A faux war in Wisconsin

This is not a return of class war to America. It’s a clash between nervous-nellie Republicans and trade unions that can only play the victim card.

Sean Collins
US correspondent

Topics USA

The eyes of America have been fixed on the state of Wisconsin, where a two-week standoff between the Republicans and public sector unions has led to big protests on the streets of the capital, Madison. Talk of the Middle East arriving in the Midwest is far-fetched, but gatherings of up to 70,000 in Wisconsin – and in other cities in solidarity – are striking in a country in which large political demonstrations had become rare.

The protests have been sparked by Republican governor Scott Walker’s proposal to reduce 170,000 public workers’ take-home pay (by means of requiring higher contributions to pensions and healthcare), remove meaningful collective bargaining rights, require annual certification of unions, and eliminate state collection of union dues. Democrats in the Wisconsin legislature fled the state to prevent a quorum necessary to pass the bill, which has given time for protests and debate to occur.

The events in Wisconsin have taken on national importance. The move is seen as part of a broader Republican campaign to rein in spending to address deficits, and in particular to target the public sector unions. Many have viewed this as a harbinger for similar struggles across the nation. Walker himself has said that he sees the showdown as akin to Ronald Reagan’s smashing of air traffic controllers’ union PATCO in the early 1980s, paving the way for union-busting in the private sector in the decades that followed.

Governor Walker’s move is an attack on workers’ living standards and their ability to have a union represent them in a significant way. The Republican arguments to justify this attack are bogus.

An austerity package born of fear

Nationally, the Republicans argue that dealing with deficits, at both the federal and state level, is the number one issue facing the country. Congressional representatives to state governors congratulate themselves for ‘daring to speak the truth’, as House majority leader John Boehner puts it. In fact, the whole approach is fear-laden, not courageous, as they warn in overblown terms of the disastrous consequences that will follow if austerity measures are not introduced immediately. It’s noticeable how the fear-mongering Republicans have virtually nothing to say about economic growth and jobs – except the implicit assumption that restoring balanced budgets will (somehow) improve conditions for recovery.

Walker claims his bill will put the state’s fiscal house in order and prevent job losses. Wisconsin faces a $3.6 billion budget shortfall over the next two years. That sounds like a lot in absolute terms, but the state has overcome a larger deficit in the recent past. In particular, the main reason for the shortfall was the recession, which led to plummeting revenues and greater demands on relief services. It follows that if a lack of economic growth caused the deficit, then restoring growth would address it. But this is beyond the imaginations of austerity-obsessed officials.

It’s not that deficits don’t matter, as there are indeed limits to state spending. However neither Wisconsin nor the federal government are near those limits. Instead, deficits have come to symbolise a broader lack of confidence in the future and a deep pessimism about the capacity to restore prosperity.

Moreover, to the extent that the state coffers are in deficit today, the pay and benefits of public sector employees are not to blame – the biggest contributing factor has been the effects of the recession. And in Wisconsin, Walker himself has added to the deficit by cutting taxes on corporations, alongside other measures.

In particular, Republicans argue that overly generous public sector pensions are the major fiscal problem facing states like Wisconsin over the medium to longer term. They claim that states can no longer meet these pension promises. But this situation is due to the decline in the value of investments following the financial crisis, rising healthcare costs, and wishful thinking on the part of government officials at the time they agreed these deals.

Again, not the unions’ problem. State managers agreed to those deals. It is interesting to see how those who normally talk about the sanctity of contracts are willing to tear them up so readily. If unions at that time had known that the commitment wasn’t worth the paper it was written on, they probably wouldn’t have agreed to the deals, which often included trade-offs that limited salaries.

More generally, Republicans argue that public sector workers are paid more than their counterparts in the private sector, and that this, in itself, creates the need for cutbacks. On the face of it, this idea seems ludicrous – whoever said they were going to join the public sector to get rich? It’s the other way around. And analysis from the Economic Policy Institute (EPI) backs up that impression. The EPI shows that, when adjusted for comparable education levels, total remuneration (including pensions) in the public sector is lower than in private industry.

But whether pay for workers in the public sector is higher or lower is really not the point. Even if public employees did earn more in total, that wouldn’t be an argument for cutting back – it would be an argument to improve private sector pay (which, as it happens, has been stagnating for decades). The Republicans think they score a populist point here: they believe that private sector workers will look at public ones and say ‘no fair, your pensions should be as poor as ours’. When liberals use such arguments to demand reductions in executives’ or bankers’ pay, conservatives call that ‘the politics of envy’. Now Republicans are relying on that same envy argument in the hope that they garner some support from at least a section of the working class.

Walker’s proposals are really the pursuit of a political agenda. They are not simply about fiscal responsibility – deficits can be dealt with by other methods, including tax increases – but about who will pay for austerity. The fact that Walker’s bill exempts police and fire-fighters, who are more likely to vote Republican, shows how cynical it is. Taking away collective bargaining rights and prohibiting dues collection is an attempt to curb the unions’ role. And since unions both fund and mobilise behind the Democratic Party, the move has obvious party-political ramifications.

