Wisconsin’s labor reforms reach three-year mark: Should Illinois have followed Walker’s lead?

February 13, 2014
By Paul Kersey

The Statehouse was packed.

Protestors crammed the building, chanting, pounding drums and marching around with signs. The historic Wisconsin state Capitol had become overrun with sleeping bags and activists. In some cases, lawmakers were harassed. Doctors diagnosed fake illnesses so protestors could be excused from work. The Senate Democratic caucus fled the state. Within days, this scene from February 2011 was national news.

The reason behind this uproar? The desire to protect powerful government worker unions from a reformed labor law proposed by Wisconsin Gov. Scott Walker.

Fortunately for Wisconsin, this movement failed. The reform bill, now known as Act 10, passed and has been in effect for three years. It has spurred a turnaround in Wisconsin.  Bargaining is now limited to wages, so unions can’t impose restrictive work rules or expensive benefits. Government workers have Right-to-Work protection, so they don’t have to pay dues to unions they don’t support. Unions need to be recertified every year, so union officials have to win worker support and keep it.

Before Act 10, union officials were taking advantage of the system and tying local governments and school systems up in knots. Bus drivers manipulated seniority and overtime rules to haul in $100,000 in annual wages. Teachers unions forced school districts into buying Cadillac health insurance from the union’s own insurer. Merit pay for teachers was unthinkable. Changes to government worker pensions were close to impossible. The state budget was in a $2 billion hole.

Act 10 changed all that. Work rules vanished, so local officials had the flexibility they needed for government programs to run smoothly. School districts could open up health insurance to competition, and some saw their health insurance bills cut in half. School districts are starting to experiment with merit pay plans. Milwaukee’s public school system saved $100 million by revamping its pensions. Wisconsin’s state budget went from a $2 billion deficit to a nearly $1 billion surplus.

And all this happened with hardly any public-sector employees losing their jobs.

Government union bosses were the only losers. Their membership – and their budgets – dropped by a quarter. And because they knew that they needed to convince workers to stay on board, and many of those workers disagreed with union politics, those unions cut back heavily on their lobbying efforts.

When the battle over Act 10 started, Walker laid out his thinking, which can be summarized this way: rather than raise taxes, lay off government workers, close down schools or cut government services – all the usual ways of dealing with holes in government budgets – he would balance budgets by shifting money and power from government union bosses who had done so much to create the mess in the first place.

And now Wisconsin is poised to offer its people $500 million a year in tax relief. It looks like Walker picked the right strategy.

Illinois is in a similar mess. The state’s pensions are underfunded by at least $100 billion. Powerful teacher unions can shut down schools to win pay hikes from nearly broke school districts. A temporary tax increase is liable to be made permanent – or worse, replaced with a progressive income tax that will chase more middle-class families and businesses out of our state.

Things can go on like this until state government breaks down under unsustainable debts. Or lawmakers could restore balance the way Wisconsin did, by taking money and power back from government union bosses and returning it to the people.

Challenging government unions was hard, but so far Wisconsin’s approach is working very well. Hopefully the story of Act 10 will encourage Illinoisans to take a long, hard look at government unions in the state.

TAGS: labor, unions