Big labor's bad night: Unions suffer election defeats

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This is a rush transcript from "Journal Editorial Report," June 9, 2012. This copy may not be in its final form and may be updated.

PAUL GIGOT, HOST: This week on the "Journal Editorial Report," Big Labor's bad night. What Scott Walker's Wisconsin win and California pension reform victories means for unions nationwide.

Plus, Mitt Romney's Massachusetts record. The Obama campaign calls it one of the worst in the country. Is it? And how does it compare to the president's?

All that, and the truth behind the male-female wage gap and Democratic attempts to exploit it.

(BEGIN VIDEO CLIP)

GOV. SCOTT WALKER, R-WIS.: Tonight, we tell Wisconsin, we tell our country and we tell people all across the globe that voters really do want leaders who stand up and make the tough decisions.

(APPLAUSE)

(END VIDEO CLIP)

GIGOT: Welcome to the "Journal Editorial Report." I'm Paul Gigot.

That was Republican Governor Scott Walker of Wisconsin on Tuesday night after surviving a union-backed recall challenge. His seven-point win over Milwaukee mayor Tom Barrett was even larger than his margin of victory when he was first elected two years ago. And it wasn't Big Labor's only loss of the night. Voters in San Jose and San Diego Tuesday overwhelmingly approved cuts to retirement benefits for city workers despite an aggressive campaign against the measures by public employee unions.

Joining the panel this week, Wall Street Journal assistant editorial page editor, James Freeman; Political Diary editor, Jason Riley; and Washington columnist, Kim Strassel.

Jason, what does it tell us, this election, about the mood of the voters?

JASON RILEY, POLITICAL DIARY EDITOR: It tells us that the voters are realists, Paul. They realize these states, governments are facing serious problems and they're going to reward politicians willing to stand up to special interest and try to solve it.

GIGOT: Kim, the thing that struck me as remarkable was the turnout. Tom Barrett got 158,000 more votes than he got two years ago. Scott Walker got 205,000 more votes. And what does it tell you about the turnout operations about the parties.

KIM STRASSEL, WASHINGTON COLUMNIST: Both of these parties put in an immense amount of work on the ground game, in part, because both saw this as a preview for Wisconsin in the presidential election, too. There was a real benefit to getting people out there. They had a huge number of state-wide offices, the RNC, in particular, the Republican National Committee, volunteers everywhere. They registered a lot of folks. And the suggestion is that this may be a help to Mitt Romney, if he has the right message in the fall.

GIGOT: But, Kim, this is the interesting thing to me. The Democrats had been talking about their ground game for months and weeks, OK? And everybody knew they were investing a lot of money in it. The big surprise, at least to me, was the Republican turnout. What have they been doing to match the Democrats?

STRASSEL: This was collaboration between the Republican National Committee and the Wisconsin GOP. They opened more than two dozens offices and put together a voter list, called four million voters in the state, registered new people. They had an amazing turnout operation on the day. One of the fascinating things of this was the incredible support that the Republican got in places like the eastern parts of Wisconsin, where you need that huge turnout to equal out some of the more liberal turnout in some of the big cities. And they did that. He got more than 70 percent of the vote in a lot of the counties.

GIGOT: Very interesting.

What about the money, James? We're hearing a lot about that now where it's saying Walker out spent Tom Barrett eight to one. That was big money from around the country. And that was essentially the reason for this victory. Take out the money, the Democrats would have won.

JAMES FREEMAN, ASSISTANT EDITORIAL PAGE EDITOR: The money is not that great considering the organizing activity and some of the -- some of the union activist in the state is really not really counted in those totals when you're talking about just discrete donations to Tom Barrett. There's a lot of other spending going on. But you're clearly seeing an enthusiasm gap. Money, you can buy a lot of commercials but what you saw in Wisconsin is a lot of people making up their minds before a lot of this --

(CROSSTALK)

GIGOT: Almost 90 percent of voter in the exit polls said they had made up their minds days or weeks before the vote.

(CROSSTALK)

FREEMAN: They decided early because Walker, amazingly, picked a big fight with unions, said we need to rein in government spending. And after this big ugly brawl, he ended up more popular.

GIGOT: This also, Jason, was the results of a Citizens United Supreme Court decision that made it easier for corporations and unions to donate. This was a Wisconsin law that said if you are a governor challenged in a recall, you can raise whatever amount of money you want to defend yourself.

RILEY: Paul, labor is looking for a scapegoat, whether they want to try to blame Citizens United or outside money, what have you. But if you look at the exit polls on how labor did among union households, they didn't do much better than in 2010. Walker won about 37 percent --

GIGOT: Thirty-seven percent, yes.

