing belief was that economic growth would cover all sins. No matter how foolishly federal and local governments spent, no matter how recklessly the money was squandered, a tide of rising prosperity would ensure there would always be more. The great American growth engine would keep the coffers filled.

Sadly, it is exactly that attitude that brought us to where we are now. The terrible debt crisis that America faces was brought on precisely through a mixture of laziness and overconfidence. No matter how much was earned, the belief was always that things could be even better if we just leveraged up that prosperity by a factor of X.

Like the man who thinks that becoming a millionaire entitles him to spend like a billionaire, that mindset was always guaranteed to end in tears. And now we have reached that terrible point in the cycle where economic growth - the very thing we have always relied on in the past - is being choked off by mountainous levels of accumulated debt.

As Hunter Thompson once said: "The Edge ... there is no honest way to explain it because the only people who really know where it is are the ones who have gone over."

We were bound and determined to find the edge. And now we are in the process of going over. Be prepared.

Again, there's more at the link. So serious is the problem, and so widespread, that many states face having their credit ratings downgraded.

I hope that the unions in Wisconsin - and their political allies - fail in their attempts to block the adoption of fiscal common sense and sustainable government expenditure. If Wisconsin can get its house in order, it'll be a major boost to the chances of other States to do likewise. However, if the unions in Wisconsin succeed in overriding the will of the people and enforcing their own, other States plagued with the same problem are going to have that much more difficult a task to resolve their own crises.

I'm not anti-union (I've benefited significantly from membership of a union at least once in my working career), but the present conduct of the unions in Wisconsin is simply inexcusable. They're behaving like spoiled brats, throwing their toys out of the pram and thrashing around in a temper tantrum because they can't get their own way. They're completely ignoring the reality that the ordinary citizens of Wisconsin have been paying through the nose for them to have their own way in the past . . . and those same citizens have become fed up with it. That's why they elected Governor Walker and a new Legislature last year.

This isn't a Republican-versus-Democrat issue. At its heart, it's whether the clearly expressed will of the people can triumph over the political influence of 'insiders'. I hope the people win.

Peter

EDITED TO ADD: See this post from POWIP for a look at how teachers and their union are lying in their teeth, and cynically exploiting the children they're supposed to be teaching, to bolster opposition to Governor Walker's and the Legislature's plans. It's quite sickening.