Wisconsin Teachers

It turns out that my earlier post "Circus Maximus" probably overstated what Wisconsin teachers make. After a conversation with the president of the Milwaukee teacher's union today, it turns out that I had been looking at the pay schedule for the 200-day employees, and not the 191-day employees--which most teachers are. It turns out that you begin--in the 2009 contract--with a BA at $35,729 plus benefits (which are deferred compensation, and which, in the form of benefits, save the state from paying Social Security taxes on their value, a win-win for workers and the state government), not $47,000. In fact, you only get to $47,000 with a BA with eight years on the job. If you get a BA and 16 extra college credits (which you pay for out of pocket, even though you haven't paid off your student loans yet!), you get to $47,000 after seven years on the job.

If you have an MA, you start off in a slightly better "lane".  See the details at http://www.mtea.org/User/Mimlitza/TEACHER0709.pdf

But consider a teacher who makes in the $40,000 range. She (usually) is still trying to pay back something like $20,000 in student loans, plus trying to pay for more college credits or an MA so that she can advance. It's a stretch.

Not to mention that $40,000 is before taxes. Yes. Public employees pay taxes. It's a form of recycling.

So when the MacIver Institute, funded by the arch-conservative Bradley Foundation, says that it costs $101,000 for a teacher in Milwaukee, realize that it is padding the numbers by adding in every possible payment, and by no means represents the situation of most teachers in the system.

It is grossly misleading and would be just plain stupid if it hadn't gone viral with the apparently respectable word "Institute" attached to it.

Slippery Times

It starts again.

The New York Times takes the “reasonable” route: criticizing Governor Walker of Wisconsin for his extremism, it says that it’s not anti-worker or anti-union to say that New York State workers are overpaid and need to accept curbs on wages, pensions, and rules that level the playing field at the bargaining table.

Fine: There are stupid rules governing pensions that allow state workers to pad their pensions in their last years by working lots of overtime. This, of course, takes the collusion of management, but it’s hardly fundamental to the budget crisis faced by the state. It is good, however, for anti-worker propaganda, which is the best reason for unions to throw this perk—taken by a tiny percentage of state workers—overboard.

But to say that state workers need to pay more into their pensions because these pensions are so costly to the state is to argue that state workers should take a cut in their take-home pay in order to make up for Wall Street’s shenanigans.  And to suggest, as the Times does, that we might “need” to move from defined-benefit to defined-contribution plans like 401(k)s, is to court the real possibility that we will have loads of elderly poor in the not-too-distant future. The Times editors acknowledge that 401(k)-type plans shift retirement risk onto employees, but they don’t really follow up with what that could mean. As it is, the average New York City employee’s pension is just $19,000.  Put that together with social security payments, and many retirees will still be paying more than 30 percent of their gross incomes on rent. That’s “outsized generosity” for you.

As for wages, the Times, which ought to know better, says that state employee pay outstripped private-sector pay by about $16,500 per year ($63,382 vs. $47,947 in 2009) without being sure they were comparing apples to apples.  Most public workers earn more than private workers both because their unions haven’t been crushed as they have in the private sector, and because they are, on average, better educated.  That is to say, a greater proportion of the public sector workforce is better educated than the proportion of the private-sector workforce. We all benefit from this.

But in order to really think about this clearly, we have to acknowledge that a great deal of lower-level work in municipal services has been privatized or pushed onto welfare-to-work programs, volunteering, or community-service sentences (e.g., parks maintenance, sanitation crews, street cleaning). This lowers the pool of less-well-paid public workers, and skews the statistics. Moreover, it’s no good for the workers themselves, as what used to be a decent living in municipal work, supporting neighborhoods, is now a temporary, insecure job, incapable of supporting a household for very long.

