The ideal espoused by President Kennedy, "Ask not what your country can do for you, ask what you can do for your country," no longer exists today. Wisconsin, Ohio, and other state employees refuse to see the real issue, getting states back on the right financial track without people losing their jobs. There are approximately forty-four states with a budget shortfall due in large part to unfavorable state union contracts. In Wisconsin Governor Scott Walker introduced a bill that would reduce the state's contributions to pensions from 10% of salaries to 4.4% and raise the state employee's contribution for a standard health insurance plan from 6% to 12.6%.
By removing the ability to collectively bargain pension and health benefits, Governor Walker could save approximately 6000 jobs. State employees are taking no responsibility for the build-up of the debt and have claimed that the debt was created by Republicans who decreased taxes on business and the rich, causing a reduction in state revenue.
Tom Campbell, who ran for Governor in California, served on the Governor's Board of Economic Advisors, and was the Director of California's Department of Finance, compared Wisconsin's $3.6 billion debt to California's $23 billion debt. He commented that "a lot of Democratic legislators believe that business would not be driven out by any tax or regulation. Look at California, which has the highest state income tax, the highest sales tax, and the highest business tax. I am for what Governor Walker is doing, making a better business environment while controlling the rate of growth of entitlements. The state employee entitlements are a substantial part of the growth of the budget deficit. It sounds right to me."
Because states do not have the same option that the private sector does, the ability to declare bankruptcy, negotiated union contracts cannot be declared void. Instead, the option taken by many Midwest Governors is attempting to change the law. Any contract would become null and void because the law changed. It is definitely not fair to Wisconsin residents to have obligations that last over a person's lifetime. Future generations should not have to be burdened by what is essentially a lifetime collective bargaining agreement.
The new Wisconsin benefit proposals are more generous than what many private sector firms offer. For example, Google will match the employee contribution to a limit of $8200. Of Fortune's "100 Best Companies to Work For" only fourteen provide 100% health care. Even the LA Unified Teachers contribute 9% of their salaries toward healthcare and 8% toward their retirement. Wisconsin state employees need to look around and be grateful that the Governor's proposals are fair and modest, and the labor unions should realize that a bankrupt employer is no good for anyone.
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