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Special Report - Out of Touch with America: Are Unions Obsolete?

Chapter III:

Right to work vs. card check: Unions face challenges


Policy: Labor

Scott Walker: Wisconsin would be in deep trouble now if public employee collective bargaining reforms had not passed

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Opinion,Sean Higgins,Labor,Wisconsin,Campaigns,Scott Walker,Labor Series,Are Unions Obsolete,Meeting the challenge

Part of the Washington Examiner's weeklong commentary series on labor unions. To see the entire series, click here.

Newly elected Wisconsin Gov. Scott Walker boldly moved in early 2011 to reform his state's public-employee collective bargaining laws.

His actions sparked major protests, including the occupation of the State Capitol by liberal activists for weeks.

His reforms ultimately passed, and Wisconsin has gone from a $3.6 billion deficit to now being on track for a nearly $1 billion surplus. He also survived a union-organized recall effort in 2012, winning more votes than he got in 2010.

Out of Touch With America: Are Unions Obsolete?

A five-chapter special report by the Washington Examiner.

Chapter 1: Big Labor’s identity crisis
» Big Labor's identity crisis
» The decline of the labor union
» Diana Furchtgott-Roth: Public employees unions help boost state debt crisis
Chapter 2: Unions and the Democratic Party
» Democrats know better than to bite the Big Labor hand that feeds them
» Steven Malanga: When unions use non-member dues to finance political activities
Chapter 3: Right to work vs. Card Check: Unions face challenges
» Despite repeated failures, Card Check still top Big Labor priority
» Right-to- work surge is reviving America's Rust Belt
» Unions in right-to-work states make opting out nearly impossible
» Q&A: Wisconsin Gov. Scott Walker
» Q&A: Indiana Gov. Mike Pence
Chapter 4: Forced unionism: The SEIU and Illinois home health care workers
» Illinois politicians forced home care workers into union that donates heavily to them
» Forced unionization turned Illinois homemaker into Supreme Court plaintiff in Harris v. Quinn case
Chapter 5: Employee Rights Act defines efforts to reinvent the union
» Big Labor turns left even as workers, lawmakers form new union models for the future
» James Sherk: Want to help workers? Reinvent the union
» Richard Berman: Employee Rights Act would make unions accountable to members
» Q&A: Utah Sen. Orrin Hatch
» Q&A: Georgia Rep. Tom Price

In an interview with the Washington Examiner, Walker explains why the reforms were necessary and what other politicians can learn from his experience.

Examiner: One of the things that you say in your book, Unintimidated, is that the main inspiration for your reforms to the public sector union system in Wisconsin came from Indiana and what Gov. Mitch Daniels did there. What about his reforms appealed to you?

Walker: I was looking at two things: Indiana and my own personal experience. I’d been Milwaukee County executive for about eight years and just was so frustrated so often.

I tried what I thought were reasonable approaches to making changes in everything from pensions and health care contributions to 35-hour workweeks for just one week out of the month, and constantly got shut down by the unions. So I was trying to figure out some way around that.

When I looked at what Mitch Daniels did in Indiana, it was clear to me that he had changed collective bargaining. In his case, he did it just for state employees, which is originally what I was looking at.

When you see how he did it, what the impact was and what the process was — of course, when we looked at the size of our deficit, we realized it needed to be beyond just state employees, that those things were great, but it’d be much greater if we could apply it to local governments, and then in turn we could adjust it to reflect the savings that local governments would get. So that’s really how it kind of all transpired.

It was simple in Mitch Daniels’ case because [former Gov.] Evan Bayh had allowed collective bargaining by public employees through an executive order in the beginning of his term as governor.

Mitch Daniels was literally able to reverse it through an executive order, and so it happened overnight instead of going through the legislative process.

Examiner: Your initial plan, though, was to end collective bargaining with them completely. Is that still the best policy, in your opinion?

Walker: Well, I think it ended up working out just fine the way it did because effectively it does end collective bargaining.

You’ve got base wages left to negotiate over but, with the other provisions we put in, like requiring a majority vote of members for recertifying the bargaining union, not just those who would show up for the event for voting purposes.

We really found that there are so many of our public employees — good, decent public servants — who decided that if they could actually talk to their supervisors, they could talk to their principal, they could talk to people who were in their departments or agencies themselves and not have to worry about the union contract, and if they could get performance pay versus just everyone getting the same, and if the only thing left with being part of the collective bargaining unit, if the only thing they could argue for or advocate for was a base salary that would still be capped off by the Consumer Price Index, that [the rest] would kind of take care of itself.

For us, it ended up being just fine because they still had the element of collective bargaining left, but the real things that stood in the way -- things like work rules and being able to have mental health insurance and things of that nature -- those were the things that were just as costly, if not more so, than the lack of significant pension or health care contributions.

Examiner: Do you think, then, that it’s better to have narrowly defined public bargaining for government workers than none at all?

Walker: I think either way it works. What we have for all practical purposes almost completely wipes out collective bargaining. When you wipe it out entirely or you have it on a very narrowly defined basis, it has essentially the same impact.

The big impact is not just financial. The big impact is that we allow the people that are elected at the state and at the local level — the school board members, the city council members, the county board members and so forth — the people we duly elect at the local level and the state level now are the ones in charge.

