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The role of unions in building a strong middle class

David Brancaccio Jun 4, 2012

The role of unions in building a strong middle class

David Brancaccio Jun 4, 2012

David Brancaccio: Tomorrow, Wisconsin voters head to the polls to decide whether recall their Republican Governor or not. Governor Scott Walker has scaled back public employee pension benefits and union rules. And labor unions as well as corporate interests have dumped millions into the state over the political fight.

Fortune magazine senior editor at large Allan Sloan joins us now to talk about why the Wisconsin fight over unions has become a national issue.

Allan Sloan: Good morning, David.

Brancaccio: So we have this economy that — no one argues with this — needs a stronger middle-class. But American voters seem divided on the role that unions play in providing that.

Sloan: Well sure, especially public employee unions, where taxpayers — like me and even like you — have not had a great time the last few years and you look around at public employees and you say, ‘Wait a minute, I don’t have what I used to have; I have to give up a lot, they should give up something too.’ And that’s, in many ways, the genesis of this.

Brancaccio: But we’re talking about teachers, firefighters, policemen putting their lives on the line. Curbing their benefits is a tough sell.

Sloan: Well, it is a tough sell, and it’s not like I’m thrilled to do it. But if you look around, especially in New Jersey, where you and I both live, for years and years and years, the unions in New Jersey did extremely well — to the point where the state just couldn’t afford the benefits. And you now end up with Chris Christie.

Brancaccio: The governor of the state now, who has made it his mission to curb the amount of money that public sector workers get in terms of compensation and benefits. But, you see this is almost on a continuum, like the pendulum has swung.

Sloan: Right, exactly so. Up until a few years ago, public unions — at least in many states — seemed unstoppable. They were organized, they were smart. And then comes the Great Recession, and suddenly, these unions are vulnerable politically and financially. But it took some of them quite a while to figure it out.

Brancaccio: In places like Wisconsin and places like New Jersey, those public sector unions have in fact had to allow the cutbacks.

Sloan: Right, indeed they have. And the huge difference between New Jersey and Wisconsin and some of the other states: In New Jersey, the benefits have been curbed, but the right to unionize is still there. The thing that shocked me in Wisconsin — which I used to think of as a progressive state, was when they took the bargaining ability away, I didn’t even know they could do that, but that shows how little I know.

Brancaccio: Allan Sloan, senior editor-at-large, Fortune magazine. Thank you very much.

Sloan: My pleasure, David.

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