Typically,the executive honors labor agreements that have been negotiated with unions.
But Walkeris not a typical executive.
He’s notnegotiating. Instead, Walker said if necessary he would literally call in theNational Guard.
As MilwaukeeCounty executive, Walker submitted two budgets that included tens of millionsof wage and benefits concessions that had not been negotiated with the unionsthat represent county employees. Walker’s 2010 budget included $32 million ofconcessions that were not included in a tentative agreement his own labornegotiator had struck with unions at the time Walker had proposed his budget.
Walker’s2010 budget was so unfair that an examiner for the Wisconsin EmploymentRelations Commission declared that Walker had bargained in bad faith.
But thathasn’t deterred Walker from using the same tactic now as governor.
Thenonpartisan Legislative Fiscal Bureau (LFB) concluded that the state would endthe year with a surplus, so there is no need for a budget repair bill. Walkerdisputes those numbers, so he has submitted a budget repair bill that wouldstrip collective bargaining rights from most state workers. Walker has excludedemployees whose unions endorsed him in the 2010 election.
Typically,changes to bargaining rights would mean a change to state statutes.
Instead,Walker is using his unnecessary budget repair bill to drive a stake through theheart of Wisconsin’s social contract that has maintained stable labor relationswith public employee unions for decades. Walker is trying to severely limit therights of public employees in addition to requesting that they make wage andbenefits concessions. But Walker’s demand for public employees to pick up moreof their expenses would have a negative effect on the state’s economy bydecreasing wages of middle-class workers; weakening their purchasing power atlocal businesses, putting more than 9,000 private sector jobs in jeopardy; andreducing property taxes statewide by an estimated $46 million, according to arecent study.
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What’sin the Works
AlthoughWalker and his fellow Republicans have blithely described the changes as simplyasking state workers to pay more for their health care and pensions, thegovernor’s budget repair bill contains a slew of changes to public employeeunion rights:
- Public employeeunions would only be able to bargain for wage increasesand those increasescould not exceed the consumer price index, unless it was approved by areferendum. Gone are negotiations about health care, seniority, job conditionsor health and safety issues.
- Labor contractswould be limited to one year, which would result in nonstop negotiationsbetween units of government and their unions.
- Unions would haveto vote to be recertified annually.
- Exemptions are themembers of unions that supported Walker in 2010law enforcement, firefightersand state troopers and inspectorsbecause, Walker explained, they are criticalto public safety. Yet other public sector employees who are critical to publicsafetynurses, corrections officers, sewer and water workers, among manyotherswould be subject to the new rules
MilwaukeeMayor Tom Barrett has taken issue with the exemption of fire and policeemployees, since they comprise 65% of the city’s operating budget salaries.Combined with Walker’s promise that his next budget will include large cuts toshared revenue sent to local governments, Barrett is concerned about the impactof Walker’s plans on the city’s budget.
“If we aregoing to ask our employees to shoulder the impact of the state’s budgetdeficit, it is only fair to apply it to all of them,” Barrett wrote in a letterto state legislators. “You should not give the Milwaukee police and fire unionsa special exception to the changes in the bill, forcing all other employees tobear the burden of the cuts.”
- University ofWisconsin faculty and academic staff, University of Wisconsin hospitals andclinics employees, home health care workers in the Medicaid program and familychild care workers would be stripped of their bargaining rights.
According tothe state LFB, these proposals are non-fiscal policy items, which are typicallynot included in the state budget so that they can be fully debated by the stateLegislature in separate legislation.
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ArePublic Employees Overpaid?
Walker hassaid that the labor changes are necessary because Wisconsin’s local and stateemployees haven’t made the same sacrifices during the Great Recession as privatesector workers.
Walkerglossed over the fact that state employees had eight unpaid furlough days in2009 and 2010, which saved the state $121 million, and their wages have beenflat for years.
He alsoforgot to mention that when he was Milwaukee County executive, members of thelargest county employee union took 26 unpaid furlough days in 2010, or oneunpaid day off for every two-week pay perioda 10% pay cut. They’ll have 26unpaid days off this year, too, as a result of Walker’s final county budget. (Theemployees at the Shepherd Express, aprivate sector company, did not have any wage decreases or forced furloughdays.)
So is Walkercorrect when he says that public employees are making more than theircounterparts in the private sector?
The shortanswer is no, according to a new study by the national nonpartisan EconomicPolicy Institute (EPI), which found that Wisconsin’s state and local employeesearn 4.8% less per hour in total compensation than their peers in the privatesector. That number jumps to 25% for college-educated employees. EPI foundthat, on average, Wisconsin’s public employees with a bachelor’s degree earn$61,668 in total compensation; their peers working for private employers earn$82,134 in wages and benefits.
And althoughGov. Scott Walker is earning $144,423 as a public sector employee with “somecollege” education, his pay package is not typical. Public sector employees whoattended college but did not earn a diploma earn an average $46,707 in wagesand benefits, while those in the private sector earn 7% more, or $50,324, EPIfound.
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ExtraCost of Cutting Wages: Killing Jobs
AlthoughWalker took office promising to focus on job creation like a laser beam, he hasnot explained how many jobs this budget bill would create.
In fact, anew study by the Institute for Wisconsin’s Future (IWF) found that cuttingpublic sector employees’ pay to the degree demanded by Walker would be adisaster for the state’s economy. In fact, about $1 billion of public employeewages would be lost each year:
- State workers wouldlose $429 million of disposable income%uFFFD
- Local employeeswould lose $335 million of disposable income
- School districtemployees would lose $230 million of disposable income
“Publicsector workers are moderate-income people who spend the vast majority of theirincome on consumer goodsunlike rich households who save the bulk of theirwealth,” wrote Jack Norman, the study’s author.
Since that$1 billion would not be spentand recirculatedin businesses throughoutWisconsin, the study projected that 9,900 private sector jobs would be lost.
“Stateleaders cannot make up for the loss in consumer purchasing power by anequivalent amount of tax cuts,” Norman wrote. “That would worsen the deficitand cancel out any savings created by cuts to public sector compensation.”
And whatabout the ripple effect on local governments? IWF’s Norman calculated that $46million of property tax revenue would be lost because of the wage cutbacks anddepressed economic activity. Dane County would be hit the hardest and lose $14million in property taxes; Milwaukee County would lose $6 million in propertytaxes.