The Times sophistry continues. Couched in completely appropriate calls for Governor Cuomo to tax the very rich a little more, it acknowledges the purpose of the Triborough Agreement while arguing that it should be scrapped. The Triborough Agreement keeps the terms of a contract in place even after it has expired. It means that the governor or the mayor cannot unilaterally change the terms of a contract after it has expired.  The Times explains:

[The Triborough Agreement] unique to New York, was a well-meaning attempt to give some balance to state unions, which by law are not allowed to strike and had no leverage to draw management to the table in flush years. The problem with the Triborough Amendment is that it gives the unions far less incentive to bargain, as we saw last year.

So the Times recommends amending the Triborough Agreement so that wages can be frozen once a contract expires. Apparently, the state’s and city’s workers weren’t willing to give up concessions that were being demanded of them rather high-handedly last year. Pity.

The problem is not just getting to the negotiating table. It’s bargaining in good faith. Without unions having the power to strike without risking disastrous consequences, neither the state nor the city have any incentive to bargain in good faith—at least not in election years.  Even with the Triborough Agreement. As a result, city and state workers often work for years without new contracts. The Triborough Agreement does balance the power a little bit. Taking it away will do the opposite.

The Times editors either clearly misunderstand collective bargaining agreements or they wish to mislead their readers.  If public-sector workers got raises of several percent over the past few years when private-sector workers were suffering, it’s because the contracts were negotiated when the state and city thought they could afford it.  But public workers have also gotten much smaller raises—or none at all—when times seemed tough, only to have the economy recover and leave them behind private-sector gains. Every contract has a lag effect, and with global capitalism going through more rapid boom and bust periods, the terms of public contracts are bound to clash sometimes with the exigencies of “the market.”

The Times’ solution? When, in good times, the editors suggest giving public workers a raise, we can talk.

Circus Maximus

In the mid-1990s, Wisconsin led the nation in draconian cuts to welfare. Governor Tommy Thompson, welfare commissioner Jason Turner, Republicans, and pliant Democrats in the state legislature ended welfare payments to the poor, requiring that they find work, work in subsidized jobs, or in “community service placements” or lose any claim on benefits.  In an expanding economy, it seemed to work well if you did not take into account the poor quality of the jobs, high turnover, and the continued economic insecurity facing poor Wisconsinites.  In fact, Wisconsin’s reforms catapulted Thompson and Turner into national prominence: Thompson became George W. Bush’s first Secretary of Health and Human Services and Turner landed a job as New York City’s welfare commissioner during Mayor Giuliani’s second term. Welfare recipients deemed “job ready” by the private agencies contracted to run the state’s largest welfare program in Milwaukee were thrown to the mercies of the labor market—usually involving commutes out of Milwaukee to suburban counties, if they found jobs at all—while the agencies collected money for every recipient purged from the rolls.

History repeats itself. Governor Scott Walker and Republican legislators’ “budget repair bill” repeats the politics of Wisconsin’s welfare reforms in several ways, though this time, thankfully, they cannot claim bipartisan support. 

First, welfare reform was framed against competition with Wisconsin’s neighbor, Illinois. At the time, there was fear of a black tide of Chicagoans fleeing the low welfare payments and high rents in Illinois, and crushing welfare in Wisconsin seemed the only way to stop it.  The $140 million in corporate tax-giveaways passed in Wisconsin that is the proximate cause of the year’s budget woes are meant to attract businesses from Illinois, which has dealt with its budget woes more responsibly, by raising taxes and cutting spending.

Second, like the poor, overwhelmingly black, and female welfare recipients before them, Wisconsin’s mostly white public workers, both male and female, face public shaming as lazy, entitled and greedy.  Some of Walker’s supporters are outraged that teachers in Milwaukee start at roughly $47,000 per year, with benefits, while the median income in Milwaukee—where nearly all of Wisconsin’s poverty is concentrated—is just $19,000. They apparently think that teachers should work at closer to the median wage. How you get a well educated workforce, most likely with student loan debt, to work for much less is difficult to see. But the entire picture suggests what public workers have always known: Opponents of public spending will always paint public employment as a more expensive version of the dole.

