On August 25th state employees in Wisconsin will receive a paycheck. It will be a paycheck that reflects significant changes. Among those changes will be a loss in pay, no deduction for union dues (already in place), and no deduction for union sponsored health insurance plans (a clearly punitive action directed at only unions and their members). Many employees will be wearing black to commerate the occassion.
Here are some conservative estimates on the real cost to state employees. Employees will now make a contribution of 5.8% of their salary to their pension. Up from 5%. Employees will now contribute 12% of the cost of their health insurance premium. Single individuals will pay $84 and those with family will pay $208. Previously they paid $31 and $78 respectively. This constitutes about $24/month increase for pension payments on a salary of $36,000 per year (somewhere near the average state worker salary), and $53 or $130/month increase in health insurance payments. For most the total impact is a loss of $154 per month, or about $1,850 annually. With no wage increases on the horizon the total cut in pay is about 5%. For many living paycheck to paycheck this will mean some real pain. Any of us losing almost $2,000 in a year when you won't work less, but in fact, probably more, is deeply discouraging. the fact is that every state agency is hemorraging employees. Some positions are being filled, but many are not. Meaning that many employees will now be doing their job and another person's job, or share of it, as well. The resulting burnout, and their desire to not continue to be the whipping boy of the Republican party and talk radio bullies will undoubtedly mean even more employees lost. Don't expect services to improve. The "reforms' to follow the decline in services will look identical to privatization no doubt. The private sector walks on water. Or they at least make larger campaign contributions. These figures are rough estimates and some will see greater pain in the paycheck and some less, depending upon health plans and classifications.
In addition, when taking into account that Wisconsin has about 65,000 (and shrinking) state employees, that amount of spending power lost equals in the neighborhood of over $120 million over the next year. Losing $10 million or more every month out of the economy! I can't imagine that this will assist what could only be charitably called weak demand. Perhaps coincidently, the average annual cost of providing tax breaks to corporations for production and to end combined reporting for corporations is about $124 million annually. Let's call it a public employee bailout for those who didn't really need bailing out. I guess that would make it more of a hand out and less of a bail out. In any event it is a dreastic redistribution of wealth.
Stay tuned for the coming costs to employees in January when the state health insurance plan makes significant changes to reduce costs by 5%. One guess on who will be covering that cost savings. And some of them voted for Scott Walker. I'd be willing to wager they had no idea it would cost them almost $7,500 over his term for that vote. Cue "That's What I Get" from Nine Inch Nails.