RILEY: -- of the union household. That's incredible. So they were able-- they weren't, the unions weren't able to move the needle much, even among households with members in it. That tells you something.

FREEMAN: I think it's an interesting split going on between members of private-sector unions, that are actually in the economy, building houses, building products, and members of public-sector unions. And increasingly, the private guys don't really see that they have much in common with the public-sector unions --

GIGOT: Because they pay taxes, too.

FREEMAN: -- assume -- that's right. When the public-sector unions consume money, it comes from private-sector union households and that's where you see more of a third of them going for Walker.

GIGOT: Kim, what about the other big news this week, which is the results in California, San Jose and San Diego, amazing. 70 percent and 66 percent supported these pension reforms. San Jose, Democratic mayor, liberal city. And yet, they voted to say, look, we're going to have to rein in pension benefits for workers.

STRASSEL: Well, this is the other side of the story. The focus this week was on the political victory that Walker won in beating the recall. The reason he won it is because he showed that the policy's work, in that when you do the reforms, you save the state on spiraling health care costs and free up more money for schools. And voters are seeing that across the country. That's why you saw them weigh in in San Diego and San Jose. And you have about 30 more states that have collective bargaining. You're going to see efforts to sort of try to dismantle some of that because they've hit a wall and people are realizing, voters are realizing the only way you get things under hand is to take on these sites and to change the structure.

GIGOT: Jason, briefly.

RILEY: One of the things people are saying about Walker is that the reason there was so much division in Wisconsin was because of the way he went about this. If he'd been more conciliatory, if he had sugar-coated this more, perhaps the unions wouldn't have been upset.

But to Kim's point, I don't think that's the case at all. The unions, these were structural reforms that the unions were not going to go for however much you sugar coated them. He had to play hard --

(CROSSTALK)

GIGOT: Particularly mandatory collections of dues.

RILEY: Exactly. Exactly. Their life line.

GIGOT: The other thing that's interesting, Jerry Brown, the governor of California, now says that the San Jose and San Diego results are a mandate for pension reform in California. That's going to be an interesting fight.

(CROSSTALK)

GIGOT: When we come back, the Obama campaign comes back with a new line of attack, going after Mitt Romney's time as Massachusetts governor. We'll examine his Bay State record on jobs and spending, and how it compares to the president's, next.

(COMMERCIAL BREAK)

GIGOT: Well, first came the hit on Mitt Romney's time at Bain Capital, and now comes the attack on his tenure in Massachusetts. President Obama's re-election campaign is spending more than $12 million on an ad that started running this week in 10 battleground states. The claim, as governor, Romney had one of the worst records in the country.

(BEGIN VIDEO CLIP)

AD NARRATOR: When Mitt Romney was governor, Massachusetts lost 40,000 manufacturing jobs, a rate twice the national average, and fell to 47th in job creation, fourth from the bottom. Instead of hiring workers from his own state, Romney outsourced call center jobs to India. He cut taxes for millionaires, like himself, while raising them on the middle class, and left the state $2.6 billion deeper in debt.

(END VIDEO CLIP)

GIGOT: Ouch.

We're back with Kim Strassel and James Freeman. Wall Street Journal columnist and editorial board member, Mary Anastasia O'Grady, also joins us.

Mary, how effective is the ad?

MARY ANASTASIA O'GRADY, COLUMNIST & EDITORIAL BOARD MEMBER: If you look at it on its own, it's devastating, assuming that the electorate is going to be completely uninvolved in the election. And actually, Paul, I don't think this is a conversation Obama should want to have.

GIGOT: Because of his problems nationally with job creation?

O'GRADY: If you peel back the numbers, the actual, the job growth rate under Romney during his time in office was one percent. OK? The job growth rate for Obama is negative .3 percent. OK? And the administration before Romney was .7 percent. On the debt figures, Romney left office with about the same debt-to-GDP ratio when he came in. Obama has increased it 25 percent, percentage points.

GIGOT: I want to get back to some of the numbers. But let's run a response ad for Mitt Romney, which his campaign put up late this week.

(BEGIN VIDEO CLIP)

AD NARRATOR: Mitt Romney, on day one. The difference is strong leadership. As governor of Massachusetts, Mitt Romney had the best jobs record in a decade. Romney reduced unemployment to 4.7 percent. He balanced every budget without raising taxes. He did it by bringing parties together to cut through gridlock. From day one, as president, Mitt Romney's strong leadership will make all the difference on jobs.

(END VIDEO CLIP)

GIGOT: Kim, fascinating that they felt obliged to respond to this Massachusetts ad in a way they didn't to the Bain Capital attack previously. Why the do you think Romney felt they had to reply?