Third, this round of reform stinks as badly of cronyism as did the last.  With welfare reform, the state—not trusting Milwaukee administrators to be tough enough—mandated the privatization of welfare services. By paying agencies for kicking people off welfare, the state officially put the foxes in charge of the henhouse. And soon, most of the providers were caught in corruption scandals. One for-profit firm, Maximus, did consulting for other states on Wisconsin’s dime, even while Jason Turner’s family was in their employ. When Turner came to New York, he brought Maximus with him.  Walker’s bill raises the stakes. It authorizes the privatization of state-owned power plants without public review or competitive bidding, and in a different version of Mr. Fox’s henhouse insurance, it puts all Medicaid decisions in the hands of an anti-Medicaid state administrator, again without public input.

Finally, all of these similarities between past and future are brought together by the behind-the-scenes funding structure: Walker and his allies share funding not just from the Johnny-come-lately Koch brothers, but also from the Bradley Foundation, a Milwaukee-based sugar-daddy of the right (though both the Kochs’ father and Harry Bradley were early John Birchers). The Bradley Foundation was crucial to funding welfare reform efforts in the 1990s, and in taking Wisconsin’s experience national, providing crucial funding not just to Wisconsin-based conservative organizations, but to national outfits like the Hudson Institute and local ones, such as New York’s Manhattan Institute, and to academics like NYU’s Lawrence Mead, who has done more than anyone else to dress up Wisconsin’s corruption and cronyism in the respectable dress of moralistic good government.

With Walker’s overreaching, however, the mask, perhaps, has begun to slip.

Re-Cant

So let’s get this straight: states and cities are in a huge pickle because public sector workers are paid too much and, even more important, their bloated pensions will result in structural deficits for state and local governments far into the future. Let’s leave aside—for a moment—Wisconsin Governor Scott Walker’s proposal to end collective bargaining altogether, and just deal with this basic claim. The claim is important because it is the crisis du jour that justifies further cutbacks to public workers. 

And it’s not true. In fact, the pension crisis is way overblown. It turns out that while there is a crisis in funding state pensions, it stems from two places. First, most of the crisis is (probably) temporary: it is the result of the stock market nosedive, and the plans are likely to recover significant value, and have likely done so already.  Second, state- and city-governments have made overly optimistic assumptions about the annual rate of return on pension plans, and have therefore underfunded their pension liabilities.  This means that they were not putting in the requisite amounts of money into the funds that would be needed to pay the deferred compensation that retirees are due.  So between dishonest rating companies that made bad investments seem as if they were safe for institutional investors, and state politicians who failed to finance pensions adequately, public sector workers’ greed—or simple addiction to basic comforts that others no longer enjoy—is still to blame.

Even so, there are some state public employee pension funds that are in fairly good shape, including, most famously, Wisconsin’s.

The “solution” to the alleged pensions crisis looks a lot like the “solution” to the crisis facing Social Security.  Privatization and risk-shift.  A good deal of noise is now being generated about moving future public employees—at least those who have not already been moved—to 401(k)-type plans. So that workers can have control over their assets.

Right.

It was hard even for the New York Times to find experts who thought this was a good idea.  Between high fees that make these plans extremely inefficient (but good for the bankers collecting the fees) and the fact that 401(k)s generally underperform the more risk-averse investing of defined-benefit pensions over the long term—meaning that retirees face a plummeting standard of living—these proposals transparently advocate throwing older people under the bus.

At this point, one might ask: Why don’t people who are harping on the financial crisis caused by public sector union benefits simply recant?

Because it’s not about the details of this or that crisis, or even whether the crisis is real.  It’s about class warfare.

This isn’t a new observation at this point, and anyone who has rallied in support of Wisconsin’s public employees has heard this shouted from the stage at rallies. If Governor Walker’s getting punk’d by the Buffalo blogger didn’t make it clear enough, the fusion of big money and far-right politics is remarkably strong. And in the wake of the Citizens United decision, corporations willing to spend lots of money to elect their favored candidates will outstrip unions in their ability to do so.  Of course, it won’t always work or work well. Mayor Bloomberg only squeaked past his opponent in the last mayoral race precisely because his ability to buy his own office struck much of the electorate as hubristic.

