Advancing a Free Society

What happens when you limit collective bargaining by teachers’ unions?

Friday, July 1, 2011
High school students in class

Answer: You get positive changes in school districts. The first effects of Wisconsin's law to restrict collective bargaining agreements are being felt. We can't make generalizations yet about its overall effect, but the experience of Kaukauna School District in Wisconsin, highlighted by Byron York, may be indicative of what is to come.

The school district's budget went from a projected deficit to a $1.5 million surplus. And as York points out, it is the result of "the very provisions that union leaders predicted would be disastrous."

Contributions to health insurance plans and pension plans from teachers were increased, from 10% to 12.6% and 0 to 5.6%. Are those teachers going to be upset about having more of their paycheck diverted into paying for their benefits? Absolutely. But since the national average of contributions for health and retirement benefits for employees in the private sector is much higher than 12.6% and 5.6%, being sympathetic to their outrage is going to be tough. And considering other changes based on limiting collective bargaining are leading to smaller class sizes, "more one-on-one sessions with troubled students," more teachers hired based on the savings, and higher pay for the best teachers, one cannot help but see the law's merit.

Perhaps the best part of York's article is the section on purchasing health insurance. Lo and behold, more competition means lower prices:

In the past, Kaukauna's agreement with the teachers union required the school district to purchase health insurance coverage from something called WEA Trust -- a company created by the Wisconsin teachers union. "It was in the collective bargaining agreement that we could only negotiate with them," says Arnoldussen. "Well, you know what happens when you can only negotiate with one vendor." This year, WEA Trust told Kaukauna that it would face a significant increase in premiums.

Now, the collective bargaining agreement is gone, and the school district is free to shop around for coverage. And all of a sudden, WEA Trust has changed its position. "With these changes, the schools could go out for bids, and lo and behold, WEA Trust said, 'We can match the lowest bid,'" says Republican state Rep. Jim Steineke, who represents the area and supports the Walker changes. At least for the moment, Kaukauna is staying with WEA Trust, but saving substantial amounts of money.

Other states in fiscal trouble will want to watch the effects of Wisconsin's non-collective bargaining experiment. Most local politicians dream of bragging about budget surpluses, smaller class sizes, and lower health care costs. Based on early results, I am thrilled I don't have to stand on the other side and argue in favor of maintaining collective bargaining agreements. That responsibility is likely going to become less and less fun as more districts report their results.