Wisconsin’s Governor Walker is losing the public-relations battle to the public-employee unions whose power he is challenging. Whenever I see this issue discussed on the news, people on Walker’s side are quoted saying the state has to cut costs or it will go broke, while people on the unions’ side say they are willing to make salary and pension concessions, they just don’t want to lose the right to collective bargaining. To the average American, Walker is a meanie trying to deny downtrodden public employees their rights.
There is a very good reason why public employees should not have the right to collective bargaining. In the private sector, companies may consist of thousands of stockholders and thousands of workers. It is obviously impossible for each stockholder to bargain with each worker. The stockholders hire managers to represent their interests, so it seems only fair that workers have unions to represent their interests. Both sides can bargain effectively based on their conflicting interest (each wants as big a share of the revenues as possible) and shared interest (each wants the company to continue).
This symmetry doesn’t exist in the public sector. On one side are the taxpayers whose money pays public employees, while on the other side are the employees. But elected or appointed officials who would bargain on behalf of the state don’t represent taxpayers; they represent voters. And if a large segment of those voters are public employees, and if their unions make large contributions to political campaigns, then the state officials are likely to make concessions that taxpayers won’t want or can’t afford to pay.
The issue in Wisconsin (and many other states) is not pay but unfunded pension and health-care liabilities. Here there is a double asymmetry: given a choice between making future taxpayers (who don’t vote) pay higher costs or facing resistance from current public employees (who do vote), officials are likely to agree to union demands for unaffordable health care and pensions.
This is the argument Walker should be, and probably is, making, but it isn’t getting heard on television because it is hard to reduce it to a 30-second sound bite. Walker’s goal is to end collective bargaining for pension and health care but continue to let workers collectively bargain for salaries and wages.
It isn’t clear to the Antiplanner why Walker thinks he can deal with the asymmetry of bargaining over pay but not the asymmetry of bargaining over health care and pensions. In comparison to that great fiscal conservative, Franklin D. Roosevelt, Walker is selling out the taxpayers.
In 1937, Roosevelt was invited to speak to the National Federation of Federal Employees. He not only refused to do so, he wrote to them that “the process of collective bargaining, as usually understood, cannot be transplanted into the public service.” He added “that militant tactics have no place in the functions of any organization of Government employees.” Members of the Wisconsin teachers’ unions would obviously never vote for him!
Still, Walker has to know that even if he wins his battle to end collective bargaining for pensions and health care this year, some day the Democrats will retake the Wisconsin legislature and restore such bargaining. In focusing on collective bargaining rather than the actual terms of employment, Walker allowed the unions to take control of the debate, making it an issue of “rights” instead of finances. Walker should have instead settled for negotiating more reasonable (and fully funded) pensions and health-care plans.
Recent history shows that, when either party retakes control of a legislative body, they usually go overboard in trying to impose their views of how government should work on the world. Whether they succeed or fail, doing so simply leads to a huge backlash that only guarantees that the other party will regain control sooner. Party leaders need to think strategically and find ways to solve problems that are less polarizing. Walker, unfortunately, failed to do so.