But there’s a lot more to this class warfare than rich people spending lots of money and buying politicians or office.  The aspect best illuminated by the Wisconsin debacle is—in spite of Walker’s and the other Republicans obvious cravenness—is the respectability of the debate.

 

Respectable debate over the neoliberal curb-stomping of basic living conditions and the majority’s institutional power to influence them takes several forms. The first, to which I refer above, is sober talk about fiscal crisis and the resulting necessity for austerity.  What is almost amusing about it is that while even the very moderate Paul Krugman has identified Shock Doctrine-type exploitation of the fiscal crisis, his fellow New York Times editorialist David Brooks doesn’t “want to let a fiscal crisis go to waste.” Both tend to talk—as do many others—as if this crisis were unique and as if the solution space is bounded by more progressive taxation on one side and more efficient government services on the other.

Similarly, a strain of academic and policy expert engages in what I can only begin to think of as a gentler version of totalitarian propaganda of the sort Hannah Arendt so expertly dissects.  Arendt writes about the “scientificality” of totalitarian propaganda, the claim that history marches forward according to a natural rhythm that is beyond human capacity to change. We can only do our best to conform to it, else get left behind, forever damaged and disgraced.  Conformity to the natural rhythm of history—or “the market,” which doesn’t have a history, apparently—can be scientifically measured and assessed.  Those with the power to do so, moreover, shed, in essence, their human fallibility. Accordingly, propagandistic predictions become programmatic statements to be fulfilled later on: 

The assumption of infallibility, moreover, is based not so much on superior intelligence as on the correct interpretation of the essentially reliable forces in history or nature, forces which neither defeat nor ruin can prove wrong because they have one concern that overrules all utilitarian considerations: to make their predictions come true.  The Nazis did not hesitate to use, at the end of the war, the concentrated force of their still intact organization to bring about as complete a destruction of Germany as possible, in order to make true their prediction that the German people would be ruined in case of defeat (Arendt 1951: 349).

Thus, when political scientists, such as my colleague, Dan DiSalvo, write that the gap between public and private workers’ pay and benefits will cause a rift between them, he is not only making a prediction.

If we continue to ignore the growing public-private gap, the implications will be dire.

Already, it has led to massive budget deficits in many states and cities around the country. Future generations are on the hook for enormous pension commitments, which threaten to crowd out other spending priorities. Meanwhile, restrictive union work rules create barriers to efficient delivery of public services. Taxpayers are paying more for less.

Furthermore, a backlash against public workers looms. While private sector employees were hit with job losses and pay cuts, Mayor Bloomberg negotiated 4% raises with most of the City’s unions, and Gov. Paterson has avoided virtually any lay offs despite a massive budget deficit. Such disparities breed resentment among those struggling in the private sector.

 It is, in fact, true that public sector workers have faced something of a backlash, but it has been stoked by writing such as this, rather than being the outgrowth of some natural process of competition or social dynamics.  Further, DiSalvo has written extensively about his wish to see public sector unions lose the right to bargain, going so far as to compare them with Tammany Hall in their ability to mobilize patronage to the detriment of everyone else.

The problem is that the scientificality of the claim trumps its politics in the eyes of others. Even Gary Chaison, a professor of industrial relations, and an advocate of public sector unions who looks aghast upon the current scene writes:

The unions must fight for the hearts and the minds of the voters. It is not enough for them simply to demand that what has been given to them in the past must be continued, or argue that they are really not better paid than private sector workers and that cuts are not justified. The unions can only repel attacks with concessions in bargaining reasonableness that seems adequate and fair. If they are to survive to represent workers forcefully in better times, they must now demonstrate that they are willing to shoulder a share of these hard times.

Note that Chaison is arguing for a strategic retreat, much as union leaders in Wisconsin have, in accepting Governor Walker’s demands for a pay cut.  But a retreat is only strategic if there is a plan for a further offensive.  But if one already accepts the “scientific” diagnosis that we really do have a fiscal crisis that justifies givebacks, it is difficult to see how the “hearts and minds of the voters” (Why do we keep using that phrase?) will ever be won.

