By Don C. Brunell, President, Association of Washington Business

The confrontation between Wisconsin Gov. Scott Walker and state employees has focused the nation’s attention on government unions.

With the Badger State facing a $137 million budget deficit and a projected $3.6 billion shortfall over the next two years, Walker wants public employees to contribute more to their health-care and pension costs. He also wants to curb the power of public-sector unions, a move that has ignited massive protests across the nation, even in states like Washington where no such effort is being considered.

Union leaders say the demonstrations are a show of solidarity and a warning that the Wisconsin conflict could spread to other states. They’re right to be concerned. Similar bills are being considered in Ohio, California and other states as lawmakers struggling with massive deficits must decide between gutting crucial programs or slashing the cost of public employee contracts.

A USA Today analysis of 2009 figures shows that public employees earn higher average pay and benefits than private workers in 41 of 50 states. In California, the difference is almost $8,000, and in Rhode Island and Nevada, it’s a whopping $17,000. In our state, it is a relatively modest $532. Other studies have shown that the real advantage for public workers is in their health benefits and pensions.

An analysis by the Seattle Times shows that’s the case here in Washington. The state workforce hasn’t suffered layoffs to the same degree as private-sector workers, public employees have better health benefits, and 92 percent of state employees are enrolled in employer-paid retirement plans, compared with 39 percent in the private sector.

Public-sector unions are different than the unions that sprang up in the 1920s and 1930s to fight for better working conditions and wages in America’s factories. Today’s public-sector unions are largely suburban and white collar. But the main difference is they help “hire” their own bosses through political contributions – the same bosses who then must negotiate contracts with the people who helped put them in office.

CBS News reported that the American Federation of State, County & Municipal Employees was the nation’s biggest political spender in the 2010 elections, contributing $87.5 million to Democrat candidates. Critics argue that taxpayers are essentially footing the bill for these contributions because they come from union dues in government salaries paid for by state budgets. Ironically, that means taxpayers are paying for efforts that lead to more benefits, bigger budgets and higher taxes.

But things may be changing. Increasingly, taxpayers are chafing at providing better benefits for state workers than they, themselves, enjoy. And governors and state legislatures are scrambling to fill billion-dollar budget gaps.

When Indiana Gov. Mitch Daniels took office six years ago, he rescinded collective bargaining rights for state employees and implemented merit pay. According to The Wall Street Journal, Daniels slashed the state workforce and turned a $600 million deficit into a $370 million surplus in one year. Indiana currently has an $800 million surplus.

Public-sector unions can prevent such all-out assaults by helping rather than hindering the process. For example, here in Washington, legislators passed a law allowing state services to be contracted out to private companies, but the process is essentially controlled by state employee unions, so it goes nowhere.

That’s not real reform.

The bottom line is this: There is no money. Business as usual is not an option. Rather than stand at the barricades fending off change, public-sector unions should use their experience and talents to help make government more efficient, effective and affordable.

That’s a solution that works for both the private and public employees.

About the Author
Don Brunell is the president of the Association of Washington Business. Formed in 1904, the Association of Washington Business is Washington’s oldest and largest statewide business association, and includes more than 7,350 members representing 650,000 employees. AWB serves as both the state’s chamber of commerce and the manufacturing and technology association. While its membership includes major employers like Boeing, Microsoft and Weyerhaeuser, 90 percent of AWB members employ fewer than 100 people. More than half of AWB’s members employ fewer than 10. For more about AWB, visit www.awb.org.

 

One thought on “There’s No Money”
  1. Well and good for you to say these things Mr. Brunnell. I contend your premise that “There is no money” is an oft-played line that really is a canard…

    there’s plenty of money, especially when Gov. Walker wants to redistribute the same money in question from state workers to a small sliver of the investor class through tax breaks for a few of his wealthiest donors. Simple economic theory and the history of economic recovery shows again and again that we need spending in all sectors, not just tax breaks for a few wealthy investors.

    This transparency is not lost upon your readers or the fine residents of the state of Wisconsin. These state employees fund 100% of their own pensions as part of their compensation package. The move simply seems to say ‘we want to dismantle the pension system for everyone and diminish expectations across the entire spectrum’.

    However this sounds to you, state unions are a fact of life, including here in Washington. Many business owners like myself support the existence of robust public worker unions in Washington and Wisconsin and every state. Unions raise the standard of living, not just for state employees, but for the entire workforce and by extension our whole society.

    These employees conceded quite a lot already…your conclusion that the only solution is for workers to surrender collective bargaining rights that many fought and even died for is simply a creative rewriting of history. Do not expect them to go gentle into that good night of an increasingly stratified society where wealth is distributed upward into fewer and fewer hands, now at an alarming rate that threatens to rend the fabric of our society.

    How many times we heard it said…we measure our society not by the concentrated wealth of the few, but by the middle class and the poorest. What Gov. Walker has done has simply ignored the will of a majority of his constituents to serve the interests of a few.

    Walkers’s move has horribly backfired and brought great opprobrium upon his office and the members of his party who cannot now escape the consequences of their folly. He did not run on such a position. I urge you to consider that if the intent is cultural and class warfare than he has succeeded. I think the consequences of his actions will not bring his desired result or end in a fashion that brings a net positive to anyone but those who think class warfare is an entertaining alternative to Dancing with the Stars.

    Respectfully, and proudly yours,
    Neal Wells
    Kirkland, WA

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