Free Markets, Free People

public sector unions


Why do unions see the recall election of Wisconsin Gov. Scott Walker as a “must win?”

The answer is actually quite simple – because the dramatic losses in membership public unions have experienced under him could be a harbinger of something that might occur nationwide:

Failure to oust Mr. Walker and overturn the Wisconsin law "spells doom," said Bryan Kennedy, the American Federation of Teachers’ Wisconsin president.

[…]

A victory by Mr. Walker "will be a dramatic signal to local and state politicians they can, in the name of fiscal responsibility, tell unions…to come into parity with private-sector workers, especially on benefits," said Michael Lotito, a San Francisco attorney who represents management in labor disputes and has testified on labor issues before Congress.

Yeah, that would be horrible, wouldn’t it, since private-sector workers get less in benefits than do most public sector workers.

Gov. Walker took some steps to curb public sector union power in the state soon after taking office:

The Walker law sharply curbed collective bargaining for nearly all the state’s public-employee unions except those for police and firefighters. Unions no longer can represent members in negotiations for better working conditions or for pay raises beyond the increase in inflation.

He also gave union members an actual choice of membership by no longer allowing the state to collect the dues for public sector unions.

Choice – that freedom prerequisite – has seen membership drop dramatically:

Wisconsin membership in the American Federation of State, County and Municipal Employees—the state’s second-largest public-sector union after the National Education Association, which represents teachers—fell to 28,745 in February from 62,818 in March 2011, according to a person who has viewed Afscme’s figures. A spokesman for Afscme declined to comment.

Much of that decline came from Afscme Council 24, which represents Wisconsin state workers, whose membership plunged by two-thirds to 7,100 from 22,300 last year.

And the American Federation of Teachers union"?

In the nearly 15 months since Mr. Walker signed the law, 6,000 of the AFT’s Wisconsin 17,000 members quit, the union said. It blamed the drop on the law.

Amazing what will happen when “members” aren’t coerced into becoming or staying members.

According to the most recent Marquette poll, Walker is leading his Democratic rival by 7 points.  His state’s structural fiscal insolvency has been remedied by making public union workers bear more of the cost of their benefits (while still being over 20% higher than private sector benefits). 

In other words, he’s actually done something to solve the problems he was elected to tackle. 

Perhaps that’s why a state that went 14 points for Obama in 2008 is plus 7 on his side in this recall farce.

And it is equally easy to see why the unions are in panic mode.

~McQ

Twitter: @McQandO


The Ohio Vote

Ohio voters voted not to back the reforms Republican Governor John Kasich wanted to implement to  break the power of public sector unions.  Michael Barone comments:

The biggest result was Ohio Governor John Kasich’s defeat on Issue 2. Voters cast 61% of their votes (as I write) to repeal Kasich’s law, which had been backed by Republican majorities in the legislature (with some defections). Kasich’s effort is part of a struggle to rein in public employee unions, which use taxpayers’ money (in the form of union dues) to elect pliable politicians who then confer benefits on their members —especially generous health care and pensions—which then result in economy-killing tax rates. It’s a kind of economic death spiral for states and localities where public employee unions are a major political force.

He’s right.  Barone lays out the basic problem with public sector unions – the fact that they have become such a force in politics that they hire their own “bosses”.  And those bosses are happy to “negotiate” away tax dollars for continued political support.  Thus the “economic death spiral” Barone talks about.  As long as the taxpayer is paying, two sides of this triangle are quite happy to continue with business as usual.

Democrats are touting this as a huge win.   And it is … for the party.  It’s certainly not a win for the state which will now have to live with this continued lopsided arrangement that will continue to cost taxpayers dearly.

The irony, of course, is that on the same ballot, Ohio voters bought into the Republican idea that the state should refuse to comply with the new National Health Care law (aka ObamaCare).

