Thursday, February 17, 2011

Governor Walker, the Public Employee Unions and Reality

Former Senator Russ Feingold characterized Governor Scott Walker's proposal to change the way public employee unions can engage in collective bargaining in the following manner  “The notion this is about the budget is a complete sham … This is about an agenda of destroying unions,”  That sounds pretty terrible until one understands exactly what the Governor has actually proposed.

The state's deficit is more than 10% of the budget, which puts it below the average among all states but still at a significant shortfall.  So what is the attempt to destroy unions actually proposing to do?   Green Bay's paper describes the proposal in much less shrill terms.  It would require "nearly all state, local and school employees to pay half the cost of their pensions and at least 12.6% of their health care premiums."

Lets get some numbers here.  According the the Bureau of Labor Statistics, the average health care benefit cost for public employers was $4.65 compared to $2.94 in the private sector.  That is on top of an average wage premium for hourly compensation which is significant.  Here is a chart from the BLS comparing the relative costs of compensation for public and private employees.

Notice that health care costs are a third higher for public employees.  Notice also that pension costs are more than double for public employees (and remember that few private employees have defined benefit plans for their retirement).

From my perspective, the Governor's request to require public employees to pay a slightly larger share of their health and retirement costs is not only reasonable but necessary.   Wisconsin's deficit at about 12% of the budget is by no means the largest in the country. But the point is if every employee in the private sector is paying a portion of their health and pension costs, why should we not ask the same of the public employees?

Much of the press coverage has been that the Governor is trying to eliminate the possibility that public employees can bargain for wages.  That is simply not true.   Were it true, I believe that a high percentage of voters would support that broader restriction on the rights of public employees.  If the question were phrased "Is it appropriate for us to require public employees to shoulder more of their health care and retirement costs?", my suspicion is that a huge majority would say "why not?"

Feingold's statement, which is parallel to a lot of other democrats, including the President, is a huge distortion of reality.   He was called to account in the last election.  Those shills for the public employee unions should also be held to a standard of truth that most of the media is unwilling to require.

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