What’s the likely impact of Wisconsin’s change to collective bargaining?

Tom Curry of MSNBC has a piece exploring this question. And it is a good one. The literature shows there are alot of nuances in how public sector unions influence fiscal and budget outcomes.

Collective bargaining laws certainly led to rapid unionization. But, what are the effects of these laws on the governments’ books?

Analysis has shown collective bargaining laws have all kinds of impacts. In some cases, they raise spending on unionized activities, but not on overall spending. Earlier studies showed collective bargaining laws led to an increase in wages and employment for unionized workers. However,  O’Brien (1994) refining these earlier studies included a variable for the political activity of unions. He found, collective bargaining may be a pre-condition for unions’ ability to influence budgets, but it is not effective by itself. He finds it is the political activity of unions that is the significant variable affecting municipal spending in fire and police department budgets and that the effect is to increase overall employment.

A great question to consider is will the change in the legal institution of collective bargaining in Wisconsin result in the outcome imagined by reformers?  Collective baragining laws may have changed, but this doesn’t mean that the political influence of unions on public policy is going to suddenly wane. Public sector unions enjoy a degree of “institutional stability” lacking in the private sector which by contrast is subject to market forces.