Here's To The Cheeseheads

I wish someone could explain to me what the heck is going on in Wisconsin.  As I see it, their governor is trying to balance the state budget and one way he is attempting to do that is by reducing salaries of the government employees.  Further, he is trying to eliminate their collective bargaining rights.  If I have any of  this information incorrect, I hope someone will please set me straight.  So to speak.


Let's take a closer look at what I see going on in Wisconsin.  According to the Bureau of Economic Analysis, the per capita personal income in Wisconsin was $29,196 in the year 2000.  I couldn't find anything more recent but this figure should work.  Just keep in mind it's 11 years old so it might need to be dusted a bit.  According to the U.S. Census Bureau, the Median Household Income in Wisconsin is $45,349.  The national average is $42,148, so Wisconsin is ahead of the curve. These numbers are relatively recent.


Now, $29,196 doesn't sound like much to someone like me living in Los Angeles but remember, this is Wisconsin.  According to the Wisconsin Realtor's Association, the Median Price paid for a home in that state in January 2010 was $135,000.  This means that if someone earning the per capita average of $29,196 was to take out a mortgage with nothing down (which is highly unusual but this is purely hypothetical) and took that loan at 7% (which is higher than interest rates actually are at the moment) they would have a monthly payment of $898.16.  With a salary of $29,196 even if they were in the 30% income tax range (which would be very high) they would have a monthly take-home salary of $1,703.10.  


What does this mean?  It means that on a salary of $29,196 a person can afford to buy a house in Wisconsin.  This means that this is a livable salary, since the person making it can live on it.  It's not excessive and it's not going to buy many luxuries but it will provide the necessities and if budgeted properly, there might even be a little left over at the end of the week.


In 2008, according to the Census Data, the average state employee in Wisconsin was paid $49,760.  That's 70% more than the per capita personal income.  It's important to understand here that the per capita number is all the residents of the state, where the state employee number is only those people employed by the state.  In other words, the employees are making 70% higher wages than their employers.


But wait, there's more.  According to Sunshinereview.org, the average Wisconsin state employee pays 6% of the cost of their healthcare insurance.  The National Conference of State Legislatures says that the national average is 22%.  The Wisconsin state employees are therefore getting paid more and spending less.  


The governor is trying to do his job and balance the budget and one area where he sees waste is in overpaid state employees.  At 70% above the state average, how is he not correct?  Further, if the average employee contribution to pay for healthcare is 22% and the Wisconsin state employees are only paying 6%, shouldn't the state employees be expected to contribute more?


The governor is going after their collective bargaining agreements because those agreements are what allowed the state employees' unions to get these high wages in the first place.  Reducing their wages is only the first step because the unions will only get the wages back.  Ridding the state of the bargaining rights ensures the taxpayers that the state employees will have salaries that are in line with the rest of the state.  


It sound to me like the Cheesehead knows what he's doing.  Reduce the state employee salaries to an average of $35,000, which is still higher than the state average.  Additionally, increase contributions to healthcare from 6% to 15%, which is still lower than the national average.  Finally, rid the state of collective bargaining agreements and pass legislation tying state salaries to the state averages, adjusted annually (nominally) for cost of living and true these up every ten years when the census is taken.


There was a time when unions were necessary in this country.  Paying their employees 70% above the state average only shows the abuse that unions have been allowed to get away with for many years.