There is some consolation here. The same Ohio voters—and the turnout seems to have been just about as high as in November 2010—who voted 61% against Kasich’s public employee union restrictions also voted 66% for Issue 3, which purported to shield Ohioans from any mandate to buy health insurance. This was a clear repudiation of Obamacare, and about half the folks that the unions turned out voted against Obamacare.

OK, maybe it really isn’t an irony.  Remember ObamaCare doesn’t like “Cadillac” health care plans and the unions have certainly ensured they have that. 

Instead, what it points to is how powerful unions are in Ohio and how well they can mobilize the vote. Unions spent big and they got results.   In reality, both Issue 2 and Issue 3 represent the union vote.  One went against the Republican governor.  The other, however, went against the Democratic President and his party.

And which one is getting all the press?

~McQ

Twitter: @McQandO


The burdens of voluntary association

Since the passage of the public employee union reforms in Wisconsin the past year, things have changed for the public unions. They have to recertify by member vote every year, and they can no longer collect dues directly from members’ paychecks. The response of one union has now been to decertify itself, as reported by Inside Higher Ed.

The Teaching Assistants’ Association at the University of Wisconsin at Madison dates to 1966. In 1970, following a four-week strike, the graduate students at Madison became the first T.A. union to win a contract. Over the years, the union — affiliated with the American Federation of Teachers — has been a leader in the drive to promote collective bargaining for graduate student workers.

Last week, after hours of debate, the union’s members voted not to seek state certification to continue to act as a collective bargaining agent…

Union leaders said that they couldn’t function well if they had to effectively be in a perpetual organizing drive for the annual union votes, and also if they had to pay annual fees to be certified…

Seeking certification year after year, [Adrienne Pagac, co-president of the union,] said, "would have meant diverting resources and neglecting all of the other things we do for members – representing them at the work site, being advocates for them, engaging our community." Pagac added that "being a union member is not just about sitting across the table from management and hammering out a contract. It’s about democracy in the workplace.”

…The union faces challenges as it adjusts to the limits imposed by the state law. Under the old contract, union dues were automatically deducted from the paychecks of the 2,700-2,800 graduate teaching assistants at Madison. Now the Teaching Assistants’ Association must seek dues from members by itself.

Quite apart from the idea that the workplace is a fairly inopportune place for "democracy"—at least if the cold wind echoing hollowly through the empty streets of Detroit is any indication—it clearly isn’t about democracy. If it was about democracy, then an annual recertification vote would be viewed as a plus, not an obstacle. I mean, regular elections are something we associate with democracy, as I understand it. The practice in the past was to have the certification vote taken once, after which the union is perpetually certified. That’s nothing more than a version of "one man, one vote, one time" that we associate with various "democratic" revolutions in the Third World. But for this union, at least, having democracy in the workplace by holding a certification vote every year is too much of a burden.

No, this has almost nothing to do about democracy in the workplace and everything about the gravy train pulling into the station at the end of the line. It was a great gig while it lasted. As soon as you could get a majority of employees to certify your organization, you were certified forever.  The state collected your dues money without fail every paycheck, and if any of the employees ever got dissatisfied, you had the resources to slap them down.

Now, all of the sudden, you have to convince the rank and file to send you their dues payments voluntarily. And every year, you have to convince them to voluntarily recertify you. The rank and file now have both purse power and democratic power to punish you, rather than the reverse. It seems that a voluntary association is inconvenient. You have to make members happy. Listen to them. Perhaps, even, respond to their concerns in a timely and effective manner. Voluntary association imposes a web of mutual obligation, unlike a top-down command system.

Now, the union just isn’t as fun. And it isn’t certified any more, either.

~
Dale Franks
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Wisconsin public union collective bargaining law benefits education

Byron York brings us the story of one school district in Wisconsin which sees the new law limiting collective bargaining by public sector unions as a "God send".

