So I’d like to talk a little about what’s going on in Wisconsin.  As you have undoubtedly heard there have been demonstrations going on at the state capital in Wisconsin which have entered now the 3rd week.  At the heart of the matter is the governor’s proposed state budget which would significantly curtail the power of public sector unions in Wisconsin.

The governor, Scott Walker is a Republican.  He was elected last November, and took office in January.  His state is facing a budget shortfall of about $137 million.  And so, to help balance his state’s budget he is asking many sectors of Wisconsin’s public to make cuts.  The most controversial have been the cuts he is asking from his public sector unions.

Under Governor Walker’s budget, state employees would be required to contribute 5.8 percent of their pay to their pensions.  Their contributions to their health care premiums would be increased from about 6% now to 12.6%.  But the most controversial aspect of Scott Walker’s plans are his plans attacking union laws and governance.

Governor Walker wants to abolish collective bargaining by the unions for benefits and working conditions.  His plan would allow collective bargaining to continue for wages.  But what’s unusual about his plan is that it seems to attack the very heart of union organization.  His plan would eliminate the automatic deduction of union wages directly from worker’s paychecks and would give workers the right to not pay dues at all.  He would require every public sector union to hold secret-ballots votes every year to determine if the majority of members still want to be unionized.       

He would require public unions to negotiate new contracts every year with the state and would limit the raises of public sector workers.  Raises beyond a certain limit would need to be voted on by the general public through a referendum.

Now, the unions in Wisconsin have agreed to all of the monetary concessions that Governor Walker has asked for.  They have agreed to the higher contributions to their benefits packages. But Governor Walker is still pressing for the concessions on collective bargaining and other union procedures.

This would seem to demonstrate that his main priorities are not just the financial concessions.  His actions would seem to demonstrate that among his goals, if not chief among his goals is to weaken the structure of the union in Wisconsin.

There is no doubt that the state budget in Wisconsin is in tough shape, as are many of the state budgets around the country.  And all of the major players are going to have to share in the sacrifice to get the entire ship back on track.  But it strikes me that the only reason to attack collective bargaining, to attack negotiating power, is not just to win concessions now. But rather to make sure that unions lose the means to ever get those concessions back.  Even if or when they can be afforded. 

His plan would require unions to take annual votes to maintain certification and eliminate the automatic deduction of union dues from member’s paychecks.


Recorded Version

Good evening ladies and gentleman and welcome to the latest podcast.  I’d like to talk today about Wisconsin.  As you’ve undoubtedly heard by now there are many protests happening in Wisconsin.  And the protests are surrounding the proposed state budget of newly elected Governor Scott Walker.  Wisconsin currently faces a budget shortfall of about $137 million.  And that budget gap is actually expected to rise well into the billions in the coming years.

Now to deal with this massive budget shortfall, Governor Walker has proposed many deep cuts in Wisconsin’s budget.  But so far the most controversial have been those cuts proposed regarding Wisconsin’s public sector unions.

Under Governor Walker’s budget unions would have to contribute much more to their pensions and their benefits.  Specifically, state employees would be required to contribute 5.8 percent of their pay to their pensions.  And contributions to their health care premiums would be increased from about 6% where it’s at now to 12.6%.  So Governor Walker is asking the unions to share some of the burden of the expenses of their benefits and pensions.

Now, the unions have agreed to these higher contributions.  They have agreed to pay more towards their pension and towards their benefits, and towards their health care premiums.  But the main point of contention still remains because the most controversial part of Governor Walker’s budget, the most controversial provision, is a provision restricting the union’s right to collective bargaining.

Now, collective bargaining is a method of bargaining by which all the employees of a union get together and bargain as a group.  Instead of each employee negotiating better wages on his or her own for example, or negotiating more benefits or better working conditions etc, separately, all of the employees get together and bargain as one.  And the reason they do this is because when bargaining as a group or bargaining collectively, employees can increase their bargaining power.  They can increase their bargaining power and negotiate terms that are a little fairer and a little more equitable.  Collective bargaining of course, is nothing new.  It’s been law in America for decades and unions have used the rule for decades to negotiate better wages and better benefits and better working conditions for their members for years.

