Labor in the crosshairs
By Max J. Castro
majcastro@gmail.com
Today the spotlight is on Wisconsin, but before it’s over this fight is liable to take place in many other states across the nation. With 9 percent the official unemployment rate and the real rate (counting those who have become so discouraged they have stopped looking for work, plus those who are working reduced hours against their will) closer to 20 percent, it’s a buyers’ market for labor right now in the United States. To make matters worse, the Great Recession has produced big budget shortfalls in most states across the nation and contributed to a huge federal budget deficit. Finally, large Republican gains in many governor’s mansions, in state legislatures, and in the U.S. Congress in last November’s election all have combined to put public sector workers and their unions in their most precarious position ever.
It doesn’t help that President Barack Obama himself — despite key support to his campaign from labor in 2008 and notwithstanding recent comments from the president backing Wisconsin government employees in their underdog struggle with Republican governor Scott Parker — started the ball rolling when he announced a five-year ban on raises for federal workers.
Unlike the federal government, however, which can print money, state and local governments are prohibited from running deficits. In recent decades, during periods of economic expansion, cities and states have agreed to improved benefits for their workforces, including good pensions and health insurance. These gains in public servants’ benefit packages are justified because, as the research shows, on average government workers have lower salaries than their peers (people in the private sector with similar educational levels, experience, and skills).
Workers’ victories were made possible by the growth in the number of members and power of public sector unions — in stark contrast to their counterparts in the private sector, which have withered to a shadow of their former selves as a result of savage attacks by employers and the shrinkage in U.S. industrial jobs because of globalization (including the rise of new manufacturing giants like China and India), automation, and the shipping of jobs to sites outside the country by U.S. companies in search of cheap labor and looser labor and environmental restrictions.
One result of this dynamic — government jobs can seldom be exported and public sector unions have gotten stronger, not weaker — is that total compensation in the public sector has tended to rise as general prosperity, government revenues, and inflation have increased. Contrast this with the private sector, where for almost four decades and despite economic growth, rising labor productivity, and soaring profits, employee pay and benefits have stagnated or even fallen, with the glaring exception of CEOs and a miniscule sector of those at the very top of the food chain.
These factors provide the perfect scenario for socking it to government workers’ pay and benefit packages and demonizing union organizations such as the American Federation of County, State, and Municipal Employees (AFCSME), the Service Employees International Union (SEIU), the American Federation of Teachers (AFT), and the National Education Association (NEA). On the one hand, the average private sector worker — the vast majority of American jobs still are in the private sector — who has seen his or her real compensation stagnate or decline — tends to be unsympathetic toward government workers whose pay generally has kept pace with economic growth and who are stereotyped as bureaucrats who impede the development of business with red tape or incompetents who wouldn’t have a job except for union protection (the case of teachers).
Thus polls generally show that the majority of the public agree with cutting government jobs and reducing salaries and pensions — especially since raising taxes, including on people whose wages have remained flat for a long time, are presented by both parties, but especially the GOP, as the only alternative. Few politicians dare bring up the possibility of major raises in taxes on those who have benefitted from economic expansion, mainly corporations, the rich, and heirs to large fortunes who have had to pay little or no estate taxes for fear of losing campaign contributions and being labeled “anti-business” or in favor of “class warfare.” Add to this the fact that Republican politicians have every incentive to torpedo unions not only because the GOP is monolithically and reflexively pro-business but also because labor unions contribute a large number of volunteers and most of their money to the Democratic cause.
The current struggle in Wisconsin is particularly significant because Gov. Parker’s proposal goes far beyond the usual cuts in salaries and benefits but actually would significantly curtail the ability of public sector unions to engage in collective bargaining. Under Parker’s plan, unions could only bargain on wages (not benefits, pensions, or work rules) and salary increases would be limited to the rate of inflation. If this bill becomes law in Wisconsin, a relatively liberal Midwestern state that until recently elected Russ Feingold (defeated in 2010), one of the most liberal members of Congress, the idea could well spread like wildfire to other states, undercutting public sector unions nationally. Republicans and conservatives in general, as well as many in the business community, no doubt hope such a development would prove to be the final stake in the heart of the U.S. labor movement.
Given this scenario, opponents of Gov. Parker’s proposed law are fighting back hard. Ever-increasing numbers of protesters have descended on the state capital of Madison over the last two weeks. One protest drew almost 100,000. In contrast, a Tea Party rally in favor of Parker drew only 5,000. For their part, the minority Democratic members of the state legislature have left Wisconsin in order to foil any effort to forcefully compel them to attend legislative sessions and thereby provide the quorum to enact the law.
The outcome of this contest is still unclear, with even larger protests being planned and Gov. Parker confidently declaring over the weekend that Democrats will come back (and the union-busting bill will be voted on.) What is clear is that what happens in Wisconsin will not necessarily stay in Wisconsin, and that the fate of what remains of the U.S. labor movement may well depend on what happens over the next few weeks in the Badger state.
