Government Spending

The Real Lesson from the Wisconsin Recall

When the issues were clear, voters were rational.

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“The art of government is to make two-thirds of the voters pay all it possibly can for the benefit of the other third,” wrote Voltaire, in one of the most counterintuitive yet accurate quotations about modern governance. Why are voters so willing to pay more of their hard-earned money to support the demands of a minority of their fellow citizens?

That’s not the question most of us are asking now, after public-sector unions were dealt devastating blows in Tuesday's elections in two of the most progressive states, Wisconsin and California.

Liberals are asking whether Wisconsin Gov. Scott Walker’s overwhelming victory in a failed recall will spur similar “anti-worker” reforms across the country. Republicans are asking whether the Wisconsin voteâ€"including the victory by three out of four Republicans in Wisconsin Senate seats targeted by the unionsâ€"spells doom for President Obama’s re-election.

Instead of wondering about short-term political implications, we should be asking why it took so long for voters to behave so rationally. Even in Democratic bastions such as San Jose, the public supported serious efforts to roll back benefit levels even for current employees. San Diego voters not only backed pension reform, but they OK’d a ban on union-only project labor agreements in the city and the reformist mayoral candidate took top place, although he will face a November run-off with a union Democrat.

Tuesday’s vote, however encouraging, is just the beginning of the broad-based reform movement that’s necessary to save states and municipalities from insolvency, to improve the nation’s increasingly decrepit public services, and to restore the proper balance between the citizen and the government official. But it is just the beginning.

Over the past decade, California governments have dramatically increased the pay and especially the benefit packages of public-sector workers. We have firefighters earning average total compensation packages of $175,000 a year in many jurisdictions, and majorities of police officers in some agencies retiring on questionable disabilities. The standard retirement package for the ever-expanding class of “public safety” officials allows them to retire at age 50 with 90 percent of their final year’s payâ€"and that’s before all the add-ons and scams. Miscellaneous membersâ€"the rest of public employeesâ€"aren’t far behind, and we’ve seen absurd enrichment schemes and salaries in one scandal after another.

I’ve watched a sea of proposals pass that give government employees special privileges that would never be allowed for mere private citizens, such as a recently passed California bill that allows many officials to shield their personal information from public property databases. These privileges encourage arrogance and misuses of power. Pensions are now consuming 16 percent of California’s discretionary budget, and in cities such as San Jose, pension costs escalated an eye-opening 350 percent in a decade.

Collective bargaining has made it nearly impossible for agencies to fire bad workers or pursue cost-saving alternatives. Although California leads the way in most absurd trends, the vast expansion of government compensation and special privileges is a nationwide problem, and in Tuesday’s election voters across the nation said they have had enough.

How did it get this bad?

The technical answer is the economic notion of “dispersed costs and concentrated benefits.” If we imposed a one-cent annual tax on every American to benefit the Greenhut family, no one would get mad and few people would notice, but I would have a great incentive to keep that tiny tax alive and plenty of money to hire the best lobbyists. All special interest groups work that wayâ€"they push for small concentrated benefits, and figure that the rest of us don’t have the time or incentive to fight back given the costs are spread out.

The public-sector unions have mastered this art, and indeed are far more ravenous than even Voltaire would have imagined. He figured two-thirds of us would work for the other third, but only about 16 percent of American workers are in government employment.

Unions have particular advantages, including the ability to automatically deduct their dues from employees’ paychecks, something that Walker has stopped in Wisconsin. They also have strength in numbersâ€"many workers who can head to the polls and participate in political efforts to prop up their special status.

But mostly union prerogatives have moved forward so rapidly because unions have bought support from both sides of the political spectrum. For instance, Orange County, Calif., where I used to work, remains the most Republican large county in the nation, yet the same pension-spiking schemes moved forward there as in more liberal jurisdictions. Pro-union candidates would dress up their union votes in law-and-order garb. In liberal areas, union legislators would depict their support for the wealthy class of government employees as support for the poor and the downtrodden, given the stated intent of the programs these people administer.

Despite loud union protests we see at capitol buildings, most union power has advanced quietly and behind the scenes. Debates over spending rarely come down to the public vs. the unions, so voters continue to elect politicians who advance union interests. But something shockingly different took place on Tuesday: clarity.

There was a clear choice, from Madison to San Diego. Do we side with a small special interest that has rigged the game in its favor or do we stand up for ourselves and say “no”? We saw what happened. Unions are busy launching their court challenges, knowing that they can't win in the court of public opinion. They have much power and will surely win many more battles. But the gig is up.

When put to the test, to the simple choice of the unions vs. the rest of us, the publicâ€"even in the most liberal places in the countryâ€"does the right thing.

That’s the real heartening news from Tuesday’s election.

Steven Greenhut is vice president of journalism at the Franklin Center for Government and Public Integrity.