Skip to main content

Workers' protests swell in Midwest as budget battles continue

By David Ariosto, CNN
The Wisconsin capitol in Madison has seen many angry workers in recent days.
The Wisconsin capitol in Madison has seen many angry workers in recent days.
  • In Indiana, House Democrats walk out on a Republican-supported bill
  • In Wisconsin, governor says in televised address: "The system is broken"
  • In Ohio, protesters gather for a second week in Columbus

(CNN) -- Republican lawmakers in the nation's heartland might be feeling a case of heartburn after their budget bills spawned demonstrations in at least three states over what protesters view as an attack on workers' rights.

Crowds in Ohio, Wisconsin and Indiana gathered Tuesday in a series of budgetary showdowns that challenge long-standing rights and benefits afforded to unionized labor while raising questions about the fiscal health of state and local governments.

"This is really emblematic of some of the bigger issues we're facing," said economist Dambisa Moyo, author of "How the West Was Lost."

"There is way too much emphasis on short-term issues like deficits and unemployment, which are important issues," Moyo said. Policymakers have long obfuscated the actual costs of their state's financial obligations by ignoring longer-term issues such as structural debt, she said.

"The proverbial chickens have come home to roost," Moyo added.

Whether the continued confrontations are the opening act to a broader budget debate or just the latest standoff in the rough-and-tumble arena of state politics, the proposed bills have nonetheless drawn thousands to statehouses across the Midwest.

In Indiana, House Democrats tore a page out of the Wisconsin book by walking out on a Republican-supported bill that would reduce private-sector union rights.

Ohio governor: Pensions 'not negotiable'
Governor: 'We don't have any more money'
Protesters crowd Wisconsin capital
Wisconsin GOP Sen.: 'I pray every night'
  • Jobs and Labor
  • Wisconsin
  • Ohio
  • Indiana

Republicans, who make up 60 of 100 House seats, lacked the two-thirds majority needed for a quorum.

"It is incredible that this legislation is being described as a step toward reform, when in fact, it will mark a huge step backward for most Hoosiers," said House Democratic Minority Leader B. Patrick Bauer in a written statement.

The bill would prevent private-sector unions from requiring workers to pay dues for representation.

Meanwhile, a bill to limit the collective-bargaining power of some public-sector workers sparked protests in neighboring Ohio, where crowds packed the state capital, Columbus, for a second week.

The measure, known as Senate Bill 5, would eliminate tenure as a consideration when making layoff decisions, require workers to pay at least 20% of their health insurance premiums and institute merit-based pay for some public-sector workers.

Republican Ohio Gov. John Kasich said the proposed curbs on collective bargaining rights are meant to "restore some balance to the system," not destroy unions.

Critics say the bill not only undercuts workers' rights, it also fails to address systemic deficit problems.

The state is facing an $8 billion shortfall.

In Wisconsin, the budget-repair bill that Gov. Scott Walker proposed is intended to address a $137 million shortfall through June 30 and would increase contributions of state workers to their pensions and health insurance benefits. It requires collective-bargaining units to conduct annual votes to maintain certification. It also eliminates the right of unions to have dues deducted from worker paychecks.

Walker defended his budget, saying the measures are needed to head off a $3.6 billion budget gap by 2013 that could result in thousands of layoffs.

"Now, some have questioned why we have to reform collective bargaining to balance the budget," he said Tuesday in what was billed as a televised "conversation" with Wisconsans. "The answer is simple: The system is broken. It costs taxpayers serious money -- particularly at the local level. As a former county official, I know that firsthand.

"For years, I tried to use modest changes in pension and health insurance contributions as a means of balancing our budget without massive layoffs or furloughs. On nearly every occasion, the local unions (empowered by collective bargaining agreements) told me to go ahead and lay off workers. That's not acceptable to me."

Fourteen Democratic state senators have boycotted the legislature and fled to neighboring Illinois to prevent a quorum from passing the bill. The measure's opponents said they won't allow a vote unless Walker negotiates on the plan to eliminate collective-bargaining rights for everything but wages.

Walker called on the Democrats to come back to Madison "and do their job."

One of the Democrats who left the state, Senate Minority Leader Mark Miller, said in a response from Rockford, Illinois, that Walker should "recognize that he got what he wants" in concessions on pension and health insurance contributions and relent on curbing collective bargaining rights.

"Wisconsin has one of the longest traditions of workers' rights in the country," Miller said. "We were the first state to have workers' compensation; we were the first state to have unemployment insurance; we were the first state to recognize public employees' right to bargain. These are rights that should not lightly be thrown away."

"A good compromise is when not everybody gets what they want," Miller said. "In a democracy you get a little of what you want, or a lot of what you want, but you don't get everything you want."

Unions, which have traditionally favored Democrats, have argued that collective bargaining, a process of negotiations meant to regulate working conditions, has helped protect wages and health care, enforce workplace safety and serve as a means to arbitrate employee grievances.

Walker warned that not passing the proposed bill would result in at least 1,500 government employees being laid off in the short term and could result in 6,000 worker layoffs in the following budget cycle.

But the Wisconsin Retirement System has more than $80 billion invested, while pensions accounted for only 1.35% of state budget costs in 2008, according to Keith Brainard, research director for the National Association of State Retirement Administrators.

"Pensions are not the driver of Wisconsin's fiscal problems," Brainard said.

The bigger difference in the national public-private debate appears in retirement contributions, where state and local governments contributed an average of more than three times their private counterparts in 2009, according to U.S. Bureau of Labor and Statistics.

Public sector employers on average also paid more than twice as much in health benefit costs that year.

"That number is high, partly because a lot of private employers don't offer matching health coverage," said economist Wayne Shelly of the Labor Bureau.

Meanwhile in New Jersey, Gov. Chris Christie introduced a $29.4 billion budget Tuesday, asking workers to shoulder more of the cost of their co-payments and premiums in an effort to save the state an estimated $323 million. By 2014, the governor would require workers to pay for 30% of their medical benefits, up from 8% today.

Christie also urged state lawmakers to overhaul the state's strapped pension system, which has a $54 billion deficit.

Budget bills were also working their way through legislatures in Tennessee and Idaho that would end or limit teachers' ability to negotiate contacts collectively, raising questions as to whether lawmakers there might expect confrontations similar to those in the Midwest.