Wisconsin, like most states in America, is strapped for cash right now. Wisconsin, like most states in America, views labor union salaries and pensions as a big part of spiraling government costs. But Wisconsin, unlike most states in America, is taking drastic measures to contain costs. The state legislature has proposed a bill that would essentially take away the collective bargaining power of all public employees in the state- no more unions, no more strikes, no more posh benefits that taxpayers have to pick up. But it’s not all good news.

Unions have been a fixture of American labor in the 19^th and 20^th centuries. Originally formed around the mid-1800s to protect workers from unfair and dangerous working conditions, they have now become in the eyes of many a mere tool, used to exhort businesses and governments for unreasonably high salaries and benefits with the threat of work stoppages. This negative public perception, along with the advent of cheap foreign labor due to globalization, has reduced the power of unions in the last 20 years. They have turned from champions of the working man to job-killing entities that bankrupted GM and Chrysler and are on the verge of bankrupting California. Now many want to do away with unions, with Wisconsin’s bill being the first shot in what will become a long, ugly battle between unions and businesses/governments.

It’s easy to see the benefits of eliminating unions. First and foremost, it saves businesses and governments money, allowing the former to hire more workers and governments to bring down their deficits. According to the AP, the bill will save Wisconsin $30 million by June 30 and $300 million in the next two years- a pretty big chunk out of government spending that Wisconsin can use for deficit reduction, tax cuts, or other spending programs. However, the majority of costs savings will come in the long-term, where expensive pensions will no longer be a burden on state balance sheets. Other benefits include the reduced ability to strike for benefits- strikes have often crippled key industries at important moments, sending prices sky high. Decreased job security should also lead to better service from government agencies, as delinquent employees are no longer protected by union interests. As anybody who has ever been through a DMV or immigration agency can attest, that would help.

However, eliminating unions is not without its drawbacks. The foremost problem is the potential talent drain as a result of decreased compensation, benefits, and job security. This may not be a problem for low-skill jobs such as operators and prison guards, but high-skill positions such as teachers, doctors, and lawyers may be substantially impacted. As a Wisconsin Democrat legislator noted, “Do you want someone making $26,000 a year to be teaching your kids?” Secondly, the effect on workers and the middle class can be devastating. The state government hires many workers, and their savings from eliminating unions obviously means that the workers have less to spend. $30 million saved by the government means $30 million less in salary for the public employees. This can have a dampening effect on businesses as these workers spend less.

The Wisconsin bill is a very daring- some would say radical- move in attempting to cut public worker costs. However, overarching application of the bill to all state employees will result in worse government services, particularly in the all-important education sector. Instead, the state government should review public employee unions on a case-by-case basis, and eliminate their collective bargaining rights based on a cost-benefit analysis on the effects of dissolving their unions.


(Photo: aflcio)