And yet Governor Walker has zeroed in on this aspect of union structure and he is claiming that it impedes the state’s ability to effectively manage its finances.  In addition, the proposed law would require public-sector unions to have to renegotiate their contracts with the state every single year.  Now, that’s obviously a tough and contentious process to have to go through every year.  The law would limit the raises of public employees to the consumer price index.  Raises beyond that level would require a vote by public referendum.  The law would require yearly votes, by secret ballot, by public employees to determine whether employees still want to be unionized.  And the law would prohibit unions from collecting dues directly from employee paychecks.

So this is what the unions are protesting against at this point.  They feel that in the final analysis, Governor Walker’s proposed law is not about the budget at all.  Rather, they feel that it’s really about them.  They feel that it is an attack on the union and it is an attack on their union rights.  But that this attack is cloaked in a budget bill.  That this attack is cloaked in what Governor Walker is attempting to present to the public as a plan for fiscal responsibility.  And I for one would be inclined to agree with them.

It’s worth repeating at this point that the unions have agreed to the financial concessions in Governor Walker’s bill.  They have agreed to the additional 5.8% contribution to their pension.  And they have agreed to pay the additional 6% towards their health care premiums.  But they have not agreed and are vowing to continue the fight against the restrictions on collective bargaining and other union procedures.  And on these, Governor Walker has yet to compromise. 

It’s also worth mentioning at this point that Governor Walker’s proposed restrictions on collective bargaining would not include wages.  They would apply only to benefits like health care and pensions.  And the restrictions would not apply at all to firefighters or law enforcement employees, only other state workers.  But the fact remains that Governor Walker is pressing on with his proposal and is showing no signs of flexibility on the key issues. 

I don’t think anyone can doubt that the budgets of many states in the country right now including Wisconsin, are in dire straits.  And if these situations are going to be improved upon, it’s going to take significant sacrifices on the part of all involved.  Public sector unions should not be exempted from being asked to make contributions, even significant contributions towards achieving this shared goal.  This is a serious time and it will require seriousness from all participants if the problems are going to be addressed effectively. 

But I find Governor Walkers proposal a little confusing.  At least, it’s confusing if he’s telling us the truth: that this bill is about improving the Wisconsin’s finances and not about weakening public sector unions.  He has taken aim at collective bargaining.  But what is collective bargaining?  Collective bargaining is not a wage, or a benefit level, or a contribution to a pension plan.  It is not in other words, a result of a negotiation; it is only a method of negotiation.

If the contracts that are in place now with public sector unions are truly harmful to the State of Wisconsin, then they need to be negotiated down to an acceptable level.  And again, public sector unions need to realize the role they must play in the process.  But the issues of contracts, finished contracts, and how unions negotiate those contracts should, and need to be separated. 

If union workers want to get together as a group and decide that they would rather select one or two representatives to negotiate on their behalf, they should be allowed to do that.  That’s for them to decide.

It is up to elected officials however, to sit on the other side of that table and negotiate terms that are beneficial to their constituents, and those are of course, the taxpayers.  Those officials should be tough in their negotiations when they need to be, and they should be flexible in their negotiations when circumstances allow for that.  Their number one loyalty remember, is to the taxpayers of the state.  That’s first and foremost.  And the unions need to understand that.

Remember also that the unions are taxpayers themselves.  It is in their interest to make sure the states who are their employers, remain healthy financially.  To negotiate contract terms that are not favorable to states budgets may be beneficial in the short term, but in the long term will prove to be detrimental to union health as well.

Ultimately, it is the responsibility of the state’s officials to be as tough as they need to be when negotiating with unions in order to protect the taxpayer body as a whole.  But it is not up to the state to dictate to the unions how or in what way they can negotiate.  They can be as tough as they need to be with them at the negotiating table but away from that table union business needs to be left to the unions.

Certainly if unions are not negotiating in as good of faith as state officials believe they can be, those officials can let that be known to the general public.  And that negotiation can tried in the court of public opinion.  Certainly they’re not going to find a lack of support against the unions these days if they are indeed being unreasonable.  And that would be fair game.  But a concerted attack such as the one we’re seeing now on union policies and procedures seems to be opportunistic and unnecessarily divisive.

Be as tough as you need to be in the negotiation but leave union procedures and organization up to the unions.