History Lesson for Scott Walker

This is our moment, this is our time to change the course of history. —Scott Walker

Ronald Reagan, Remarks in Chicago, Illinois, at the Annual Convention and Centennial Observance of the United Brotherhood of Carpenters and Joiners, 3 September 1981:

This union has a proud history. Just 100 years ago, having only a few thousand members, you opened your first convention in Chicago. Now, it's not true that I attended that convention, also. [Laughter] Since then, you've grown to more than 800,000 members. You've served as a bulwark in America's free union movement.

Over the years, this union was responsible for improving the well-being of its members as they labored building this Nation. And through the collective bargaining system, you improved images—or wages, I should say—benefits, and working conditions. More than that, the United Brotherhood of Carpenters and Joiners has shown time and time again that it supports our free market system and the fundamental tenets of American democracy. It was this belief in representative government and free enterprise that gave the working people of this country unequaled freedom and prosperity.

We forget this at our peril. In these recent years when advocates of collectivism and government intervention have held sway, we should recall the wisdom of that greatest of labor statesmen, the founder of the American labor movement, Samuel Gompers. He said, "Doing for people what they can and ought to do for themselves is a dangerous experiment. In the last analysis, the welfare of the workers depends on their own initiative. Whatever is done under the guise of philanthropy or social morality which in any way lessens initiative is the greatest crime that can be committed against the toilers. Let social busybodies and professional 'public morals experts' in their fads reflect upon the perils they rashly invite under this pretense of social welfare."

Samuel Gompers believed with all his heart that if a worker was properly and fairly paid for his work, he could provide for himself without having to hold out this hand to a caseworker for government-provided benefits. He was a champion of collective bargaining.

Collective bargaining in the years since has played a major role in America's economic miracle. Unions represent some of the freest institutions in this land. There are few finer examples of participatory democracy to be found anywhere. Too often, discussion about the labor movement concentrates on disputes, corruption, and strikes. But while these things are headlines, there are thousands of good agreements reached and put into practice every year without a hitch.

Part of successful collective bargaining is honest, straightforward exchanges. A number of Presidents have observed that of all the meetings in the Oval Office, the most direct, productive, and useful have been with the leaders of organized labor. Straight talk has always been a feature of these exchanges, and that's a tradition I want to continue here today. You and I may not always agree, as President Konyha said, on everything, but we should always remember how much we have in common.

I can guarantee you today that this administration will not fight inflation by attacking the sacred right of American workers to negotiate their wages. We propose to control government, not people. Now, today I want to express again my belief in our American system of collective bargaining and pledge that there will always be an open door to you in this administration.

During my 8 years as Governor of California, I was proud of my relationship with organized labor. Yes, we had disagreements over such things as welfare reform and budget allocation, but we followed the advice of a one-time mayor of Boston who said, "We can disagree without being disagreeable."

Some people would have forgotten-except your president very graciously reminded you—that I am the first man to attain this high office who was formerly president of an AF of L-CIO union.

Ronald Reagan, Labor Day Speech at Liberty State Park, Jersey City, New Jersey, 1 September 1980:

On this day, dedicated to American working men and women, may I tell you the vision I have of a new administration and of a new Congress, filled with new members dedicated to the values we honor today?

Beginning in January of 1981, American workers will once again be heeded.  Their needs and values will be acted upon in Washington.  I will consult with representatives of organized labor on those matters concerning the welfare of the working people of this nation.

I happen to be the only president of a union ever to be a candidate for President of the United States.

As president of my union -- the Screen Actors Guild -- I spent many hours with the late George Meany, whose love of this country and whose belief in a strong defense against all totalitarians is one of labor’s greatest legacies.  One year ago today on Labor Day George Meany told the American people:

“As American workers and their families return from their summer vacations they face growing unemployment and inflation, a climate of economic anxiety and uncertainty."

Well I pledge to you in his memory that the voice of the American worker will once again be heeded in Washington and that the climate of fear that he spoke of will no longer threaten workers and their families.

When we talk about tax reduction, when we talk about ending inflation by stopping it where it starts -- in Washington -- we are talking about a way to bring labor and management together for America.  We are talking about jobs, and productivity and wages.  We are talking about doing away with Jimmy Carter’s view of a no-growth policy, and ever-shrinking economic pie with smaller pieces for each of us.

That’s no answer.  We can have a bigger pie with bigger slices for everyone.  I believe that together you and I can bake that bigger pie.  We can make that dream that brought so many of us or our parents and grandparents to this land live once more.

Let us work to protect the human right to acquire and own a home, and make sure that that right is extended to as many Americans as possible.  A home is part of that dream.

I want to work in Washington to roll back the crushing burden of taxation that limits investment, production, and the generation of real wealth for our people.  A job, and savings, and hope for our children is part of that dream.