The Kaukauna School District, in the Fox River Valley of Wisconsin near Appleton, has about 4,200 students and about 400 employees. It has struggled in recent times and this year faced a deficit of $400,000. But after the law went into effect, at 12:01 a.m. Wednesday, school officials put in place new policies they estimate will turn that $400,000 deficit into a $1.5 million surplus. And it’s all because of the very provisions that union leaders predicted would be disastrous.

In the past, teachers and other staff at Kaukauna were required to pay 10 percent of the cost of their health insurance coverage and none of their pension costs. Now, they’ll pay 12.6 percent of the cost of their coverage (still well below rates in much of the private sector) and also contribute 5.8 percent of salary to their pensions. The changes will save the school board an estimated $1.2 million this year, according to board President Todd Arnoldussen.

Of course there’s an additional benefit to this – if they run a “surplus”, they can lower taxes, can’t they?

Anyway, other benefits accrued from the law:

In the past, Kaukauna’s agreement with the teachers union required the school district to purchase health insurance coverage from something called WEA Trust — a company created by the Wisconsin teachers union. "It was in the collective bargaining agreement that we could only negotiate with them," says Arnoldussen. "Well, you know what happens when you can only negotiate with one vendor." This year, WEA Trust told Kaukauna that it would face a significant increase in premiums.

Now, the collective bargaining agreement is gone, and the school district is free to shop around for coverage. And all of a sudden, WEA Trust has changed its position. "With these changes, the schools could go out for bids, and lo and behold, WEA Trust said, ‘We can match the lowest bid,’" says Republican state Rep. Jim Steineke, who represents the area and supports the Walker changes. At least for the moment, Kaukauna is staying with WEA Trust, but saving substantial amounts of money.

Funny how that works, no?  I’m just the vindictive enough type of person to let WEA stew in their own juices and take the lowest bid that isn’t theirs.  It tends to make for a very competitive bid the next time they’re given the opportunity.   Aren’t markets an amazing thing?

Finally:

Then there are work rules. "In the collective bargaining agreement, high school teachers only had to teach five periods a day, out of seven," says Arnoldussen. "Now, they’re going to teach six." In addition, the collective bargaining agreement specified that teachers had to be in the school 37 1/2 hours a week. Now, it will be 40 hours.

The changes mean Kaukauna can reduce the size of its classes — from 31 students to 26 students in high school and from 26 students to 23 students in elementary school. In addition, there will be more teacher time for one-on-one sessions with troubled students. Those changes would not have been possible without the much-maligned changes in collective bargaining.

Teachers’ salaries will stay "relatively the same," Arnoldussen says, except for higher pension and health care payments. (The top salary is around $80,000 per year, with about $35,000 in additional benefits, for 184 days of work per year — summers off.) Finally, the money saved will be used to hire a few more teachers and institute merit pay.

Or, the schools will have some options that actually benefit the students vs. benefitting the teachers.  I know … for most of us that’s what we thought the system should always have been about, no?  But for too long, public sector unions ruled the roost and were able to get working conditions and benefits from friendly politicians that were essentially ruining the education system (and other parts of government) by limiting options and choices.

The introduction of some market based mechanisms plus more options is sure to benefit students over teachers as it should be – not, I’d argue, that teachers come out of this on the poor side of things.  On the contrary – now they have to join the rest of us an work 40 hours a week, pay for their benefits and do a bit more to earn that $125,000 in salary and benefits for 184 days work.

Tough stuff, huh?

~McQ

Twitter: @McQandO


Who is winning the public relations fight in Wisconsin?

Rasmussen says it’s Republican governor Scott Walker:

A sizable number of voters are following new Wisconsin Governor Scott Walker’s showdown with unionized public employees in his state, and nearly half side with the governor.

A new Rasmussen Reports national telephone survey finds that 48% of Likely U.S. Voters agree more with the Republican governor in his dispute with union workers. Thirty-eight percent (38%) agree more with the unionized public employees, while 14% are undecided.

Additionally:

Thirty-eight percent (38%) of voters think teachers, firemen and policemen should be allowed to go on strike, but 49% disagree and believe they should not have that right. Thirteen percent (13%) are not sure.

