Posts tagged ‘collective bargaining’

The Wisconsin Debacle

Collective Bargaining? YES. Unlimited Benefits? Not likely.

The recent uproar in Wisconsin has demonstrated the kind of hyperbole that plagues the education debate. Public employees were stripped of their collective bargaining rights in a bizarre sequence of events led by the governor and ultra conservative legislators. The action, which targeted a seemingly conciliatory teachers’ union, attempted to set a precedent for legislative union busting. Fortunately, at least one judge has chosen to challenge the constitutionality of that action. However, the residue of the Wisconsin fiasco is a debate that failed to differentiate between the right to collective bargaining and the need for fiscal prudence in funding wages and benefits for employees.

Rising healthcare costs and under-funding of pension benefits for state and municipal employees will strain budgets in the best of times. Many factors have conspired to give us Social Insecurity where old-age benefits once seemed secure. Private companies have responded to similar constraints by asking their employees to share the burden of funding their health and retirement benefits, effectively choosing between wages and benefits in their total compensation. The collective bargaining process creates a structure that offers the benefit of a more democratic decision for employees along with the burden of proof and persuasion for the employer. This is not necessarily a problem.

 The governor and a significant percentage of the legislators in Wisconsin attempted a power play to avoid the bargaining process, citing the unions for an untenable position. This was not a valid argument. Further, the governor’s intent was clearly to abuse his new power in the immediate future – the kind of clear and present danger that has driven unionization of workforces historically.

While the fate of public employees in Wisconsin hangs in the balance, the rest of us may wish to consider more creative solutions to the finance issue. Regardless of the outcome in the courts on collective bargaining, the fiscal challenges will not go away. Among the issues to research are:

  • Salary structures that reward performance as well as tenure
  • Flexible compensation plans that allow choices between wages and benefits
  • Alternatives to union-managed defined benefit pension plans

 Finally, public employers are often the largest purchasers of healthcare benefits in any state. They need to continue to exert pressure as prudent buyers against price increases from healthcare providers. If the largest employers cannot influence prices, government institutions may wish to join their employees in a fight against a common foe, healthcare monopolies.


March 23, 2011 at 9:29 AM Leave a comment