I want to help Americans of every race, creed and heritage keep and build that sense of community which is at the heart of America, for a decent neighborhood is part of that dream.

We will work to strengthen the small business sector which creates most of the new jobs we need for our people.  Small business needs relief from government paperwork, relief from over-regulation, relief from a  host of governmentally-created problems that defeat the effort of creative men and women.  A chance to invest, build and produce new wealth is part of the dream.

But restoring the American dream requires more than restoring a sound, productive economy, vitally important as that is.  It requires a return to spiritual and moral values, values so deeply held by those who came here to build a new life.  We need to restore those values in our daily life, in our neighborhoods and in our government’s dealings with the other nations of the world.

These are the values inspiring those brave workers in Poland. The values that have inspired other dissidents under Communist domination.  They remind us that where free unions and collective bargaining are forbidden, freedom is lost.  They remind us that freedom is never more than one generation away from extinction.  You and I must protect and preserve freedom here or it will not be passed on to our children.  Today the workers in Poland are showing a new generation not how high is the price of freedom but how much it is worth that price.

Do private-sector workers earn less than government workers?

I am posting this here, and I hope that The Economist doesn't mind too much.

Don't join the government to get rich

Feb 21st 2011, 14:55 by M.S.

ONE of the memes being thrown around over the past few years by advocates of reducing the power of public-sector unions has been the claim that public-sector workers are overpaid in comparison to their private-sector counterparts. I've always considered this an odd claim to hear, as I've been in the labour market for quite a long time and can't recall ever hearing anyone say they were going to work for a government bureaucracy because they wanted to make a lot of money. At crucial career-making junctures in life, people who want to get rich tend to enter corporate law rather than join the District Attorney's office, to work for internet companies rather than teach math in public high schools, and so forth.

All of this is coming up now because Wisconsin has become the showdown state for the public-sector union controversy, and Scott Walker, the governor, is claiming he needs to destroy the state's public-sector unions' ability to negotiate in order to deal with its budget shortfall. State workers, he says, are paid too much. But the Economic Policy Institute tells us that, in Wisconsin, public-sector workers are not in fact paid more than their private-sector counterparts. They're paid less. You can only make it appear that public-sector workers earn more by ignoring the fact that "both nationally and within Wisconsin, public sector workers are significantly more educated than their private sector counterparts."

Nationally, 54% of full-time state and local public sector workers hold at least a four-year college degree, compared with 35% of full-time private sector workers. In Wisconsin, the difference is even greater: 59% of full-time Wisconsin public sector workers hold at least a four-year college degree, compared with 30% of full-time private sector workers. 

...Public employees receive substantially lower wages, but much better benefits than their private sector counterparts. Wisconsin state and local governments pay public employees 14.2% lower annual wages than comparable private sector employees. On an hourly basis, they earn 10.7% less in wages. College-educated employees earn on average 28% less in wages and 25% less in total compensation in the public sector than in the private sector.

The EPI study does find there's a class of public-sector workers who earn a bit more than their private-sector counterparts: those without high-school degrees. In other words, district attorneys earn less than corporate lawyers, but janitors at the district attorney's office may earn more than janitors at a corporate law office—provided the government hasn't outsourced its facilities staff to the same private company the law office uses, which it may have, since governments have been targeting low-skilled workers for outsourcing precisely because that's how they can save money.

For most people who work for the government, however, the expectation is that your year-to-year salary will be lower, but your benefits will be better, in particular your pension. It turns out, however, that state governments won't have the money to pay a lot of those pensions. They're likely to renege on their promises, and Republicans in Congress want to allow them to declare bankruptcy in order to do so. (Funnily enough, this may be the one area in which labour unions and Wall Street are in alliance: neither one wants states to be allowed to declare bankruptcy.) In other words, as Ezra Klein points out, the public-sector employees got rooked: they accepted lower pay in exchange for retirement benefits, and now the retirement benefits look unlikely to come through.

Now, how can we explain the fact that public-sector employees are paid less than private-sector employees? After all, public-sector employees are heavily unionised, while private-sector employees aren't. Shouldn't those unions be winning public-sector employees better wages? Well, I don't really know; perhaps the fact that the government is a monopoly employer with staggering market power has something to do with it. But try considering how employees' wage negotiations with the government might look if there were no public-sector unions. In most lines of work, individuals' power to negotiate higher wages with large organisations is very limited. In government employment, individuals' power to negotiate higher wages is utterly non-existent. An individual teacher who bargains with a private school for a higher wage than her peers is going to have a tough negotiation on her hands; an individual teacher who tries to bargain with the City of Milwaukee for a higher wage than her peers is going to be laughed out of the superintendent's office. In his initial post on this subject, my colleague ventured that civil servants would constitute a powerful bloc able to protect their wages even without unions. I'm not really sure what this means. Through what mechanism are civil servants supposed to bargain for wage increases if they don't have unions? Who's supposed to do the bargaining?

