A dispute in one cold state is having nationwide repercussions

THE state of Wisconsin considers itself something of a leader when it comes to workers’ rights. It was the first state to provide unemployment benefits, the first to introduce compensation for those injured on the job and, in 1959, the first to recognise unions representing state workers. Now it is setting a very different trend. The row the state’s leaders sparked off by attempting to curb the influence of public-sector unions is spreading across the country. Several other state legislatures have taken up similar proposals. National politicians are gleefully weighing in. America is facing cutbacks at every level of government, and the melodrama unfolding in Madison, Wisconsin’s small, snowbound capital, will help determine where the axe falls.

Scott Walker, the newly installed Republican governor, enraged public-sector unions earlier this month by insisting that in order to plug the state’s $3.6 billion deficit he would need not only to trim civil servants’ benefits, but also to strip the unions that represent them of almost all their collective-bargaining rights. Under his plan unions would not be able to haggle with the state or local governments about benefits or working conditions. Only basic pay would be up for discussion, and even that would, at most, keep pace with inflation. Real increases in salaries would be banned, unless voters decided otherwise in a referendum.

The Republican majority in the state legislature was all set to approve an emergency budget bill containing these measures when the Democratic minority in the Senate, in a last-ditch attempt to derail it, fled the city, depriving the chamber of a quorum. The governor ordered state troopers to find the fugitives and bring them back. But the 14 Democrats had escaped to a water park in neighbouring Illinois, beyond the reach of Wisconsin’s authorities. They say they are willing to accept the cuts Mr Walker is proposing to workers’ benefits, but cannot countenance the restrictions on collective bargaining, and will not come back until they are dropped.

If the bill does not pass by February 25th, the state will miss the opportunity to refinance some of its debt, at a cost of $165m. To induce the Democrats to return, the Senate Republicans have passed a rule obliging them to collect their paychecks in person at the capitol. Mr Walker has added to the pressure by saying that the only alternative to trimming benefits would be to start sacking people. Some 1,500 jobs would have to go by July, he says, and perhaps another 10,000-12,000 if the dispute drags on. To avert this, a Republican senator has suggested a compromise whereby collective bargaining would be suspended for two years rather than permanently scrapped. But that, says Mr Walker, would be just another short-term fix of the sort that got the state into its current mess.

The unions, meanwhile, have been mounting round-the-clock protests in Madison for almost two weeks now. A contingent has set up camp in the state capitol, creating something of a carnival atmosphere. They drum, cheer and chant slogans like “Kill the bill!” for hours on end. Inflatable mattresses and sleeping bags dot the grand marble foyers. Banners denouncing Mr Walker and his allies hang from the arches and balustrades. Outside, where crowds of as many as 60,000 have rallied against the bill, union members have set up an impromptu barbecue and are handing out free sausages. One wag dressed up as a breast and carried a sign reading “Walker is a giant boob”.

Many conservatives, however, regard him as a hero. Americans for Prosperity, a right-wing taxpayer group, has set up a website called “Stand with Walker” where some 70,000 people have registered their support. The Republican Governors Association has declared the ruckus in Madison “a defining moment for our country and the conservative movement”. Almost every Republican thought to be considering a run for the presidency has jumped on the bandwagon. One of them, Mitch Daniels, the governor of nearby Indiana, says, “The most powerful special interests in America today are the government unions.”

Collectively, America’s 50 states face some $125 billion in budget shortfalls in the coming year, according to the Centre on Budget and Policy Priorities, despite having already grappled with combined deficits of $430 billion over the past three years. Worse, states, counties, municipalities and school districts face unfunded pension liabilities of anywhere between $700 billion and $3 trillion, depending on how gloomy your actuarial assumptions are. Mr Walker and his supporters say it will be impossible to fix all this unless they do away with the need to haggle endlessly with greedy union bosses.

Public-sector unions wield undue influence, argues Steven Malanga of the Manhattan Institute, author of a book on the subject, since they help to elect the very people who set their wages. Moreover, the political benefits of coddling the unions are immediate, whereas the costs are generally deferred. He points out that even Franklin Roosevelt was uncomfortable with the idea of public-sector unions. By the same token, prominent contemporary Democrats, such as Rahm Emanuel, the newly elected mayor of Chicago (see article) and Andrew Cuomo, New York’s new governor, have argued that public-sector workers must tighten their belts.

But Amy Hanauer, of Policy Matters Ohio, a left-leaning think-tank, says there is no clear correlation between the extent of collective bargaining with public-sector unions in a state and the size of its deficit. In 2010, she notes, the nine states that ban the practice altogether had budget shortfalls of 25% on average, compared to 24% in the 14 states that allow it for all public-sector employees. And in Wisconsin, after all, the unions have agreed to deep cuts.

Yet several other states are following Mr Walker’s lead. The new Republican governor in Ohio, John Kasich, is backing a move to restrict collective-bargaining rights for both state and local employees, despite union protests. Tennessee’s legislature is considering a measure that would eliminate collective bargaining for teachers. Mr Daniels, in Indiana, has proposed a similar measure, although he opposes a move by the state legislature to allow employees in any unionised workplace to opt out of paying union dues, as Mr Walker also proposes, for fear it will spark a knock-down drag-out fight with the labour movement. A hullabaloo erupted anyway: Indiana’s House of Representatives was about to approve a “right to work” bill when the Democratic minority mimicked their Wisconsin colleagues and fled the state.

The debate is energising activists on both the left and the right. Madison is full of union organisers, talking excitedly into mobile phones about deliveries of placards and arrivals of fresh contingents of protesters from around the country. The Democrats in the Wisconsin Senate have raised as much money in the week since they left the state as they did in the whole of the previous year. Mr Walker, in turn, has achieved national fame for taking on the public-sector unions, much as Chris Christie, the Republican governor of New Jersey, became a hero on the right for imposing budget cuts on reluctant Democrats in his state legislature. Unless matters take a nastier turn, neither side has much incentive to compromise.