March 29, 2011

Wisconsin’s Budget Approach: Solution or Disaster?

Print More

I strongly believe that the current radical policy changes occurring in Wisconsin will inevitably lead to the downfall of equal opportunity for the lower classes of America. While state and local governments are attempting to reorganize their dwindling budgets, the Republican Party has decided to scrutinize the one entity to which they can easily assign blame for the budget crisis: the unions. While this approach will likely be effective in curing short-term deficiencies in state and local budgets, the impact of terminating collective bargaining rights could have devastating long-term effects on American society.

The governor of Wisconsin has asserted that the elimination of unions and the collective bargaining process is a step toward diminishing the “exceedingly high” salaries of the state’s public employees. I am inclined to agree that the collective bargaining process needs to be updated in many ways. However, eliminating it without negotiation is by no means the appropriate answer. Collective bargaining allows for mutual agreement and cooperation by all parties involved. If this process is eliminated, and other states institute Wisconsin’s policies, class tensions in America will without a doubt heighten dramatically.

Currently, the American middle class is steadily decreasing in size. According to notable economist Paul Krugman, following the Great Depression, there was a rise in private sector unionism, which led to an increased amount of income equality among Americans. However, between 1980 and 2004 came “the New Gilded Age,” in which the large gains in GDP solely went to the top classes of society. While real wages of individuals in manufacturing fell one percent, the real income of the richest one percent rose 135 percent. Krugman argues the lapse in collective bargaining in this period is largely to blame for this discrepancy in wage gain.

Rather than eliminating collective bargaining from the public sector, I believe an alternate solution exists as a way to resolve the budget crisis. My personal opinion is that policymakers should raise taxes for the top five percent of wealthiest Americans. Currently, statistics show the top five percent of America owns 40 percent of the country’s wealth. There is a fine line between living comfortably and living in excess. While many members of the upper classes have without a doubt worked extremely hard for their earnings, raising taxes just a tiny percent will not have much of a noticeable influence on spending habits or in overall savings. However, that money would in fact have an extremely large impact on the state and local governments that desperately need the money. Why are we punishing the lower classes and eliminating their rights, when the money is currently available in the pocketbooks of a small yet extremely wealthy sect of Americans?

This previous spring, I studied abroad in Denmark, a democracy with exceedingly high taxes, yet is considered by many studies to be the happiest country in the world. While America cannot by any means be compared with Denmark in its size or population, there are a few lessons Americans can learn by the Danish ideals on life expectations and overall beliefs on money. I learned in one of my classes abroad that the reason why the Danes are considered to be the happiest people, beyond their good looks, is their overall ability to set realistic expectations for their careers and expected wealth. The Danish people don’t choose careers to make the most money as possible; they align themselves with the paths that give them the most overall satisfaction and allow them to live in comfortable means. Even the garbage collectors and taxi drivers in Denmark appreciate their work and are able to live comfortably off the income received on the job. Americans could learn a great deal from the Danish ideals. Rather than focusing on attaining as much money as possible, the American people should learn the benefits of living in comfort and spreading their excess wealth elsewhere to those who truly need the money.

Karl Marx predicted in his writings that one day, capitalism would give way to socialism due to the inevitable separation of upper and lower classes that results from the capitalist system. If public workers are underappreciated and undervalued, the small services we take for granted everyday could be severely altered. Is a short-term fix of eliminating collective bargaining rights worth the potentially devastating long-term impacts on society? Policy makers need to ask themselves this when determining how to go about fixing the current budget crisis.

Laurie Josephson is a senior in the School of Industrial and Labor Relations and an Arts staff writer for The Sun. She can be reached at lj67@cornell.edu.  Guest Room appears periodically this semester.

Original Author: Laurie Josephson