And finally:

Public employee unions have long been strong supporters, financially and otherwise, of Democratic Party candidates, so it’s no surprise that 68% of Democrats support the union workers in the Wisconsin dispute. Sixty-eight percent (68%) of Republicans and 56% of voters not affiliated with either of the major political parties side with the governor.  [emphasis mine]

The bold line is key.  I find nothing particularly surprising about either of the percentages from Democrats polled or Republicans.  But again this indicates that the Democrats have lost the independent vote and lost it significantly.  Public opinion, based on this poll, is definitely with the Governor.

What is playing out in Wisconsin has been recognized by unions as a hill they must die on or suffer the probably irreversible consequences of losing political power.   They also understand the potential reaches far outside Wisconsin.  If Wisconsin goes, others could follow:

“Some of the labor people are saying, ‘It’s the beginning of the fight back,’” said a top labor official. “But if the labor movement rallies and gets run over in Wisconsin, it opens [the gates] in every state” for governors to start pushing harder to curtail labor rights.

“Not every state’s going to roll back collective bargaining,” the official — who, like many, spoke off the record to avoid undermining the protests — added, but said it could open the gates for union losses on various fronts, like benefits.

Don’t be fooled – this isn’t just about “benefits”.  It is about power, politics and money.  The mix of those three have given public sector unions a synergy that has allowed them, in many places, to hand pick Democratic representatives, have them elected and then have them do the union’s business.  It is a pernicious and non-competitive arrangement that is finally, because of the financial downturn, coming to light.

But the unions have a problem.  They haven’t been able to sell the emotional argument (benefits) and they certainly aren’t about to try to explain the real reason they’re fighting this (power and money).   So what they’re having to deal with the the public’s perception, formed over many years in Wisconsin, that the public sector costs too much, has to be cut and that includes public sector employee benefits as well:

But this fight isn’t at the time or place of the unions’ choosing. Hostility to public-sector workers, including teachers, is at an all-time high amid a recession and a new national mania for curbing the tide of fiscal red ink. Walker appears to have a firm legislative majority on his side.

And labor is struggling to explain — and convince a voting public that has inched away from the concept of unions as a bedrock American institution over the years — that while it’s willing to be flexible on Walker’s demands for cost control, his attempts to change the rules governing public unions are a matter of institutional life and death and union principle. Labor hopes the public will see Walker’s attempt to use a budget gap to reshape labor-management relations as an overreach. But for many people watching from afar, the details of what Walker wants to accomplish have gotten lost, and the fight is playing out as yet another in a long string of recent state-based brawls over the high cost of the public sector.

So public sector unions have a heck of a PR problem not only in Wisconsin, but if the Rasmussen poll is to be believed, throughout the US.  Nationally that could mean this:

Bradley Tusk, a former Illinois deputy governor and New York Mayor Mike Bloomberg’s 2009 campaign manager, said that if Walker succeeds in the fight, “this will be portrayed as a major change toward fiscal sanity and protecting taxpayers.”

“The average voter will never feel any pain from it,” he added, “so the high ground shifts away from labor. That puts Obama and other Democrats in the position of being forced further to the left, or moving more toward the GOP position and risking losing support from labor. … This almost creates some of the problems that a primary forces on the challenger.”

And the union’s “winning strategy” to counter that?

As a broader issue, in other states, national union officials think they’ve found a winning strategy in shifting the fight off government and slamming Wall Street, armed with repeated polls that show anti-financial industry sentiment at an all-time high.

Apparently, however, union officials don’t understand that it isn’t an “either/or” situation.  The public blames both for different reasons.  But more importantly, the public realizes “what is, is” and you deal with it.  Whether they believe (or not) that Wall Street is to blame, that doesn’t change the fact that the problem (budget deficit) has to be confronted and solved and part of the solution has to be borne by public sector employees.

