The Agenda

PublicSectorInc. is Offering the Best Coverage of Wisconsin

If you want to understand the underlying sources of the political conflict in Madison, I urge you to read PublicSectorInc., home to my friend and colleague Josh Barro among others. Josh has written an exceptionally smart post comparing CBR at the federal level and in states like Wisconsin:

Barack Obama weighed in Wednesday on the collective bargaining reforms that Wisconsin Republicans want to enact, and he doesn’t like them. He said ”some of what I’ve heard coming out of Wisconsin, where you’re just making it harder for public employees to collectively bargain, generally seems like more of an assault on unions.”

It is possible that the president believes that all workers should have collective bargaining rights, and that he doesn’t see a meaningful distinction between workers negotiating with private firms and workers negotiating with elected bodies. I would suggest that the shift away from traditional modes of organized labor in the private sector have generally had salutary consequences for productivity, and my sense is that we could use higher-quality, lower-cost public services in the U.S.

Josh continues:

The funny thing about this statement is that the scope of collective bargaining for federal employees is sharply limited. They are forbidden to collectively bargain for wages or benefits; instead, raises are determined annually through legislation. Wisconsin unions would actually have slightly more scope for bargaining than this: they could bargain for cost of living adjustments up to CPI, or more if approved in a referendum. So, if the Wisconsin law is an assault, federal employee unions have already been pummeled.

Moreover, the president himself has been doing at least some of the “pummeling”:

But instead of trying to strengthen the hand of federal workers’ unions, Obama supports aggressive use of the direct wage-setting power, urging Congress to freeze federal workers’ pay for two years. He’s made no suggestion that such a wage freeze should occur only through a bargaining process, which would be required in states where wages are a matter for collective bargaining.

As Josh goes on to suggest, the freeze is a decent and defensible idea. This backtracking is less so. 

It’s worth remembering that, as Josh has observed earlier, the federal government has shifted to a model for its employees that is far more sustainable than the defined-benefit plans that tend to prevail at the state level. It seems likely that the extent of CBR plays a role.

Elsewhere at PSI, E.J. McMahon offers a broader perspective:

Just as Taft-Hartley represented the first claw-back of union power in the private sector, Gov. Scott Walker’s program represents the first serious attempt to weaken public sector unions in a state with mandated collective bargaining in the public sector.  If Walker wins, it could be public-sector labor’s Taft-Hartley moment.  And not a moment too soon: while less than 8 percent of private workers are covered by union contracts, union penetration in the public sector is 40 percent (and about 50 percent in Wisconsin). Government employees are now more than half of all remaining union members, and government unions increasingly dominate what is left of the organized labor movement–along with the politics of states that have granted them the widest array of rights and privileges.  

Furthermore, the Walker measure could have consequences for the concentration of political power, which could be why we’re seeing such intense coverage and such apocalyptic language:

[B]y far the biggest threat Walker’s bill poses to labor leaders is the loss of the automatic, compulsory “dues checkoff” on employee paychecks. This would hit the unions directly in the wallet, with ripple effects that ultimately will weaken their political operations as well as their organizational efforts.

It will be very interesting to see what happens next. It is not obvious to me that limiting CBR for public employees will mean the heavens will fall. Rather, it will give state government more leeway to implement reform measures — it does not mean that state government will actually follow through. Again, this measure will make things easier for Madison, and for local governments, to more flexibly deploy and compensate public workers, but it won’t eliminate the hard work of figuring out how to actually raise productivity.