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Posted at 3:15 PM ET, 02/22/2011

On Wisconsin, again

By Charles Lane

There's a lull in the action up in the Badger State, so let me turn to Ezra Klein's latest post, which disputes the notion that there is any distinction, from the public's point of view, between unionism in the public and private sectors. According to Ezra, "Unions are not just about challenging the 'might and greed' of private-sector CEOs," but about "correcting the tremendous power imbalance between those who can be fired for asking too many questions or demanding a different bargain and those who get to do the firing and would prefer a more submissive workforce and a status quo that they've created and defined."

Ezra argues that the economic distinction posited by public unions' critics is phony, too: Yes, the public must pay higher taxes when unions bargain for higher wages in the public sector, but consumers have to pay the higher costs of increased wages in the private sector, in the form of higher prices. Same difference.

This is unpersuasive on a couple of levels. I doubt that anyone who has seen "Waiting for Superman" would agree with Ezra that unions are helpless to "define the status quo," or that enforced employee submissiveness is a major problem in the public schools. Be that as it may, public-sector workers often enjoy civil service protections designed to prevent politicized firing and discipline of the kind that worries Ezra -- and where they don't, they should. Scott Walker actually proposed strengthening civil service coverage in his bill. Few critics of public-sector unionism object to civil service protections; I strongly favor them since my goal broadly is the progressive one of depoliticized government service-delivery.

If it's the muzzling of dissent that worries Ezra, I would have thought he'd spend some reflecting on the relationship between the unions' use of mandatory dues money for partisan purposes and freedom of conscience for individual union members. As we all know, public-sector unions use their clout to promote free and open discussion within the Democratic Party, especially on issues affecting their interests like education.

Ezra really goes wrong, though, on the pass-along to the public of union conquests at the bargaining table. Of course private employers can attempt to incorporate the cost of higher wages and benefits into the prices they charge. But they are constrained in doing so by competition in the marketplace. Anyone who doubts this need only ponder the differing fortunes of the United Auto Workers-organized Detroit automakers on the one hand, and the nonunion international automakers on the other. By contrast, public-sector services are generally monopolistic. When expensive union contracts drive up their cost, the consumer has no choice but to pay higher taxes.

It's true that voters can rebel against higher taxes and vote out the politicians who bargained the costly contracts -- but that is a lot harder to effectuate than the decision to switch from an expensive UAW-built car to a cheaper import or a Honda made in Alabama. Come to think of it, this is probably one of the reasons that the union share of the private-sector workforce is plummeting while the public-sector share is not.

Previously, Ezra touted a study by the Economic Policy Institute purporting to show that public-sector workers are actually undercompensated when compared to their private-sector counterparts, adjusted for a series of factors of which the most important is education. The supposed bottom line: "Adjusting for the slightly fewer hours worked per week on average, these public workers still face a compensation penalty of 5% for choosing to work in the public sector."

But this, too, is a highly dubious assertion -- and not just because the study in question emanates froma think tank whose board of directors includes the heads of the AFL-CIO, the state and local workers' union and a major teachers union.

What the study mainly illustrates is (a) the old adage about statistics and (b) that the comparison Ezra endorses is wildly skewed because a disproportionate number of public employees in Wisconsin are teachers, which is itself a byproduct of the government's near-monopoly on educational services.

Over to you,Don Schwab of Middleton, Wis.:

At first glance it seems reasonable to account for education in wage analysis. After all, we value education as a society and know that those with more education obtain higher wages then those with less. Nevertheless, there are several serious problems with [this] method. Most important, it compares apples with broccoli.

Over half of local public employees are teachers. They have a bachelor's degree at least and often have advanced degrees. In the private sector, alternatively, college graduates tend to work in occupations involving business -- marketing, finance, production and engineering. Those with advanced degrees in the private sector often obtain MBA degrees and hold high-level managerial positions.

In consequence, comparing public and private sector employees on years of education is really comparing employees in very different occupations.

To be even more precise, the study Ezra cites makes much of the fact that 59 percent of full-time Wisconsin state and local employees hold a bachelor's degree -- twice as many as in the private sector. But, according to the federal Bureau of Labor Statistics, roughly 45 percent of all state and local employees in Wisconsin work for K-12 education or the community colleges. The vast majority of those, of course, are teachers, and that would account for the vast majority of all those college-grad state employees.

A fairer comparison would be between teacher compensation in Wisconsin's public and private schools. Alas, I couldn't find one; but according to the National Institute for Education Statistics, in 2007-08, the average annual base salary of all regular full-time public school teachers ($49,600) was higher than the average annual base salary of regular full-time private school teachers ($36,300).

