After a long standoff, it looks highly likely that Wisconsin will enact a law that severely restricts the scope of collective bargaining and the ability of public-employee unions to collect dues. It’s now worth reflecting on how this change is and is not significant.
First, despite the howls coming from the left, Wisconsin’s new policies on public-employee relations will not be especially unusual. Only 26 states have laws that grant collective-bargaining privileges to substantially all public employees. Twelve have laws that give collective bargaining to some workers, and twelve have no statewide collective-bargaining law at all, though some municipalities may grant bargaining rights in those states.
And as I have been pointing out until I get blue in the face, most federal civilian workers do engage in collective bargaining, but wages and benefits are excluded from that bargaining, rendering it very limited. Far from seeking to strengthen the hand of federal-employee unions, Barack Obama has sought to impose a two-year wage freeze on federal workers through the budget process. If the federal government had a bargaining law like the one Wisconsin has today, he would be unable to do that.
So, while Wisconsin’s reform will make it easier to manage budgets in the state — especially municipal budgets, because most government workers are employed at the local level — the state will be operating within well-charted territory, not blazing a trail. Paul Krugman can stop worrying that this reform will make America “less of a functioning democracy and more of a third-world-style oligarchy,” unless he thinks places like Indiana and Virginia are third-world-style oligarchies.
That said, even if the national reaction was overdone, Wisconsin’s own public-employee unions have had good cause to be alarmed about this reform, because it will structurally reduce their power over the policymaking process in the long term. Some on the Left claimed that the bill was essentially punitive or mean-spirited, because Democrats were willing to cut deals to approve pension and health-benefit cost cuts this year, so long as Republicans would agree to leave collective bargaining untouched. But the reason that both Republicans and Democrats cared a great deal about the collective-bargaining reforms is that they will have significant effects on the terms under which public employees work — and the cost of government — in future years.
Fights over employee compensation are always about tradeoffs: giving a richer package to each employee means either employing fewer employees (and therefore providing fewer or lower-quality services), raising taxes, or cutting non-compensation costs of government. A loss of collective-bargaining privileges means that unions will lose more of those fights, even when Democrats are in power. As the Washington Post has noted, Fairfax County Democrats spend a lot less on public employees than Montgomery County Democrats, in part because they do not have to deal with collective bargaining.
For this reason, I am skeptical of Democrats’ vigorous hopes to retake Wisconsin’s government and repeal this new law. There is no clamor among Democrats in Virginia to give collective-bargaining privileges to public workers, nor have Democrats in Washington, D.C., shown much interest in empowering federal workers’ unions. This is because Democratic officeholders, quite rationally, prefer to write their budgets themselves, rather than hand over control of employee-compensation costs to unions. Once Wisconsin lawmakers get used to the new status quo, I think this is likely to be true there, too — why would mayors, school-board members, and state legislators want to give up a powerful new budgeting tool they’ve been given?
Eventually, Democrats will take power in Wisconsin again, and when they do I think they are likely to restore the “dues checkoff” — automatic deductions from public payrolls to pay union dues, eliminated in the just-passed bill. But I think they are likely to find the federal model of limited collective bargaining pretty useful, just as Barack Obama has. Under pressure from municipal officials, Wisconsin Democrats will be more likely to “reform” this law while retaining significant constraints on bargaining than to repeal it entirely.