Public Unions

What's The Real Message of Wisconsin?

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Over at The New Republic Alec MacGillis enumerates all the reasons why public unions experienced an utter rout yesterday in Wisconsin: they were outspent; they should have attempted a referendum like their more successful comrades in Ohio rather than a recall; voters were in a pro-incumbent mood; Walker is a wily bastard who exempted cop and firefighter unions and thereby splintered the union vote.

The only reason he neglected to mention happens to also be the correct one: taxpayers straining under out-of-control union demands finally cried: "ENUFF." But MacGillis does ask why unions don't engage is some soul searching and self-reform now that voter mood is turning against them:

What could unions have done differently? The Wisconsin defeat is a huge blow to public employee unions, and it may well help decide the election later this month of the next president of the American Federation of State, County and Municipal Employees—Danny Donohue, the challenger from New York, will surely use the Wisconsin loss an argument against Lee Saunders, the union's current number-two and the anointed successor to outgoing president Gerald McEntee. I keep coming back to a question I've asked many union leaders the past few years—why did unions not make more of an effort to get out ahead of the anti-union push by engaging in more self-reform, reining in the obvious, glaring excesses (the cops in Yonkers, etc.) that have made public employee unions such an easy target for opportunistic conservatives like Walker? The union leaders rebuff this question by arguing that they simply found it wrong for their members to be scapegoated—bankers' shenanigans had a far bigger role in the financial crisis and recession than union pensions. Which is true. It's also true that politicians like Walker, and the groups backing them, were intent on eviscerating organized labor in a way that went beyond mere concessions over pensions and pay, which the unions in Wisconsin made clear they were prepared to make. Still, though, one can't help but wonder whether the unions could have done more to see this coming and, by self-reforming, draw support from the median voter.

 No, they couldn't have. And for the same reason that they are out-of-control in the first place.

Whatever the flaws of private sector unions, they have a right to collectively bargain to get as big a share of company profits as is sustainable. What is sustainable? Something in line with the value they help generate. If they ask for more, employers can't summarily fire them and hire someone else given how our labor law is currently written. But unions can't make limitless demands forever without sucking the company dry. Hence there is some market discipline that they have to hew to even when labor law arguably gives them unfair latitude.

But there is no equivalent discipline that public sector unions have to submit to. They don't generate profits. So there is no objective way to measure the value of their work. The main purpose of their collective bargaining powers – it is a misnomer to call them "rights"—is to extract the most lavish wages and benefits they can possibly get from their government employer. Meanwhile, the employer, who pays from taxpayer pockets not her own, has little incentive to insist on reasonableness, especially if unions have helped put her in office. Collective bargaining powers in the public sector, then, virtually invite abuse. And so long as unions have these powers, they will have little reason to "self reform" beyond minor, cosmetic changes.

Perhaps Wisconsin voters intuited all this, which is why when they were finally invited to weigh in, they opted to clip these powers and address the root of the problem.

That's the real message of Wisconsin.