If you are working in the private sector, how much do you pay out of pocket for health care and retirement?
Of course, this assumes certain things; first, that you have a job, and that the position offers health care and retirement benefits.
But for the sake of argument, let’s say that you’ve grabbed the brass ring in today’s economy; you’re employed, and your company has some form of health care and retirement programs.
The safe money is that you have a defined contribution system where you set aside wages to fund a 401(k) type pension – with an employer match if you’re lucky – as well as a substantial portion of your employer-supplied health care.
If you’re not aware, this is generally at odds with public employees at all levels, who enjoy generous defined benefit plans.
These plans offer handsome health care and retirement benefits that are determined, in most cases, by length of service, not employee contributions, and are guaranteed for the life of the employee, regardless of economic circumstance, creating a gigantic liability for the state, locality or municipality.
The taxpayer is simply stuck with the tab.
In defense of public largesse, the more generous and certain pension and health care benefits were offered to attract workers to jobs that generally paid less than the private sector. But over the last twenty years that paradigm has shifted with public employee unions aggressively engaging in an insidious cycle of unvirtuous conduct, ostensibly on behalf of their membership.
Consider that applicants for public positions are required, as a condition of their employment, to join the union and pay union dues. They neither have a say in how these dues are used, and they cannot opt out.
Union management then uses these dues as political contributions to influence politicians to support ever-increasing benefits for public employees, paid for, of course, by taxpayers.
As legislators come to depend on this campaign cash, a cycle of ever increasing benefits is cemented, regardless of the ability of the jurisdiction to actually pay, creating a yawing disconnect between entitlements and the tax base, as well as the public employees and their private sector counterparts.
It is insidious because at its heart, tax dollars – in the form of union dues taken from publicly supplied salaries – are diverted to union leadership, which uses this taxpayer money to lobby candidates who promise to keep increasing public employee benefits, or to go negative on candidates that don’t.
And we are not talking chump change here. In 2010 the American Federation of State, County and Municipal Employees Union (AFSCME) contributed $87 million to midterm races.
But for all the claimed complexity of the issues involved, this is really just a simple racket: Your tax dollars are funding concerted lobbying for higher state spending, which in turn requires additional taxes.
Again, and again, and again.
It is invidious.
With that background, on to Wisconsin.
In order to close a massive state budget deficit, newly elected Republican governor, Scott Walker (R), is supporting a bill that would require state employees to pay more for their health care and retirement. The bill would also reform the process to determine future salary and benefit increases for state employees.
Under Walker’s proposal, public union employees would be required to pay 5.8% of their guaranteed pension benefits, and 12.6% of their guaranteed health care benefits. Currently, Wisconsin public employees pay 2/10ths of a percent to their pensions and 4-6% to their health care.
Outrageous or reasonable?
Walker’s proposal would immediately save $30 million by July 1st.
To address the longer term challenge of public pensions and health care in the out years, the bill Walker supports would end collective bargaining rights for state, county and local employees – except for police and firefighters – on pensions and health care. Rights to bargain on wages would continue, but any pay increase above the consumer price index (CPI) would have to pass a public referendum.
Importantly, union members would no longer be forced to pay dues to the union and could opt out.
Again, given our current economic environment, outrageous or reasonable?
These changes would save Wisconsin $300 million over two years, helping to close the budget gap.
In return for the changes, Walker has promised that there would be no layoff or furloughs for the state’s 170,000 public employees, which is quite a guarantee given Wisconsin’s 7.5% unemployment rate.
How many of those unemployed would like a gubernatorial guarantee of employment?
Overall, pretty modest and sober, yes?
At a time when unemployment is hovering near 10% nationally, and those with jobs have seen salary and benefit cutbacks, is it too much to ask that those who serve the public also share the pain, as plummeting revenues cause state budgets to bust?
Well, apparently yes.
Madison, Wisconsin suddenly has all the makings of a Little Cairo.
There are mass protests in Madison. Nearly 10,000 by some counts, yesterday.
