U.S. Recovery Might Need Public-Sector Unions: Tom Juravich

[Omaha Steve]

http://www.businessweek.com/news/2011-02-27/u-s-recovery-might-need-public-sector-unions-tom-juravich.html

February 27, 2011, 7:04 PM EST

By Tom Juravich

Feb. 28 (Bloomberg) -- Wisconsin Governor Scott Walker is wrong. The way to fix his state’s fiscal crisis isn’t by destroying public-sector unions and the half-century tradition of collective bargaining among teachers and state employees.

Walker argues that given the growing state deficit, there is no other choice than to slash the wages and benefits of public-sector workers whose compensation, he suggests, far exceeds that of workers in the private sector. He says he needs to gut collective bargaining because he and political leaders at the local level need flexibility to institute further cuts if necessary. Upon examination, his position is rooted more in the rhetoric of the Tea Party than in economic reality.

There is no evidence that public-sector workers in Wisconsin have higher total compensation than their counterparts in the private sector. It is true that a gross comparison shows many public-sector workers earn more, but they are significantly better-educated than most workers in the private sector. When one compares Wisconsin public-sector workers with their real counterparts, as the Economic Policy Institute has done, Wisconsin pays its public-sector workers 14.2 percent less than workers in the private sector.

Walker and other Republican leaders in the state have made a big deal of the “gold-plated pensions” of state workers, yet median state and local pensions in Wisconsin are less than $23,000. Fewer than 2 percent receive pensions of $100,000, the threshold bantered around in the press as commonplace. These pensions are most likely the managers and top administrators, as well as senior police and firefighters, who, coincidentally, are excluded from Walker’s draconian legislation.

Fiscal Responsibility

FULL story at link.

[applegrove]

1. Wow! Businessweek says this.