STRASSEL: I think they did it for two reasons. One is that he has made, obviously, his management of Massachusetts a key part of his campaign. He's lent a lot on biography, and this is his argument, I've run a stated and run it well. Two, I think the other problem is there was a lot of misinformation in that Obama attack ad that came out, and they want to set the record straight on it.

You know, the goal here for Mitt Romney needs to be to make the comparison, like Mary was talking about, about policies and different outcomes in policies. Leaning too much on Massachusetts, there's a lot there he probably doesn't want to talk about in the campaign, particularly Romney-care. He should be looking forward to this but he probably needed to answer those specific claims.

GIGOT: So, James, the Obama administration would say, that's totally fair, those numbers are totally fair. And by the way, your comparison to our national record is unfair because we inherited a terrible recession. Romney, when he became governor, the country wasn't in recession. It wasn't booming, but at least it was growing. What's your response?

FREEMAN: Well, it's funny, it's a similar scenario in both cases. They both come into office while unemployment is on the rise. It had been rising dramatically in Massachusetts the year before Mitt Romney took office. We see the same thing with President Obama.

GIGOT: Even though the national economy wasn't in recession, he did --

(CROSSTALK)

FREEMAN: The Massachusetts economy was in good shape. And it ended up -- unemployment ended up peaking after Romney the summer after came into office. But after that, it came down, and he ended up with lower overall job gains and much lower unemployment than when he came into office. So the contrast is not good. President Obama comes in, unemployment is 7.8 percent and now it's at 8.2. Oops. You haven't seen the vigorous rebound.

GIGOT: What about the spending record? Mitt Romney -- we've been critical of Mitt Romney on the health care plan, precursor to the Obama- care. I think indisputable fact that that's true. That has increased spending in Massachusetts since he left. Is the overall Romney spending record better than Obama's?

O'GRADY: When you look at the state spending, they're obliged to balance an operating budget.

GIGOT: Right.

O'GRADY: So that was balanced. Where some debt went up was in the area of capital projects. But still, if you compare that to Obama, it's ridiculous. I think the increase for Mitt Romney was something like 6.7 percent, which is completely in line with governors in Massachusetts. The increase for the Obama administration is 134 percent. So, it's not -- what I find amazing about this, the more you talk about Mitt Romney's record and, you know, that the -- the desire to look back, the more it shows that the Obama administration is not putting out any ideas for the future. And the more you do that, the more this is going to be a referendum on Barack Obama's first four years.

But, Mitt Romney, James, does not want this to be a referendum on Massachusetts. He wants this to be a referendum --

(CROSSTALK)

GIGOT: -- on Obama.

FREEMAN: Well, part of the reason he doesn't is because you had a Massachusetts legislature overwhelmingly populated with Obama voters. Overwhelmingly Democratic --

(CROSSTALK)

FREEMAN: -- overriding his vetoes, where he did try to cut spending and try to cut taxes. The results are -- you would have to say mediocre if you're a small-government person.

GIGOT: What does that say about --

(CROSSTALK)

FREEMAN: Worse than mediocre because he gave us Romney-care, which became Obama-care. But the -- if you wanted more spending restraint in Massachusetts, you probably would have needed more people to --

(CROSSTALK)

GIGOT: What does that say about the point in the Romney ad, I was a leader and had bipartisan cooperation. You're saying he really didn't.

FREEMAN: What I'm saying is that his record is -- let's call it a grade C, but it compares well to the president's. Whether you're talking jobs or growth, it's better than --

(CROSSTALK)

GIGOT: All right.

Thank you all.

In hot pursuit of the women's vote, Democrats roll out the Paycheck Fairness Act. But does the wage gap between men and women still exist, and can legislation fix it? We'll take a closer look, next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: Next week, there's a vote in Congress on a bill that would give working women the tools they need to demand equal pay for equal work. Ensuring paycheck fairness for women should be a no-brainer and they need to pass that bill.

(END VIDEO CLIP)

GIGOT: That was President Obama last week urging Congress to pass the Paycheck Fairness Act. Harry Reid and Senate Democrats failed to get the votes needed Tuesday to advance the legislation despite the president's push and often-cited statistic that women earn just 77 cents for every dollar that men make.

We're back with Wall Street Journal columnists, Mary Anastasia O'Grady and Kim Strassel.

Mary, how real is the wage gap and what are is it causes?

O'GRADY: Paul, the problem is that the numbers aren't very clear. We're always told there's a comparison of the dollar versus --

(CROSSTALK)

GIGOT: That's true in some sense, correct?

