For Immediate Release

Bring Government Labor Contracts In Line with Private Sector Compensation

WASHINGTON – The Libertarian Party supports measures taken by Gov. Scott Walker of Wisconsin to curtail collective bargaining rights of state unions in his bid to cut the state budget deficit. But it’s only a first step.

Government employee labor contracts in Wisconsin, like most made between unions and federal, state and local governments in the United States, are inherently illegitimate. Fulfilling their demands, therefore, is not obligatory.

‘Governments and unions have an incestuous relationship in this country,’ said Libertarian Party Chair Geoffrey J. Neale. ‘Politicians pass laws forcing millions of government employees to pay union dues while handing out lucrative government employee contracts. The unions pour money into the re-election campaigns of those politicians. Everyday taxpayers and workers are left holding the bag.’

A judge must recuse himself when adjudicating a case where he has a financial interest in one of the parties before him. Libertarians assert that, likewise, a lawmaker who takes campaign donations from contractors, unions or anyone else who profits from taxpayer money should not be allowed to vote for handing out government largesse. Nor should those who profit from government be allowed to donate to political campaigns.

But lawmakers routinely allow this conflict of interest, passing laws to mandate the terms of labor contracts and signing those contracts, rendering them invalid.

A valid contract is one where all interested parties agree to the terms of the contract. When elections can be bought by those who profit from Big Government, the taxpayers have, at best, weak representation. Yet they’re expected to foot the bill.

‘To call such contracts ‘non-discretionary’ is a sham. Taxpayers never gave their consent to pay for labor union contracts that dish out high wages, generous benefits, and retirement packages worth two to fives times what private sector workers get for doing the same job,’ said Chair Neale. ‘This keeps taxes high and promotes recklessly high government overspending. It’s also fundamentally unfair.’

The Libertarian Party calls for re-writing these contracts to bring government worker compensation in line with that of comparable private sector workers and to eliminate unnecessary and duplicate jobs that drive up government spending.

On June 5th Gov. Walker faced a recall election prompted by protests against his 2011 Budget Repair Act, which increased public employee contributions toward pensions and health coverage and restricted union powers of collective bargaining and dues collection.

While this was a move in the right direction, it’s only a start.

According to a study b

y the American Enterprise Institute and the Heritage Foundation, before the Budget Repair Act, Wisconsin state employees received total compensation (salary and benefits) about 29 percent higher than comparable private sector workers. After the act, the compensation premium remained at about 22 percent.

‘The Wisconsin vote is an indication of whether Americans want to go the way of Greece — or do the right thing and start to bring government employee compensation down to earth before the U.S. becomes insolvent,’ said Neale. ‘This will move money out of government coffers and back into the private sector where it belongs and where it will be invested in small businesses that create sustainable, private sector jobs.’

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