No doubt it's difficult to make a clear apples-to-apples comparison of public and private-sector compensation; as Ezra notes, the former is skewed in the direction of pensions and other forms of deferred compensation -- a consequence, in part, of union leaders' and politicians' mutual need to obscure the full costs of their agreements from the public. Then again, there are some jobs -- lawyer and doctor come to mind -- that are just totally different in the public and private sectors. You cannot have a private-sector assistant county prosecutor, or a public-sector cosmetic surgeon. Yet the EPI study attempts to compare them, finding, spuriously, that public sector J.D.'s and M.D.'s are getting the shaft as compared to private-sector ones.

Given all the uncertainties, I'll maintain my skepticism about the EPI study, and refer interested readers to a disinterested source: the federal Bureau of Labor Statistics. It reports a 44 percent total compensation advantage for state and local employees over private-sector employees.

By Charles Lane  | February 22, 2011; 3:15 PM ET
Categories:  Lane  | Tags:  Charles Lane  
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Comments

we voted in wisconsin, our votes were counted, but.....

obama, and jesse jackson, and a bunch of teachers who get a %7500 a year contribution to thier pensions, paid for by us taxpayers, are suddenly acting like coal miners and auto workers from the 30s...

washington knows best, aka Arizona, Wisconsin...

washington knows it spends $1.65 TRILLION DOLLARS THIS YEAR, we do not have, and
the media spin blinds them to the fact,
we pay...
we pay...

and baby, we vote...
we vote!!!

Posted by: simonsays1 | February 22, 2011 3:25 PM | Report abuse

But what does Gabrielle Giffords think about this?

I can't wait til this paper goes under.

Posted by: tjtucker | February 22, 2011 3:33 PM | Report abuse

Here's some fact's about Walker's past that Charles Lane omitted:
Before he was elected Governor last fall Walker served a Milwaukee County Executive. While in that position Walker attempted to fire union security guards and replace them with private contractors from a firm in the United Kingdom called G4S Wackenhut. The County Board then overrode Walker’s decision, but he went ahead with the move anyway under justification of a budget “emergency.”

Later, an independent arbitrator determined that no real “emergency” existed in the country, and ordered the reinstatement of the union security guards who were fired. In addition, as Maddow points out, the hiring of G4S Wackenhut turned out to save much less money than Walker had predicted. With the ordered reinstatement, Walker’s move will end up costing the county about half-a-million dollars. Finally, and perhaps most damning, Wackenhut was subsequently involved in a scandal involving raunchy pictures taken of some of their personnel hired by the State Department in Afghanistan. In Milwaukee County Wackenhut ended up hiring a man with a criminal record as the security chief in charge of the county courthouse.

Posted by: dhxx | February 22, 2011 3:35 PM | Report abuse

It's wake up time for public "service" unions.

Either get to work, or wear a pink slip.
Personally, you look pretty in pink.

Posted by: BluePelican | February 22, 2011 3:35 PM | Report abuse

Mr. Lane,

Quoting letters to the editor? That's pathetic.

Seriously, give up already. You're making a fool of yourself.

Posted by: tracymohr | February 22, 2011 3:36 PM | Report abuse

Here's some fact's about Walker's past that Charles Lane omitted:
Before he was elected Governor last fall Walker served a Milwaukee County Executive. While in that position Walker attempted to fire union security guards and replace them with private contractors from a firm in the United Kingdom called G4S Wackenhut. The County Board then overrode Walker’s decision, but he went ahead with the move anyway under justification of a budget “emergency.”

Later, an independent arbitrator determined that no real “emergency” existed in the country, and ordered the reinstatement of the union security guards who were fired. In addition, as Maddow points out, the hiring of G4S Wackenhut turned out to save much less money than Walker had predicted. With the ordered reinstatement, Walker’s move will end up costing the county about half-a-million dollars. Finally, and perhaps most damning, Wackenhut was subsequently involved in a scandal involving raunchy pictures taken of some of their personnel hired by the State Department in Afghanistan. In Milwaukee County Wackenhut ended up hiring a man with a criminal record as the security chief in charge of the county courthouse.

Posted by: dhxx | February 22, 2011 3:36 PM | Report abuse

To illustrate the nonsense that is written:

1. Firstly, obviously the WI governor is interested in busting the unions, not in cutting expenses, since the union has already agreed to the cuts the governor has proposed;

2. Lane says that "the average annual base salary of all regular full-time public school teachers ($49,600) was higher than the average annual base salary of regular full-time private school teachers ($36,300)". HORROR!!! My son has a learning deficiency, and private schools would not admit him. They are not equiped to and their teachers are not trained to handle that. So, Lane, you are comparing different abilities.

