Just yesterday, Governor Scott Walker asserted that he would remain steadfast in pursuing his, by now, famous budget proposal, asking public sector workers to contribute to their generous health and pension benefits, and weakening collective bargaining rights at the state-level.

Opponents of the measure say that this is a battle against labor, ignoring what’s at the heart of the matter. Public-sector unions and state governors have conspired against taxpayers for too long, creating shortfalls in state budgets that are so large that taking up the battle to rein in state spending is no longer optional.


Who protects the rights of the private-sector workers that can only dream of the kind of generous benefits public sector workers receive? Collective bargaining rights in the public sector don’t work well because the negotiating parties sit on the same side of the table, dividing amongst themselves the economic pie created by productive private-sector businesses and workers.


Robert Barro discusses collective bargaining versus the right to work in the Wall Street Journal:



The current pushback against labor-union power stems from the collision between overly generous benefits for public employees- notably for pensions and health care-and the fiscal crises of state and local governments. Teachers and other public-employee unions went too far in convincing weak or complicit state and local governments to agree to obligations, particularly defined-benefit pension plans, that created excessive burdens on taxpayers.


In recognition of this fiscal reality, even the unions and their Democratic allies in Wisconsin have agreed to Gov. Scott Walker’s proposed cutbacks of benefits, as long as he drops the restrictions on collective bargaining. The problem is that this “compromise” leaves intact the structure of strong public-employee unions that helped to create the unsustainable fiscal situation; after all, the next governor may have less fiscal discipline. A long-run solution requires a change in structure, for example, by restricting collective bargaining for public employees and, to go further, by introducing a right-to-work law.


There is evidence that right-to-work laws-or, more broadly, the pro-business policies offered by right-to-work states-matter for economic growth. In research published in 2000, economist Thomas Holmes of the University of Minnesota compared counties close to the border between states with and without right-to-work laws (thereby holding constant an array of factors related to geography and climate). He found that the cumulative growth of employment in manufacturing (the traditional area of union strength prior to the rise of public-employee unions) in the right-to-work states was 26 percentage points greater than that in the non-right-to-work states.


The national fiscal crisis and recession that began in 2008 had many ill effects, including the ongoing crises of pension and health-care obligations in many states. But at least one positive consequence is that the required return to fiscal discipline has caused reexamination of the growth in economic and political power of public-employee unions. Hopefully, embattled politicians like Gov. Walker in Wisconsin will maintain their resolve and achieve a more sensible long-term structure for the taxpayers in their states.