Act 10 was no mistake; in fact, it should be expanded
Journal Sentinal - Edmund Henschel And Russell Knetzger - 10/4/2014
Where bargaining has been especially deleterious for taxpayers is unions began focusing on fringe benefits, which are hidden from public view and often hidden from employees themselves and under-appreciated by them. It is now common for public employees to receive benefits that cost 50% of their total pay, whereas the private-sector ratio is around 25%. This "fringes strategy" has paid excess dividends to public workers in two costly areas: health insurance and pensions.
In health insurance, public employees were shielded from the huge run-up in health premiums because they were able to bargain 100% employer pickup of the cost. Such premiums between 1978 and the 2008 economic slump rose 600%, or double the 300% rise in general inflation.
For teachers, they achieved an extra bonus from their employer-paid health insurance. The local unions bargained, and won in 60% of Wisconsin school districts, that the no-bid contract for health insurance go to the insurance company owned by the state teachers union.
That insurance can be called "cadillac coverage." Not only did it have five-way coverage — doctor, hospital, drugs, vision and dental — each was top of the line. For example, in private-sector dental insurance, when it existed, $1,000 per year was the typical limit per patient in the family. A few companies offered $1,200, and a very few $1,500. Some teachers' coverage: $2,000 per patient per year.
In pensions, most private-sector employers contribute up to 3% of wages into the company 401(k) plan, and under 401(k) rules, employees may add another 3%, a total of 6% between them. But because the early retirement feature of the Wisconsin plan is so costly, the plan specifies total contributions as high as 16% a year.
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