By Steven Greenhut | Franklin Center for Government and Public Integrity
Union activists are portraying Tuesday’s recall election of Wisconsin Gov. Scott Walker as an epic struggle between downtrodden Wisconsinites and callous Republicans who want deny basic subsistence to working people.
A new research report confirms that the state’s vote splits between the haves and have-nots, but the results should be an embarrassment to these Samuel Gompers wannabes. The haves are Wisconsin’s government employees, who even after Walker’s Act 10 reforms, receive compensation packages that soar above those earned by the state’s private-sector employees.
Two noted researchers, Andrew Biggs of the American Enterprise Institute and Jason Richwine of the Heritage Foundation, revealed the following data:
“After Act 10, Wisconsin state workers receive health benefits nearly twice as valuable and pension benefits more than 4.5 times as valuable as what workers in large private firms receive. Before Act 10, Wisconsin state employees received total compensation (salary and benefits) about 29 percent higher than comparable private sector workers. After Act 10, the compensation premium is about 22 percent. In dollar terms, the average Wisconsin state worker after Act 10 receives total compensation including benefits equal to $81,637 versus $67,068 for a similarly-skilled private worker, a difference of $14,569.”
Act 10 reforms hiked contributions that public employees must make to their pension and health plans, put limits on collective bargaining and reduced unions’ ability to deduct members’ dues from their paychecks. These are basic, but not particularly radical reforms, that politicians in myriad states have proposed as a means to cut back on the unsustainable growth in public-employee compensation. Some of the reforms target the costs in particular and others target the union power that has achieved the skyrocketing benefit levels.
The above-mentioned report makes clear why the unions are agitated – they lose a slight portion of their benefits and some of their political power, but it’s hard to understand why anyone outside of that relatively small group of elite workers would be ready to take to the streets and decry a supposed assault on the working classes.
As Biggs and Richwine add, “The implication is that Act 10 is far from a radical or sweeping reform. Its direct reductions to public sector compensation still preserve a substantial premium for public workers, and its limitations on the political power of unions could reflect a reasonable desire to restrict the growth of compensation in the future. Act 10’s reforms fail to restore pay parity between the public and private sectors in Wisconsin.”
Instead of decrying the reforms, perhaps critics should be asking why Walker didn’t push harder for even deeper cuts in compensation packages received by Wisconsin’s very own 1 Percenters, its state workers.
According to the report, public and private workers in the state receive roughly comparable wages when adjusted for education, but that the extreme differences come in the benefit packages public workers receive. To pick nits, I take issue with comparisons between categories of workers based on education levels. The public sector rewards employees not on their productivity or value to the operation, but on easily identifiable standards such as educational attainment, which ends up over-rewarding people for getting degrees they don’t need and often don’t contribute to the job at hand. But there’s no debate on the relative size of the non-salary compensation, and the numbers don’t even reflect their additional days off, shorter work weeks and extreme job security.
It’s becoming clear that Walker’s modest reforms are paying off for public employees and private employees alike. The Milwaukee Journal-Sentinel has a liberal editorial page, yet its editorial supporting Walker in the recall made the following points:
“To his credit, Walker has helped to right the state’s finances with a minimum of gimmicks – the governor reported recently that the state may be able to book a $154 million surplus next year. … And while we think Act 10 – the law that clipped the wings of most public-employee unions in the state – was an overreach of political power, we understand and supported the need to rein in the state’s labor costs. Municipalities and school districts as well as the state needed more control over their budgets, which Act 10 provided.”
Another report, by the Beacon Hill Institute, found that the collective bargaining reform alone saved Wisconsin taxpayers more than $1 billion. These are significant savings that will help bolster public services.
No wonder Republican politicians from around the country are flocking to Wisconsin to help support Walker, who in essence is really supporting them. These GOP officials suspect the polls showing a 5 point to 10 point lead by Walker are going to hold up through election day and want to bask in that glow. Meanwhile, Democratic leaders, with the exception of a few has-beens, are avoiding the state like the plague.
The evidence is in: Public sector workers in Wisconsin – who, as Biggs told me, are not nearly as aggressively compensated as those in states such as California and Illinois – receive compensation packages that are not only crunching the state’s budget, but far outpace those received by most others. Even after Act 10, they still maintain a huge lead, so it’s only fair that Walker be given the chance to continue his reforms on behalf of all Wisconsinites.
Steven Greenhut is vice president of journalism for the Franklin Center for Government and Public Integrity. He is based in Sacramento. Write to him at firstname.lastname@example.org.