Wisconsin: Ground zero in battle over clout of labor unions in US

At stake in the fight between unions and Wisconsin Governor Scott Walker is the perception of public-sector unions and how much clout they'll retain in an era of tight budgets for state and local government.

A pitched political battle in Wisconsin, which gathered momentum with dueling rallies by labor union fans and foes Saturday, has grown into something broader than a debate about policies in a single state.

What's at stake is the perception of public-sector labor unions in the US, and how much clout they'll be able to retain in an era of tight budgets for state and local government.

It's a debate that goes echoes beyond the Midwest, and it resonates with many taxpayers who see union workers as enjoying premium benefit packages at their expense.

In Wisconsin, Gov. Scott Walker (R) argues that state employees should help fund their retirement plans by paying half of needed contributions into pension plans. The cost would equal about 5.8 percent of a typical state worker's paycheck.

As governors and legislatures struggle to balance their budgets, labor costs are one of the biggest expenses they face. Although unionized workers don't make up a majority of state employees, they account for a much higher share there than in the private sector.

Some 40 percent of public-sector workers are represented by labor unions, versus 7.7 percent of workers in the private sector, where union ranks have been declining for years.

So, how does union pay in the public sector stack up against that of private sector workers?

Here's a quick reality check:

• Weekly earnings are $917 for the typical union worker employed by state government in the US. That compares with $703 for the comparable wage-and-salary worker in the private sector, and $855 for the comparable unionized employee in the private sector. (These Labor Department numbers are the median amounts earned by workers in the second quartile, or roughly the middle of the income spectrum.)

• Weekly earnings have grown at a similar pace for union and non-union workers in the past decade. Without adjusting for inflation, wages are up 33 percent in the private sector for the typical worker. The comparable figures are 31 percent for private sector union workers, and 33 percent for government union workers.

• For state employees, there's a union versus non-union gap in wage gains. Union pay has risen 36 percent in the past decade, while non-union state employees saw wages rise just 27 percent – roughly holding steady with inflation.

• On benefits, union compensation is higher – and has been rising faster – for government workers than for non-government workers. (These numbers, from the Labor Department, don't break union and non-union into separate categories). The cost of hourly benefits averaged $13.85 per hour in the public sector in the third quarter of 2010, up 32 percent in seven years. By contrast, private sector benefits averaged $8.20 per hour, up 23 percent in that same time frame.

Does all this mean that public-sector unions should see a cut in their pay, their benefits, or their political clout? That's a volatile political question, as the shouting and speechifying in Madison, Wis., attests.

On Saturday, Democrats and Republicans in the state's legislature were sparring over what elements of Governor Walker's bill might be negotiable. Republicans say Democrats should return to the state, after their dramatic departure earlier this week, so a vote on the bill can occur.

The debate in Wisconsin is not just about pensions, paychecks, and the health of state finances. Labor supporters say Governor Walker's demands also include "union-busting" policies, such as an effort to prevent the collection of union membership dues through public paychecks.

Wisconsin has the biggest flareup currently. But the contest there is mirrored, or could be soon, in other states from New York to Illinois to California.

The budget battles don't hinge entirely around union pay. But as states cut a range of public services, and seek ways to stay financially on track for the long term, you can expect union compensation to remain part of the debate.