Thursday, May 31, 2012

The real story in Wisconsin

Our cheesehead neighbors to the east have been in the political news almost non-stop for 18 months now, ever since Wisconsin voters elected Scott Walker as governor and gave him a Republican legislative majority back in 2010. Faced with a multi-billion dollar budget shortfall, Walker and the Legislature took the mandate they had won and actually used it in a positive way, passing a budget-balancing bill known as Act 10.

In addition to balancing the budget, Act 10 imposed a number of reforms on a spending system that was wildly out of control. Among those reforms was the limiting of some of the collective bargaining rights of the Wisconsin public employee unions.

Of course, the lefties went beserk. Some Democrat legislators fled the state to avoid having to vote on the bill, protestors stormed the Capitol (resulting in millions of dollars in damage and clean-up costs) and after Act 10 became law, the unions began bankrolling a series of recall elections that will culminate Tuesday, when Walker himself faces a recall election. The likely end result of all this will be that the unions will have flushed away tens of millions of dollars while leaving things pretty much the same way they were after the 2010 election: Walker will still be the governor, the Republican legislative majorities will still be in place and Act 10 will stay in force.

Much of the focus has been on the fact that Wisconsin state employees were now forced to contribute more to their pensions and health care, bringing their benefits closer to (but still more lucrative than) most private-sector benefits. For example, most public employees now have to pay 5.6% of their salary towards their retirement, and 12.6% of their health-care costs. Most private sector employees view that as a pretty sweet deal, even though it made the union leaders hold their breath until they turned blue. These minor adjustments have made a huge difference for Wisconsin's towns, counties and school districts, many of whom have moved from deficit to surplus, and are actually lowering property taxes.

But less attention was paid to a provision of Act 10 that prohibited public employee unions from forcing their members to pay dues. Whenever a union contract expired, the union could only collect dues from members who said they WANT to have the dues taken from their paycheck.

It turns out that huge numbers of Wisconsin public employees don't think there's much value in belonging to a union. Since March of 2011 to this past February, the number of AFSCME (American Federation of State, County and Municipal Employees) members is Wisconsin has fallen from 62,818 to 28,745, according to figures in the Wall Street Journal. Among just state employees, that number has dropped to 7,100 from over 22,000 last year.

Among teachers, the drop is not as steep, but it's still severe. About 6,000 of the 17,000 Wisconsin teachers represented by the American Federation of Teachers (AFT) have left the union since mandatory dues were eliminated.

Keep in mind that even after Act 10, union membership was not without its benefits. The union still negotiates on pay issues, can represent members in grievances and provide other assistance.

And yet, thousands and thousands of union members - given genuine choice as to whether they would belong - fled the union when given the first opportunity to do so.

It's not surprising. Americans have been voting with their feet and wallets for years, which is why unions represent only about 7% of private-sector employees. The public employee membership rate has been about 37%, and for years many economists said that number was as high as it was only because membership was mandatory in many cases.

"Nonsense," the union bosses said, arguing that public employees valued their union membership and needed it to avoid being exploited by those evil, greedy taxpayers.

Those same union bosses were using employee dues to fund some pretty lavish pay and perks for themselves. For example, the state's largest teachers union, Wisconsin Education Association Council (WEAC), employed 151 staffers at an average compensation package of $95,250 per employee, all funded by the teachers' dues. They're now laying off about 40% of their staff.

Turns out that teachers and other public workers just don't see the value in paying for all of that. Like emancipated slaves, Wisconsin's public employee union members are shedding their shackles and fleeing for greener pastures.

Isn't "choice" a beautiful thing?

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