Clearly, there is an opportunist element at play. Republicans genuinely believe the country faces a fiscal crisis, but they are using that as an excuse to undermine unions in the public sector – something that would have a limited impact in the next year or two, but might provide a longer-term advantage in clearing away opposition.

All this said, it would be wrong to see the latest Republican attacks and the protests in response as a return to traditional class warfare. One of main reasons is that a war needs two sides, and, unfortunately, there really isn’t one lining up to fight back in earnest. Despite impressive numbers of people protesting in Madison, the unions remain isolated and on the defensive.

The defeatism of the unions

Public sector unions are the last bastion of unionisation in America. Private sector unions represent a mere seven per cent of workers whereas public sector unions represent 36 per cent of workers. This isolation deprives the public sector unions of tangible support from other organised workers. Low union membership nationally gives some Republicans the idea that they can take on and win against this holdout section.

Public unions have also faced a hostile environment for decades. States like Indiana and Virginia already outlaw collective bargaining in the public sector. This is not the first year that there have been demands to hold down pay. And arguably an even bigger issue is demoralisation. Since the Reagan era, neither party has had good words to say about public sector workers: they just appear as a cost that needs to be reduced, and consequently any higher purpose about their role in society has been stripped away.

But it is also the case that unions have not helped their cause by being so defeatist. Clearly, the deals they made in exchange for improved pensions are proving to be bad ones. And in recent years, unions across the public sphere have accepted further cuts in pay and benefits.

In fact, what’s striking about the Wisconsin situation is that the unions have already conceded to Walker’s key demand to reduce their take-home pay via increasing their payments for pensions and healthcare. Unions are too willing to play the victim card: look at us, they say, we’re willing to give up our pay, just please let us exist. But just as the best defence is a good offence, the unions’ lack of offence is proving to be no real defence.

Consequently, the unions have narrowed the focus to the issue of collective bargaining and dues collection. They are not up in arms because their members’ benefits are being reduced, but because they fear losing their role. Yet not fighting the key provision raises the question of what the union exists for. As it happens, no truly independent union should rely on the state for collecting its dues. The public sector unions are clearly afraid that without automatic dues collection they will stand exposed as the empty shells of bureaucracy that they are.

There is no doubt that making the issue into one of collective bargaining rights in Wisconsin has enabled unions and the Democrats to label Walker as an extreme union-basher, therefore winning support from those who believe that is a step too far. Yet as it happens, many states are not taking the anti-union measures Walker has, but are nonetheless introducing severe cuts. The list includes New York and California, which are led by Democratic Party governors. Opposing austerity generally would provide a potentially broader basis of support, as many more workers nationally are affected, but that would also mean challenging the unions’ allies in the Democratic Party. Indeed, it can be argued that, if not for support from their Democratic friends, the public sector unions would have gone the way of private sector ones long ago.

There is another sense in which this is not an old-school class conflict: on a national level, the Republicans are not as determined to see through the attacks on public sector unions as it appears. The unions themselves make Republicans seem tough, referring to them all the time as ‘bullies’ (and portraying themselves as meek victims of this bullying). But in fact, as already mentioned, the Republicans’ campaign is grounded in fear rather than confidence – fear of bankrupt state government and, more broadly, fear of the future.

Moreover, many Republicans have expressed serious concerns about Walker’s approach in Wisconsin, and are reversing their plans to take similar steps. In Ohio, Republican state senators have backtracked and are now softening a bill that would have banned all collective bargaining by state workers. And in Michigan and Florida, Republican governors have said they will negotiate with public employees rather than start a fight.

On the face of it, now would seem a favorable time for Republicans to take on the unions. As Matt Bai writes in the New York Times magazine, in a profile of another anti-union governor, Chris Christie of New Jersey: ‘Not only are public employees’ contracts no longer untouchable for any politician who wants to stay in office, but it turns out the opposite is true: taking the fight to unions is a good way to bolster your credentials as a gutsy reformer with voters who have been losing faith for years in public schools and government bureaucracies.’ And some Republicans have been hyping a ‘new populism’ that assumes the masses are in lockstep with the Tea Party. But it turns out that many Republican politicians have got cold feet: they’ve read the USA Today/Gallup poll which shows that Americans oppose the Wisconsin law by a nearly two-to-one margin, and don’t want to risk unpopularity. In the past, a ruthless offensive to defeat a class enemy would not have been held back by opinion polls and short-term electoral considerations.

The battle in Wisconsin is a kind of faux war. On one side, there are the nervous-nellie Republicans, fretting over deficits and desperately wanting to be popular. On the other side, there are the unions and their Democratic allies, playing the victim and frantically clinging on to existence as an institution.

Of course, the Wisconsin Republicans’ attacks have serious implications for people’s jobs and living standards. Public sector unions have shortcomings, but they should be addressed by their members, not smashed by governors. For these reasons, the bill should be strongly opposed. But if the opposition is to become more than a stage army for union bureaucrats seeking to survive, there needs to be clarity about what’s at stake. In particular, we need to stand up for unlimited economic growth and stop apologising for wanting better pay and benefits – something neither side in this faux war is willing to do.

Sean Collins is a writer based in New York. Visit his blog, The American Situation, here.

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Topics USA


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