O'GRADY: What it doesn't take into account is the number of hours worked. What you end up seeing happen is that a lot of women who get into the work force end up having children. And when they have children, they want more flexible hours and they want part-time work, because they want to raise -- have a hand in raising their children, even if they use some child care. And this is what distorts that number from 100 to 77 cents. If you look at women in their 20's who are childless and on a career track, they're earning as much if not more than men. So it's hard to argue that it's a big conspiracy.

GIGOT: So the wage gap is real, but the reasons are occupational choices, life style choices, family choices?

O'GRADY: Exactly. I mean, you know, we've done a lot with reproductive science but, in the end, only a woman can bare a child. And as it turns out --

(CROSSTALK)

GIGOT: And they're still the principal care givers for children.

O'GRADY: They are. Then you have another problem, which is there are a lot of households where children are born out of wedlock, so if it's a single woman raising a child, again, she's going to need something with more flexible hours, so forth. Even if you look at countries, like Scandinavian countries who provide a lot of child care, you still find a wage gap. The reason is a lot of women prefer to have a hand in raising their children. So you're not going to fix the problem by forcing them into this system that would basically take their children away at birth so that they wouldn't -- so they could work as many hours as men.

GIGOT: Kim, you've looked at this issue for many years and written a book about it. What about this particular remedy that Democrats were offering to fix this problem, the Paycheck Fairness Act. How would it try to address it?

STRASSEL: What it would have done, fundamentally, is require all companies to comply with a whole new raft of regulations that would have forced them to justify all of their pay decisions. And what the bill fundamentally was -- this is why Democrats viewed it as a political winner, Paul, was because you both tried to get the women's vote by saying, we care about your issues. You're also paying off a key constituency of the Democratic Party, which was the trial lawyers. What these regulations fundamentally did was set up a situation whereby trial lawyers could sue any company that did not adequately justify its pay decisions and would there would have been a class-action breakout on this.

GIGOT: So you would have also had -- I think you've made the point in print, but this would have basically made it harder for companies to have flexible wage programs or bonus programs that accommodated flexible work- time schedules. It would have increased the uniformity --

STRASSEL: Exactly.

GIGOT: -- that companies would have had to do. And that might not necessarily have helped women.

STRASSEL: No, the biggest -- the people that would be most hurt by that are women. Because, as Mary said, women -- if you ask them -- and there are polls showing -- they place flexibility over almost anything in their careers. And to the extent that companies can have flexible pay structures and work structures, this benefits women to the extent that this bill was saying everyone has to move more toward a uniform set of pay requirements. It could have ended up in uniform paying mandates across the country. This was only detrimental to the women looking for that flexible.

GIGOT: Briefly, Kim, the politics of this, is this going to be a big issue in the election or will it just fade away?

STRASSEL: They lost the vote this week obviously, just as they lost the vote in 2010 when they tried to push it through in a lame duck. This was done entirely -- again, part of the contraception debate and everything else, to get women's vote, and we'll see if it works.

GIGOT: Thank you, both, very much. You know a lot more about this than I do.

We have to take one more break. When we come back, "Hits and Misses" of the week.

(COMMERCIAL BREAK)

GIGOT: Time now for "Hits and Misses" of the week.

Mary, first you.

O'GRADY: This is a hit for the Senate Intelligence chair, Dianne Feinstein, who this week called for an investigation of an avalanche of leaks from the administration on U.S. national security interests. She said it demoralizes our allies, it puts Americans at risk, and it jeopardizes the war on terror. And I think she's right. And I applaud an adult in the Democratic Party for standing up to the White House.

GIGOT: OK.

Jason?

RILEY: This is a miss for the first lady. Michelle Obama was asked recently in an interview who she would be if she could be anyone else, and she answered Beyonce, which is the answer you might expect from a 12-year- old, Paul, but not the first lady of the United States.

(LAUGHTER)

A lot of black women did not like this answer and left the first lady know on the blogs, and I think they have a point.

GIGOT: Beyonce is pretty successful.

(LAUGHTER)

All right.

James?

FREEMAN: This is a miss to the new socialist president of France, Francois Hollande, for getting into office and deciding that all the fiscal problems, that what they really need to do is lower the retirement age for --

(LAUGHTER)

-- tens of thousands of state government workers. I think you're going to see a lot of French people try to immigrate to Wisconsin now, and I think we ought to let them.

GIGOT: Brother Freeman never misses a chance --

(LAUGHTER)

-- to pick on the French.

(LAUGHTER)

I think this is -- we've got to --

(CROSSTALK)

GIGOT: And remember, if you have your own "Hit or Miss," please send it to us at jer@FOXnews.com. And visit us on the web at FOXnews.com/journal.

That's it for this week's edition of the "Journal Editorial Report." Thanks to my panel and to all of you for watching. I'm Paul Gigot. We hope to see you right here next week.

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