Posted by: AMviennaVA | February 22, 2011 3:40 PM | Report abuse

Let me get this straight. If Unions get a raise, taxes must go up, but on the national level we can spend a trillion dollars on Iraq and the tax levels go down. Do I have that right?

Posted by: donemoore | February 22, 2011 3:42 PM | Report abuse

IMPEACH WALKER and get rid of all lying, bigoted, racist rip-publicans. We don't need Palins or Becks to screw up America.
IMPEACH THE LYING WALKER.

Posted by: artistdavid | February 22, 2011 3:44 PM | Report abuse

Teachers understand that if they are making 50 or $60k per year (max, in many cases,) that is ONLY because of past collective bargaining. You can dispute whether you think that's too much, but there's no doubt that they have it because they organize.

If you have comparable education and training as that of a public school teacher, and if you have comparable working conditions with comparable responsibility, and you are making 50k per year, then you, too, should organize (as a member of a union or a group that works for fair taxation.) The country does have enough wealth if it is fairly distributed among those who work very hard.

Do not begrudge a basic, family-supporting wage to others simply because you are not as well off. That doesn't get you anything. Do not conflate the obscenely large pensions garnered by a few groups and individuals with the generally meager retirement of most public employees. I retired after 32 years in the classroom and my pension is $23,000 per year.

Not the lush life.

Posted by: MartinOne | February 22, 2011 4:31 PM | Report abuse

Charles Lane:

You write:

"By contrast [with private-sector unions], public-sector services are generally monopolistic. When expensive union contracts drive up their cost, the consumer has no choice but to pay higher taxes."

If we were to concede for the sake of argument that "public-sector services are generally monopolistic", you would have to concede that they are generally monopsonistic, i.e. the only buyer of public-sector labor, as well.

This means that, if your characterization of "the government's near-monopoly on educational services" is accurate, the teachers themselves can't just simply go get higher-paying, better-benefit jobs, if their bosses demote or mis-assign them. It's simply not a competitive marketplace for their labor.

In other words, in the absence of another buyer for their services, where are teachers in a non-unionized workforce going to work, should pay, benefits and conditions not adequately reflect, in an individual teacher's view, their merit? If an administrator gives preference to, say, that boss's cronies or relatives, what are the options in your described monopoly? Give up? Try another profession?

The reality is that, if there is not a competitive marketplace for teachers' labor, then their only recourse against the monopolistic power of state-appointed administrators to hire, fire and compensate according to rank favoritism is to organize. If one truly supports efforts toward a more meritocratic America, as us movement liberals do, then workers organizing against state bureaucrats' fiat should be completely uncontroversial, except, perhaps, to the less critically-thinking in theater audiences where mythologizing movies like "Waiting For Superman" constantly play.

The other side to the "consumers have nowhere else to go" public-sector monopoly coin is the fact that public-sector workers also have nowhere else to go.

Public services consumers and public-sector workers aren't even different different sides of the same coin, obviously, they're the same side of the same coin. Teachers have their garbage removed by the same sanitation workers as other public-services consumers.

It's interesting that you would fail to point this obvious fact out in a piece on the perils of monopoly, Charles Lane.

More interesting, though, is how dedicated you are to the narrative that consumers and other workers are somehow at odds with each other, as if their interests somehow diverged, as if the extremely wealthy will never pay more tax, and that the burden of public-services expenses will always fall primarily upon the middle class.

Is that just how you like it, Charles Lane, with ordinary people resentful and distrustful of each other, while Eisenhower-era tax rates that enabled building of the interstate highway system disappear ever-so-helpfully from public memory day by day, week by week, Washington Post column by Washington Post column?

Posted by: stuart_zechman | February 22, 2011 4:34 PM | Report abuse

Only 5 states do not have collective bargaining for educators and have
deemed it illegal. Those states and their ranking on ACT/SAT scores
are as follows:
South Carolina - 50th
North Carolina - 49th
Georgia - 48th
Texas - 47th
Virginia - 44th
If you are wondering, Wisconsin, with its collective bargaining for
teachers, is ranked 2nd in the country. Let's keep it that way.

Posted by: brianinfreedom | February 22, 2011 4:40 PM | Report abuse

donemoore @ February 22, 2011 3:42 PM wrote "Let me get this straight. If Unions get a raise, taxes must go up, but on the national level we can spend a trillion dollars on Iraq and the tax levels go down. Do I have that right?" ABSOLUTELY!

brianinfreedom @ February 22, 2011 4:40 PM: It's a race to the bottom. Like the 'dot-com' bust, the reasoning is that although we lose on every transaction, we will make it up in the volume. In other words, when we're ALL at SC levels, then SC will be #1!