That ultimately puts the taxpayers in charge. In the past, it was a handful of big-government union bosses that called the shots.

Now the taxpayers are in charge. I think that's important, not only when it comes to balancing budgets, but I think the bigger long-term benefit is for things like in our schools.

We can now in our schools across the state hire and fire based on merit and pay based on performance. That way you can actually put the best and the brightest in the classrooms. We can pay them to be there.

Examiner: What's the worst aspect of public sector unionism? Is it the fact that it subverts the ordinary democratic process?

Walker: Yes. I point out in my book that it is a vicious cycle. Taxpayers’ money goes to pay legitimate wages and benefits but on top of that, it goes to pay for union dues that are automatically deducted because of mandatory union dues under collective bargaining.

Then that money goes not only to pay for union activities, but for political activities. Those are largely focused on electing people who say they will do more to strengthen the unions and get more benefits, more pay, more employers — all regardless of whether it’s beneficial to the taxpayers or not.

Then the vicious cycle starts all over again. Nowhere in that equation does anybody stand up and advocate for the hardworking taxpayers. What we did was finally put the taxpayers back in charge.

Examiner: The exit polls show that in your recall election, you got 25 percent of the union vote. What do you attribute that to? To the type of things that you mentioned just now, or were there other factors?

Walker: Yes, I think it is fairness. Certainly for public sector employees it is fairness. I hear from a lot of teachers now in particular who say, “Thanks, we all knew there were one or two bad apples who were at the school, and they are gone now.” So, similar to that.

I also think part of it, too, is that if you're someone who works in a private sector union, you probably already are paying more than even what I asked for from public sector union members in terms of your retirement and your health care.

If you’re paying attention, you go, “Hey, wait a minute. I pay for my own pension. Not only am I paying for that, I’m paying for my health insurance. And these [public sector] guys are whining because they have to pay not even close to what I pay? Oh, by the way, I’m also a taxpayer who’s paying their wages on top of that.”

I think a lot of those private sector union members say, “That’s crazy. That’s not fair.” It goes back to my argument that we should win the fairness argument.

Examiner: Since your reforms passed, public sector union membership has plunged in the state. Is this a better situation? Are the civil service protections enough for those workers?

Walker: Oh, totally. We still have some of the strongest civil service protection in the country. Again, we’re protecting people based on merit and performance, not based on some union contract, which I think arbitrarily protected those who were underperforming.

Examiner: The changes were political hardball, though. It was pretty obvious that they would cause the unions to lose some of their membership when they passed. What do you say to your critics who argue that that was your real motivation?

Walker: One of the few unions that endorsed me was not a public sector one, but the operating engineers, a union that I would argue is in that category I mentioned before. They provide real value to the members.

They provide professional training. They do it in conjunction with the transportation and construction companies in the state that their members work for. Their president went out on a limb and endorsed me. They stayed with me in 2012.

Their union just had a [leadership] election a year ago, and their president for the first time in union history got re-elected without opposition.

The reason I tell you this is that I think if the union provides value to its members, then there’s no reason why they should lose members.

But if the reason that they have numbers is because the government forcibly requires people to be a member, then the union takes it for granted and they don’t provide that value to members.

In the future, I think public sector unions could still be around if they acted more like a professional agent who provided value.

For us, the reason I did what I did had nothing to do with the political implications, it had everything to do with my having been Milwaukee County executive for eight years and knowing the only way I could make the changes we had to make in our budget to avoid the horrific other choices -- which would have been massive layoffs, massive cuts in Medicaid or massive tax increases, or probably a little bit of all of them -- was to make changes in the way we provided aid to local governments.

And the only way to avoid massive problems for schools and local governments was if we changed collective bargaining.

Along the way of doing that, we thought a fair tradeoff to the 300,000 or so public servants in our state was to get public employees to pay a little bit more toward their pension and a little bit more for health care, though arguably less than most people do.

In return, at least we should give them the freedom to choose whether or not they want to be in a union.

Examiner: So you would still counsel other elected leaders — mayors, governors — to follow your example?

Walker: Absolutely. I just think, long-term -- much like you can't deal with the federal issues unless you do something reform-minded with entitlements and the only way long-term you can do that is to tackle the debt and deficit problem -- there's no other way that in our states and even in our cities, at least the large urban cities, that you can really tackle the long-term challenges. Not only fiscal, but otherwise.

Remember, a lot of the challenges to governing more efficiently are driven by the problems of collective bargaining contracts.

The only way to change that for states and cities — long-term in particular — is to put the control back in the hands of the taxpayers.

Examiner: We would be remiss if we didn't ask if you are running for president in 2016.

Walker: [Laughter] You would be, and you're not going to be surprised that I'm not going to give you an answer.

I'd point out that any Republican who is talking about anything other than 2014 is doing a disservice not only to the party but to the country.

We’ve shown in our book that in Wisconsin, but also in other battleground states, that the key to successful reform is not just a new chief executive.

It's putting a team in place in places like Wisconsin, Michigan and Ohio, and that those teams get real things done.

It's important for us to not look past 2014. We need a team in place in the Senate and a team in place in the House. And then, after we get that, then we can talk about what comes next.

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