And that’s the point.  The Italian Communist Antonio Gramsci shared something of Arendt’s understanding of science and politics, but cast it somewhat more generally, and less tendentiously:

It is absurd to think of purely “objective” prediction. Anyone who makes a prediction has in fact a programme for whose victory he is working, and his prediction is precisely an element contributing to that victory ... Only the man who wills something strongly can identify the elements which are necessary for realisation of his will (Gramsci 1971: 171).

In this light, the comparison I made earlier between what seems like a fairly innocuous column in a newspaper to Nazi propaganda seems overwrought. Gramsci sees the drive to self-fulfillment as the property of any knowledge claim that is not purely speculative.  In so doing, he points to a significant failing on the part of the left in the US, one that makes Chaison’s acceptance of the crisis premises, or the earlier labor historians, Jewel and Bernard Bellush’s similar analogy to Tammany Hall (1984), that much more poignant.

We do not have “a programme for whose victory” we are working, and so we accept the “respectable” talk of austerity too readily. We accept, even if in general terms of agreement, the idea that our services should be constantly evaluated, made more efficient, and that rewards—or even the basic tools necessary to perform these services—should be linked to performance.  Who, after all, is for inefficiency?

Gramsci’s enduring legacy, about which I’m sure I’ll have more occasion to write, is to alert us to the marriage of economic, political, and cultural aspects of class struggle.  Our acceptance of crisis, of our need for efficiency, of the appeal of “shared pain” in the face of austerity is, so far, largely bipartisan.  These are what Gramsci understood as the “hegemonic” or dominant terms of debate.   So far, the right seems to have imbibed the lesson that a broad cultural strategy is a partner of economic and political strategies for domination far better than the left, and has therefore forged for us a common vocabulary.  But as we gather to rally in support of Wisconsin’s public workers, as we rally, as we must, to the defense of Providence, Rhode Island’s teachers, and as we marvel at the loss of fear among people oppressed with our blessing in the Middle East, if we fail to talk with each other about a real program, a shared vision of the world in which we would like to live and to bequeath to future generations, we’re letting an important opportunity pass.

References:

Hannah Arendt (1951). The Origins of Totalitarianism. New York: Harcourt Brace Jovanovich.

Jewel and Bernard Bellush (1984). Union Power and New York: Victor Gotbaum and District Council 37. New York: Praeger.

Antonio Gramsci (1971). Selections from the Prison Notebooks. New York: International Publishers.

In the Same Boat

One of the most distressing elements of the current attacks on public employees is the support given to them by many private-sector workers.  The reasons are simple. Many private-sector workers resent that public-sector workers, paid for through their taxes, continue to enjoy job protections, health care, and insurance while workers in the private sector find their jobs, benefits, and pay increasingly precarious.  Further, these workers believe that public sector workers, through their unions, have an unfair fix on these privileges: they mobilize to elect the people with whom they have to bargain. Further, those same elected officials, unconcerned with the bottom line—it’s not their money, after all—accede to every union demand.  At the same time, even some private-sector union members argue that unions are needed in the private sector, where the profit motive creates too many incentives for employers to exploit them, but are not needed in the public sector, where no such motive exists. Finally, many people believe that public sector unions are responsible for bankrupting states.

Each of these deserves a real response beyond “That’s just what the Koch brothers want you to believe.”

It has now been said many times that while it is true that public-sector workers enjoy pensions and job protections not enjoyed by many private-sector workers, this is not because things have changed dramatically for public employees. Rather, it is because over the last forty years, private employers have kept more of the proceeds from production than they used to keep by making work less secure for workers than it used to be. Real wages have been almost flat since the early 1970s, while union membership declined precipitously, pension plans were changed to financially vulnerable 401(k)s—if they ever existed in the first place—and companies cut back on the proportion of the workers they hired full time.  Chalking this up to “the global economy” skirts the many political and judicial decisions that eroded workers’ security. As the National Employment Law Project has documented, the growing low-wage sectors of the economy are particularly bad: here, employer harassment, overtime violations, wage theft, and other exploitative practices are increasingly the norm, and largely unpoliced.  More private-sector unions are needed, not fewer public-sector ones.

