These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission:
Wisconsin’s new law curbing public employee unions ends the first skirmish to restore integrity to public-sector collective bargaining and sanity to states’ finances. But even if other states adopt similar laws, it won’t provide a politically stable model for public-sector collective bargaining.
Governors and state legislatures are grappling with chronic budget deficits caused in some measure by union contracts guaranteeing excessive retirement and health-care benefits.
Wisconsin Governor Scott Walker, facing a $3.6 billion shortfall, pushed through legislation requiring most state workers to kick in 5.8% of wages for pensions, and pay 12.6% of the cost of health insurance. Compared to private-sector workers, those are great terms.
The rub: the new law limits collective bargaining to wages, prohibits bargaining on pensions and health insurance, limits the collection of dues through paychecks, and requires unions to submit to annual recertification elections. Other states are considering similar laws, because governors increasingly recognize union political activities subvert the balance in labor-management relations necessary to ensure sustainable wage and benefit structures and sanity in state finances.