Posted by: AMviennaVA | February 22, 2011 4:52 PM | Report abuse

The reason for discrepancies in pay and benefits between public and private sector employees is the ruthlessness of corporate union-busters who will hand out billions in cash to creeps like Walker to shaft their employees and drive down wages.

Posted by: dnahatch1 | February 22, 2011 4:58 PM | Report abuse

hopelessly cynical, donemoore.

I think a general strike (including unions in the private sector) might wake 'em up. It's coming.

Posted by: brianinfreedom | February 22, 2011 5:03 PM | Report abuse

@BluePelican

Your kids will look pretty - at home in their pink Pjs. Because they have no teachers. Because who wants to teach for little pay, no benefits, and the chance of being fired because your students can't perform, regardless of every action that you do?
Yea, didn't think so. How bout you come teach a classroom for a month. Might show you how much real work we do, and how much of each dollar we earn.

Posted by: Rufusgoofus | February 22, 2011 5:25 PM | Report abuse

Let me get this straight: You saw a movie, and on that basis you know that "enforced employee submissiveness" cannot be a problem in schools? Did you ever see what happens to a teacher who flunks the star quarterback in math? Have you ever heard of biology teachers being required to teach Creationism? Have you never heard a teacher complain of having to "teach to the test"?

Please spend less time going to the movies and more time reading newspapers and talking to people like teachers in your community.

PS: No, I am not a teacher, nor have I ever been one.

Posted by: JoyfulAlternative | February 22, 2011 5:44 PM | Report abuse

If it's really about saving the money and the budget, the unions have already given in. This is about extreme ideological hatred of Unions.

Corporations, big business and robber barons have never liked Unions. In the past, they owned the newspapers, they bought the Politicians and they would simply have the Governor send in the troops. Anyone remember the Union-busting massacres of the past?? Now that the SCOTUS allows unlimited Corporate purchases of politicians and RepubliCorp's Faux News is running their propaganda effort, watch out! What's next? Pinkerton Guards (Blackwater security?) sending in agent provocateurs?? Calling out the National Guard?

No Unions? No 40 day workweek, no child labor laws, no health benefits? Who are you going to trust, The Corporations and the Politicians that they buy and sell to the public?

Posted by: thebobbob | February 22, 2011 6:00 PM | Report abuse

Would someone please make sure that the Democratic legislators of Wisconsin and Indiana get several boxes of Pampers and Depends shipped to them in Illinois? Thanks!!

Posted by: Azarkhan | February 22, 2011 6:13 PM | Report abuse

The Republican's are well on their way to achieve theire agenda to totally wipe out the middle class. This is just the first step involving the erosion of workers rights, followed by shutting down health care, education, social services.
The main objective is nothing short of genocide and its in full swing.
The joke is actually on the Tea Party idiots who would follow just about anyone into hell just as long as they were bigioted or ignorant enough to carry the Beck Bible.
What they fail to understand is that eventually it will be their families, sisters, brothers, children, who will lose fundings for their teaching , fire fighters, social workers, health care workers,
and the millions of jobs that are being targeted to be eliminated in order to continue feeding the military machine and keeping their corporate bosses happy.
This new, totally blind of reason movement that they are so enthusiastic about will result in their own demise.
So enjoy the circus, because all they are doing is lighting the fuse to their own extinction.

Posted by: dylan915 | February 22, 2011 6:21 PM | Report abuse

Ezra's sources are dubious. If he really cared about reliable information, he would forget the studies and just cite what the brave Gabrielle Giffords would say if she could speak normally.

Posted by: fakedude2 | February 22, 2011 7:32 PM | Report abuse

Just so everyone knows, this statement is 100% false, "If it's the muzzling of dissent that worries Ezra, I would have thought he'd spend some reflecting on the relationship between the unions' use of mandatory dues money for partisan purposes and freedom of conscience for individual union members."

Any union member in the US can elect to pay only the share of dues that is required to directly pay for their representation, usually around 80% of full dues. This is commonly referred to as a Beck Objection.

Posted by: jimmoffet | February 22, 2011 7:53 PM | Report abuse

A point in missed in the discussions about pay variance between private and public sector jobs is the rather large factor of risk versus gain. The risk concerning security of income in a private sector job is much greater than that in a public sector job. The gain reflects quite the opposite. A person would be a fool to pass up a public sector job for one in the private sector today.

