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Unions and State Budget Woes: A Reading List

February 26, 2011

Early Friday morning, the Wisconsin State Assembly passed Governor Scott Walker's budget bill, which calls, among other things, for eliminating the collective-bargaining rights of most public-sector workers in the state — a move Republican legislators argue is necessary to address the state's fiscal crisis and Democrats and their pro-union supporters decry as an attack on unions and the middle class. With most Democrats in the state senate opting to leave the state in order to deny senate Republicans the quorum needed to hold a vote on the bill, the stalemate in Wisconsin is likely to continue.

Meanwhile, Americans on both sides of the issue are holding rallies across the country to make their voices heard. What does recent public opinion research have to say about the perceptions of unions, private and public, in American life?

Labor Unions Seen as Good for Workers, Not U.S. Competitiveness, a new report from the Pew Research Center for the People & the Press, found that the overall favorability rating of unions declined from 58 percent in 2007 to 41 percent in 2010, although it has inched back up slightly, to 45 percent, in recent months. The report also found that college graduates, those with family incomes of $75,000 or more, and Republicans were more likely to view unions unfavorably. At the same time, the report found that the percentage of Americans with favorable views of business had declined, even among Republicans, and that Americans remained evenly split as to which side they favored in disputes between labor and government or labor and business.

What do Americans think about state budget deficits and the measures needed to address them? Facing Facts: Public Attitudes and Fiscal Realities in Five Stressed States, a 2010 report from the Pew Center on the States and the Public Policy Institute of California, looked at how residents in five states -- Arizona, California, Florida, Illinois, and New York -- viewed their states' budget woes, budget cuts, tax increases, and the prospect of more borrowing. Among other things, the report found that survey respondents were more likely to say that elected officials were wasting taxpayer money and that services were delivered inefficiently than to say that state governments were too big. The report also found that while taxpayers would prefer to see the wealthy, corporations, and smokers pay higher taxes, they'd be willing to see their own taxes go up to finance high-priority areas like public education.

The Pew Center on the States report The Trillion Dollar Gap: Underfunded State Retirement Systems and the Road to Reform ranks states according to their funding levels for pension, healthcare, and other benefits; unfunded liabilities; and contributions as of the end of fiscal year 2008. Interestingly, the State Fact Sheets give Wisconsin high marks for the way it has managed its long-term pension liabilities.

Public school teachers, a highly visible contingent among the pro-union protesters in Wisconsin, are the focus of Better Benefits: Reforming Teacher Pensions for a Changing Work Force, a report from the Education Sector. Funded by the Chicago-based Joyce Foundation, the report explains how defined-benefit pension plans create barriers to attracting, retaining, and assigning good teachers equitably. Proposed reforms outlined in the report include changing the benefit formula/structure, dialing down the political pressure on teachers' unions, and phasing in any changes mandated by new legislation.

Quiet No More: Philadelphia Confronts the Cost of Employee Benefits, a 2009 report from the Pew Charitable Trusts, compares the financial difficulties of Philadelphia's pension and healthcare benefits system with those of nine other cities. The report looks at some of the restructuring plans that have been put forward, including a proposal to impose a partial but permanent takeover of distressed systems across the state and freezing all benefits at current levels. In a similar vein, the Boston Foundation report The Utility of Trouble: Leveling the Playing Field: Giving Municipal Officials the Tools to Moderate Health Insurance Costs projects how much municipalities in eastern Massachusetts would save in employee health insurance costs by joining the state's Group Insurance Commission. Recommendations include aligning state and local health benefits and giving municipalities more authority to change plan designs.

What are your thoughts about collective bargaining for public unions and the role it plays, or doesn't, in state budget shortfalls? Will the push to limit such rights in Wisconsin, Indiana, and Ohio be adopted by other states? And how is this trend likely to affect the delivery of state and municipal services and the quality of public education? Feel free to share your thoughts in the comments section.

-- Kyoko Uchida

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