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Labour showdown in Wisconsin - a battle with national consequences

The high-stakes battles being waged by public sector unions throughout the U.S. rust belt are rattling the entire nation for much the same reason Watson the computer worries Jeopardy! aficionados.

Both raise nagging questions about a worker's worth.

Private-sector unions have been in such steep decline in America since the 1970s that the public sector has increasingly come to offer the best path to a middle-class lifestyle and secure retirement. Now, globalization appears to have caught up with government workers, too.

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As well-paying unionized jobs in the private sector have become rarer, the burden of paying for the more generous benefits of public employees has fallen on a poorer base of taxpayers in the now shrinking states that once formed the mighty U.S. manufacturing heartland.

This has created the political climate for Wisconsin Governor Scott Walker's frontal assault on the state's public sector unions and similar attacks by Republican leaders in Ohio, Indiana, New Jersey and other states.

Just as greedy and intransigent unions were seen as culprits in the declining competitiveness of U.S. industry - Wisconsin's sole General Motors assembly plant closed in 2008 - they are now being blamed for driving state governments to the verge of bankruptcy.

It is tempting, thus, to view the labour protests and legislative paralysis in Wisconsin and other states as a sad symbol of a former industrial powerhouse coming messily to terms with its diminished economic wherewithal. Of course, the truth is more complicated.

Mr. Walker, who swept into office in a November Republican wave that left both houses of the state legislature in GOP hands, has seized on the party's nearly unprecedented lock on power to decimate the opposition.

At the national and state levels, unions have long been the Democratic Party's largest source of campaign funds. The American Federation of State, County and Municipal Employees spent $90-million (U.S.) to elect Democrats in the November elections, more than the U.S. Chamber of Commerce shelled out for Republicans.

Mr. Walker used Wisconsin's current $137-million budget shortfall, and a looming $3.6-billion deficit for the next two-year budget cycle, to table a bill that doubles the share state workers must pay for the cost of health insurance (to 12.6 per cent) and raises their pension contributions to 5.8 per cent of their salaries from zero.

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But he did not stop there. Mr. Walker's "budget repair bill" would limit collective bargaining to wages only and subject salary increases for government workers to a statewide referendum. Under the bill, state agencies would no longer deduct union dues from workers' paycheques, forcing unions to collect them on their own. And the legislation would require unions to hold recertification votes annually.

"This is pure party politics," University of Wisconsin political science professor Howard Schweber explained. "Mr. Walker is one of half a dozen Republican governors who came to power committed to pursuing a political goal of breaking the power of public sector unions because they are regarded as traditional supporters of Democratic politicians."

Democratic members of the state senate have stalled the legislative process by hiding out in Illinois, denying Mr. Walker the required two-thirds quorum required to put the bill to a vote.

Their counterparts in Indiana have resorted to the same tactic to kill a bill that would outlaw the closed union shop in their state. And in Ohio, the new GOP governor wants to go further than Mr. Walker in abolishing all collective bargaining rights for state workers.

In states with Democratic majorities in the legislature, GOP governors have resorted to divide-and-conquer tactics. New Jersey Governor Chris Christie's Tuesday budget makes property tax rebates for the middle class conditional on getting public employees to pay 30 per cent of the cost of their health insurance, up from 8 per cent.

President Barack Obama has more than a disinterested stake in the outcome of what he has labelled an "assault on unions" in Wisconsin. If the union-breaking initiatives gain momentum, it could financially cripple a prime political backer that spent $400-million to elect him and other Democrats in 2008.

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To be fair, Mr. Walker and his GOP counterparts did not invent the budget crisis they are facing, in no small part because of lavish health-care and pension benefits granted by their Democratic predecessors to win labour peace or reward a political ally.

The examples of public employees retiring at 50 with six-figure pensions belie the fact that the vast majority of state workers do not fall into that cushy category. But perceptions that government workers "have it too good" nevertheless rankle a nation bombarded by stories of its own decline.

The showdown in Wisconsin is a symbol - as if America needed another - that the country has been living beyond its means for too long.

Like losing to Watson, the truth is sometimes scary.

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About the Author

Columnist Konrad Yakabuski writes on politics, policy and business for The Globe and Mail’s Comment section and Report on Business. More

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