Norman Adler, a longtime lobbyist for public sector labor unions in New York, says the unions have to fight – that this is not something they can walk away from.  And, if they lose in Wisconsin, they “have to reconfigure their tactics and move on.”  But, he says:

“Labor pretty much lost the PR fight a number of years ago,” he said, suggesting the true targets of opportunity at the moment are state lawmakers who are “on the fence,” and can be swayed because they’re worried about getting elected back home. “And I think their position is that they have to show political muscle here.”

Translation: this could get even nastier.

Watch for it.

~McQ


Observations: The QandO Podcast for 20 Feb 11

In this podcast, Bruce, Michael, and Dale discuss the demonstrations by public employee unions in Wisconsin, and the wave of protests across the Mideast.

The direct link to the podcast can be found here.

Observations

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.


Madison equals Cairo? Not even close

It’s a cold day in hell here as I favorably quote someone who I usually savage.   And I have to revise my thoughts on the left not getting irony – apparently some do.  Who am I taking about?  Joe Klein.  Yup that Joe Klein, TIME’s Joe Klein.  He actually gets it:

Revolutions everywhere–in the middle east, in the middle west. But there is a difference: in the middle east, the protesters are marching for democracy; in the middle west, they’re protesting against it. I mean, Isn’t it, well, a bit ironic that the protesters in Madison, blocking the state senate chamber, are chanting "Freedom, Democracy, Union" while trying to prevent a vote? Isn’t it ironic that the Democratic Senators have fled the democratic process? Isn’t it interesting that some of those who–rightly–protest the assorted Republican efforts to stymie majority rule in the U.S. Senate are celebrating the Democratic efforts to stymie the same in  the Wisconsin Senate?

An election was held in Wisconsin last November. The Republicans won. In a democracy, there are consequences to elections and no one, not even the public employees unions, are exempt from that.

I know … you’re wondering, “what did they do with the real Joe Klein”, but hey give the devil his due (keeping with the cold day in hell metaphor) – he’s exactly right.

The other Klein, the Ezra type, not so much.

Let’s be clear: Whatever fiscal problems Wisconsin is — or is not — facing at the moment, they’re not caused by labor unions.

That, sir, is irrelevant.  Whatever “fiscal problems” are present need to be solved by having across the board spending cuts and that’s the point of requiring public service labor union members to pitch in a little more on their benefits.  Essentially what Wisconsin is trying to do is put state employees on an even par with private employees in terms of benefits.P1-AZ544_UNIONS_NS_20110217194803

Here’s the bottom line of what is triggering these protests:

Besides limiting collective-bargaining rights for most workers—excepting police, firefighters and others involved in public safety—it would require government workers, who currently contribute little or nothing to their pensions, to contribute 5.8% of their pay to pensions, and pay at least 12.6% of health-care premiums, up from an average of 6%.

Wow.  No more free lunch.  Can’t imagine that, can you?  You know, actually having to pitch in for your pension and health-care?  Privately employed citizens have been doing that forever.  So why are the public sector folks exempt?  Well that’s the dirty little secret isn’t it?

Let’s go to Matt Welch for the answer:

We are witnessing the logical conclusion of the Democratic Party’s philosophy, and it is this: Your tax dollars exist to make public sector unions happy. When we run out of other people’s money to pay for those contracts and promises (most of which are negotiated outside of public view, often between union officials and the politicians that union officials helped elect), then we just need to raise taxes to cover a shortfall that is obviously Wall Street’s fault. Anyone who doesn’t agree is a bully, and might just bear an uncanny resemblance to Hitler.

There is Wisconsin in a nutshell – distilled as well as you’ll find it anywhere.  These deals were mostly pay for play and the state’s taxpayers were sold down the river.  I noted some months ago that the Democrats have become the party of public service unions instead of the party of the blue collar worker.  They are dependent on the money and machine those powerful unions provide to stay in power.