Source: http://www.economist.com/blogs/democracyinamerica/2011/02/wisconsin_public_unions

Gov. Walker's Reaganesque Power Grab

For my 300th post, I re-publish the following column. This is a sign of two things: (1) I lack the time to state my own view on this matter and my reasons for it; (2) Krugman and I are in complete agreement on this matter. Click here for an explanation of the title of this post. 

Wisconsin Power Play

By PAUL KRUGMAN

Published: February 20, 2011

Last week, in the face of protest demonstrations against Wisconsin’s new union-busting governor, Scott Walker — demonstrations that continued through the weekend, with huge crowds on Saturday — Representative Paul Ryan made an unintentionally apt comparison: “It’s like Cairo has moved to Madison.”

It wasn’t the smartest thing for Mr. Ryan to say, since he probably didn’t mean to compare Mr. Walker, a fellow Republican, to Hosni Mubarak. Or maybe he did — after all, quite a few prominent conservatives, including Glenn Beck, Rush Limbaugh and Rick Santorum, denounced the uprising in Egypt and insist that President Obama should have helped the Mubarak regime suppress it.

In any case, however, Mr. Ryan was more right than he knew. For what’s happening in Wisconsin isn’t about the state budget, despite Mr. Walker’s pretense that he’s just trying to be fiscally responsible. It is, instead, about power. What Mr. Walker and his backers are trying to do is to make Wisconsin — and eventually, America — less of a functioning democracy and more of a third-world-style oligarchy. And that’s why anyone who believes that we need some counterweight to the political power of big money should be on the demonstrators’ side.

Some background: Wisconsin is indeed facing a budget crunch, although its difficulties are less severe than those facing many other states. Revenue has fallen in the face of a weak economy, while stimulus funds, which helped close the gap in 2009 and 2010, have faded away.

In this situation, it makes sense to call for shared sacrifice, including monetary concessions from state workers. And union leaders have signaled that they are, in fact, willing to make such concessions.

But Mr. Walker isn’t interested in making a deal. Partly that’s because he doesn’t want to share the sacrifice: even as he proclaims that Wisconsin faces a terrible fiscal crisis, he has been pushing through tax cuts that make the deficit worse. Mainly, however, he has made it clear that rather than bargaining with workers, he wants to end workers’ ability to bargain.

The bill that has inspired the demonstrations would strip away collective bargaining rights for many of the state’s workers, in effect busting public-employee unions. Tellingly, some workers — namely, those who tend to be Republican-leaning — are exempted from the ban; it’s as if Mr. Walker were flaunting the political nature of his actions.

Why bust the unions? As I said, it has nothing to do with helping Wisconsin deal with its current fiscal crisis. Nor is it likely to help the state’s budget prospects even in the long run: contrary to what you may have heard, public-sector workers in Wisconsin and elsewhere are paid somewhat less than private-sector workers with comparable qualifications, so there’s not much room for further pay squeezes.

So it’s not about the budget; it’s about the power.

In principle, every American citizen has an equal say in our political process. In practice, of course, some of us are more equal than others. Billionaires can field armies of lobbyists; they can finance think tanks that put the desired spin on policy issues; they can funnel cash to politicians with sympathetic views (as the Koch brothers did in the case of Mr. Walker). On paper, we’re a one-person-one-vote nation; in reality, we’re more than a bit of an oligarchy, in which a handful of wealthy people dominate.

Given this reality, it’s important to have institutions that can act as counterweights to the power of big money. And unions are among the most important of these institutions.

You don’t have to love unions, you don’t have to believe that their policy positions are always right, to recognize that they’re among the few influential players in our political system representing the interests of middle- and working-class Americans, as opposed to the wealthy. Indeed, if America has become more oligarchic and less democratic over the last 30 years — which it has — that’s to an important extent due to the decline of private-sector unions.

And now Mr. Walker and his backers are trying to get rid of public-sector unions, too.

There’s a bitter irony here. The fiscal crisis in Wisconsin, as in other states, was largely caused by the increasing power of America’s oligarchy. After all, it was superwealthy players, not the general public, who pushed for financial deregulation and thereby set the stage for the economic crisis of 2008-9, a crisis whose aftermath is the main reason for the current budget crunch. And now the political right is trying to exploit that very crisis, using it to remove one of the few remaining checks on oligarchic influence.

So will the attack on unions succeed? I don’t know. But anyone who cares about retaining government of the people by the people should hope that it doesn’t.

Source: http://www.nytimes.com/2011/02/21/opinion/21krugman.html