Macroeconomics Over the Last Several

Macroeconomics

Over the last several years, the economy has been through a number of different challenges. Part of the reason for this, is because of shifts that have taken place in: the deficits that many state and local government are running. As a result, this period has been marked by a number of problems to: address the shortfalls that many different governments are facing. One of the more radical approaches took place in Wisconsin not long ago, when the Governor signed a law that would eliminate the employee public unions' collective bargaining rights. This is important, because it shows how the large deficits are having an impact, on the way governments are delivering various services to the general public. As they are seeking out any kind of tools they can use to: decrease their costs and improve the overall quality of services that are being provided. To fully understand the overall scope of this issue requires: examining a newspaper article that discusses the current problem in Wisconsin. Once this takes place, it will provide the greatest insights, as to the underlying challenges that all governments are wrestling with in dealing with this issue. (Weitzman)

In the article titled Judge Blocks State's Union Rights Law, Weitzman (2011), discusses the current situation that is taking place. as, a showdown has occurred between: conservative Republicans (backed by the new Governor Scott Walker) and liberal Democrats. At the heart of issue, is the ability of the state renegotiate labor contracts. According to Walker, every step has been taken to reduce the budget deficits that the state has been running over the last several years. However, as the budget cuts became more severe, the lingering economy is having a dramatic impact upon the tax revenues that are being generated by: the state and local governments. As a result, any kind of cuts that were made to the budget over the last several years helped, but it was not enough to reduce the total negative effects. (Weitzman)

The led directly, to the current showdown that is taking place. As Republican lawmakers felt that the collective bargaining rights of public employees, made it difficult to make adjustments to changes in the economy. This is because, previous agreements with government over the years allowed these employees to: receive generous compensation and benefits packages. As the collective bargaining agreements could apply to several different public employee unions (such as: sanitation workers and firemen). Over the course of time, this power gave these unions the ability to: receive consistent pay and benefits increases, beyond what was available in the private sector. (Weitzman)

Once the budget shortfalls became more severe, is when these agreements were brought into question. As many proponents of eliminating this power (led by Walker), are trying to increase the ability of the government to: adapt to the changes that are taking place in the economy. This is because they believe that these agreements mean that their overall: labor and benefits costs will be forced to remain at current levels. Once they expire is when the unions will: join together and use this power to achieve even greater benefits. This is problematic, because it allows government waste and inefficiency to increase, which this makes it more difficult to: fire or layoff non-essential employees. As a result, there has been a concentrated effort to eliminate this power, in order to improve the state's ability to adapt to shifts in the economy. (Weitzman)

However, many of the public employee unions and liberal Democrats have been fighting this law. The reason why, is because they believe that under the basic Constitutional principles: the Governor and the Legislature simply cannot pass a law to strip employees of this power. This has led to a campaign of resistance among Democrats opposed to the law, who were refusing to vote on it. (Weitzman)

After this political strategy failed and the law was passed, is when the focus was changed to challenging its legality in court. As the public employee unions would claim that they are being stripped of their right to due process of law. While, the state is saying that these steps are necessary in order to prevent a financial implosion (resulting in a possible collapse in services). Recently, a judge ruled: that the new regulations are a violation of due process of law and ordered that arguments should be heard about its legality. This is important, because it highlights the overall challenges that all states are wrestling with during the Great Recession. (Weitzman)