The Union's Real Problem

Anyone watching the news in the last few days has seen the sleep ins, protests, and general unrest in Madison, Wisconsin.

The cause of the consternation is the "budget fix bill" proposed by the Governor, Scott Walker, that would require union members to pay 5.8% towards their retirement, and 12% (up from 6) of the cost of their health care premiums.

It would also restrict collective bargaining to wage packages only, other currently bargained items would fall under the same state laws (some of the most restrictive in the country) that non-represented employees are covered under.

If you spend a little time reading the articles, and especially the comments, in places like the Milwaukee Journal-Sentinel you'll see many union members commenting that they'd be happy to bargain for those concessions, but not have them rammed down their throats.

I believe them, I think a good chunk would agree that they right now have a sweet deal that they can't justify to their friends in the private sector. At the same time, they don't want to lose their collective bargaining leverage on other issues, which I can't blame them for.

The problem is, it's not the rank and file pushing the issues, it's the union leadership, and frankly, they'd cave on the whole thing except for one small provision in the bill. That provision makes Wisconsin essentially a right to work state. It forbids the deduction of union dues from paychecks, and requires annual certification votes by members.

Once people start writing checks for due, it becomes personal. They start wondering what exactly they are getting for the money. When it happens unions generally fold, because workers doing their own cost-benefit analysis figure out they aren't getting much for that check.

They also don't like this because for years they failed to unionize many public employees. During the eight years of Jim Doyle's administration a number of laws were passed that took that choice from the workers, and put them in unions without a vote by anyone but a Democratic controlled state legislature.

How did they manage that? It was actually easy, just find a group of non-represented workers who work in an area with a union presence; the University system's admin and some support staff for example; and reclassify their positions into a group that's already represented. Voila! You suddenly have thousands of new dues paying members without needing a vote by the affected people.

So when you listen to the news reports about AWOL legislators, protesting teachers, and sick-outs, keep in mind that the rank and file union members probably aren't the biggest obstacle in Madison, the union leadership and their reduced funding is.

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Lessons from the States

Peter Suderman has a great article in the Wall St. Journal's opinions page about lessons we've learned from the states when it comes to health care reform and mandates.

The Lesson of State Health-Care Reforms points out some inconvenient truths; to borrow a phrase; about health care reform. Specifically, those things that we are being told from Washington will reduce our costs have done just the opposite in the states.

He points out numerous states, New York, Maine, Kentucky, Tennessee, Massachusetts, Vermont, and New Jersey that have tried things like community rating (rates based strictly on age, not risk) and guaranteed issuance (pre-existing conditions ignored) and mandated coverage. What they found is that each of them, in their own way, increased the cost of insurance, and didn't significantly decrease the number of uninsured.

Sounds counter intuitive that mandated coverage wouldn't decrease the number of uninsured, but, as Massachusetts has found out, if the penalty isn't big enough to be a problem, people will still ignore the mandate. They've also found out that with community rating and guaranteed issuance many people buy coverage when they find out they are sick, then drop it when the treatment ends.

Wisconsin was added to the list of failed state initiatives this week, when it's Badgercare Plus, for childless adults announced it couldn't afford to let anyone else into the program after this Friday. Like "Cash for Clunkers" it ran out of money long before anticipated, three months instead of a year.

While Wisconsin Governor Jim Doyle says that Badgercare Plus's problem shows we need national health reform, he doesn't mention that we should probably multiply the cost estimates by four to actually have enough money to pay for it. Then again, that's probably a wise thing to ignore. If folks were told we'd need 4 trillion over ten years, or even 3.4 trillion for the Senate package, everyone would be at the tea parties.

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