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February 28, 2022

Is this the end for public service unions?

It's tough to be a union man in the U.S. these days. As unionized private-sector jobs continue to disappear, the burden of paying for the seemingly lavish benefits of public employees has fallen on a shrinking base of disgruntled taxpayers.

That’s why Wisconsin and several other cash-strapped states are in the midst of turmoil as their Republican governors attempt to rein in spending by checking the growth in public employees' benefits.

Wisconsin Governor Scott Walker’s budget bill, for instance, would make civil servants – excluding local police, state troopers and firefighters – pay substantially more for pensions and benefits, and would, since it hopes to subject salary increases for government workers to a state-wide referendum, likely cripple public service unions as a force in both collective bargaining and politics.

Under the bill, state agencies would also no longer deduct union dues from workers’ paycheques, forcing unions to collect them on their own. And the legislation would also require unions to hold recertification votes annually.

The measure has prompted widespread protests at the state Capitol and seen some public sector workers walk off the job. Several Democratic senators have actually gone into hiding in order to hold things up on the Senate floor.

Nonetheless, unless Walker relents — and there’s little sign of that — Wisconsin’s populist attack on unions seems likely to succeed.

Could the same thing happen on this side of the border? Probably not, since a Supreme Court decision a few years ago guarantees Charter protection to collective bargaining.

Despite this though, there is a growing sense here that the public service has flourished during the recession, while private sector wage and benefits have withered. And the gap seems to be increasing.

The Canadian Federation of Independent Business, for instance, claims public servants enjoy a premium of something like 35 per cent in wages and benefits, compared to their private sector counterparts.

Would you like to see a Wisconsin-like policy shift here in Canada? Is the public/private gap simply too large?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...