Ohio and Wisconsin, two heavily unionized states awash in red ink, are about to make some major changes to the laws that govern public employees. The legislatures in both states are considing measures that would significantly change collective bargaining rights for state workers in an effort to find budget savings.
Public employee unions have successfully used collective bargaining to obtain higher wages, guarantee jobs, and more generous benefits, including for healthcare and pensions, for their members. However, some feel that collective bargaining has been abused, extracts high costs on the state and taxpayers, and is increasingly irrelevant given other laws that govern the workplace. In Ohio, for example, a report by the Buckeye Institute shows that state employees earn more than private sector employees in 85 of the state's 88 counties. In fact, public employees unions have used collective bargaining to guarantee wage increases for government workers even as the private sector lost jobs. Since 2000, Ohio has lost 612,700 private sector jobs, but the state lost a net of only 1,600 government jobs.
Today and Thursday, the Ohio Senate is hearing testimony on Senate Bill 5, authored by Senator Jones, which would eliminate collective bargaining for state workers in Ohio. In Wisconsin, Governor Scott Walker is proposing in his budget to limit collective bargaining for state workers (except police and firefighters) to the issue of wages. Additionally, Walker is proposing to require “government workers to contribute 5.8 percent of their pay to their pensions, much more than now; and requiring state employees to pay at least 12.6 percent of health care premiums (most pay about 6 percent now).”
Walker says he is doing this because the state is broke and it’s time to pay up. This year, Wisconsin faces a budget gap of $137 million and a deficit worth several billion dollars over the next few years. If Walker can’t save money through reducing the cost of government employees, he fears he may have to lay off about 6,000 state workers or eliminate Medicaid altogether.
With states like Ohio and Wisconsin facing serious fiscal challenges in the months ahead, it doesn't make much sense to continue to keep the hands of governors and legislatures tied when they negotiate with government workers. Failing to change collective bargaining laws could leave the states forced to make extremely painful choices that no one wants to contemplate.