Internal Walker Memo Shows Intent of "Base Wage" Rule is to Cut Teacher Pay by 31.1%

Submitted by Jud Lounsbury on Thu, 05/31/2012 - 12:04pm

Earlier this year, the governor's office was asked to approve implementation rules for Act 10 developed by Walker-appointed commissioners at the Wisconsin Employment Relations Commission. The rules were how to define "base wages" in determining the size of the "pot of money" available for salaries in collective bargaining agreements. The WERC commissioners said what everyone else thought Act 10 said: The base wage is the amount an employee gets paid.

Walker could have gone along with that, but instead, decided to go a very different route.

In a 1/16/12 memo from Walker's assistant legal counsel, Nate Ristow, to Walker, Ristow explains that they could reduce worker pay by playing around with how "base wage" is defined:

The base wage determination is important because it defines how the state and local governments determine how big the pot of wages is for negotiations between governments and recertified bargaining units. This is the cap on the total amount public employees may bargain for in wage increases without a referendum; the state or local government may negotiate for less than this amount in actual wage increases.

Then Ristow says that while all public workers will be affected by the rule, but teachers will be hit the hardest:

However, teacher pay scales are the most complex, and these public employees will see the greatest effects from the nature of this rule.

And what does Ristow mean by "greatest effects"? He offers the governor three options of where he could go with this rule.

"Option 3" is described by Ristow as the "status quo" and says:

Option 3 would use teacher's current base wage as a starting point. This would be based on Education and years of service. On the Waukesha School District Pay Scale, teachers would fall in different places all over the chart. Option 3 results in the highest amount available for bargaining. It also means, theoretically, all employees could receive a raise equal to CPI over what they actually made in wages the previous year. This is not the case in Options 1 and 2.

Option 3 is also what Walker has assured everyone that Act 10 would do-- that its not that big of a deal because teachers and other public workers will essentially have their wages frozen with cost of living increases to prevent pay cuts due to inflation. "Option 3," of course, is not what Walker chose.

In "Option 2" Ristow says:

Option 2 would allow teachers' salaries to be determined in relation to the level of education they had obtained. This is reflected in the Waukesha School District Pay Schedule as the top row of wages. The total base wage would be determined by multiplying the number of teachers in each educational category (7 different categories in Waukesha) by the wage appearing on the top row. This would result in a slightly higher amount available for bargaining than Option 1.

Finally, "Option 1" which Ristow describes as the "bare minimum." This was ultimately the option that Walker chose, with some marginal tweeks for putting money back in the "pot of money" collective bargaining salary pot for years of experience:

Option 1 will define base wage as the lowest wage earned by an employee in a bargaining unit. It will eliminate from the equation all wage increases related to years of experience and education. The pot of money available for bargaining will be calculated as follows:

Total Base Wages = The lowest wage (base) X the number of employees

Total Base Wages X Percent of CPI Increase = Wages Available for Collective Bargaining

Option 1 results in the smallest amount available for bargaining. Option 1 effectively eliminates all employees from receiving a raise equal to the increase in CPI, because for many employees, the base wage is determined to be less than the wage they actually earned.

Later in the memo, they clearly lay it out:

The "average single base wage" in Option 3 or the "status quo" will go from $56,302.57 to $38,822 in Option 1 (the one that Walker chose). That means on average, the average base wage will drop by 31.1%-- a huge hit to a teacher pay that is already below the national average.

There you have it in the Walker camp's own words: The intention of this rule was to make collective bargaining impossible by pushing the bargaining ceiling for salaries 31.1% below what teachers are being currently paid.

It also gives local school boards the political cover of being able to say they gave their teachers the maximum salary available under this rule. Yes, school districts can voluntarily restore the salary cuts that this rule mandates, but that's where the rubber hits the road: many school districts either won't do this because of their rightwing ideology and many will simply not have the money and will be forced to use this latest "tool" from Walker.

Keep in mind that school districts could and still can voluntarily restore money recently taken out teacher pay checks for pension and health care contributions. How many school districts voluntarily did that?

In stark contrast to the internal discussions of the Governor's office, a second documen t relased yesterday is a set of FAQs that Walker’s office created and distributed to legislators in May 2012, after the new rule had alreadybeen adopted–to explain to the public what the new rule does. That document says, “Q:Does this rule mean that if I currently get compensated for other supplemental compensation such as education credits I may get a base pay cut? A: No.”

The second document goes on to lie by obfuscation: It says that wages can’t be cut when the CPI is decreased. While that is technically true, the FAQ leaves off the fact that the base wage is (in the words of the INTERNAL memo) “less than the wage they actually earned.” In other words: We won't REDUCE your base wage. We are just REDEFINING your base wage to be something less than what you’ve actually earned in the past.

It is very tricky, and when you read these FAQs you have to consider that each word, each phrase, has a very specific legal meaning that may not be the same as its apparent normal meaning.