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Home Publications Blogs Beat the Press Governor Walker Tells Post Readers That He Doesn't Understand Basic Economics

Governor Walker Tells Post Readers That He Doesn't Understand Basic Economics

Thursday, 17 March 2011 05:33

It's always scary when someone in a position of responsibility doesn't understand some of the basics of their job. Apparently this is the case with Wisconsin Governor Scott Walker.

In a column in the Washington Post this morning Walker noted that under his new compensation package for public sector employees in Wisconsin, workers in the state will still be paying a far smaller portion of their health care benefits than most workers in the private sector or federal employees. He then comments:

"It’s enough to make you wonder why there are no protesters circling the White House."

Actually, it's enough to make you wonder what Governor Walker could possibly be thinking.

Employer payments for pensions, health care coverage and other benefits are part of a total compensation package. It makes little difference to an employer whether they pay another dollar for health care or for wages. Public employees in Wisconsin had bargained for a compensation package that gave them lower wages than their private sector counterparts, but more generous benefits. Their total compensation package was still somewhat lower than for private sector workers with the same education and experience. When Governor Walker increased the amount that workers had to pay for their pensions and health insurance, he cut their pay pure and simple putting them further behind their private sector counterparts.

Governor Walker seems not to understand this simple fact. According to the logic of his column, a worker getting a salary of $40,000 a year with full health care benefits and an employer-provided pension would be better off than a worker getting $200,000 a year and no benefits. Obviously this makes no sense. It would be good if one of Governor Walker's aides could explain this to him.

Comments (10)Add Comment
Either Way It's Socialism, Low-rated comment [Show]
Dean is right...Post lets Walker make up "facts"
written by David Cay Johnston, March 17, 2011 7:29
I posted a comment at the Wash Post referring to my tax.com column making the same point as Dean -- all compensation is earned and internal accounting is not economic substance.

Bad journalism begets bad policies.
Makes one worry
written by Floccina, March 17, 2011 9:34
It's always scary when someone in a position of responsibility doesn't understand some of the basic of their job. Apparently this is the case with Wisconsin Governor Scott Walker.

Makes one have second thoughts about so much power in the hand people elected by the median voter.

Free banking anyone?
"Health coverage" is not free to government employees, nor harmless
written by Rachel, March 17, 2011 9:49
Of course Dean is right. The health coverage of public employees is a far cry from one doctor giving free care to another doctor's son. That "courtesy" may be partly paid for by other patients, partly paid "in kind." Public employees health benefits, in contrast, may be simply paid for by the city or state, without letting the employee see the bill. They come out of employees' salaries.

In the long run this may seriously hurt the employees. In northern California, we have the problem of medical prices rapidly rising, especially due to the big mergers between hospitals and health plans. But the newspapers rarely cover it, and I don't hear any union leaders talking about it. The benefits packages can make the situation worse, by covering up the details of what is happening. So the union members end up just having to take it: take the pay cuts, take the job losses. And now they're taking the blame too.
Govener Walker Tells Post Readers That He Does Not Understand Basic Economics
written by Jim Forrester, March 17, 2011 11:55
Hello Dean--

I do not believe Gov. Walker is deluded, mistaken or ignorant. He says whatever canned thinking is convenient to further his program of beggaring the vast majority of Wisconsin's citizens and selling off the state's assets (part of the recent anti-labor bill). It is this thinking, the think tanks that can it and their funding sources like the Koch brothers (who also help fund Walker) that need exposing.

Many of these conservative think tankers are likely fellow economists and it is probably impolitic for you to attack them personally. But policies that spread so much destruction and offer only more of the same indicates corruption and not honest or rigorous thought. It is this (so called) intellectual underpinning that has to be sent to history's dust bin.

Your conservative colleagues remind me of tv preachers and advertising executives.

As for Walker's aides, they get paid to come up with the nonsense coming from his mouth and pen and likely ghost wrote the Post piece. It's like asking Frank Nitti to advise Al Capone to pay his taxes.
written by Al, March 17, 2011 12:56
If you want distortion read larry summers recent interview. He must not be reading this blog

written by Kenneth Fingeret, March 17, 2011 3:40
Hello Dean Baker,

How do you expect the governor to get his head out of his lower opening? Too much Koch sucking reduces the "little gray cells" to a bare minimum so thinking becomes impossible.
Walker Is Doing the Same that the GOP Does Generally
written by Hugh Sansom, March 17, 2011 6:53
Walker is no different from his GOP cohorts -- make up whatever suits the political agenda, dress it for consumption by the desired audience, and repeat repeat repeat. As on issues of climate change, national defense, education, health car -- take your pick -- facts are irrelevant to Republicans (and, sadly, to most Democrats).

To add to the indifference to truth or fact, add the evident, profound stupidity of Walker and his ilk (Sarah Palin, Michele Bachmann, Rich Santorum, James Inhofe). Willful ignorance and severely limited mental capacity -- a very dangerous combination.
written by Mwknitter , March 18, 2011 4:49
I'm pretty sure that Walker understands that total compensation includes benefits & that, by increasing the amount state employees pay for insurance he is actually decreasing their income. He just says whatever comes into his head that sounds vaguely right & that he thinks the stupids (ie his supporters) will buy.
written by Mary-Joe Eaton, March 19, 2011 7:32
It's sad to see what is happening to the workers in Wisconsin, Gov. Walker should be ashamed of himself. This is a total abuse of his position by taking the rights of workers who fought many years to have a voice.
Workers united against a Dictator.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.