But public-sector unions are not nearly as strong as they are often imagined to be.  Opponents of public employee unions are fond of quoting New York City’s Victor Gotbaum, who claimed in 1975 that unions elect their own bosses.  But this was before the New York City fiscal crisis humbled Gotbaum, forcing him to accept tens of thousands of layoffs of his members and to rescue the city by committing union pension funds to buy what were at the time worthless municipal bonds. Then, as now, the withdrawal of federal subsidies to state and local governments was a key component of the crisis, and another was real estate speculation underwritten by Wall Street banks. Then, as now, financial elites and their allies in government tried to use the crisis to undermine hard-won workers’ rights.  Since that time, increasing numbers of municipal services have been privatized or put in the hands of unpaid or poorly paid workers in welfare-to-work or corrections programs.  New York City’s Department of Parks and Recreation, for example, has half the number of fulltime workers as it had in the 1970s, but the workforce of about 3,000 employees is supplemented by almost the same number of seasonally hired Job Training Program workers from the welfare rolls, and a smaller number of people working off community service requirements.  Job Training Program workers' wages were cut unilaterally by Mayor Bloomberg in 2005, and while they rose last year, they still do not reach the levels at which they were twelve years ago. In addition, private, nonprofit corporations have taken over the management of an increasing number of centrally located parks, such as Central Park and Bryant Park--or even "public benefit corporations" like Hudson River Park Trust, and hired or contracted their own, non-union workforces to clean and maintain the parks.  As the city laid off thousands in 1976, then-Mayor Abraham Beame called on people to volunteer to fill the gap. Now, more than 850 full-time equivalent hours of volunteering contributes to parks maintenance, too.  In spite of some potential benefits to civic life, this means that overall, thousands of people who might have made a go at a solid working-class life and a career with a job ladder no longer can do that. None of this is evidence of particularly strong public-sector unionism.

Further, we acknowledge all the time that public investment makes private profit-making possible, regardless of the other social benefits that it creates.  Clean parks and streets, good public schools, and safe streets improve a city’s business environment because businesses like to locate in areas where their employees want to live, the costs of training workers is partly socialized through public education systems, and industries like tourism, "hospitality," and real estate benefit tremendously. Therefore, there is really no essential difference between public- and private-sector workers in this regard. The difference is only that the former has an indirect relation to profit-making activities, where the latter’s relationship is more direct.  Because public-sector unions fight to protect jobs in the public sector, gutting them will only increase the likelihood that public investments are privatized further, leading to lower standards of living among a large section of working people, and to a growing unevenness in public investment toward high-yield areas and away from working- and middle-class areas.

Finally, if public sector unions really were responsible for state fiscal crises, one would expect that the percentage of public workers belonging to a union (or represented by a union) would map nicely onto the size of state budget holes, as measured by the size of projected deficits relative to general funds. It doesn’t. Though highly unionized states like New Jersey are facing budget crises of fairly calamitous proportions, so are nearly union-free states such as Texas and North Carolina.  Instead of taking the entire picture into account, opponents of unions regularly cherry-pick their evidence.  Further, because many non- or barely unionized states do not have an institutionalized lobby to protect public services, their public services routinely rate poorly next to those in more unionized states.

Ultimately, however, the debates about public-sector unions may be a red herring. As Indiana’s legislature has helped us see by proposing curbs on private-sector union rights, these are broader debates about working people’s ability to join together in free associations to demand better treatment from their employers. This means that people (among whom are my colleagues) who try to draw a clear distinction between public and private employees in the hopes of curbing public-employee rights either willfully ignore their real commonalities in a broader economic system, or are simply shilling for crushing workers' rights altogether.  

We should not be divided so easily.