Does Flexibility Always Have To Mean Job Cuts?


Wisconsin is well known for its icy winters and the legendary feats of its NFL team, the Green Bay Packers. But in the past month, it has also rapidly become known for the machinations of its politicians — in particular for the controversial anti-union policies of its strongly conservative Republican governor, Scott Walker.

The Wisconsin story encapsulates the swirling economic and social cross-currents of US politics: the grassroots conservative activism of the Tea Party, disillusionment with the US political system, the consequences of the global financial crisis, the inexorable rise in the US deficit, the decline of the American labour movement, and the power of money in politics.

Walker was swept to the governor’s mansion in the election last November that installed Republicans — many of them with Tea Party leanings — in state houses and congressional seats across America. Like many of his colleagues, Walker campaigned as a fiscal conservative, promising to cut taxes and spending. And like many of his Republican colleagues, since winning office, Walker has been faced with the parlous financial situation of America’s states. And just like his colleague Chris Christie in New Jersey, Walker has responded by laying off state employees and attacking the public sector unions that represent them.

There is no doubt that American states are hard up for cash. Many states, like Illinois, were already victims of dysfunctional budget appropriation systems; in California the issue was citizen propositions that quarantined parts of the budget for particular causes. But even relatively well-run budgets, like Wisconsin’s have been hammered by the double whammy of falling taxes and rising unemployment benefits as a result of the global financial crisis. As a result, most states have imposed swingeing budget cuts, eliminating public sector jobs and further worsening the effects of the US recession.

The cuts being proposed by many states are far from cosmetic. In Texas, for example, legislators are debating a proposal to slash $9.8 billion from the education budget over the next two years. According to the Wall Street Journal, "funds for public schools would shrink 13.1 per cent". Florida’s Republican Governor Rick Scott has recommended a 9 per cent cut to schools.

On top of this, many state pension funds — the equivalent of Australian superannuation funds — are in deep trouble. Part of the problem is that many funds were never fully funded in the first place. In Illinois and New Jersey, far less money was contributed than necessary, even in good years. Some of these funds then suffered huge losses as a result of investments that soured in the global financial crisis. As a result, Republicans and some Democrats have been arguing that stiff cuts to employee benefits and wages are necessary to help pay for the shortfalls — even if, as Dean Baker at the Centre for Economic and Policy Research notes, the overall picture is sustainable.

Wisconsin has become a crucible for this discontent. A state proud of its German immigrant heritage, Wisconsin has always enjoyed relatively a vibrant progressive movement and strong labour unions — as Christopher Hitchens recently observed. Now public sector unions are under attack from a Governor who is intent on making Wisconsin’s relatively mild deficit issues a pretext for an all-out assault on the pay and conditions of teachers and other state workers.

Among the measures announced by Governor Walker in his "Budget Repair Bill" are big increases in mandatory contributions of state employees to their pensions and health insurance. Because the state currently pays for these, the changes amount to a significant cut in take-home pay.

Wisconsin’s unions and public sector workers have responded with a series of massive rallies against the cutbacks. For three weekends in a row, huge protest crowds of more than 70,000 have filled the state capital of Madison in peaceful demonstrations against the Budget Repair Bill and its associated layoffs and industrial relations measures. Meanwhile, Democratic state senators have engaged in an unusual form of filibuster: they have fled the state, removing the legislature’s quorum and preventing a vote on the bill for taking place.

The key animating issue remains Walker’s attempts to wind back the rights of unions to collectively bargain. Walker’s bill removes the rights of collective bargaining from most of Wisconsin’s 175,000 state employees. The Governor justifies it on the grounds that the state needs more "flexibility". For Australians who remember the WorkChoices debate, it will all be quite familiar. When it comes to wages and conditions for workers, "flexibility" always seems to mean "lower pay and worse conditions". Wisconsin is one of more than 10 states looking to wind back collective bargaining right and reduce union power.

New Matilda spoke to protest leader Thomas Bird in Madison today. Bird and a group of protestors were occupying the state capitol building for several weeks until they were forced to leave by Wisconsin police. "This whole time that we were in the Rotunda there were just giant rallies going on outside everyday," he said in a phone interview. "We got well over 100,000 people one day in a big snowstorm. Those rallies have largely been organised by the unions."

Bird has been astonished by the opinion polls showing support for collective bargaining and the public sector unions. "I never thought we would see public opinion polls swing in this direction in my lifetime. I’m only 22 and the whole time that I’ve been politically aware, we’ve had a very polarised political debate in our country. Governor Walker got elected actually with a surprising amount of union support, but he didn’t campaign — he didn’t say a word — on most of the provisions of this bill. He completely lost all of his union support and the public opinion polls are massively in our favour."

"I definitely see that on the ground, I’ve seen no more than 10 Governor Walker fans in the past two weeks. There’s lots of people carrying signs saying ‘I voted for Walker and I’m sorry’."

The public antipathy towards public sector workers and labour unions in the US is not just astroturfing, however. While recent polls find support for collective bargaining, they also show that many in the US think public sector workers are overpaid. For instance, in a recent New York Times/CBS poll that showed strong support for the right of collective bargaining, respondents were still evenly divided on the question of whether public sector workers were paid too much or too little; Republican voters were far more likely to line up against public sector workers and the rights of unions.

This polarisation is the result of some long-running trends in US politics. After a generation of increasingly free market industrial relations policies, the United States economy is largely un-unionised. Private sector unions are almost vestigial, and public sector unions are losing members and political support. The majority of Americans work in precarious private sector jobs and their wages have been stagnating for several decades.

There is also, of course, a political aspect to the hostility. Trade unions are among the most important source of political donations for the Democratic Party, and Republicans and conservatives have long seen attacks on unions as a handy tactic to weaken their opponents. Mother Jones’ Kevin Drum puts it well:

"Conservatives succeeded spectacularly over the past few decades in destroying private sector unions (and doing considerable damage to the Democratic Party in the process), and this means that most people no longer belong to a union or even know anyone who does. Unionism in general, then, simply has very little public support these days. With that as background, it’s pretty easy to understand how a recession would fuel growing taxpayer resentment toward public sector union benefits they’re paying for. The next few years are going to be rough ones for public sector workers."

And, as ever in politics, the power of money continues to exert a pernicious influence on Wisconsin. Two billionaire petroleum magnates, the Koch brothers of Koch Industries — known for their massive donations to conservative and free market causes, including climate sceptic groups — have reportedly contributed heavily to Walker’s campaign. In an embarrassing twist, a prank caller pretending to be David Koch recorded a 20-minute phone conversation with the Governor, in which Walker boasted of his anti-union strategy.

For now, the protests appear to be galvanising union support across the United States. Wisconsin protesters have been buoyed by solidarity messages from Egyptian protesters in Cairo, and some union leaders are publicly hoping that the protests will help renew America’s increasingly anaemic labour movement. However, given the electoral mathematics of US congress, in which Tea Party-aligned Republicans hold power in the House of Representatives, it seems likely that anti-union attacks from the right will increase in 2011 and 2012.

"It’s a little early to start declaring victory," Bird cautions. "It’s certainly true that in the past few decades public employee unions specifically and unions in general have been in decline, there’s been what I see as a concentrated attack on them by the Republicans. I definitely think that we’re going to see a turn-around in this. Teachers unions specifically have been really demonised in the public discourse in past years and this is really going to swing around for them."


Like this article? Register as a New Matilda user here. It’s free! We’ll send you a bi-weekly email keeping you up to date with new stories on the site.

Want more independent media? New Matilda stays online thanks to reader donations. To become a financial supporter, click here.

Ben Eltham is New Matilda's National Affairs Correspondent.