Montreal, October 27, 2011 – Ohioans will be called upon this November 8 to vote in a referendum on a reform that would limit collective bargaining in the public sector. This reform would also remove the right to strike from 300,000 municipal and school employees. The Viewpoint published today by the Montreal Economic Institute (MEI) provides an overview of the situation to help people better understand the issues involved.
The right to collective bargaining has existed in the public sector for about half a century in the United States, and exists in some thirty states today. Recently, though, the pendulum seems to be swinging the other way as several U.S. states grappling with financial difficulties have passed laws to limit the scope of public-sector collective bargaining. At least ten states (including Michigan, Indiana and Wisconsin) have passed such laws since the beginning of the year. "We are really seeing a trend emerging from several U.S. states. There is no such movement here in Canada, however, and the intent of our publication is not to make recommendations, but rather to understand this phenomenon," explains Youri Chassin, economist at the MEI.
These days, it is the Ohio case that is making headlines, because the public-sector collective bargaining reforms in this traditionally working-class state are facing some opposition. Its 11 million citizens will soon have to determine the fate of the law.
Wisconsin's course change, for its part, is symbolic since it was the first U.S. state to have granted the right to collective bargaining to certain public-sector employees in 1959. In March 2011, a law was passed restricting collective bargaining to the issue of base salary and limiting wage increases to the inflation rate, unless larger increases are approved by referendum.
This tendency to want to reduce public spending, especially through less generous wages and benefits, is not limited to Republican politicians. In New York State, for example, the Democratic governor wants to freeze civil servants' salaries, which make up a large part of the budget.
The Viewpoint on public-sector collective bargaining in the United States, prepared by Youri Chassin, economist at the MEI, can be consulted free of charge on our website.
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The Montreal Economic Institute is an independent, non-partisan, not-for-profit research and educational organization. Through its publications, media appearances and conferences, the MEI stimulates debate on public policies in Quebec and across Canada by proposing wealth-creating reforms based on market mechanisms. It does not accept any government funding.
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