There will be a lot written and said about this in the coming days, The TerryReport wants to address the larger issue: why is this attack on unions coming now?
The most important reason that has barely been discussed in major national media is this: with the housing bubble collapse of 2008, many public employee pension funds lost billions of dollars that had been invested in mortgage securities and in the stock market. Those losses continue to build as foreclosures move forward around the nation. As a result, the pension funds appear to be a major source of problems for state governments, when, in fact, the problem originated with the Wall Street schemes of pushing bad loans and then calling them triple A, investment grade securities.
By attacking state employees as “villains” who are taking too much of the tax payer’s money, Republican governor’s are shifting the blame from Wall Street to state workers and their unions. These workers, especially those already collecting pensions or who are about to, are being forced to take the losses for Wall Streets misdeeds between 2000 and 2008. What a deal. Make the employees into the bad guys instead of the wheeler dealers who took home billions of dollars in bonuses creating various fraudulent financial schemes that nearly took down the entire world financial system.
In other words, focusing on unions is a trick and a pretty dirty one at that. This does not mean that some state employees are not getting excessive pensions or that everything the unions have done is necessarily wonderful. It does, however, put matters in a somewhat different perspective. Had Wall Street not collapsed, the problems with “unfunded pension obligations” would be comparatively milder. (The whole issue of what a reasonable pension should be is something that should be addressed calmly and outside of a crisis atmosphere brought on by declining state revenues, something also brought on, by the way, by the banking/Wall Street meltdown.)
Here are some other reasons that Republicans are hitting against unions right now:
1. The recession means people are worried about keeping any job, so when employees are feeling weaker, it is a good time to hit them while they are down.
2. Likewise, the recession causes resentment among the unemployed and those who don’t make nearly as much as state employers. It is the old divide and conquer strategy and it is being applied right now to drive a wedge between private and public employees.
3. The excuse of the budget problems of state and local governments makes it appear that it isn’t just aimed at unions, as it would any other time.
4. The Tea Pot groups pushed new and fairly extreme politicians into office who otherwise would not have come into power. Governors like Walker in Wisconsin are by far the exception in recent American history, because most politicians would not want to take on workers and their supporters in such a direct, confrontational way. How this ultimately plays out will not be known until the next election cycle (unless recall succeeds). We also don’t know how much influence in this process is being felt from the wealthy donors behind the Tea Pot groups.
Without bargaining power, there is no real reason to have a union. Certainly, union members would be very reluctant to give money to a union that really has no power to do anything for them. Additionally, wages generally will go down without the effect of union wages pushing higher. Walker indirectly acknowledged this in his statement after the vote in the Wisconsin State Senate when he said that 250,000 new jobs would be created in Wisconsin. How? By lowering wages and benefits to offer a worse deal to more workers, obviously.
Walker thinks the private sector will be energized by the chance to pay lower wages and offer fewer benefits and thus create new jobs. Of course, we are unlikely to know if there is any truth in the governor’s statement before the end of his four years in office. The truth, if it is there, can not be demonstrated. It is merely an assertion of his opinion, an opinion apparently informed by right wing think tanks that continually come up with new explanations of why workers should not be paid decent wages or accorded rights on the job.
Doug Terry, 3.10.11