Fiscal reality wins a victory in Wisconsin

Maybe average Wisconsin voters didn’t consciously know each household must pay $1,563 in extra taxes every year for the next 30 years just to fund public pension shortfalls. But they probably realized they don’t have a pension anymore, even if they have jobs. And any lucky enough to have jobs know that before Scott Walker became governor, they were paying higher taxes while working harder and longer at lower pay with slashed benefits.

Hey politicians, wake up: This is not just about jobs; it’s about which jobs.

It’s not about envy; it’s about the desperation of paying property taxes and making house payments.

It’s not a struggle over collective bargaining rights; it’s a pure power struggle over an entrenched elite squeezing more out of citizens already getting by on less.

That reality overwhelms every other factor in Walker’s astounding 1 point rematch gain defeating Tom Barrett Tuesday.

It has national implications. Fewer Americans working harder for less and paying more taxes to increasing numbers of government employees who get more is not a shared-sacrifice program that wins elections.

Before Republicans and Democrats start imputing much to Walker’s victory, they should think about that reality and how it represents an untenable future for America.

Wisconsin job numbers are so stark that no amount of campaign propaganda spending by either side could overcome what citizens know is happening to them and their neighbors.

In just a decade while private jobs dropped 4 percent – down more than 6 percent from the 2007 peak – state and municipal government employment steadily grew by 2.9 and 2.4 percent respectively through 2010.

Wisconsin numbers show below national average government employment growth, but much worse private sector job losses, according to Bureau of Labor Statistics data.

But beyond the net loss of almost 94,000 private sector jobs in a decade as of the end of 2010, Wisconsin lost the most from businesses that offer the best pay and benefits.

Looking at preliminary numbers from January 2001 through January 2011, businesses that employ 50 or more workers lost more than 173,000 jobs. Businesses that employ 49 or fewer workers added more than 36,000 jobs.

Through September 2011 the bigger businesses were trending up, thought still far below pre-recession peaks. Smaller businesses were trending down.

More ominous is the fact that the biggest losses of business establishments over the decade were concentrated in bigger businesses, which makes recovery less likely.

Wisconsin lost 37 establishments employing 1,000 or more workers in a decade. That’s 27 percent of companies generally offering higher pay, better benefits and secure retirement.

The state lost 14 percent of firms employing 500 to 999 workers and 15 percent of those employing 250 to 499.

No realistic expectation of small business growth can replace those jobs, and most jobs small businesses do create cannot make up the compensation.

Wisconsin voters know they are struggling. They sense that unchecked growth of local and state governments will grind them down even more. Government as usual was not an option.

But they need to know how bad things really are.

For example, without major reforms the public pensions officially accounted at 100 percent funded actually need $1,563 more from the average household every year for 30 years just to pay benefits already promised, according to an updated study for the National Bureau of Economic Research by Robert Novy-Marx and Joshua Rauh.

Public retiree health care funding is more than $2.3 billion short, according to the Pew “Widening Gap” study, and the state only paid 45 percent of the last payment due. Somebody is going to have to make up the difference.

An analysis released Monday by Governing magazine found that since 2008 Wisconsin state and local governments cut jobs about 3 percent while the private sector lost more than 5.7 percent.

To one degree or another what is happening in Wisconsin is happening all over America. The one third of American workers paying for everybody else is starting to feel squeezed.

Nationally, the Governing analysis “finds state and local government reductions being applied unevenly so far, with employment growing or remaining roughly unchanged in about half of states since the start of the recession. Private sector employment, by contrast, increased in only five states …

“… Labor Department estimates also suggest numbers of public employees actually grew in some states, even those with notable drops in private employment.”

Any politicians who think voters who lost jobs, took pay cuts, gave up benefits and surrendered any hope of retirement will quietly pay more for those who shared no sacrifice are going to be in for a shock on election day.

Reality always wins.


 (This blog is republished with permission from a project of Feature photo – screenshot of FOX NEWS.)

3 thoughts on “Fiscal reality wins a victory in Wisconsin

  • June 10, 2012 at 1:44 PM

    Hi Frank. I am not sure where you got your “data” for your article, especially your closing paragraph. “Any politicians who think voters who lost jobs, took pay cuts, gave up benefits and surrendered any hope of retirement will quietly pay more for those who shared no sacrifice are going to be in for a shock on election day.” I am a professor in the University of Wisconsin System. To imply that we haven’t taken pay cuts or given up benefits — or are even concerned about retirement — is ludicrous. You also call us “an entrenched elite.” I have been teaching in the Wisconsin system since 2000. In order to keep my job, I had to go back and earn a PhD, which I did. I have not received a raise in 4 years. I lived through two years of furloughs, which no matter how you spin those are pay cuts. Now I have to pay much more for my benefits, which are not what they used to be either. Payments are up; copayments are up. I make less than $50,000 a year for a job that requires a PhD. Please do not write about us being the “elite.” I am in my job because I am the last line of defense for many of my students. I teach and I advise. The students can no longer afford college because of the raises in tuition — a direct result of Governor Walker’s policies. There are no factory jobs for these students to go to. This is NOT their grandparents’ and their parents’ America. Whenever I post in response to conservative messages such as yours, I always get “If it’s so bad, then why don’t you go to the private sector?” It may come down to that. For the sake of my students, I hope it doesn’t. You can think Walker’s victory is good for Wisconsin and America. But please don’t spread untruths in the telling of your “truth.” And BTW, we don’t use our names when we post things because harassing public employees isn’t out of the question in Wisconsin and the current administration would think that was okay.

  • Frank Keegan
    June 10, 2012 at 12:14 PM

    Don’t know who you are bertnb, because you are afraid to use your real name. But as nearly as I can tell, you never contacted me. That is sad. Sadder is the fact that state and municipal politicians have dumped us into a fiscal abyss, and anybody who thinks average taxpayers are going to pick up the tab is in for a shock.

  • June 10, 2012 at 8:36 AM

    I have already contacted Frank regarding inaccuracies in this article. Apparently, inaccuracies don’t matter when you have an agenda to push. Sad.

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