Winners in Wisconsin: Taxpayers

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Wisconsin demonstrates the monopoly power of government unions can be broken and the Wall Street Journal takes notice:

Congratulations to Wisconsin Republicans, who held together this week to pass their government union reforms despite unprecedented acting out by Democrats and their union allies. Three weeks ago we described this battle as a foretaste of Greece come to America, but maybe there’s hope for taxpayers after all.

The good news is that Governor Scott Walker’s reforms have been worth the fight on the policy merits. The conventional media wisdom is that Mr. Walker “overreached” by proposing limits on the ability of government unions to bargain collectively for benefits. But before he offered those proposals, Democrats and unions had refused to support his plan that public workers pay more for their pensions and health care. Only later did they concede that these changes were reasonable and will spare thousands of public workers from layoffs.

Unions can still bargain for wages, but annual increases can’t exceed the rate of inflation. Unions will also have to be certified each year, which will give their dues-paying members a chance to revisit their decision to unionize. No longer will it be one worker, one vote, once. Perhaps most important, the state will no longer collect those dues automatically and give them to the union to spend almost entirely on politics. The unions will have to collect those dues themselves.The collective bargaining reforms also mean that this won’t merely be a one-time budget victory. Government unions know that financial concessions (and layoffs) they agree to during recessions are typically won back when tax revenues increase and the public stops paying attention. They merely need to elect a friendly governor. Mr. Walker’s reforms change the balance of negotiating power in ways that give taxpayers more protection.

If Mr. Walker’s effort can be faulted, we’d say it’s for not stressing enough the value of these collective bargaining changes for taxpayers, and how public unions too often end up on both sides of the bargaining table. Instead, he stressed the short-term fiscal benefits of his bill. Yet his changes will pay off in future years in Wisconsin in ways that reforms by GOP Governors in Michigan or even New Jersey will not. A future Wisconsin legislature can change these laws again, but not without a big political reversal.

That’s exactly what Democrats and unions now want to engineer, as they promise to launch recall campaigns against state senators who voted for the reforms. Our email inbox has been filling up all week with Democratic fund-raising appeals screaming about Wisconsin. Mr. Walker’s poll numbers have slumped amid the raucous debate, and unions will go all-in to punish the GOP.

But under Wisconsin law, only eight of the 18 Republican senators who voted “aye” have served the requisite one year to be subject to recall. And only one of those is in a truly vulnerable district. Republicans would continue to hold 60 of the 99 seats in the state assembly, and if Wisconsin’s budget is balanced and the economy is growing a year from now, voters may dismiss the predictions of Apocalypse as hyperbolic.

The real game for unions and Democrats is 2012. After their rout in 2010, they are pursuing what we’d call the Mayhem Strategy to mobilize their base and sour independents on the GOP. Cry havoc and create enough tumult, and many voters may sue for labor peace. This is exactly the strategy that government unions have used to block any welfare-state reforms in Europe. The public is held hostage to government workers who shut down services to stop even modest changes in their workload or benefits.

Mr. Walker and his allies have won a rare victory for taxpayers, one which should be a lesson for other states and Governors. The monopoly power of government unions can be broken.