And in protesting, we can forget about all that Gabby Giffords’ inspired civility – it’s so yesterday.
Indeed, many of the protestors, seeing themselves as the American incarnation of the Egyptian protest movement, carried signs saying “Death to the Dictator.”
Of course, in this case, they meant Walker, not Mubarak.
Unions rarely let something as trivial as circumstance and context get in the way of a good theme.
Adding to the theatrics, teacher union employees, officially barred from striking, conducted a “sick-in”, effectively shutting down the schools, to protest Walker’s plan, throwing Wisconsin families into disarray as they scrambled to manage child care in working families.
And Democratic lawmakers added to the mayhem in comedic fashion.
To prevent the Wisconsin Senate from considering the Walker bill, Democratic state senators, channeling their best French army impersonations, fled the capital to Illinois; managing to both abdicate their responsibilities as lawmakers and look patently ridiculous at the same time.
But that’s not all.
The national labor movement has gotten involved as well.
The AFL-CIO has activated its network across the country to support the Wisconsin protests and pressure Walker and the Republicans to back down.
In truth, carnival antics aside, the stakes could not be higher for organized labor.
The perpetual slush fund that has become the public employee unions will be under significant pressure nationwide if Walker is successful.
Other states, hemorrhaging red ink, will use Wisconsin as an example, as they seek to curb their own union contracts and modify future structures by turning to defined contribution as opposed to defined benefit plans to protect taxpayers.
So what is otherwise a considered rational and responsible move by governors to control spending is being pitched in a virtual tantrum, as a diabolical assault on unions.
That pitch would not be nearly so significant if it wasn’t for the fact that that interpretation enjoys unqualified support in the White House.
In a truly astonishing act, the White House has activated President Obama’s grass roots network — Organizing for America — to mobilize protests against the Wisconsin bill, and to get a head start on other states considering similar legislation, like Ohio. This, according to today’s the Washington Post.
There is no modern precedent for a sitting President to mobilize his supporters directly to challenge a bill under consideration.
As much as progressives may believe that enacting the Wisconsin law will be a setback for organized labor, the idea of the President of the United States directing supporters nationwide to actively take part in protests should send chills down every citizen’s spine.
Is it untruthful to say that by urging loyalists to oppose the Wisconsin bill and support the protests, that the President and Democrats are also indirectly supporting an otherwise illegal teacher strike, couched as “sick ins”? Article II Section 3 of the Constitution states, “…he shall take Care that the Laws be faithfully executed…
” Where does the call to protest cross this line?
However, the real story here is not the protests but their futility.
It would be hard to understate that this is the wrong issue, at the wrong time, in the wrong place, with the wrong opponent.
At a time of crippling austerity for Americans and daunting, unfunded liabilities for governments at every level, the central argument of the public employee unions is that taxes aren’t high enough to fund their largesse.
That is a preposterous premise, one that average Americans will see though fairly quickly. As a matter of fundemental fairness, Americans will side with the governors. And the more raucus the protests, the more firmly citizens will align with their respective governors.
The progressive, Democratic over-reaction here is actually just the grease needed to make passage of the Wisconsin bill inevitable.
If Walker and his fellow governors have courage and nerve, they will win the day here.
Not because they are “union busters,” but rather because they wish to make the unions accountable as everyone else is. That in dealing with our debt that we have shared sacrifice.
That is something all Americans can support.
And before it gets raised, this is not a demonization of public union employees.
These professionals serve in essential, in some cases indispensible functions for the general populous every day. They deserve our support and respect.
No, this is a fight with their union management that is dead set on reaping financial benefits regardless of what the state or taxpayers can afford. And with just enough chutzpah to use taxpayer dollars (from dues) to lobby for these increases.
Scott Walker has bravely taken the first step toward fiscal sanity.
If he wins, and gains control of Wisconsin’s budget, he’ll have set a fresh standard in executive leadership, and be well on his way as a presidential contender in years to come.