Wisconsin Gov. Scott Walker to Kill Collective Bargaining for Public Unions

You’ve probably been hearing a lot about Wisconsin Governor Scott Walker’s new “Budget Repair Bill,” in which he hopes to kill collective bargaining agreements for many public sector unions. While it can be confusing to sift through all the litigation and media hype, what it means for union workers is that “total wage increases could not exceed a cap based on the consumer price index (CPI) unless approved by referendum.” Simply put, unions can’t fight for wage increases that outpace inflation except for special circumstances.

Another noteworthy change in the bill is that “Contracts would be limited to one year and wages would be frozen until the new contract is settled. Collective bargaining units are required to take annual votes to maintain certification as a union. Employers would be prohibited from collecting union dues and members of collective bargaining units would not be required to pay dues.” In other words, it is a plan to weaken unions by not allowing them to collect the funds to operate. Further, it means that the unions would essentially have to be revoted into existence each year.

And now the controversy. Reportedly, Governor Walker exempted law enforcement, fire personnel, state troopers and inspectors would be exempt. They were also the governor’s biggest supporters. So there are really 3 issues going on:

1. Walker is attempting to balance the budget by cutting collective bargaining for public sector Wisconsin unions
2. He is weakening unions by not allowing them to collect dues (along with the fact that they have to vote each year to keep unions active)
3. The governor allowed unions that supported him to be exempt

It is understandable that Wisconsin is up in arms about the entire bill. But what does this mean for your finances?

If you are a state union worker, you may be seeing a salary freeze or only a small increase in your annual salary. Since the union situation is unstable, it would be wise to start slashing your spending, cutting down debt and increasing your savings. Sign up for a deposit account like a Wisconsin certificate of deposit or high interest savings account in order to help your money grow faster. If Walker’s legislation is passed, there may be many new and unexpected consequences to your finances.