On Wisconsin — The End of the Beginning

I think that Matthew Yglesias has the right reaction to the surprise move by the Wisconsin Senate to circumvent the need for a quorum and pass the anti-public-union bill:

Not to draw an equivalence between a bad bill and a good one, but what it reminds me of is congressional Democrats after Scott Brown’s election. The early CW was that somehow Democrats “had to” back down in the face of their unpopularity. But they didn’t have to do anything. They believed as strongly in universal health care as the Wisconsin GOP believes in crushing labor unions. So they passed the damn bill.

That was exactly the analogy that occurred to me. I refer to the passage of this bill as the end of the beginning — the opening salvo was to write the bill and find a way to pass it. The next phase is to see if it can withstand legal challenges and recall efforts to change the legislative balance. There will be some drama in that phase, but that’s not what really interests me. The real issue comes in the next phase, assuming the law survives. There will be two important questions:

First, what will the strike that follows the implementation of the law look like? Narrow or general? How much support will the public sector unions get from other unions and non-union workers? Will the disruptions to commerce be enough to get taxpayers and their representatives to fold? Now that’s drama.

Second, what will happen in specific cases of local public sector employers negotiating with a stronger position? Governor Walker defends his efforts partly as follows:

Local governments can’t pass budgets on a hope and a prayer. Beyond balancing budgets, our reforms give schools—as well as state and local governments—the tools to reward productive workers and improve their operations. Most crucially, our reforms confront the barriers of collective bargaining that currently block innovation and reform.

Suppose his intentions are borne out — teachers regarded as ineffective are not renewed, teachers regarded as effective are rewarded, or some combination of higher quality and lower cost emerges for people to see. I am a strong believer that in a well functioning market, workers are protected by their ability to take their talents to another employer (Free to Choose, Chapter 8). The key question will be whether the markets for public services at the local level function well enough for this to happen. For an economist, that’s even more dramatic.

About Andrew Samwick 89 Articles

Affiliation: Dartmouth College

Andrew Samwick is a professor of economics and Director of the Nelson A. Rockefeller Center at Dartmouth College in Hanover, New Hampshire.

He is most widely known for his work on the economics of retirement, and his scholarly work has covered a range of topics, including pensions, saving, taxation, portfolio choice, and executive compensation.

In July 2003, Samwick joined the staff of the President's Council of Economic Advisers, serving for a year as its chief economist and helping to direct the work of about 20 economists in support of the three Presidential appointees on the Council.

Visit: Andrew Samwick's Page

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