Throughout the 1950s in Singapore, the young socialist lawyer Harry Lee successfully fought the British colonial government on behalf of public sector unions for higher pay and greater allowances. These unions provided Lee with a base of political support that he used to vault to the leadership of an increasingly independent Singapore in 1959.
Upon assuming power however, the now-Lee Kuan Yew faced a severe budget crisis that threatened to wreck the economy of the nascent state. Lee soon realized that the high wages and benefits he had fought for years before were unsustainable. Strengthened by his previous position as the champion of these unions, he persuaded his socialist colleagues to enact a series of cuts to public sector compensation. As a result of these and other pro-growth policies, Singapore, with little to none in foreign aid, has become an economic powerhouse within a few decades, clocking in with the highest growth in the world this past quarter, all while providing decent, appropriate and affordable housing, healthcare, infrastructure and education to its citizens.
California today, as Singapore did 50 years ago, is facing a massive budget crisis, and the big question for the candidates is: Could Jerry Brown execute a similar about-face? Could Meg Whitman succeed in passing the necessary tough reform though a Democratic-controlled Legislature?
Public sector reform will happen, sooner or later. The state of California and its localities cannot exist solely or primarily for the benefit of its employees. The recent revelations in Bell have only fueled the outrage at a privileged class of Californians who appear to be gaming the system while students, the poor and countless other groups face savage cuts to much-needed programs. This is not an ideological issue but one of basic equity and practicality. What is egregious (Bell) must be stopped entirely and clawed back, and what is unsustainable (public employee liabilities) or mismanaged (CalPERS) must be severely reformed.
Gov. Arnold Schwarzenegger has been unable to do this, both at the height of his popularity in the first few years of his administration and now at its nadir. Whitman believes that she could accomplish what her fellow Republican could not. Left unclear is how. She might point to New Jersey Republican Gov. Chris Christie’s recent success in passing significant if modest reform through a Democratic-dominated Legislature.
Christie focused singularly on this issue. He risked a great deal of political capital by very publicly and aggressively confronting the public sector unions. Ultimately, his media strategy paid off by leveraging public support into votes. Would Whitman be singularly focused? Does she realize that her platform of lower business taxes and better public education is not possible unless the public sector is thoroughly and completely reformed? And if so, does she have the acumen to accomplish this?
Brown has his own baggage. The public sector unions are bankrolling his fight against Whitman’s bottomless treasury. In addition, he had a role in creating this problem when, as governor, he signed the Ralph C. Dills Act in 1977, allowing collective bargaining for public sector employees.
In spite of (or perhaps because of) this background, Brown could argue that he is in a better position to bring about reform than his Republican opponent. The theory is that not only would he be able to gain support among his fellow Democrats that Whitman could not, but he also has a greater knowledge of the ins and outs of Sacramento. He could argue that public sector reform is such a complicated and explosive issue that a novice would be at a severe disadvantage.
This assumes that Brown has the courage to stand up to his biggest erstwhile supporters — a big if. Brown will only be competitive with Whitman because of the millions that these public sector unions will pump into his campaign. It is therefore unlikely that he will, in the course of the campaign, advocate reform. Does Brown realize, though, that by refusing to do so, he is imperiling not just California’s economic growth but also investments in infrastructure, green technology, healthcare and education that Democrats are supposed to support?
The choice in November for Californians could not be murkier. Neither candidate has proposed a realistic roadmap for public sector reform. Unfortunately, the state cannot wait until 2014, and so the voters can only hope that the candidate they support will have the fortitude of Lee Kuan Yew and that California, like Singapore, will somehow confront its current crisis.
David Ragsdale, a native of Los Angeles, recently completed his master’s degree in public policy at the Lee Kuan Yew School of Public Policy at the National University of Singapore.