Commentary: Perry can't blame unions for Texas' budget woes

The Fort Worth Star-TelegramMarch 4, 2011 

Last week, Gov. Rick Perry was quick to blame Wisconsin's problems on its unions and their pensions, saying they were "strangling the state's budget."

"It doesn't take a rocket scientist or a Ph.D. from Harvard to understand the issues here," Perry told CNBC.

But if unions are ruining Wisconsin, what's the explanation for Texas?

The budget hole here is a lot deeper, unemployment is higher, and poverty and health care are much worse.

Perry can't blame unions, not with a membership rate that's half the national average and laws that prohibit state employees from collective bargaining. So if unions aren't the problem in Texas, is it management?

That's too simplistic, of course -- and it's the kind of snarky shot that Perry took at Wisconsin. But his comments invite a comparison with the state where public employees are camping out in the Capitol to protest a plan to strip away their union power.

Perry often says that Texas is the envy of the nation, but on many fronts, it doesn't measure up well against Wisconsin and more-unionized states. Start with the most pressing issue of the day, the budget gap.

According to the Center on Budget and Policy Priorities in Washington, Wisconsin faces a $1.8 billion shortfall in fiscal 2012, equal to almost 13 percent of its current budget. Texas is $13.4 billion short for the next fiscal year, more than 31 percent of its current budget.

Even the much-maligned federal government has a shortfall of just 20 percent, the center reports.

As a percentage of current spending, only three states are in worse shape than Texas -- New Jersey, Illinois and Nevada. Even California is slightly better off. Those four states are all among the top 10 in union penetration, while Texas is 10th from the bottom for 2010.

Here's a surprise: Texas added 101,000 workers to the union category in the past four years, while Wisconsin had a net decline of 35,000. Still, Wisconsin remains a union bastion, with 15 percent of its work force covered by union deals, compared with 6.7 percent in Texas.

Unions are widely credited with helping build the nation's middle class by bargaining for better wages, benefits and work rules for average folks. But they can also resist change and innovation, and some unions have helped to bring down companies and industries.

They are often an effective counterpoint to management and shareholders in the private sector. Southwest Airlines, which is proud to say that it's the nation's most unionized airline, is also praised for being the most profitable and the best-run.

But in the public sphere, unions can have outsized influence, helping elect the officials who later sit across from them at the bargaining table. Many critics blame that dynamic for the generous pay and benefits.

Yet rich benefits can be won without formal union authority. In Fort Worth, the city pension faces a $700 million unfunded liability that could threaten budgets for decades. Police and firefighters only recently gained collective bargaining rights, but their retirement packages were sweetened years earlier, long before they had that power.

In the public sector, unions and collective bargaining tend to have the biggest impact in boosting benefits. More unionized workers have health insurance through their employers, and they pay lower deductibles and a smaller share of healthcare costs. That comes from a study by the Economic Policy Institute, a think tank that focuses on issues affecting low- and middle-income Americans.

Unionized workers get more vacation time and retirement contributions from their employers. And workers who aren't in a union shop often benefit, too, because unions set a higher baseline for wages in the area.

In Wisconsin, the median income is $51,763, which is higher than the U.S. median and almost 10 percent higher than in Texas. In many other categories, including SAT scores, Wisconsin performs much better than the national average, while Texas tends to lag behind it.

One of the biggest differences is in healthcare: In Wisconsin, 57 percent of workers get health insurance through their employer, compared with 44 percent here. Texas also has the dubious distinction -- and significant expense -- of having the largest uninsured population in the country: 26 percent of Texans have no health insurance at all, compared with 10 percent in Wisconsin.

More unions would mean more health coverage, which would be a great benefit for one of the state's most pressing financial burdens. But the trade-off might be job growth, a category in which Texas trounces everybody.

In the past year, as Texas was digging out from the recession, it added almost 232,000 jobs, compared with 32,500 in Wisconsin. Even with Wisconsin's smaller size (5.7 million people to 25 million here), Texas' worker rolls grew almost twice as fast in 2010. Still, in December, Wisconsin had a 7.5 percent unemployment rate, compared with 8.3 percent in Texas.

Wisconsin residents do pay much more in taxes: $2,563 per capita vs. $1,646 here, which includes all state collections. That kind of tax hike would be anathema in Texas, but at least Wisconsin can point to returns on its investment. And unions have been a big part of the mix.

Would Texas be a better place if it suddenly had more unions?

"That's a chicken or egg question," said Jeffrey Keefe, a Rutgers associate professor who specializes in labor issues. "States that are hostile to unions also tend to be hostile to government. They go hand in hand, so people get the political outcomes they want. I'm just glad yours isn't mine."

I imagine that Rick Perry would say the same about Keefe's state, New Jersey, where the tax load is twice as high as in Texas.

McClatchy Washington Bureau is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service