And when that machine falters?  Well, you get tantrums like this.  Remember the union protesters in Illinois a few months ago clamoring for the governor there to raise taxes instead of cutting their benefits?  Just like Ezra Klein they want to lay off the fiscal mess on others instead of recognizing its reality and understanding that the free ride has come to an end.  It doesn’t matter if the unions had anything to do with the mess – the mess says everything is on the table.  That’s the only way out of the mess.

But, this is Armageddon for the Democrats and their stakeholders.  If states succeed in breaking the hold public service unions have on government, Democrats stand to lose substantial power.   That explains why President Obama has entered the fray.  While he wouldn’t back the protesters in Iran because it might be seen as meddling in the internal affairs of the state, he has no qualms whatsoever of meddling in the internal affairs of the state of Wisconsin.   Apparently elections only have consequences when he wins.

What has the unions so terrified of the Walker plan?  Well here’s the plan:

His plan allows workers to quit their union without losing their job. He requires unions to demonstrate their support through an annual secret-ballot vote. He also ends the unfair taxpayer subsidy to union fundraising: The state and local government would stop collecting union dues with their payroll systems.

Under that plan, union membership would be an actual choice instead of a mandated requirement to hold a job.  Horror of horrors.   How dare a governor advance something which actually enhances freedom (choice = freedom) – why that makes him a dictator, of course and akin to Hitler.

Make no mistake, these protests in Madison aren’t about democracy, freedom or liberty.  They’re about the left’s power and something they love to project on the right and Wall Street – selfishness.  The protests are a collective tantrum from adolescents who refuse to acknowledge that their special-interest Candyland no longer exists and while it did, it existed on the back of the tax payers who were made to unwillingly subsidizing their way of life.

This is the wrong fight, in the wrong place at the wrong time, and Democrats are on the wrong side.  Public sector unions are not popular and despite Ezra Klein’s denial, are held responsible for some of the fiscal problems the states face (like pensions):

A new poll from the Washington-based Clarus Group asked:

Do you think government employees should be represented by labor unions that bargain for higher pay, benefits and pensions … or do you think government employees should not be represented by labor unions?

A full 64% of the respondents said "no."

That includes 42% of Democrats, and an overwhelming majority of Republicans. Only 49% of Democrats think public workers should be in unions at all.

So, as you watch these “protests” keep them in context.  They’re an astroturfed attempt, orchestrated from the highest office in the land,  to keep the power current structure in place that underpins the political power of the Democrats.  This isn’t about rights or liberty or freedom, this is about power and money.  And it has finally unmasked the left in this country and revealed what it is really all about.

~McQ


Dems have become the government union choice

Charles Lane hits at least part of the Democrats problem with voters right on the head. 

Public sector unions are not just the base of the party — they’re the base of the base.

[…]

But in an era of increasing discontent over taxes, government spending and the perks of government employees, these are not necessarily the allies you want to have. A party that depends on the public employees to get elected will have trouble reaching out to the wider electorate — i.e., the people who pay the taxes that support public employee salaries and pensions.

Bingo. The supposed strength of the Democratic party was its support of the common man – the blue collar worker. The middle class family. I’ve always thought such a characterization was nonsense, however, that was the narrative they successfully embedded for years.

That is now visibly changing. And I think it is apparent that the new narrative isn’t a particularly good one politically speaking.  They’re now the party of big government and government unions.  In an era of financial difficulty that’s not exactly the constituency you want to be identified with – especially when it is becoming common knowledge that government workers now earn more than private sector employees doing comparable jobs.

And that’s especially true now that the woefully underfunded public pension plans are coming to light and Democrats are casting around for a solution to include considering ideas such as using 401(k) funds to rescue them.

This new constituency is not a particularly popular one and even more damaging is they’re a very visible one.  Think of all the incidents that reflect badly on government unions which have involved the SEIU lately.

When the majority of the country is oriented toward smaller government, less spending and less intrusion, working to satisfy a constituency whose entire existence demands precisely the opposite approach is not the best place to be at election time.

~McQ

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