Posted by: kbp69 | February 22, 2011 8:01 PM | Report abuse

If the people of Wis. really think breaking this union is going to even begin to fix the state's problems, than they are most certainly a bunch of rubes being led by a Gaddafi hawker at the fair. I started in the Gary mills in 75, moved to Colorado, and was a foreman in two mines. so I've seen both sides, and I,m not as stupid as a lot of people in the cheesehead state.

Posted by: cmhorst | February 22, 2011 8:25 PM | Report abuse

@donemoore, totally brilliant. The brilliant part is that it doesn't matter what side of the debate your on, those two realities co-existing is ridiculous. If you want something, you have to pay for it.

The fact that just the supplemental budget (~165 billion) for the wars in Iraq and Afghanistan (which sits on top of the ~550 billion in the base defense budget), is more than enough to give every American their first $35,000 in income tax-free makes for some entertaining conversation about the role of middle-class taxes in our national budget.

The point i'd like to raise is that you get what you pay for... We pay the lowest taxes in the first world and we have health and education outcome that are in the bottom third (at best).

Teaching kids with disabilities is horrendously expensive and right now we are all sharing the burden. There has never, anywhere, been a successful private model for providing this service to everyone who needs it. It's not a luxury and it happens to folks across the economic spectrum. If each parent had to pay the real cost of educating their disabled child, most of those parents could not afford it. We pay for it collectively because this is a first-world country and as such, we make those kinds of sacrifices. I want to live in a first-world country and I'm willing to pay for it. If paying a few bucks for healthcare for someone who cant afford it means that I don't have to live in country with dysentary and cholera, that is worth it for me. If it's worth it to 50.1% of the population, then that's just the way it is. If you want an individualistic, free-market paradise where you don't have to pay taxes or abide by government regulations, move to Somalia, you'll love it, and leave everyone who believes in the common good here.

I'll take democracy (one man, one vote) before oligarchy (one dollar, one vote) any day of the week.

Posted by: jimmoffet | February 22, 2011 8:28 PM | Report abuse

Aren't you going to tell us what Gabby Giffords thinks about this?

Posted by: DougJ3 | February 22, 2011 10:43 PM | Report abuse

"Any union member in the US can elect to pay only the share of dues that is required to directly pay for their representation, usually around 80% of full dues."

Oh, I see. Only 80%. Well, then, that's no problem.

Posted by: tjk1 | February 23, 2011 12:58 AM | Report abuse

My dad told me about "Clearance Auto Insurance" or something which helped him to find a lower priced Auto insurance (with ALMOST similar coverage) he is recommending this to me. What do you think of them? BTW you can find more about them online.

Posted by: stellaveiga | February 23, 2011 3:08 AM | Report abuse

I do not know what your comment "mandatory use of dues money" refers to but I know for a fact that it is a VOLUNTARY deduction from wages for state public employees in Ohio and that goes to a PAC...Ohio is not Chicago! And to all you Fox News watchers....you are so misinformed with so called facts and figures..I've never seen so much propaganda to pad the RICH...

Posted by: readsalot1 | February 23, 2011 1:10 PM | Report abuse

Ezra and all the rest can give their opinion and add to the confusion of right and wrong in the public and private sector. A good example of the private sector would be the coal miner. They can tell you all about CEO greed and lust clear down to aimed thugs and murder.
Another good example of private sector greed would be the condition of the biggest industry in the world. That is the trucking industry. 90% of truck drivers have no chance at collective bargaining. The employee turnover is high and there's always an opening for any man or woman in need enough to forget about occupied time and pay. Then when they get it figured out that the companies are making all the money and their donating their life for less than minimum wage with no over time they move onto the next story which is no different than the one before. If we really want to straighten the mess out we'll cut trade and cheap labor imports. But you can forget your politicians ever bringing that up because that's where the mass profits are. All the politicians have to do is turn their heads and play dumb. The special interest packs their pockets with perks and secrets to riches and wealth. More typical of the republican party and the military industrial complex than anyone else in the government.

Posted by: kimkimminni1 | February 23, 2011 7:36 PM | Report abuse

Another idea would be to put tariffs on trade with other countries. Regulate the tariffs with the trade deficits. Since trade is the root of the problem and special interest is the main benefactors. The only thing thats holding this idea back is crooked politics and big oil who seem to be the only people that win ever time no matter what. Thats definitely corrupted when special interest can control the government and the economy with a natural resource and make mass wealth at the same time. How about 75% tax on every gallon?

Posted by: kimkimminni1 | February 23, 2011 7:47 PM | Report abuse

Mr Lane...don't tell me...you just had a twenty minute conversation with one of the Koch brothers...and you feel all inspired to help the poor fellow out...what with all his money problems and all...

Posted by: kmdyson | February 23, 2011 11:57 PM | Report abuse

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