Make Everybody Hurt
By DAVID BROOKS
Over the past few weeks we’ve begun to see the new contours of American politics. The budget cutters have taken control of the agenda, while government’s defenders are waging tactical retreats. Given the scope of the fiscal problems, it could be like this for the next 10 or 20 years.
No place is hotter than Wisconsin. The leaders there have done everything possible to maximize conflict. Gov. Scott Walker, a Republican, demanded cuts only from people in the other party. The public sector unions and their allies immediately flew into a rage, comparing Walker to Hitler, Mussolini and Mubarak.
Walker’s critics are amusingly Orwellian. They liken the crowd in Madison to the ones in Tunisia and claim to be fighting for democracy. Whatever you might say about Walker, he and the Republican majorities in Wisconsin were elected, and they are doing exactly what they told voters they would do. It’s the Democratic minority that is thwarting the majority will by fleeing to Illinois. It’s the left that has suddenly embraced extralegal obstructionism.
Still, let’s try to put aside the hyperventilation. Everybody now seems to agree that Governor Walker was right to ask state workers to pay more for their benefits. Even if he gets everything he asks for, Wisconsin state workers would still be contributing less to their benefits than the average state worker nationwide and would be contributing far, far less than private sector workers.
The more difficult question is whether Walker was right to try to water down Wisconsin’s collective bargaining agreements. Even if you acknowledge the importance of unions in representing middle-class interests, there are strong arguments on Walker’s side. In Wisconsin and elsewhere, state-union relations are structurally out of whack.
That’s because public sector unions and private sector unions are very different creatures. Private sector unions push against the interests of shareholders and management; public sector unions push against the interests of taxpayers. Private sector union members know that their employers could go out of business, so they have an incentive to mitigate their demands; public sector union members work for state monopolies and have no such interest.
Private sector unions confront managers who have an incentive to push back against their demands. Public sector unions face managers who have an incentive to give into them for the sake of their own survival. Most important, public sector unions help choose those they negotiate with. Through gigantic campaign contributions and overall clout, they have enormous influence over who gets elected to bargain with them, especially in state and local races.
As a result of these imbalanced incentive structures, states with public sector unions tend to run into fiscal crises. They tend to have workplaces where personnel decisions are made on the basis of seniority, not merit. There is little relationship between excellence and reward, which leads to resentment among taxpayers who don’t have that luxury.
Yet I think Governor Walker made a strategic error in setting up this confrontation as he did. The debt problems before us are huge. Even in Wisconsin they cannot be addressed simply by taking on the public sector unions. Studies done in North Carolina and elsewhere suggest that collective bargaining only increases state worker salaries by about 5 percent or 6 percent. That’s not nearly enough to explain current deficits. There are many states without collective bargaining that still face gigantic debt crises.
Getting state and federal budgets under control will take decades. It will require varied, multipronged approaches, supported by broad and shifting coalitions. It’s really important that we establish an unwritten austerity constitution: a set of practices that will help us cut effectively now and in the future.
The foundation of this unwritten constitution has to be this principle: make everybody hurt. The cuts have to be spread more or less equitably among as many groups as possible. There will never be public acceptance if large sectors of society are excluded. Governor Walker’s program fails that test. It spares traditional Republican groups (even cops and firefighters). It is thus as unsustainable as the current tide of red ink.
Moreover, the constitution must emphasize transparent evaluation. Over the past weeks, Governor Walker increased expenditures to pump up small business job creation and cut them on teacher benefits. That might be the right choice, but if voters are going to go along with choices such as these, there is going to have to be a credible evaluation process to explain why some things are cut and some things aren’t.
So I’d invite Governor Walker and the debt fighters everywhere to think of themselves as founding fathers of austerity. They are not only balancing budgets, they are setting precedent for a process that will last decades. By their example, they have to create habits that diverse majorities can respect and embrace. The process has to be balanced. It has to make everybody hurt.